Cemtrex Inc (CETX) 2023 Q3 法說會逐字稿

Greetings and welcome to the Cemtrex third-quarter 2023 financial results conference call. (Operator Instructions) As a reminder, this conference is being recorded.

歡迎參加 Cemtrex 2023 年第三季度財務業績電話會議。 （操作員指示）謹此提醒，本次會議正在錄製中。

Before we begin the formal presentation, I would like to remind everyone that statements made on the call and webcast may include predictions, estimates, or other information that might be considered forward-looking. While these forward-looking statements represent our current judgment on what the future holds, they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of the presentation. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. Throughout today's discussion, we will attempt to present some important factors relating to our business that may affect our predictions. You should also review our most recent Form 10-K and Form 10-Q for a more complete discussion of these factors and other risks, particularly under the heading Risk Factors. A press release detailing these results was issued today and is available on the Investor Relations section of our company's website, cemtrex.com.

在我們開始正式演示之前，我想提醒大家，電話會議和網絡廣播中的陳述可能包括預測、估計或其他可能被視為前瞻性的信息。雖然這些前瞻性陳述代表了我們目前對未來的判斷，但它們受到風險和不確定性的影響，可能導致實際結果出現重大差異。請您注意不要過分依賴這些前瞻性陳述，這些陳述僅反映我們截至演示之日的觀點。請記住，我們沒有義務根據新信息或未來事件修改或公開發布對這些前瞻性陳述的任何修改結果。在今天的討論中，我們將嘗試提出一些與我們的業務相關、可能影響我們的預測的重要因素。您還應該查看我們最新的表格 10-K 和表格 10-Q，以更完整地討論這些因素和其他風險，特別是在風險因素標題下。今天發布了詳細介紹這些結果的新聞稿，可在我們公司網站 cemtrex.com 的投資者關係部分獲取。

Your hosts today are Saagar Govil, Chief Executive Officer, and Paul Wyckoff, Chief Financial Officer, who will present results of operations for the third quarter and the June 30, 2023. At this time, I will turn the call over to Cemtrex Chief Executive Officer, Saagar Govil.

今天的主持人是首席執行官 Saagar Govil 和首席財務官 Paul Wyckoff，他們將介紹第三季度和 2023 年 6 月 30 日的運營業績。此時，我將把電話轉給 Cemtrex 首席執行官軍官，薩加爾·戈維爾。

Thank you, operator, and good afternoon, everyone. I'm pleased to welcome you to today's third-quarter 2023 financial results conference call. The third quarter of fiscal year 2023 was highlighted by a second consecutive quarter of operating profit driven by the company's realignment and operating performance power. Continued sales execution by Vicon with multiple large orders resulted in revenue growth of 36% year over year.

謝謝接線員，大家下午好。我很高興歡迎您參加今天的 2023 年第三季度財務業績電話會議。 2023 財年第三季度的亮點是，在公司的重組和經營業績動力的推動下，營業利潤連續第二個季度實現增長。 Vicon 持續銷售執行多個大訂單，導致收入同比增長 36%。

In combination with operational improvements, the quarter led to a gross margin improvement of 200 basis points to 44%. We continue to expect increases in our gross margin over the next couple of quarters as we make further enhancements in Vicon's business.

結合運營改進，本季度毛利率提高了 200 個基點，達到 44%。隨著我們進一步增強 Vicon 的業務，我們繼續預計未來幾個季度的毛利率將會增加。

Overall, operating income was positive for the second quarter in a row at $0.1 million compared to an operating loss of $1.5 million a year ago. Our quarterly performance is now reflecting our shift in focus to the Vicon and Advanced Industrial Services, or AIS, businesses. With the actions we have taken to drive business improvement and the increasing demand for security solutions, we expect to achieve a full year operating profit for fiscal year 2024. We also believe that there is room within our inventory and asset base to draw extra liquidity in order to continue to maintain a healthy cash position.

