Cemtrex (CETX) 14 Feb 232023 Q1 Earnings call transcript

Greetings, and welcome to the Cemtrex First Quarter 2023 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

As a reminder, this conference is being recorded.

Before we begin the formal presentation, I would like to remind everyone that statements made on the call and webcast may include predictions, estimates or other information that might be considered forward-looking.

differ represent are judgment uncertainties subject cause results statements future what that forward-looking actual they holds, to to these our on current the could While materially. risks and

forward-looking release place revision not You are which in our future revise obligating statements in this ourselves only opinions mind, reliance to of publicly the of date Please forward-looking to reflect events. the new undue the as presentation. of cautioned any information statements, on that these results to of not keep light we or are or

today's present that relating Throughout discussion, important we our affect to will business some our attempt to predictions. factors may

other also a and the section website heading risks, Form our review release of Form recent Risk XX-Q Factors. should A company's more XX-K these today, of for discussion investor issued press results was and the relations our and particularly You complete detailing is under most factors in available cemtrex.com. these

Officer, Chief Saagar for ended XXXX. Govil, XX, Your results will December the first Paul operations Financial and Chief host of present Officer quarter today, Executive Wyckoff,

will I ahead. turn call Cemtrex's Chief over time, Executive Please Officer, this At go to Saagar Govil. the

to operator, XXXX afternoon, good you, I'm you everyone. quarter Thank today's to first financial pleased call. and conference results welcome

year top was grew continued first we quarter The of fiscal growth, line year-over-year. XXXX as highlighted by sales XX% by

XX%. led gross margin a operationally improvement to different basis the have have XXX points we Additionally, to taken steps of

our quarters, in continued we to expect margin the in couple increases see gross business. as We over next drive improvements our of

better performance. and the reflect shift are drive with quarterly operating and are and our results beginning assets our XX% with the for operating the restructuring the since quarter in making in pleased the to This we focus. we focus declining XXXX, noncore advanced reduced Cemtrex financial we on our by more improved services progress loss to income transformative fully level. Overall, Vicon completed now business November industrial In corporate is brands to expenses at of accelerating divestiture

its into and for going services led technology In security on segment industry segments, focused Vicon financial consisting presentation QX leading on improving security, is Cemtrex increase dominant in demand. strong divestiture, a and services the conjunction was a advanced industrial Year-over-year corporate. with XX% with the modified three revenue building industrial by Vicon has forward consisting applications. of company the brand, industrial government commercial, solutions our company security delivering and for of

from $X.X January, Valerus large solutions. software customers continue cameras technology to new We million award it’s a and security customer management for winning in demand from Vicon video received a order to expand in Texas security system recently, with Most strong roughneck protection current see our solutions. border

new multisensor Vicon capabilities is roughneck for environment. well addition positioned dynamic surveillance the technology currently cloud for leveraging the deployed growth expands art and the With servers. at believe with software order the security of today's the and to models cameras solutions video SaaS AI site, industry state highly shifts winning award of We customer the as Vicon

due mainly segment services our decreased timing. products to slightly record quarter, to during industrial services recognition revenue the revenue Turning AIS, and

demand has is equipment. to and ability back inventory and continue to AIS in the complexity for years comprehensive services significant to for cash a US the reshoring repeat growing and balance more a source AIS offer business, the empowering We of and see increasing and sheet, industry strong high equipment. predictive of flow over maintenance to due the monetizing industrial services manufacturing with XX and need opportunities With

continued us announced restructure Most XX to particularly we one that with has stock for bolt-on economy recently, reverse the has stock. common industrial listing the for NASDAQ effecting also our and capitalization the split the for capital compliance market As we manufacturing on for US continues significant potential to allowed AIS in thrive, believe acquisitions. regain expansion, full a

the over Officer financial Paul discuss to turn call Chief now Financial Wyckoff, to I’ll

increase services. our Revenues segment quarter segment first year-over-year. The demand for increased of The increase security and of security million due and a for $XX quarter technology $X.X the million of Saagar. the revenues XXXX XXXX, respectively, security XX% XXXX the million to $X.X revenue first Thank revenue due you, an The XXXX the for first year in were increased was company's totaled products million increase increases the to Vicon under was products brand. for and quarters to $X XX%. for for demand compared an of of

lower quarter XXXX due $X.X million revenues, to first quarter or increased the for percentage was period. or for as $X compared to And million first profit recognition million gross $X Gross the of XX% of revenues subcontractor the $X to is by of ago costs. segment and services. segments X% of of the services and XX% to Industrial the year of products attributed timing of XXXX the profit mainly decreased to prices for mainly revenues for million, increase revenue

in was was of to an first primarily a compared XXXX increase Total loss million $X an in decrease compared an of period. profit to due XXXX to was operating in million first for of quarter $X the the $X.X to XXXX. The quarter million the for operating first XX% quarter increase research period. in due the gross prior loss the to profit for development increase expenses million, -- year's $X.X expenses of for Operating was and the the as quarter. decline The

million loss Net first as as in and of XX. of a to XXXX, due totaled XX, compared on million XXXX. cash equivalents to loss at the million, the million Net first $X.X loss primarily in for December year, last $X.X in the XXXX discontinued quarter compared quarter period was $X.X XXXX. the compared operations. loss to same increased $X.X to as Cash net September

is or $X,XXX,XXX in attributable $X,XXX,XXX inventories to XXXX. to in Inventories transit XX, X% inventories $XXX,XXX to XXXX increase December from yet at September increased XX, be sold. at The

review back a for call turn of Saagar to outlook. XXXX our now I'll the

Paul. long our well create term summary Vicon strong continue restructuring you, for our In Thank complete to we to for positioned value AIS, performance with and and be shareholders.

