Cemtrex Reports Second Quarter 2021 Financial Results

Brooklyn, NY, June 24, 2021 (GLOBE NEWSWIRE) -- - Cemtrex Inc. (NASDAQ: CETX, CETXP, CETXW), a technology company driving innovation in Internet of Things (IoT), security, machine vision & artificial intelligence, and augmented & virtual reality, has reported its financial and operational results for the second quarter ended March 31, 2021.

Second Quarter 2021 Financial Results

Revenue for the three months ended March 31, 2021, and 2020 was $9.3 million and $12.1 million, respectively, a decrease of 24%. Revenue for the six months ended March 31, 2021, and 2020 was $18.1 million and $24.3, respectively, a decrease of 26%. The decrease in revenue was primarily due to shutdowns and limited operations of businesses due to the COVID-19 crisis. The Advanced Technologies segment revenues for the three months ended March 31, 2021, decreased by 11% to $5.5 million, and the Industrial Services segment revenues for quarter decreased by 36%, to $3.8 million.

Gross Profit for the second quarter of 2021 was $3.9 million, or 42% of revenues as compared to gross profit of $5.3 million, or 44% of revenues for the year ago period. Gross profit decreased due to lower sales and varies from product to product and from customer to customer.

Total operating expenses for three months ended March 31, 2021 were $5.9 million, compared to $5.9 million in the prior year’s quarter.

Operating activities for continuing operations used $2.9 million for the quarter ended March 31, 2021 compared to using $1.4 million of cash for the quarter ended March 31, 2020.

Net income for the quarter ended March 31, 2021 was $2.5 million, as compared to a net loss of $1.6 million in 2020. Net income increased in the second quarter as compared to the same period last year primarily due to other income items including a one-time settlement agreement and unrealized gains on marketable securities.

Cash and cash equivalents totaled $15.6 million at March 31, 2021, as compared to $15.9 million at December 31, 2020 and $19.5 million at September 30, 2020.

Management Commentary

Cemtrex’s Chairman and CEO, Saagar Govil, commented on the results: “In the second quarter of 2021 we continued to see a weakness due to COVID-19 which affected our overall business. Looking ahead we continue to focus on driving top line growth as markets return to normal and spending returns. We continue to further develop our product lines, with ongoing R&D in our Advanced Technologies Segment’s proprietary technology, including Virtual Reality solutions, SmartDesk, and Artificial Intelligence (AI) based, next generation solutions associated with security and surveillance systems software. We believe with ongoing investments in our core technologies and a rebounding economy, we continue to be well positioned for a return to growth that will create long term value for our shareholders,” concluded Govil.

About Cemtrex

Cemtrex, Inc. (CETX) is a leading multi-industry technology company that is driving innovation in markets such as Internet of Things (IoT), Augmented and Virtual Reality (AR & VR), and Artificial Intelligence and Computer Vision (AI & CV) in a wide range of sectors, including consumer products, industrial manufacturing, digital applications, and intelligent security & surveillance systems. www.cemtrex.com.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the closing of the offering, gross proceeds from the offering, our new product offerings, expected use of proceeds, 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. Statements made herein are as of the date of this press release and should not be relied upon as of any subsequent date. These risks and uncertainties are 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.

Investor Relations
Chris Tyson
Executive Vice President – MZ North America
Direct: 949-491-8235
CETX@mzgroup.us
www.mzgroup.us