總體而言，第二季度營業收入連續盈利，達到 10 萬美元，而去年同期營業虧損為 150 萬美元。我們的季度業績現在反映了我們將重點轉向 Vicon 和先進工業服務 (AIS) 業務。通過我們為推動業務改進所採取的行動以及對安全解決方案不斷增長的需求，我們預計將在2024 財年實現全年營業利潤。我們還相信，我們的庫存和資產基礎中有空間可以吸引額外的流動性以繼續保持健康的現金狀況。

As a reminder, we have now modified our financial presentation into three segments, security consisting of Vicon, industrial services consisting of Advanced Industrial Services, and Cemtrex Corporate.

提醒一下，我們現在已將財務報告修改為三個部分：由 Vicon 組成的安全部門、由先進工業服務部門組成的工業服務部門以及 Cemtrex Corporate。

Year over year, improving revenues in our security segment were led by Vicon with a 36% increase to $9 million driven by strong demand from customers for its award-winning Roughneck Cameras and Valerus video management software solutions. Vicon orders included a follow-up $1.1 million order from a current large border protection customer in Texas to expand its security technology system with new security solutions, a follow-on to its $1.5 million order earlier in the year. Increasing modernization of the current security infrastructure is accelerating the growth of the border security market, driven by the rise of geopolitical instabilities and an increase in border threat assessments.

與去年同期相比，由於客戶對其屢獲殊榮的 Roughneck 攝像機和 Valerus 視頻管理軟件解決方案的強烈需求，Vicon 引領了我們安全部門的收入增長 36%，達到 900 萬美元。 Vicon 訂單包括來自德克薩斯州當前大型邊境保護客戶的 110 萬美元後續訂單，用於通過新的安全解決方案擴展其安全技術系統，這是今年早些時候 150 萬美元訂單的後續訂單。在地緣政治不穩定因素增加和邊境威脅評估增加的推動下，當前安全基礎設施的日益現代化正在加速邊境安全市場的增長。

Another $0.8 million order for a new prison being built in the UK includes a full end-to-end system of Vicon's surveillance products, including hardware and software, and equipped with the latest smart technologies to better protect prisoners, staff, and the public. We see demand in the US and internationally from corrections facilities as a growth driver for us, as they are increasingly focusing on deploying the latest and greatest technologies.

另一份價值80 萬美元的訂單用於在英國建造一座新監獄，其中包括Vicon 監控產品的完整端到端系統，包括硬件和軟件，並配備最新的智能技術，以更好地保護囚犯、工作人員和公眾。我們將美國和國際懲戒設施的需求視為我們的增長動力，因為他們越來越注重部署最新、最先進的技術。

With Vicon on track to launch more products this year, as well as continued improvements to our core software platform Valerus, we expect to drive further growth. Through the first nine months of our fiscal year, Vicon has delivered $25.9 million in revenue, which is already more revenue than we achieved of $23.6 million for the full year, fiscal year 2022. We believe revenues for Vicon, based on our current demand, will exceed our earlier expectations of $28 million for fiscal year 2023, given the growing demand for our products and services. Additionally, we see further opportunity to grow our gross margin percent in fiscal year '24.

隨著 Vicon 今年有望推出更多產品，以及我們核心軟件平台 Valerus 的持續改進，我們預計將推動進一步增長。在本財年的前 9 個月，Vicon 實現了 2590 萬美元的收入，這已經比我們 2022 財年全年 2360 萬美元的收入還要多。我們認為，根據我們當前的需求，Vicon 的收入，鑑於對我們產品和服務的需求不斷增長，我們對2023 財年的預期將超過2800 萬美元。此外，我們認為在 24 財年還有進一步提高毛利率的機會。

Shifting to our industrial segment, revenue for our industrial services segment, AIS, increased 5% during the quarter, mainly due to increased demand for our services.

轉向我們的工業部門，我們的工業服務部門 AIS 的收入在本季度增長了 5%，這主要是由於對我們服務的需求增加。

Recently, we closed on a highly synergistic acquisition of Heisey Mechanical, based in Columbia, Pennsylvania, which is focused on steel fabrication and contracting, primarily to the commercial and industrial wastewater treatment market, as well as other service industries. Heisey provides the water treatment industry with a variety of fabricated vessels and equipment, including ASME pressure vessels, heat exchangers, mixed tanks, reactors, and other specialized fabricated equipment.