ahead, we for XX% million sales. the AI revenues $XX our based our fiscal analytics demand current improvements approximately to XXXX, on launch should for continue of solutions, to believe and given select based Looking Vicon increase year to by additional Valerus Industries

is AIS. continued fiscal for XX% in market, XXXX X% services gross improve to driven AIS Vicon the for Furthermore, XX% fiscal year year XXXX revenues year $XX.X for is approximately XXXX. approximately to gross for by percentage the expand margin percentage will industrial for We to AIS margin profit fiscal increase expected to to by strength expected million believe profit for the to continue

all to performance the due the we reflect million. drive fully. With under the timing over combined the quarter the four and more of June improvements quarters our our business to of to March effects believe December we The these actions $X.X in were performance approximately the expect next be loss restructurings only to changes demonstrated taken improvement, quarters partially operating and

We the inventory year than by we can reduce also over believe that, more course fiscal X.X XXXX. of million

inventory, burden the the us overall the As the improve. offset couple will quarters the in cash next by from cash obtained allow loss on reduction This over from position. we've our cash reducing supply the constraints operating seen loss of chain expected to

short growth margins, on we the believe reduction to in With increasing expenses. have operating improvement approximately We and $X.X focus restructuring roadmap. million capital our revenue on in our in term sufficient cash, executing

focus moving Our capture by our income our we will positive significant and improved is rest With results businesses see reach escalating operating to company expectation for of in shift the that, financial opportunities. into XXXX. believe near-term We XXXX. the demand can

work long our the sustainable to I We with term updates term value throughout believe for position path shareholders. XXXX. to look continue and company forward provide the long to our on for financial will we which providing growth, shareholders of further model

to all And now attending. I you like thank some Operator? answers And for questions. we'd

and time from a gentlemen, will we session. James. Jason go from this Please Dawson Kolbert Thank comes question you. Ladies line Our be [Operator at Instructions] of first the ahead. conducting question-and-answer

like very I'd appreciate what and which you? the quarter. and you One solid are how is to question prior in artefact with really consistent discussed fourth on have Saagar, also for guidance typically is the the Congratulations sequentially. of the slightly it company. I while period very, like great up down a sequentially quarter are seems that not understand is an the that year-over-year, is quarter, And numbers they're

if I that? So you wondered could address

Sure. Jason. And the thanks question, for

growth is As know Vicon's revenue you in driven. this a of was lot the and driven Vicon largely project quarter, by business

invoiced and our projects are the is that growing demand timing executed will timing or to is those within general always a this period We they're when the from reasonable when backlog and not sometimes the demand have business, And overall sense executed sometimes shipped affirmation do but we control. and are closed fluctuate so period. of and have projects the of of the for when

little seasonality. bit There is of also a

budgeting that of and a of our sequentially. really for sometimes different types in so of -- that play clients, terms it's role forth. and or government So And schools whether on depends some does cycles

a revenue basis to sequentially less the sequential So a more determine from certainly analyse perspective, tend improving on we success on whether perspective terms basis our in and the an expense business business to operating from year-over-year a overall of matters. we're

that now. of border little for success to very stage bit And the that system could the And that's much, a with and right obviously execution award associated topic the seems security, contract large a talking me more. installation about in hot it much set

be order bit states municipalities So to might it took about that or next? can other and a you win discuss or what border border municipalities little what

Yeah, appreciate the question.

NDAs with generally not to we're in to able our due customers talk border, about area. So this in to respect place, so specifics

actually federal quite protection. of with work border respect However, do we bit to a

five segments revenue is to average. segments on of XX% average represents of in Protection years, on terms our largest and the at our the over look you individual If last Border one probably of company, X%

a so migrant number certainly an different on that. because And situation, opportunities government And little opportunity there's the is with expand unfortunate federal the work have certainly more to of current crisis, but does a slowly, popped of there bit the up.