Cemtrex, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets

Condensed Consolidated Balance Sheets - USD ($)Mar. 31, 2021Sep. 30, 2020
Current assets  
Cash and equivalents$15,573,734 $19,490,061 
Restricted cash 1,706,926  1,582,798 
Short-term investments 522,612  887,746 
Trade receivables, net 5,403,292  6,686,797 
Trade receivables - related party 1,498,776  1,432,209 
Inventory -net of allowance for inventory obsolescence 7,358,808  6,793,806 
Prepaid expenses and other assets 1,820,031  1,188,317 
Total current assets 33,884,179  38,061,734 
Property and equipment, net 7,335,201  6,961,751 
Right-of-use assets 2,862,154  2,728,380 
Assets held for sale 8,323,321  8,323,321 
Goodwill 5,886,096  4,370,894 
Other 1,074,861  744,207 
Total Assets 59,365,812  61,190,287 
Current liabilities  
Accounts payable 2,314,545  2,857,817 
Short-term liabilities 6,595,935  7,034,510 
Lease liabilities - short-term 764,108  721,036 
Deposits from customers 96,468  29,660 
Accrued expenses 2,676,724  2,392,487 
Deferred revenue 1,473,041  1,651,784 
Accrued income taxes 553  89,318 
Total current liabilities 13,921,374  14,776,612 
Long-term liabilities  
Loans payable to bank 1,323,989  1,871,201 
Long-term lease liabilities 2,106,545  2,027,406 
Notes payable 3,154,743  6,029,999 
Mortgage payable 2,306,834  2,355,542 
Other long-term liabilities 1,075,171  1,063,733 
Paycheck Protection Program Loans 5,406,477  2,169,437 
Deferred Revenue - long-term 784,667  467,329 
Total long-term liabilities 16,158,426  15,984,647 
Total liabilities 30,079,800  30,761,259 
Commitments and contingencies  
Shareholders' equity  
Preferred stock value 1,795  2,157 
Common stock, $0.001 par value, 50,000,000 shares authorized, 18,711,463 shares issued and outstanding at March 31, 2021 and 17,622,539 shares issued and outstanding at September 30, 2020 18,711  17,623 
Additional paid-in capital 58,320,570  60,221,766 
Retained earnings (accumulated deficit) (31,758,563) (32,520,084)
Treasury stock at cost (148,291) (148,291)
Accumulated other comprehensive income (loss) 1,824,350  1,777,112 
Total Cemtrex stockholders' equity 28,258,622  29,351,383 
Non-controlling interest 1,027,390  1,077,645 
Total liabilities and shareholders' equity 59,365,812  61,190,287 
Series A and C Preferred Stock [Member]  
Shareholders' equity  
Preferred stock value$50 $100 

Cemtrex, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss)

Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss) (Unaudited) - USD ($)

3 Months Ended6 Months Ended
Mar. 31, 2021Mar. 31, 2020Mar. 31, 2021Mar. 31, 2020
Income Statement [Abstract]    
Revenues$9,260,385 $12,113,847 $18,096,461 $24,333,930 
Cost of revenues 5,331,501  6,767,743  10,162,107  13,639,340 
Gross profit 3,928,884  5,346,104  7,934,354  10,694,590 
Operating expenses    
General and administrative 5,249,985  5,458,071  10,667,181  10,032,481 
Research and development 641,497  404,933  1,275,722  781,519 
Total operating expenses 5,891,482  5,863,004  11,942,903  10,814,000 
Operating income/(loss) (1,962,598) (516,900) (4,008,549) (119,410)
Other income/(expense)    
Other income/(expense) 1,679,944  447,792  2,630,932  672,117 
Settlement Agreement - Related Party 3,674,165   3,674,165  
Interest Expense (849,076) (1,348,298) (1,458,017) (1,830,820)
Total other income/(expense), net 4,505,033  (900,506) 4,847,080  (1,158,703)
Net loss before income taxes 2,542,435  (1,417,406) 838,531  (1,278,113)
Income tax benefit/(expense) (98,477) (189,543) (127,431) (189,543)
Net income/(loss) 2,443,958  (1,606,949) 711,100  (1,467,656)
Less income in noncontrolling interest (10,174) (7,848) (50,421) 187,063 
Net income/(loss) attributable to Cemtrex, Inc. shareholders 2,454,132  (1,599,101) 761,521  (1,654,719)
Net income/(loss) 2,443,958  (1,606,949) 711,100  (1,467,656)
Other comprehensive income/(loss)    
Foreign currency translation gain/(loss) (87,972) (749,826) (40,491) (166,800)
Defined benefit plan actuarial gain/(loss) 87,895   87,895  
Comprehensive income/(loss) 2,443,881  (2,356,775) 758,504  (1,634,456)
Less comprehensive income/(loss) attributable to noncontrolling interest 19,625  (897) 50,255  (214,237)
Comprehensive income/(loss) attributable to Cemtrex, Inc. shareholders$2,424,256 $(2,355,878)$708,249 $(1,420,219)
Income/(loss) Per Share-Basic$0.13 $(0.26)$0.04 $(0.31)
Income/(loss) Per Share-Diluted$0.13 $(0.26)$0.04 $(0.31)
Weighted Average Number of Shares-Basic 18,559,113  6,250,761  18,195,731  5,292,167 
Weighted Average Number of Shares-Diluted 18,629,064  6,250,761  18,200,974  5,292,167 

