Strategic Divestiture of Non-Core Assets and Transformative Restructuring to Accelerate Vicon and AIS Brands Reducing Overhead by
Management to Host Conference Call
Key Fourth Quarter 2022 and Subsequent Highlights
- Completed divestiture of non-core assets to focus on accelerating its Vicon and AIS brands, a transformative business restructuring that will result in operating expense reduction of over
$5.2 million per year on a go forward basis. - The Company has also identified another
$1M in corporate overhead from legal, accounting, and development expenses that were incurred in FY 2022 that will not be incurred in FY 2023. This will result in approximately$6.2M in operating expense reduction to be realized going forward fromNov 2022 . - Revenue for the full year of 2022 increased 17% to
$50.3 million , compared to revenue of$43.1 million for the full year of 2021. - Gross margin up 634 basis points to 40% in Q4’22 from 33% in the prior year quarter
- Cash and equivalents as of
September 30 th, 2022 was$10.6M - Appointed
Shane Compton as Chief Operating Officer of Vicon, a 20-year operations veteran who will lead operational growth, oversee sales and engineering, and spearhead efficiency initiatives.
Management Commentary
“Year over year improving revenues in our Advanced Technologies segment were led by Vicon, with strong demand from major customers for its award winning, Roughneck cameras and Valerus video management software solutions. Vicon has become a global leader in advanced security and surveillance technology to safeguard businesses, schools, municipalities, hospitals, and cities across the world. We continue to believe Vicon is on a strong path towards
“To continue executing on Vicon’s business plan, we recently appointed
“Fiscal 2022 revenue for our Industrial services segment, AIS, grew 12% on rising demand for its industrial contracting services. With over 35 years in the industry and high repeat business, AIS has a strong reputation as a single source industrial contractor and premier provider of industrial contracting services. We continue to see considerable monetizing opportunities for AIS services with the need for predictive maintenance services, reshoring of manufacturing back to the US, and an increasing complexity in industrial equipment. With its strong balance sheet and cash flow, and as the industrial economy expands, we believe AIS has significant potential for expansion, particularly with bolt on acquisitions.
“Looking ahead for
Full Year 2022 Financial Results
Revenue for the full year of 2022 totaled
Gross Profit for the year ended
Total operating expenses for 2022 were
Net loss for the full year of 2022 was
Cash and cash equivalents totaled
Inventories increased by
Fiscal Year 2023 Outlook
Govil continued, “Looking ahead, we believe revenues for
“We have taken steps to reduce expenses at the
With approximately
$ in Millions except percentages | FY2022 (Internal - Actual) | FY2023 (Outlook) | Increase/Decrease | ||||||
Revenues | |||||||||
23.6 | 28.0 | 15.7 | % | ||||||
21.2 | 21.8 | 2.7 | % | ||||||
Gross Profit | |||||||||
8.8 | 13.5 | 34.8 | % | ||||||
6.3 | 7.3 | 13.1 | % | ||||||
Gross Profit Margin % | |||||||||
37 | % | 48 | % | 1094 bps | |||||
30 | % | 34 | % | 359 bps | |||||
Operating Income | |||||||||
(5.7) | (1) | -82 | % | ||||||
.6 | 1.5 | 138 | % | ||||||
Corporate Expenses | $ | 4.2 | $ | 2.5 | (1.7 | ) | |||
Cemtrex Post-Divestiture Operating Income | (9.3 | ) | (2.0 | ) | -78 | % | |||
Vicon Inventory | 8.7 | 7.2 | -17.0 | % | |||||
Fourth Quarter and Full Fiscal Year 2022 Results Conference Call
To access the call, please use the following information:
Date: | |
Time: | |
Toll-free dial-in number: | 1-877-407-0792 |
International dial-in number: | 1-201-689-8263 |
Conference ID: | 13734858 |
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact
The conference call will be broadcast live and available for replay at https://viavid.webcasts.com/starthere.jsp?ei=1588112&tp_key=fbaddf3b91 and via the investor relations section of the Company's website at www.cemtrex.com.