最近，我們完成了對總部位於賓夕法尼亞州哥倫比亞的 Heisey Mechanical 的高度協同收購，該公司專注於鋼鐵製造和承包，主要面向商業和工業廢水處理市場以及其他服務行業。 Heisey 為水處理行業提供各種裝配式容器和設備，包括 ASME 壓力容器、熱交換器、混合罐、反應器和其他專用裝配式設備。

The acquisition brings over $11.6 million in immediately accretive annual revenue and approximately $775,000 in adjusted EBITDA, when averaged over the last four years, with its client list of commercial and industrial facilities, a seasoned team, and extensive manufacturing equipment. We expect the transaction to be accretive in the fourth quarter of fiscal year 2023.

此次收購帶來了超過 1,160 萬美元的立即增值年收入和約 775,000 美元的調整後 EBITDA（過去四年平均），其客戶名單包括商業和工業設施、經驗豐富的團隊和廣泛的製造設備。我們預計該交易將在 2023 財年第四季度實現增值。

Looking ahead, we believe AIS will continue to expand revenues and clearly exceed our original 3% target of $21.8 million for fiscal year 2023, driven by continued strength in the industrial services market, as well as one quarter of revenue with the acquisition consolidated. The gross profit margin for AIS improved to 36% for the quarter, compared to 30% for the prior year quarter, driven by increased prices and lower subcontractor costs. The gross margin percent is expected to maintain or exceed approximately 34% for the fiscal year 2023 for AIS.

展望未來，我們相信，在工業服務市場持續強勁的推動下，AIS 將繼續擴大收入，並明顯超過我們最初設定的2023 財年2180 萬美元3% 的目標，以及收購合併後四分之一的收入。由於價格上漲和分包商成本下降，本季度 AIS 的毛利率提高至 36%，而去年同期為 30%。 AIS 2023 財年的毛利率預計將保持或超過約 34%。

I will now turn the call over to Paul Wyckoff, CFO, to discuss the financials. Paul?

我現在將把電話轉給首席財務官保羅·威科夫 (Paul Wyckoff)，討論財務狀況。保羅？

Thank you, Saagar. Revenue for the three months ended June 30, 2023, and 2022 was $14.7 million and $12.1 million, respectively, an increase of 22%. Revenue for the nine months ended June 30, 2023, and 2022 was $42.8 million and $33.3 million, respectively, an increase of 29%. This increase is mainly due to the increased demand for the company's products and services.

謝謝你，薩加爾。截至2023年6月30日和2022年6月30日的三個月收入分別為1,470萬美元和1,210萬美元，增長22%。截至2023年6月30日和2022年6月30日的九個月收入分別為4280萬美元和3330萬美元，增長29%。這一增長主要是由於對公司產品和服務的需求增加。

The security segment revenues for the three months ended June 30, 2023, increased by 36% to $9 million. The security segment increase was due to an increased demand for the security technology products under the Vicon brand. The industrial services segment revenues for the quarter increased by 5% to $5.7 million, mainly due to increased demand for the segment's services.

截至 2023 年 6 月 30 日的三個月，安全部門收入增長了 36%，達到 900 萬美元。安全部門的增長是由於對 Vicon 品牌下的安全技術產品的需求增加。該季度工業服務部門的收入增長了 5%，達到 570 萬美元，主要是由於對該部門服務的需求增加。

Gross profit for the third quarter of 2023 was $6.5 million, or 44% of revenues as compared to gross profit of $5 million, or 42% of revenues for the same period a year ago, mainly attributable to the increased demand for our products and services, along with increased prices and lower subcontractor costs.

2023 年第三季度的毛利潤為 650 萬美元，佔收入的 44%，而去年同期的毛利潤為 500 萬美元，佔收入的 42%，主要歸因於對我們產品和服務的需求增加，以及價格上漲和分包商成本降低。

Total operating expenses for the three months ended June 30, 2023, were $6.4 million compared to $6.6 million for the prior year's quarter. The decrease was due to a reduction in research and development expenses for the period.

