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Cemtrex, Inc. Announces Results for the Third Quarter Ended June 30, 2018

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Cemtrex, Inc. (NASDAQ:CETX, CETXP, CETXW)), world leading multi-industry
technology company that provides a wide array of solutions to meet
today's consumer, commercial, and industrial challenges, announced its
third quarter consolidated results of operations for the three and nine
months ended June 30, 2018.

Third Quarter Highlights:

  • Net sales for the three months ended June 30, 2018 were $19,164,314
    which comprised of $11,216,531 in Electronics Manufacturing,
    $7,647,445 in Industrial Technology and $330,338 in Advanced
    Technologies, and representing a decrease of 31% from $27,806,656 in
    sales for the three months ended March 31, 2017, comprising of
    $14,339,173 in Electronics Manufacturing and $13,467,483 in Industrial
    Technology.
  • Research and development (R&D) expenses were $2.3 million (11.7% of
    revenue) during the third quarter ended June 30, 2018, as compared to
    no expenses during the quarter ended June 30, 2017. The company
    continues to invest in R&D to increase the depth as well as range of
    the offering in "Smart" products and Virtual Reality applications.
  • Net Loss for the three months ended June 30, 2018 was $2,583,211 down
    by 318% as compared to net income of $1,182,582 for three months ended
    March 31, 2017.
  • Earnings per share for the three months ended June 30, 2018 decreased
    to $(0.30) per share as compared to $0.04 per share for the three
    months ended June 30, 2017.
  • Adjusted EBITDA was income of $1,914,235 in the third quarter ended
    June 30, 2018 as compared to $1,903,342 in the third quarter ended
    June 30, 2017 which represents slight improvement.

Nine Month Ended June 30, 2018 Financial Highlights

  • Net sales for the nine months ended June 30, 2018 were $71,959,510
    which comprised of $41,874,472 in Electronics Manufacturing,
    $29,154,029 in Industrial Technology and $931,009 in Advanced
    Technologies, representing a decrease of 18% from $87,708,896 in sales
    for the nine months ended June 30, 2017, comprising of $45,684,285 in
    Electronics Manufacturing and $42,024,611 in Industrial Technology.
  • Net Loss for the nine months ended June 30, 2018 was $1,427,749 down
    by 148% as compared to net income of $3,001,743 for nine months ended
    June 30, 2017.
  • Earnings per share for the nine months ended June 30, 2018 were
    $(0.22) per share as compared to $0.27 per share for the nine months
    ended June 30, 2017.
  • Adjusted EBITDA was income of $4,837,259 in the nine months ended June
    30, 2018 as compared to $5,896,087 in the nine months ended June 30,
    2017.

The Company began taking preorders for its SmartDesk on May 22nd,
2018 with customers receiving delivery of the SmartDesk in FY Q1 2019.
The SmartDesk's selling price is between $4000 and $6000 per desk based
upon its configuration. The Company received the following number of
preorders for the SmartDesk: May: 9 units, June: 128 units, July: 165
units, August: 355 units for a total number of 657 preorders as of
August 10th, 2018. The Company expects to convert these
preorders in to deliverable orders in its Q1 Fiscal Year 2019 and thus
realize the revenue. The Company anticipates that demand will continue
to rise for the SmartDesk as the Company increases its marketing efforts
and deliveries start taking place.

The Company's Industrial Technology revenues are lower since it
continues to experience weakness in new orders in its environmental
instruments and control products markets both domestically and
internationally. As fewer number of projects are being decided and
awarded due to relaxation and non-enforcement of environmental
regulations under the current administration, the Company will continue
to reduce its presence in the environmental instruments and control
products markets in the coming year and shift its focus into smart
devices and virtual reality applications. However, Company anticipates
the Industrial Technology & Electronics manufacturing quarterly revenues
to stabilize at the current level. Company further anticipates that its
Advanced Technology revenues will continue to rise as the sales of its
SmartDesk increase and the company launches its VR applications.

