GlobeNewswire Inc | Jun 24, 2021 09:00AM EDT

June 24, 2021

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 2021Financial 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 years 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

Cemtrexs 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 Segments 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 managements 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 RelationsChris TysonExecutive Vice President MZ North AmericaDirect: 949-491-8235CETX@mzgroup.uswww.mzgroup.us

Cemtrex, Inc. and SubsidiariesCondensed Consolidated Balance Sheets

Condensed Consolidated Balance Sheets - USD Mar. 31, 2021 Sep. 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 7,358,808 6,793,806 obsolescencePrepaid 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, 50,000,000shares authorized, 18,711,463 shares issuedand outstanding at March 31, 2021 and 18,711 17,623 17,622,539 shares issued and outstanding atSeptember 30, 2020Additional 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 1,824,350 1,777,112 (loss)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 SubsidiariesCondensed Consolidated Statements of Operations and Comprehensive Income/(Loss)

CondensedConsolidatedStatements of 3 Months Ended 6 Months EndedOperations andComprehensiveIncome/(Loss)(Unaudited) -USD ($) Mar. 31, 2021 Mar. 31, 2020 Mar. 31, 2021 Mar. 31, 2020

IncomeStatement [Abstract]Revenues $ 9,260,385 $ 12,113,847 $ 18,096,461 $ 24,333,930 Cost of 5,331,501 6,767,743 10,162,107 13,639,340 revenuesGross profit 3,928,884 5,346,104 7,934,354 10,694,590 Operating expensesGeneral and 5,249,985 5,458,071 10,667,181 10,032,481 administrativeResearch and 641,497 404,933 1,275,722 781,519 developmentTotaloperating 5,891,482 5,863,004 11,942,903 10,814,000 expensesOperating (1,962,598 ) (516,900 ) (4,008,549 ) (119,410 )income/(loss)Other income/ (expense)Other income/ 1,679,944 447,792 2,630,932 672,117 (expense)SettlementAgreement - 3,674,165 3,674,165 Related PartyInterest (849,076 ) (1,348,298 ) (1,458,017 ) (1,830,820 )ExpenseTotal otherincome/ 4,505,033 (900,506 ) 4,847,080 (1,158,703 )(expense), netNet lossbefore income 2,542,435 (1,417,406 ) 838,531 (1,278,113 )taxesIncome taxbenefit/ (98,477 ) (189,543 ) (127,431 ) (189,543 )(expense)Net income/ 2,443,958 (1,606,949 ) 711,100 (1,467,656 )(loss)Less income innoncontrolling (10,174 ) (7,848 ) (50,421 ) 187,063 interestNet income/(loss)attributable 2,454,132 (1,599,101 ) 761,521 (1,654,719 )to Cemtrex,Inc.shareholdersNet income/ 2,443,958 (1,606,949 ) 711,100 (1,467,656 )(loss)Othercomprehensive income/(loss)Foreigncurrency (87,972 ) (749,826 ) (40,491 ) (166,800 )translationgain/(loss)Definedbenefit plan 87,895 87,895 actuarial gain/(loss)Comprehensive 2,443,881 (2,356,775 ) 758,504 (1,634,456 )income/(loss)Lesscomprehensiveincome/(loss)attributable 19,625 (897 ) 50,255 (214,237 )tononcontrollinginterestComprehensiveincome/(loss)attributable $ 2,424,256 $ (2,355,878 ) $ 708,249 $ (1,420,219 )to Cemtrex,Inc.shareholdersIncome/(loss)Per $ 0.13 $ (0.26 ) $ 0.04 $ (0.31 )Share-BasicIncome/(loss)Per $ 0.13 $ (0.26 ) $ 0.04 $ (0.31 )Share-DilutedWeightedAverage Number 18,559,113 6,250,761 18,195,731 5,292,167 ofShares-BasicWeightedAverage Number 18,629,064 6,250,761 18,200,974 5,292,167 ofShares-Diluted

Condensed Consolidated Statements of Cash Flows(Unaudited/Restated)

Condensed Consolidated Statements of Cash 6 Months EndedFlows (Unaudited) - USD ($) Mar. 31, 2021 Mar. 31, 2020

Cash Flows from Operating Activities Net income/(loss) $ 711,100 $ (1,467,656 )Adjustments to reconcile net loss to netcash 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 (948,733 ) (19,569 )obsolescenceChange 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 475,000 317,667 notes payableGain on marketable securities (1,869,338 ) (338,057 )Settlement Agreement - Related Party (3,674,165 ) Changes in operating assets and liabilitiesnet 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 1,970,785 LoansProceeds 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 (754,748 ) 6,564,694 activitiesEffect of currency translation (70,668 ) (193,974 )Net increase in cash, cash equivalents, and (3,721,531 ) 1,399,833 restricted cashCash, cash equivalents, and restricted cash 21,072,859 2,858,085 at beginning of periodCash, cash equivalents, and restricted cash 17,280,660 4,063,944 at end of periodBalance Sheet Accounts Included in Cash, Cash Equivalents, and Restricted CashCash and equivalents 15,573,734 2,809,591 Restricted cash 1,706,926 1,254,353 Total cash, cash equivalents, and restricted 17,280,660 4,063,944 cashSupplemental 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 ActivitiesInvestment in Virtual Driver Interactive 439,774 Stock issued to pay for products and/or 198,583 servicesStock issued to pay notes payable $ 1,707,327 $ 3,632,518