GlobeNewswire Inc | Aug 16, 2021 04:15PM EDT

August 16, 2021

Brooklyn, NY, Aug. 16, 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 third quarter ended June 30, 2021.

Third Quarter 2021Financial Results

Revenue for the three months ended June 30, 2021, and 2020 was $10.3 million and $8.4 million, respectively, an increase of 22%. This increase is mainly due to an improvement in economic conditions from the impact of the COVID-19 crisis during the same period last year. Revenue for the nine months ended June 30, 2021, and 2020 was $28.4 million and $32.8, respectively, a decrease of 13%. The Advanced Technologies segment revenues for the three months ended June 30, 2021, increased by 17% to $5.8 million, and the Industrial Services segment revenues for quarter increased by 29%, to $4.5 million.

Gross Profit for the third quarter of 2021 was $4.1 million, or 40% of revenues as compared to gross profit of $3.3 million, or 39% of revenues for the year ago period. Gross profit increased due to higher sales and varied from product to product and from customer to customer.

Total operating expenses for three months ended June 30, 2021, were $6.4 million, compared to $5.7 million in the prior years quarter.

Operating activities for continuing operations used $6.2 million for the nine months ended June 30, 2021 compared to using $3.4 million of cash for the nine months ended June 30, 2020.

Net income for the quarter ended June 30, 2021 was approximately $1.1 million, as compared to a net loss of $4.2 million in 2020. Net income increased in the third quarter as compared to the same period last year primarily due to overall economic improvement from the impact of the COVID-19 crisis during the same period last year and the result of PPP Loan forgiveness.

Cash and cash equivalents totaled $12.9 million at June 30, 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 third quarter of 2021 we continued to see a renewed improvement in our segments, with revenue for the quarter up 12% sequentially from the second quarter. We remain optimistic that our revenue will continue to trend upward as the economic uncertainty due to the pandemic recedes.

Throughout the year we have striven to remain at the forefront of innovation by continuing to invest in the development of our roadmap including 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. While we experienced some delays due to the pandemic, we believe that as we continue to roll out our exciting new products and solutions over the next year that our outlook remains positive.

Despite the challenges of the pandemic, we believe this focus on the evolution of our core technologies, and a commitment to driving top line growth, has put us in a strong position as our market returns to normal and customers reopen for business and resume purchasing.

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.

Cemtrex, Inc. and SubsidiariesCondensed Consolidated Balance Sheets

(UNAUDITED) (Restated) June 30, September 30,Assets 2021 2020 Current assets Cash and equivalents $ 12,879,278 $ 19,490,061 Restricted cash 1,690,873 1,582,798 Short-term investments 452,175 887,746 Trade receivables, net 5,234,216 6,686,797 Trade receivables - related party 1,505,789 1,432,209 Inventory ?net of allowance for inventory 8,669,397 6,793,806 obsolescencePrepaid expenses and other assets 2,164,367 1,188,317 Total current assets 32,596,095 38,061,734 Property and equipment, net 7,236,755 6,961,751 Right-of-use assets 3,098,523 2,728,380 Assets held for sale 8,323,321 8,323,321 Goodwill 5,886,096 4,370,894 Other 1,094,429 744,207 Total Assets $ 58,235,219 $ 61,190,287 Liabilities & Stockholders' Equity (Deficit)Current liabilities Accounts payable $ 2,888,144 $ 2,857,817 Short-term liabilities 6,381,047 7,034,510 Lease liabilities - short-term 840,016 721,036 Deposits from customers 39,227 29,660 Accrued expenses 2,476,812 2,392,487 Deferred revenue 1,794,187 1,651,784 Accrued income taxes 331 89,318 Total current liabilities 14,419,764 14,776,612 Long-term liabilities Loans payable to bank 1,046,504 1,871,201 Long-term lease liabilities 2,261,148 2,027,406 Notes payable 3,079,743 6,029,999 Mortgage payable 2,282,409 2,355,542 Other long-term liabilities 1,078,752 1,063,733 Paycheck Protection Program Loans 2,871,161 2,169,437 Deferred Revenue - long-term 449,563 467,329 Total long-term liabilities 13,069,280 15,984,647 Total liabilities 27,489,044 30,761,259 Commitments and contingencies - - Shareholders' equity Preferred stock , $0.001 par value, 10,000,000 shares authorized,Series 1, 3,000,000 shares authorized, 1,885,151 shares issued andoutstanding as of June 30, 2021, and 2,156,784 shares issued andoutstanding as of September 30, 2020 1,885 2,157 (liquidation value of $10 per share)Series A, 1,000,000 shares authorized, zero shares issued and outstanding atJune 30, 2021, and 1,000,000 shares issued - 1,000 and outstanding at September 30, 2020Series C, 100,000 shares authorized, 50,000 shares issued and outstanding atJune 30, 2021, and 100,000 shares issued 50 100 and outstanding at September 30, 2020Common stock, $0.001 par value, 50,000,000 shares authorized,18,711,463 shares issued and outstanding at June 30, 2021, and17,622,539 shares issued and outstanding at 18,711 17,623 September 30, 2020Additional paid-in capital 58,846,576 60,221,766 Retained earnings (accumulated deficit) (30,660,550 ) (32,520,084 )Treasury stock at cost (148,291 ) (148,291 )Accumulated other comprehensive income 1,624,673 1,777,112 (loss)Total Cemtrex stockholders' equity 29,683,054 29,351,383 Non-controlling interest 1,063,121 1,077,645 Total liabilities and shareholders' equity $ 58,235,219 $ 61,190,287