A replay of the conference call will be available after
Toll-free replay number: | 1-844-512-2921 |
International replay number: | 1-412-317-6671 |
Replay ID: | 13734858 |
About
AIS –
For more information visit 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
Investor Relations
Executive Vice President –
Direct: 949-491-8235
CETX@mzgroup.us
www.mzgroup.us
Condensed Consolidated Balance Sheets
Assets | 2022 | 2021 | ||||||
Current assets | ||||||||
Cash and equivalents | $ | 10,610,181 | $ | 15,426,976 | ||||
Restricted cash | 1,577,915 | 1,759,347 | ||||||
Short-term investments | 13,721 | 14,981 | ||||||
Trade receivables, net | 5,960,686 | 7,810,896 | ||||||
Trade receivables - related party | - | 1,487,155 | ||||||
Inventory –net of allowance for inventory obsolescence | 9,531,682 | 5,657,287 | ||||||
Prepaid expenses and other assets | 2,575,105 | 2,585,652 | ||||||
Total current assets | 30,269,290 | 34,742,294 | ||||||
Property and equipment, net | 6,106,292 | 6,738,944 | ||||||
Right-of-use assets | 2,641,198 | 2,940,127 | ||||||
Note receivable - related party | 761,585 | - | ||||||
4,505,283 | 7,821,283 | |||||||
Other | 1,473,980 | 697,240 | ||||||
Total Assets | $ | 45,757,628 | $ | 52,939,888 | ||||
Liabilities & Stockholders' Equity (Deficit) | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 3,256,559 | $ | 4,235,002 | ||||
Accounts payable - related party | 19,133 | - | ||||||
Short-term liabilities | 16,894,743 | 9,977,972 | ||||||
Lease liabilities - short-term | 818,730 | 830,791 | ||||||
Deposits from customers | 198,178 | 536,220 | ||||||
Accrued expenses | 2,281,324 | 1,621,053 | ||||||
Deferred revenue | 1,951,282 | 2,004,170 | ||||||
Accrued income taxes | 94,848 | 448,194 | ||||||
Total current liabilities | 25,514,797 | 19,653,402 | ||||||
Long-term liabilities | ||||||||
Loans payable to bank | 110,331 | 767,279 | ||||||
Long-term lease liabilities | 1,822,468 | 2,017,408 | ||||||
Notes payable | - | 2,350,000 | ||||||
Mortgage payable | 2,160,169 | 2,257,785 | ||||||
Other long-term liabilities | 807,898 | 839,171 | ||||||
Paycheck Protection Program Loans | 97,120 | 1,032,200 | ||||||
Deferred Revenue - long-term | 607,309 | 467,967 | ||||||
Total long-term liabilities | 5,605,295 | 9,731,810 | ||||||
Total liabilities | 31,120,092 | 29,385,212 | ||||||
Commitments and contingencies | - | - | ||||||
Shareholders' equity | ||||||||
Preferred stock , | ||||||||
Series 1, 3,000,000 shares authorized, 2,079,122 shares issued and | ||||||||
2,015,022 shares outstanding as of | ||||||||
1,821,051 shares outstanding as of | 2,079 | 1,885 | ||||||
Series C, 100,000 shares authorized, 50,000 shares issued and outstanding at | ||||||||
50 | 50 | |||||||
Common stock, | ||||||||
26,413,296 shares issued and outstanding at | ||||||||
20,782,194 shares issued and outstanding at | 26,413 | 20,782 | ||||||
Additional paid-in capital | 66,616,038 | 61,727,834 | ||||||
Retained earnings (accumulated deficit) | (54,929,020 | ) | (41,908,062 | ) | ||||
(148,291 | ) | (148,291 | ) | |||||
Accumulated other comprehensive income (loss) | 2,377,525 | 2,896,452 | ||||||
Total | 13,944,794 | 22,590,650 | ||||||
Non-controlling interest | 692,742 | 964,026 | ||||||
Total liabilities and shareholders' equity | $ | 45,757,628 | $ | 52,939,888 | ||||
Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss)
(Unaudited)