some steps of that's a a border called respect a that area it's opportunities. to product per we've an product and So unit. some for thermal pursuing have I can And for created force devoted we we deliver And a that opportunity internally. towards Actually, great more protection. taken -- lot border incredible half think of the there's solutions to resources these monitor We've protection. an with more about mile sensor think task potential

a So think have actually of respect to border forward, going reference demonstrated I competency and we lot with protection. customers

on certain and of I those are states fronts, going so taking front renting resources, progress of a be apprised. the of And now. out And keep to A more solutions spending certainly this put marketing getting lot as amount shareholders we'll in to these word clients. we're out we new think make seriously

protection also well seen seeing country think demand that to US at sales and garner solutions, success and I believe remember think on and the the the our -- the moment. that isn't I We for growing demonstrate we also capabilities internationally it's border that as again, company's border we've can important protection We protection. long markets. only issues based border history within facing border have do more in in

the the helpful. question Thank Vicon notes, down with how bit not revenues. it's saw of things other AIS, but And directly I about kind corporate, to or was little last is you you. third AIS? can which the to do breaking but like of a talk Vicon area you're legacy was, a that I That's understand and revenue, the has related nominal and products amount the other very what

public a costs to and with respect segments so out other separate from forth. for the fees, costs some to non-operating fees, the company it's audit legal two really presentation So perspective, of

breaking So across a that's some that We those than more put there's more really number. both where the it can explicitly. you segments that or we business drill little rather revenue based bit a down into just expenses out allocated specific in equally operations of that bucket on

terms business segment, if expand creates And it doing of bit basis. I in how's added think standalone more little a I another just that contracts, kind we grow, as more the we of a mean, flexibility presentation gives on visibility

update. for Okay. the the Appreciate Terrific. Thanks questions.

pleasure. My

you. Thank

Our [indiscernible] Partners. question from of ahead. next Please the go comes line Dennis

a doing grateful you got on guys Hi, you. And evening. love again only the wasn't direction of so heading quarter. you one Thanks my congratulations I'm rid I the for Good for taking going guys Listen, I business that have to in you that X.X love stock. I well question. are in. million million concern. I we is concern. are blowing Again, But have your heading. XX, I'm upcoming direction concern address the How August. a have due you're My and to debt the this? that's March do X.X great that

question, for Dennis. Thanks the

relationship continue work down had either ways And past find those debt or with So it holders. with we'll to extend the in we've with certain and time. good the to them debt company out a has them pay over to

And solution certainly to that's a to there so is there's on believe it fair we're good everybody going as out that the go work for a that address shareholders and to holder our works and well to the it's path company continue debt we and and forward. with to work work we mind its for

because we like Yes, obviously, have that times. no And rolled about, different concerned you many I over I'm year was It's ago. And a kind short-term. real than we're guys private of very the strong a in time funding were investor because feel a have little that you relationship. money it

concern. doing main God, job. I my wonderful that's my are So a mean, you just guys again,

my really, really heading skies. guys clear you this If for hurdle, are Lord, blue you

Yes. different we're our certainly options some and and it's we Dennis in radar through that, different us. have working Appreciate on certainly yes, front options of and

we're and I drive to to to that pursue a outcome. So, positive it think, going continue

Thank look What really I to positive I it. to I do. look I forward some and forward you appreciate Well, that. outcomes,

Thank Yes. you.

you. Thank

from Next go Holub from line question Holub the comes Office. Larry of Family ahead. Please

I'm talk and be we looking that in new could like things term, company's my just customers, about near for milestones and Taking if the that? instance, upcoming should for you monitor keep backlog the to of pipeline, track progress question, wondering

have question, the Larry. a company, going Sure. of lot things exciting we At the on. for Thanks

I progress. think key monitor out to for our probably, to couple continue kind look a of to there's of things

be driver that I for have think or products we really out will which the be they love to to the will is customers is, be feel point AI and Vicon going a our the for first under thing I would exciting company. coming over growth are going we related released months, it couple of really that weeks a

is AI the towards we company leveraging within security play know going And topic you the in path throughout couple in years. a had days. As becoming forward. and going is of a We we're going AI on media AI to these it significant believe hot role some been intensely pursuing experience the forward for a developing last focused

So there'll be that look around to launches product forward to.

think win different announcements projects pursuing sizeable deals, -- and customer as to we'll we and those a we're continue of projects, making I about Additionally, number customers be wins.

that's thing for. another keep to out so think And I looking

different We're I able AIS And certainly acquisitions make about we'll right execute also at an a conversations the levels transactions, looking opportunities. and number of to bolt-on of some for as we're and, that. we've announcement think find been in on with

the and continue quarters, is better I our And in as then and thing better the to key just forward. I improvements we methodical right? think to we're So financial translate go lastly, to into monitor make systematic continue should that results business. continuing think And to

income results. all we three we're I improvements top improvements, drive the wherever gross think it's or look a can real levels, hard taking operating at better margin whether And line, on

think continue and so that milestones the to And I coming quarters. will look weeks, of into translate out can for shareholders all months over

Great.

Looking forward it. to Thank you.

we Ladies for remarks. reached turn back to of now you. and question-and-answer Thank Mr. the Session. over I the closing Govil like gentlemen, have to end his would call

call on and more assist. your answer conference out you forward we'd than regroup unable everyone. Thank you. happy our earnings our firm time, today thank questions to your were update and our joining you growth. all today, please would to any reach If to IR each and to Thank for I to for of be like continuing we to you progress look and ongoing

has your Cemtrex, Thank Inc. participation. of now for concluded. conference you The sir. you, Thank

disconnect lines. now may your You