       
For the three months ended For the nine months ended
June 30, June 30,
2018     2017 2018     2017
Net (loss)/income (US GAAP) (2,583,211) 1,182,582 (1,427,749) 3,001,743
Income tax expense 182 172,286 101,819 122,197
Interest expense 375,543 204,992 948,371 948,360
Interest income and other 197,880 (154,579) (600,833) 81,969
Depreciation and amortization 898,933 498,061 2,583,645 1,741,818
Equity investment loss 778,823 - 778,823 -
Research and development expenses 2,246,085 - 2,453,183 -
Adjusted EBITDA (NON-GAAP) 1,914,235 1,903,342 4,837,259 5,896,087
 

Cemtrex's Chairman and CEO, Saagar Govil, commented on the results, "We
had a decrease in sales due to lower sales in our industrial products
business arising from a weakness in environmental markets, however we
remain optimistic about the long-term demand for our products and
services. Based on the incoming orders over the past few months, we
anticipate that our legacy business revenues have now stabilized on a
quarterly basis and we can expect moderate organic growth over the
medium term."

"Our progress in launching SmartDesk and securing orders in 2018 gives
us confidence to reach our strategic goal of making Smart Desk a vital
part of modern workspace globally. I am proud of our team of dedicated
employees and the culture we have created that has worked hard to create
and launch this revolutionary product at a rapid pace. We continue to
spend on Research & Development which will reduce our earnings in the
short-term however the investments that we are making today will provide
long-term benefits and I continue to feel excited about our future,"
continued Mr. Govil.

Adjusted EBITDA
Earnings before interest, taxes, and depreciation
and amortization EBITDA and Adjusted EBITDA are non-GAAP measures.
Reconciliation table of EBITDA and Adjusted EBITDA as used in this press
release to GAAP is included below in this press release. In defining
Non-GAAP EBITDA, the Company excludes the impact of non-cash stock-based
preferred stock dividend and other non-recurring items, such as R&D
expenses of SmartDesk and equity interest loss. EBITDA has limitations
as an analytical tool, and should not be evaluated in isolation or as a
substitute for analysis of results as reported under U.S. GAAP.
Management utilizes this metric as a basis for evaluating our ongoing
operations, and believes investors' understanding of our performance is
enhanced by including this non-GAAP financial measure as a reasonable
basis for evaluating our ongoing results of operations, without the
effects of interest, taxes, depreciation and amortization and other
non-recurring expenses.

About Cemtrex

Cemtrex, Inc. (NASDAQ:CETX) is the manufacturer of the SmartDesk, the
world's most advanced workstation. Cemtrex is a diversified technology
company that's driving innovation in a wide range of sectors, including
smart technology, virtual and augmented realities, advanced electronic
systems, industrial solutions, and intelligent security systems.
www.cemtrex.com

Safe Harbor Statement

This press release contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995,
including statements relating to our new product offerings or any
proposed fundraising activities. These forward-looking statements are
based on management's current expectations and are subject to certain
risks and uncertainties that could cause actual results to differ
materially from those set forth in or implied by such forward looking
statements. These risks and uncertainties include, but are not limited
to: operational losses and negative cash flows; any need for additional
financing; market acceptance of our products; our ability to manufacture
and develop effective products and solutions; indebtedness to our
lenders; current and future economic conditions that may adversely
affect our business and customers; potential fluctuation of our revenues
and profitability from period to period which could result in our
failure to meet expectations; our ability to maintain adequate levels of
working capital; our ability to incentivize and retain our current
senior management team and continue to attract and retain qualified
scientific, technical and business personnel; our ability to expand our
product offerings or to develop other new products and services; our
ability to generate sales and profits from current product offerings;
rapid technological changes and new technologies that could render
certain of our products and services to be obsolete; competitors with
significantly greater financial resources; introduction of new products
and services by competitors; challenges associated with expansion into
new markets; and, other factors discussed under the heading "Risk
Factors" contained in our Form 10-K filed with the Securities and
Exchange Commission. All information in this press release is as of the
date of the release and we undertake no duty to update this information
unless required by law.

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