Cemtrex Reports Financial Results for the 2017 Fiscal Third Quarter

Total Revenue Increased 13% Year-Over-Year to $27.8 Million, Book Value Increased 108% to $3.49 per share from year ago

Farmingdale, NY, Aug. 14, 2017 (GLOBE NEWSWIRE) -- Cemtrex (Nasdaq: CETX, CETXP, CETXW), a world leading industrial and manufacturing leader, today reported its financial results for the three-month and nine-month periods ended June 30, 2017.

“We maintained strong topline growth in the third quarter of fiscal 2017, with total revenue increasing 13% to $27.8 million, while remaining profitable. Our ability to drive steady revenue growth is evident when looking out over the past couple of years. Our revenue has increased from $42 million to $56 million to $86 million for the nine month periods ended June 30, 2015, 2016 and 2017, respectively,” stated Saagar Govil, Chairman and CEO of Cemtrex. “We are focused on continuing to grow our business through the acquisition of new, high quality customers, as well as expanding organically through our existing customers. In April 2017, we received a record number of new incoming orders for a single month, totaling over $21 million. Included in these orders is a $15 million, three year agreement with one of our existing customers, which is the single largest order we have ever received.”

“In addition, we announced the establishment of our new subsidiary, Cemtrex Advanced Technologies along with its first development product, an advanced ‘smart desk.’ It is an exciting time at Cemtrex as we leverage our deep experience in electronics development and manufacturing and focus on bringing to market proprietary technologies that we believe are revolutionary. Our initial products, in line with the innovative ‘smart desk’, will embrace the concept of bringing the workspace environment up to speed with technological advances.”

“Cemtrex is strategically positioned to continue growth organically and through acquisitions. With $13.2 million in cash and cash equivalents we are consistently evaluating growth opportunities to advance our businesses. This is a pivotal time for the company as we see a strong pipeline in new and existing customers as well as new product development under our subsidiary. We continue to scale the business with shareholder value as a core focus on going,” concluded Mr. Govil.

Fiscal 2017 Third Quarter Business Highlights and Financial Highlights

  • Total Revenue for Q3 2017 increased 13% to $27.8 million, compared to $24.7 million for Q3 2016. This increase was primarily due to the acquisition of Periscope on May 31, 2016.
    • Industrial Products & Services (IPS) Revenue for Q3 2017 increased 8% to $13.5 million, compared to $12.5 million for Q3 2016. The increase was primarily due to increased shipment of goods and execution of projects.
    • Electronics Manufacturing Services (EMS) Revenue for Q3 2017 increased by 17% to $14.3 million, compared to $12.2 million for Q3 2016. This increase was primarily due to the acquisition of Periscope, an electronics manufacturing solutions business. 

  • Gross Margin for Q3 2017 was 36%, compared to 33% for Q3 2016. 

  • Operating Margin for Q3 2017 decreased to 5.1% compared to 6.9% for Q3 2016. This is attributable to an increase in operating expenses of 31% to $8.5 million, compared to $6.5 million for Q3 2016, which includes an increase of sales, marketing and professional service costs for the 2017 period. 

  • Net Income for Q3 2017 was $1.2 million or $0.11 per share, compared to $1.4 million, or $0.16 per share for Q3 2016. This decrease was due to increase sales and marketing expenses in the third quarter, and loss on disposal of assets.

Nine Month 2017 Financial Highlights 

  • Total Revenue for the nine months ended June 30, 2017 increased 54% to $87.7 million, compared to $56.9 million for the same period in 2017. This increase was primarily due to the acquisitions of Advanced Industrial Services (AIS) and Periscope.
    • IPS Revenue for the nine months ended June 30, 2017 increased 27% to $42.0 million, compared to $33.2 million for the same period in 2016. The increase was primarily due to increased shipment of goods and execution of projects.
    • EMS Revenue for the nine months ended June 30, 2017 increased 93% to $45.7 million, compared to $23.7 for the same period in 2016. The primary reason for increased sales was due to the acquisition of Periscope. 