截至 2023 年 6 月 30 日的三個月總運營費用為 640 萬美元，而上年同期為 660 萬美元。減少的原因是期內研發費用減少。

Operating income for the third quarter of 2023 was $0.1 million as compared to an operating loss of $1.5 million for the third quarter of 2022. The increase was primarily due to an increase in gross profit for the period.

2023 年第三季度的營業收入為 10 萬美元，而 2022 年第三季度的營業虧損為 150 萬美元。這一增長主要是由於該期間毛利潤的增加。

Net loss for the quarter ended June 30, 2023, was $1.1 million, as compared to a net loss of $0.7 million in 2022, an increase of 68%. Net loss increased in the third quarter as compared to the same period last year, primarily due to a decrease in other income.

截至 2023 年 6 月 30 日的季度淨虧損為 110 萬美元，與 2022 年的淨虧損 70 萬美元相比，增長了 68%。第三季度淨虧損較去年同期有所增加，主要是由於其他收入減少。

Cash and cash equivalents and restricted cash totaled $6.4 million at June 30, 2023, as compared to $11.4 million at September 30, 2022. Inventories increased to $8.7 million at June 30, 2023, from $8.5 million at September 30, 2022.

截至2023年6月30日，現金和現金等價物以及限制性現金總額為640萬美元，而2022年9月30日為1140萬美元。庫存從2022年9月30日的850萬美元增至2023年6月30日的870萬美元。

I will now turn the call back to Saagar for a review of our 2023 outlook.

我現在將把電話轉回 Saagar，回顧我們 2023 年的前景。

Thank you, Paul. In summary, with approximately $6.4 million in cash, our restructuring complete, year-over-year revenue growth of almost 30%, increasing margins, and two sequential quarters of positive operating income, we believe we are well-positioned to drive profitable growth. Looking ahead, we are highly focused on Vicon's ability to disrupt the status quo of how the security industry traditionally operates with its upcoming next-generation version of state-of-the-art surveillance cameras and VMS software. Additionally, we are looking to build on AAS's growth, leveraging the resurgence of manufacturing demand in the US, and seeking out further acquisition opportunities.

謝謝你，保羅。總而言之，憑藉約640 萬美元的現金、我們的重組已完成、收入同比增長近30%、利潤率不斷提高，以及連續兩個季度實現正營業收入，我們相信我們已做好充分準備來推動盈利增長。展望未來，我們高度關注 Vicon 是否有能力通過其即將推出的下一代最先進的監控攝像頭和 VMS 軟件來顛覆安全行業傳統的運營方式。此外，我們希望利用美國製造業需求的複蘇，以 AAS 的增長為基礎，並尋求進一步的收購機會。

After achieving operating profit for the second and third fiscal quarters, we are optimistic we can achieve a full-year positive operating income in fiscal year 2024 while driving attractive topline and bottom-line growth. We look forward to providing additional updates in the months to come as we accelerate our efforts to build long-term value for our shareholders. I thank you all for attending, and now would like to open it up for questions. Operator?

在實現第二和第三財季的營業利潤後，我們樂觀地認為，我們可以在 2024 財年實現全年正營業收入，同時推動有吸引力的營收和利潤增長。隨著我們加快努力為股東創造長期價值，我們期待在未來幾個月提供更多更新。我感謝大家的出席，現在開始提問。操作員？

(Operator Instructions) It appears we have no questions. This concludes our question-and-answer session. I would like to turn the conference back over to Saagar Govil for any closing remarks.

（操作員說明）看來我們沒有問題。我們的問答環節到此結束。我想將會議轉回 Saagar Govil 發表閉幕詞。

Thank you, operator. I would like to thank each of you for joining our earnings conference call today, and look forward to continuing to update you on our ongoing progress and growth. If we were unable to answer any questions today, please feel free to reach out to our IR firm, MZ Group, who would be more than happy to assist. You can also email us at investors@cemtrex.com. Thank you all.

謝謝你，接線員。我要感謝大家今天參加我們的收益電話會議，並期待繼續向您通報我們持續取得的進展和增長的最新情況。如果我們今天無法回答任何問題，請隨時聯繫我們的投資者關係公司 MZ Group，他們將非常樂意為您提供幫助。您也可以發送電子郵件至investors@cemtrex.com。謝謝你們。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連接。