Press release·05/15/2025 14:15:03

General Overview

Cemtrex was incorporated in 1998 in the state of Delaware and has evolved through strategic acquisitions and internal growth into a leading multi-industry company. The Company’s reporting segments consist of Security and Industrial Services, with unallocated corporate expenses also reported.

Security Segment

Cemtrex’s Security segment operates under the brand of its majority owned subsidiary, Vicon Industries, Inc. (Vicon), which provides end-to-end security solutions, including browser-based video monitoring systems, analytics-based recognition systems, cameras, servers, and access control systems.

Industrial Services Segment

Cemtrex’s Industrial Services segment operates under the brand, Advanced Industrial Services (AIS), which offers single-source expertise and services for rigging, millwrighting, in-plant maintenance, equipment erection, relocation, and disassembly to diversified customers.

Significant Accounting Policies and Estimates

Cemtrex’s discussion and analysis of its financial condition and results of operations are based on accounting principles generally accepted in the United States (U.S. GAAP). The preparation of financial statements requires management to make judgments, estimates, and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures.

Results of Operations – For the three months ended March 31, 2025, and 2024

Revenues

• Security segment revenues increased by 110% to $16,981,152, mainly due to a large sale valued at $10,375,000.
• Industrial Services segment revenues increased by 13% to $10,269,117, due to increased demand for the segment’s services.

Gross Profit

• Gross profit increased to 45% of revenues, up from 40% in the prior year period.
• Security segment gross profit margin was 52%, up from 51% in the prior year period.
• Industrial Services segment gross profit margin was 33%, up from 31% in the prior year period.

General and Administrative Expenses

• Decreased by 4% to $6,770,742, mainly due to decreased general and administrative expenses, legal expenses, short-term rent, and travel.

Research and Development Expenses

• Decreased by 18% to $777,889, related to the Security Segment’s development of next generation solutions.

Other Income/Expense

• Other income was $4,104,211, mainly driven by gains on changes in fair value of warrant liability.

Provision for Income Taxes

• Income tax expense was $110,525, with an effective tax rate of 1.26%.

Results of Operations – For the six months ended March 31, 2025, and 2024

Revenues

• Security segment revenues increased by 30% to $22,434,851, mainly due to a large sale valued at $10,375,000.
• Industrial Services segment revenues increased by 11% to $18,555,317, due to increased demand.

Gross Profit

• Gross profit increased to 44% of revenues, up from 41% in the prior year period.
• Security segment gross profit margin was 52%, up from 50% in the prior year period.
• Industrial Services segment gross profit margin was 34%, up from 32% in the prior year period.

General and Administrative Expenses

• Decreased by 1% to $13,864,031, mainly due to decreased salaries, other operating expenses, and travel.

Research and Development Expenses

• Decreased by 7% to $1,667,972, related to the Security Segment’s development of next generation solutions.

Other Income/Expense

• Other expense was $22,161,046, mainly driven by losses on excess fair value of warrants and changes in fair value of warrant liability.

Provision for Income Taxes

• Income tax expense was $231,063, with an effective tax rate of -1.17%.

Effects of Inflation

• Cemtrex’s business and operations have been affected by inflation, and the company has instituted price increases and cost-saving measures to mitigate the effects.

Liquidity and Capital Resources

• Working capital decreased to $5,037,130, primarily due to the increase in current maturities of long-term liabilities.
• Cash provided by operating activities was $1,600,532, compared to cash used of $2,752,236 in the prior year period.
• Cash used in investing activities was $1,436,452, primarily for the purchase of property and equipment and investment in Masterpiece VR.
• Cash provided by financing activities was $1,032,254, primarily from the revolving line of credit, note payable, and exercise of warrants.
• The company’s working capital may not be sufficient to cover operating costs, indicating substantial doubt about the company’s ability to continue as a going concern.
• The company is exploring options to raise additional capital and restructure or refinance its debt to meet its obligations.