  • Gross Margin for the nine months ended June 30, 2017 was 33%, compared to 31% for the same period in 2016. 

  • Operating Margin for the nine months ended June 30, 2017 decreased to 4.3% from 5.4% in the same period of 2016. This increase was primarily due to an increase of sales, marketing and professional service costs for the 2017 period. Operating expenses increased 68% to $24.8 million, compared to $14.8 million for the same period in 2016 due to the increase from the acquisitions of AIS and Periscope. 

  • Net Income for the nine months ended June 30, 2017 increased 2% to $3.0 million, or $0.26 per share, compared to $2.9 million, or $0.36 per share for the same period in 2016. This increase was primarily due to the acquisitions of AIS and Periscope. 

Balance Sheet as of June 30, 2017:

  • Cash and Cash equivalents were $13.2 million or $1.28 per share.
  • Book value was $3.49 per share.

Conference Call and Webcast Information

Cemtrex will host a conference call with the investment community on Thursday, August 14th at 11:00 a.m. Eastern Time featuring remarks by Saagar Govil, Chairman and CEO of Cemtrex. The dial-in numbers for the conference call are 877-524-8416 (Toll-Free) or 412-902-1028 (Toll). Please call at least five minutes before the scheduled start time. 

For interested individuals unable to join the conference call, a replay of the call will be available through August 28, 2017, at 877-660-6853 (Toll-Free) or 201-612-7415 (Toll). Participants must use the following code to access the replay of the call: 13667842.

Cemtrex will also offer a live and archived webcast of the conference call, accessible from the “Investor Relations” section of the Company’s website at http://www.cemtrex.com/investor-relations/.  The online archive of the webcast will be available for 30 days following the call.

About Cemtrex

Cemtrex Inc. (CETX) is a global, diversified industrial and manufacturing company that provides a wide array of solutions to meet today’s technology challenges and is rapidly growing through acquisitions. Cemtrex provides: manufacturing services of advanced custom engineered electronics, industrial contracting services, monitoring instruments for industrial processes and environmental compliance, and equipment for controlling particulates, hazardous pollutants and greenhouse gases used in carbon trading globally. 
@Cemtrex

Safe Harbor Statement 

This press release contains forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties. Statements made herein are as of the date of this press release and should not be relied upon as of any subsequent date. This release may contain non-GAAP financial information and are not calculated or presented in accordance with US GAAP. The Company believes that the presentation of non-GAAP financial measures provides useful information to management and investors regarding underlying trends in its consolidated financial condition and results of operations. The Company’s management regularly uses these supplemental non-GAAP financial measures internally to understand, manage and evaluate the Company’s business and to make operating decisions.


    For the three months ended     For the nine months ended  
    June 30,   June 30,  
    2017     2016     2017     2016  
Revenues                                
Industrial Products & Services Revenue   $ 13,467,483     $ 12,468,737     $ 42,024,611     $ 33,206,953  
Electronics Manufacturing Services Revenue     14,339,173       12,246,116       45,684,285       23,730,693  
Total revenues     27,806,656       24,714,853       87,708,896       56,937,646  
                                 
Cost of revenues                                
Cost of Sales, Industrial Products & Services     9,437,556       8,935,388       30,327,245       24,298,643  
Cost of Sales, Electronics Manufacturing Services     8,437,194       7,620,796       28,393,397       14,774,708  
Total cost of revenues     17,874,750       16,556,184       58,720,642       39,073,351  
Gross profit     9,931,906       8,158,669       28,988,254       17,864,295  
                                 
Operating expenses                                
General and administrative     8,526,625       6,461,447       24,833,985       14,805,001  
Total operating expenses     8,526,625       6,461,447       24,833,985       14,805,001  
Operating income     1,405,281       1,697,222       4,154,269       3,059,294  
                                 
Other income (expense)                                
Other Income (expense)     154,579       94,781       (81,969 )     559,287  
Interest Expense     (204,992 )     (237,665 )     (948,360 )     (597,826 )
Total other income (expense)     (50,413     (142,884 )     (1,030,329 )     (38,539 )
                                 