For the year ended | ||||||||
Revenues | $ | 50,274,923 | $ | 43,130,934 | ||||
Cost of revenues | 31,219,405 | 26,162,582 | ||||||
Gross profit | 19,055,518 | 16,968,352 | ||||||
Operating expenses | ||||||||
General and administrative | 27,756,159 | 22,538,496 | ||||||
Research and development | 4,851,720 | 3,171,676 | ||||||
3,316,000 | - | |||||||
Total operating expenses | 35,923,879 | 25,710,172 | ||||||
Operating loss | (16,868,361 | ) | (8,741,820 | ) | ||||
Other income/(expense) | ||||||||
Other income | 7,265,293 | 8,758,212 | ||||||
Settlement Agreement - | - | 3,674,165 | ||||||
Interest Expense | (3,897,719 | ) | (2,921,345 | ) | ||||
Total other income/(expense), net | 3,367,574 | 9,511,032 | ||||||
Net (loss)/income before income taxes | (13,500,787 | ) | 769,212 | |||||
Income tax benefit/(expense) | 208,545 | (375,434 | ) | |||||
(Loss)/Income from Continuing operations | (13,292,242 | ) | 393,778 | |||||
Loss from discontinued operations, net of tax | - | (8,280,047 | ) | |||||
Net loss | (13,292,242 | ) | (7,886,269 | ) | ||||
Less loss in noncontrolling interest | (271,284 | ) | (78,274 | ) | ||||
Net loss attributable to | $ | (13,020,958 | ) | $ | (7,807,995 | ) | ||
Other comprehensive income/(loss) | ||||||||
Net loss | $ | (13,292,242 | ) | $ | (7,886,269 | ) | ||
Foreign currency translation (loss)/income | (518,927 | ) | 996,100 | |||||
Defined benefit plan actuarial gain | - | 87,895 | ||||||
Comprehensive loss | (13,811,169 | ) | (6,802,274 | ) | ||||
Less comprehensive loss attributable to noncontrolling interest | (271,284 | ) | (78,274 | ) | ||||
Comprehensive loss attributable to | $ | (13,539,885 | ) | $ | (6,724,000 | ) | ||
Income/(loss) Per Share-Basic | ||||||||
Continuing Operations | $ | (0.52 | ) | $ | 0.02 | |||
Discontinued Operations | $ | - | $ | (0.44 | ) | |||
Income/(loss) Per Share-Diluted | ||||||||
Continuing Operations | $ | (0.52 | ) | $ | 0.02 | |||
Discontinued Operations | $ | - | $ | (0.44 | ) | |||
Weighted Average Number of Shares-Basic | 24,832,056 | 18,911,746 | ||||||
Weighted Average Number of Shares-Diluted | 24,832,056 | 18,911,746 | ||||||
Condensed Consolidated Statements of Cash Flows
(Unaudited)
For the twelve months ended | ||||||||
Cash Flows from Operating Activities | 2022 | 2021 | ||||||
Net loss | $ | (13,292,242 | ) | $ | (7,886,269 | ) | ||
Net loss from discontinued operations | - | (8,280,047 | ) | |||||
Net loss from continuing operations | (13,292,242 | ) | 393,778 | |||||
Adjustments to reconcile net income/(loss) to net cash used by operating activities | ||||||||
Depreciation and amortization | 1,862,690 | 1,335,189 | ||||||
Loss on disposal of property and equipment | 78,707 | 48,981 | ||||||
Noncash lease expense | 616,116 | 870,860 | ||||||
Goodwill Impairment | 3,316,000 | - | ||||||
Change in allowance for doubtful accounts | 73,696 | (161,856 | ) | |||||
Loss on write off of related party receivables | 708,512 | - | ||||||
Share-based compensation | 155,505 | 156,418 | ||||||
Income tax expense/ (benefit) | (208,545 | ) | 375,434 | |||||
Interest expense paid in equity shares | 926,646 | 1,291,596 | ||||||
Accounts payable paid in equity shares | 50,000 | - | ||||||
Accrued interest on notes payable | 1,043,346 | 398,321 | ||||||
Amortization of original issue discounts on notes payable | 1,544,622 | 675,000 | ||||||
Gain on marketable securities | (8,399,152 | ) | (2,612,847 | ) | ||||