Condensed Consolidated Statements of Cash Flows
(Unaudited/Restated)

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)

6 Months Ended
Mar. 31, 2021Mar. 31, 2020
Cash Flows from Operating Activities  
Net income/(loss)$711,100 $(1,467,656)
Adjustments to reconcile net loss to net cash provided/(used) by operating activities:  
Depreciation and amortization 680,004  888,391 
Gain on disposal of property and equipment 9,219  311 
Amortization of right-of-use assets 438,539  281,758 
Change in allowance for inventory obsolescence (948,733) (19,569)
Change in allowance for doubtful accounts (137,356) (6,416)
Share-based compansation 65,318  143,208 
Income tax expense/ (benefit) 127,431  189,543 
Interest expense paid in equity shares 657,329  1,004,518 
Accrued interest on notes payable 41,833  291,384 
Amortization of original issue discounts on notes payable 475,000  317,667 
Gain on marketable securities (1,869,338) (338,057)
Settlement Agreement - Related Party (3,674,165) 
Changes in operating assets and liabilities net of effects from acquisition of subsidiaries:  
Accounts receivable 1,420,861  (62,013)
Accounts receivable - related party (71,581) (90)
Inventory 383,731  (419,711)
Prepaid expenses and other curent asstets (631,714) (297,176)
Other assets 169,346  (834,561)
Other liabilities 11,438  (90,121)
Accounts payable (543,272) (854,616)
Operating lease liabilities (450,102) (293,138)
Deposits from customers 66,808  9,166 
Accrued expenses 161,820  (143,160)
Deferred revenue 138,595  227,172 
Income taxes payable (88,765) 102,463 
Net cash used by operating activities (2,856,654) (1,370,703)
Cash Flows from Investing Activities  
Purchase of property and equipment (944,601) (4,340,023)
Investment in Virtual Driver Interactive (900,000) 
Investment in MasterpieceVR (500,000) 
Proceeds from sale of marketable securities 7,080,375  13,083,547 
Purchase of marketable securities (4,845,903) (12,347,199)
Purchases of treasury stock  (190,483)
Note Receivable - Related party  
Net cash used by investing activities (110,129) (3,794,158)
Cash Flows from Financing Activities  
Proceeds from notes payable  2,990,000 
Payments on notes payable (2,070,257) (676,640)
Proceeds on bank loans  2,476,000 
Payments on bank loans (655,276) (133,414)
Proceeds from Paycheck Protection Program Loans 1,970,785  
Proceeds from securities purchase agreements  1,580,100 
Expenses on securities purchase agreements  (58,950)
Revolving line of credit  387,598 
Net cash provided/(used) by financing activities (754,748) 6,564,694 
Effect of currency translation (70,668) (193,974)
Net increase in cash, cash equivalents, and restricted cash (3,721,531) 1,399,833 
Cash, cash equivalents, and restricted cash at beginning of period 21,072,859  2,858,085 
Cash, cash equivalents, and restricted cash at end of period 17,280,660  4,063,944 
Balance Sheet Accounts Included in Cash, Cash Equivalents, and Restricted Cash  
Cash and equivalents 15,573,734  2,809,591 
Restricted cash 1,706,926  1,254,353 
Total cash, cash equivalents, and restricted cash 17,280,660  4,063,944 
Supplemental Disclosure of Cash Flow Information:  
Cash paid during the period for interest 283,855  342,268 
Cash paid during the period for income taxes 88,765  188 
Supplemental Schedule of Non-Cash Investing and Financing Activities  
Investment in Virtual Driver Interactive 439,774  
Stock issued to pay for products and/or services  198,583 
Stock issued to pay notes payable$1,707,327 $3,632,518 



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