Net income before income taxes     1,354,868       1,554,338       3,123,940       3,020,755  
                                 
Provision for income taxes     172,286       123,298       122,197       67,424  
Net income     1,182,582       1,431,040       3,001,743       2,953,331  
                                 
Preferred dividends paid     -       -       332,938       -  
Net income available to common shareholders     1,182,582       1,431,040       2,668,805       2,953,331  
                                 
Other comprehensive income/(loss)                                
Foreign currency translation gain/(loss)     891,215       38,392       573,389       (375,709 )
Comprehensive income available to common shareholders   $ 2,073,797     $ 1,469,432     $ 3,242,194     $ 2,577,622  
                                 
Income Per Common Share-Basic   $ 0.12     $ 0.16     $ 0.27     $ 0.36  
Income Per Common Share-Diluted   $ 0.11     $ 0.16     $ 0.26     $ 0.36  
                                 
Weighted Average Number of Common Shares-Basic     10,033,060       8,804,446       9,932,894       8,116,266  
Weighted Average Number of Common Shares-Diluted     10,300,022       8,872,966       10,214,020       8,184,552  

    June 30, 2017     September 30, 2016  
Assets            
Current assets                
Cash and equivalents   $ 13,241,368     $ 6,045,521  
Restricted Cash     811,569       698,459  
Accounts receivable, net     14,576,581       13,568,727  
Inventory, net     16,565,678       14,071,627  
Prepaid expenses and other current assets     2,102,444       2,475,404  
Deferred tax asset     67,000       67,000  
Total current assets     47,364,640       36,926,738  
                 
Property and equipment, net     16,860,577       17,647,888  
Goodwill     918,819       918,819  
Other assets     85,203       540,064  
Total Assets   $ 65,229,239     $ 56,033,509  
                 
Liabilities & Stockholders’ Equity (Deficit)                
Current liabilities                
Accounts payable   $ 8,026,375     $ 7,733,459  
Credit card payable     218,204       294,169  
Sales tax payable     247,531       263,107  
Revolving line of credit     2,823,047       3,454,913  
Accrued expenses     3,010,121       5,174,529  
Deferred revenue     564,901       1,387,139  
Accrued income taxes     1,139,220       1,042,589  
Convertible notes payable     520,000       3,748,000  
Current portion of long-term liabilities     2,015,434       2,056,887  
Total current liabilities     18,564,833       25,154,792  
                 
Long-term liabilities                
Loans payable to bank     5,486,709       6,402,228  
Notes payable     397,468       1,222,158  
Mortgage payable     3,785,016       3,869,066  
Notes payable to related party     -       3,599,307  
Total long-term liabilities     9,669,193       15,092,759  
Deferred tax liabilities     94,000       94,000  
Total liabilities     28,328,026       40,341,551  
                 
Commitments and contingencies     -       -  
                 
Shareholders’ equity                
Preferred stock , $0.001 par value, 10,000,000 shares authorized, Series A,
1,000,000 shares authorized, issued and outstanding at June 30, 2017 and
September 30, 2017
    1,000       1,000  
Series 1, 3,000,000 shares authorized, 1,736,858 and no shares issued and
outstanding as of June 30, 2017 and September 30, 2016, respectively
    1,736       -  
Common stock, $0.001 par value, 20,000,000 shares authorized,
10,207,739 shares issued and outstanding at June 30, 2017 and
9,460,283 shares issued and outstanding at September 30, 2016
    10,207       9,460  
Additional paid-in capital     23,350,562       5,230,745  
Retained earnings     13,938,466       11,424,900  
Accumulated other comprehensive loss     (400,758 )     (974,147 )
Total shareholders’ equity     36,901,213       15,691,958  
Total liabilities and shareholders’ equity   $ 65,229,239     $ 56,033,509  



Investor Relations
Cemtrex, Inc.
Phone: 631-756-9116
investors@cemtrex.com


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