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

For the three months ended For the nine months ended June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020Revenues $ 10,326,431 $ 8,440,867 $ 28,422,892 $ 32,774,797Cost of 6,198,715 5,161,015 16,360,822 18,800,355 revenuesGross profit 4,127,716 3,279,852 12,062,070 13,974,442 Operating expensesGeneral and 5,670,019 5,347,718 16,337,200 15,380,199 administrativeResearch and 757,966 331,936 2,033,688 1,113,455 developmentTotaloperating 6,427,985 5,679,654 18,370,888 16,493,654 expensesOperating (2,300,269 ) (2,399,802 ) (6,308,818 ) (2,519,212 )income/(loss) Other income/ (expense)Other income/ 3,901,658 158,134 6,532,590 830,251 (expense)

Settlement - - 3,674,165 - Agreement ?Related PartyInterest (433,009 ) (1,982,101 ) (1,891,026 ) (3,812,921 )ExpenseTotal otherincome/ 3,468,649 (1,823,967 ) 8,315,729 (2,982,670 )(expense), net Net lossbefore income 1,168,380 (4,223,769 ) 2,006,911 (5,501,882 )taxesIncome taxbenefit/ (40,759 ) (7,658 ) (168,190 ) (197,201 )(expense)Net income/ $ $ ) $ $ )(loss) 1,127,621 (4,231,427 1,838,721 (5,699,083 Less income innoncontrolling 29,608 (35,751 ) (20,813 ) 151,312 interestNet income/(loss)attributable $ 1,098,013 $ (4,195,676 ) $ 1,859,534 $ (5,850,395 )to Cemtrex,Inc.shareholders Net income/ $ 1,127,621 $ (4,231,427 ) $ 1,838,721 $ (5,699,083 )(loss)Othercomprehensive income/(loss)Foreigncurrency (193,554 ) 154,443 (234,045 ) 161,460 translationgain/(loss)Definedbenefit plan - - 87,895 - actuarial gain/(loss)Comprehensive 934,067 (4,076,984 ) 1,692,571 (5,537,623 )income/(loss)Lesscomprehensiveincome/(loss)attributable (35,731 ) 41,266 14,524 (118,623 )tononcontrollinginterest Comprehensiveincome/(loss)attributable $ 969,798 $ (4,118,250 ) $ 1,678,047 $ (5,419,000 )to Cemtrex,Inc.shareholders Income/(loss)Per $ 0.06 $ (0.38 ) $ 0.10 $ (0.82 )Share-BasicIncome/(loss)Per $ 0.06 $ (0.38 ) $ 0.10 $ (0.82 )Share-Diluted WeightedAverage Number 18,711,463 10,933,926 18,368,274 7,161,785 ofShares-BasicWeightedAverage Number 18,711,463 10,933,926 18,368,274 7,161,785 ofShares-Diluted