Discharge of Paycheck Protection Program Loans | (971,500 | ) | (5,320,485 | ) | ||||
Settlement Agreement - | - | (3,674,165 | ) | |||||
Changes in operating assets and liabilities net of effects from acquisition | ||||||||
of subsidiaries: | ||||||||
Trade receivables | 1,776,514 | (962,243 | ) | |||||
Trade receivables - related party | - | (59,960 | ) | |||||
Inventory | (3,874,395 | ) | (670,838 | ) | ||||
Prepaid expenses and other current assets | 48,308 | (1,411,653 | ) | |||||
Other assets | (276,740 | ) | 110,534 | |||||
Other liabilities | (31,273 | ) | 70,576 | |||||
Accounts payable | (978,443 | ) | (512,138 | ) | ||||
Accounts payable - related party | 36,191 | - | ||||||
Operating lease liabilities | (524,188 | ) | (962,790 | ) | ||||
Deposits from customers | (338,042 | ) | 33,310 | |||||
Accrued expenses | 660,271 | 47,389 | ||||||
Deferred revenue | 86,454 | 506,982 | ||||||
Income taxes payable | (182,562 | ) | (16,558 | ) | ||||
Net cash used by operating activities | (16,093,504 | ) | (10,051,165 | ) | ||||
Cash Flows from Investing Activities | ||||||||
Purchase of property and equipment | (1,844,620 | ) | (1,069,283 | ) | ||||
Proceeds from sale of property and equipment | 554,335 | - | ||||||
Investment in MasterpieceVR | (500,000 | ) | (500,000 | ) | ||||
Investment in Virtual Driver Interactive | - | (1,075,428 | ) | |||||
Proceeds from sale of marketable securities | 28,302,309 | 11,477,321 | ||||||
Purchase of marketable securities | (19,901,897 | ) | (7,991,709 | ) | ||||
Net cash provided by investing activities | 6,610,127 | 840,901 | ||||||
Cash Flows from Financing Activities | ||||||||
Proceeds from notes payable | 8,000,000 | 5,005,000 | ||||||
Payments on notes payable | (1,751,763 | ) | (2,220,257 | ) | ||||
Payments on capital lease liabilities | - | (20,061 | ) | |||||
Payments on bank loans | (1,225,700 | ) | (1,261,035 | ) | ||||
Proceeds from Paycheck Protection Program Loans | - | 2,942,285 | ||||||
Net cash provided by financing activities | 5,022,537 | 4,445,932 | ||||||
Effect of currency translation | (537,387 | ) | 880,834 | |||||
Net decrease in cash, cash equivalents, and restricted cash | (4,460,840 | ) | (4,764,332 | ) | ||||
Cash, cash equivalents, and restricted cash at beginning of period | 17,186,323 | 21,069,821 | ||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 12,188,096 | $ | 17,186,323 | ||||
Balance Sheet Accounts Included in Cash, Cash Equivalents, and Restricted Cash | ||||||||
Cash and equivalents | $ | 10,610,181 | $ | 15,426,976 | ||||
Restricted cash | 1,577,915 | 1,759,347 | ||||||
Total cash, cash equivalents, and restricted cash | $ | 12,188,096 | $ | 17,186,323 | ||||
Supplemental Disclosure of Cash Flow Information: | ||||||||
Cash paid during the period for interest | $ | 383,105 | $ | 556,428 | ||||
Cash paid during the period for income taxes | $ | 353,346 | $ | (358,876 | ) | |||
Supplemental Schedule of Non-Cash Investing and Financing Activities | ||||||||
Investment in Virtual Driver Interactive | $ | - | $ | 439,774 | ||||
Shares issued to pay for services | $ | 50,000 | $ | - | ||||
Shares issued to pay notes payable | $ | 3,993,124 | $ | 5,025,652 | ||||
Shares issued in connection with note payable | $ | 700,400 | $ | - | ||||
Investment in right of use asset | $ | 317,187 | $ | - | ||||
Source:
2022 GlobeNewswire, Inc., source