Condensed Consolidated Statements of Cash Flows(Unaudited/Restated)

For the nine months ended June 30,Cash Flows from Operating Activities 2021 2020 (unaudited) (restated)Net income/(loss) $ 1,838,721 $ (5,699,083 ) Adjustments to reconcile net loss tonet cash provided/(used) by operating activities:Depreciation and amortization 972,186 1,343,207 Gain on disposal of property and 18,583 457 equipmentAmortization of right-of-use assets 653,175 352,691 Change in allowance for doubtful (161,101 ) 126 accountsShare-based compensation 110,904 167,312 Income tax expense/ (benefit) 168,190 (197,201 )Interest expense paid in equity shares 818,348 2,505,924 Accrued interest on notes payable 64,748 308,748 Amortization of original issue 575,000 757,278 discounts on notes payableGain on marketable securities (2,407,841 ) (607,103 )Settlement Agreement - Related Party (3,674,165 ) - Discharge of Paycheck Protection (3,349,700 ) - Program Loans Changes in operating assets andliabilities net of effects from acquisitionof subsidiaries: Accounts receivable 1,613,682 1,654,383 Accounts receivable - related party (78,594 ) 5,510 Inventory (1,875,591 ) (1,384,453 )Prepaid expenses and other current (976,050 ) (514,580 )assetsOther assets 149,778 (1,017,337 )Other liabilities 15,019 (117,667 )Accounts payable 30,327 (1,205,851 )Operating lease liabilities (650,535 ) (296,892 )Deposits from customers 9,567 2,003 Accrued expenses (78,851 ) 383,230 Deferred revenue 124,637 (99,354 )Income taxes payable (88,987 ) 272,925 Net cash used by operating activities (6,178,550 ) (3,385,727 ) Cash Flows from Investing Activities Purchase of property and equipment (1,113,658 ) (4,541,537 )Investment in Virtual Driver (1,075,428 ) - InteractiveInvestment in MasterpieceVR (500,000 ) - Investment in related party - (500,000 )Proceeds from sale of marketable 9,134,159 22,720,132 securitiesPurchase of marketable securities (6,290,747 ) (23,479,038 )Purchases of treasury stock - (190,483 )Net cash used by investing activities 154,326 (5,990,926 )Cash Flows from Financing Activities Proceeds from notes payable - 4,485,000 Payments on notes payable (2,145,257 ) (726,640 )Proceeds on bank loans - 5,947,101 Payments on bank loans (957,186 ) (224,196 )Proceeds from Paycheck Protection 2,942,285 - Program LoansProceeds from securities purchase - 12,462,648 agreementsPayments on capital lease liabilities (20,061 ) (13,838 )Expenses on securities purchase - (840,728 )agreementsRevolving line of credit - (425,812 )Net cash provided/(used) by financing (180,219 ) 20,663,535 activities Effect of currency translation (298,265 ) 128,771 Net increase in cash, cash (6,204,443 ) 11,286,882 equivalents, and restricted cashCash, cash equivalents, and restricted 21,072,859 2,858,085 cash at beginning of periodCash, cash equivalents, and restricted $ 14,570,151 $ 14,273,738 cash at end of period Balance Sheet Accounts Included inCash, Cash Equivalents, and Restricted CashCash and equivalents $ 12,879,278 $ 12,939,493 Restricted cash 1,690,873 1,334,245 Total cash, cash equivalents, and $ $ restricted cash 14,570,151 14,273,738 Supplemental Disclosure of Cash Flow Information:Cash paid during the period for $ 432,930 $ 240,971 interest Cash paid during the period for income $ 88,987 $ 75,724 taxes Supplemental Schedule of Non-Cash Investing and Financing ActivitiesInvestment in Virtual Driver $ 439,774 $ - InteractiveStock issued to pay for products and/ $ - $ 428,538 or servicesStock issued to pay notes payable $ 2,187,837 $ 6,933,924

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