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Cemtrex, Inc. released its third quarter consolidated results of operations for the three and nine months ended June 30, 2018.
Third Quarter Highlights:
- Net sales for the three months ended June 30, 2018 were $19,164,314 which comprised of $11,216,531 in electronics manufacturing, $7,647,445 in industrial technology and $330,338 in advanced technologies, and representing a decrease of 31% from $27,806,656 in sales for the three months ended March 31, 2017, comprising of $14,339,173 in electronics manufacturing and $13,467,483 in industrial technology.
- Research and development (R&D) expenses were $2.3 million (11.7% of revenue) during the third quarter ended June 30, 2018, as compared to no expenses during the quarter ended June 30, 2017. The company continues to invest in R&D to increase the depth as well as range of the offering in “Smart” products and Virtual Reality applications.
- Net Loss for the three months ended June 30, 2018 was $2,583,211 down by 318% as compared to net income of $1,182,582 for three months ended March 31, 2017.
- Earnings per share for the three months ended June 30, 2018 decreased to $(0.30) per share as compared to $0.04 per share for the three months ended June 30, 2017.
- Adjusted EBITDA was income of $1,914,235 in the third quarter ended June 30, 2018 as compared to $1,903,342 in the third quarter ended June 30, 2017 which represents slight improvement.
Nine Month Ended June 30, 2018 Financial Highlights
- Net sales for the nine months ended June 30, 2018 were $71,959,510 which comprised of $41,874,472 in electronics manufacturing, $29,154,029 in industrial technology and $931,009 in Advanced Technologies, representing a decrease of 18% from $87,708,896 in sales for the nine months ended June 30, 2017, comprising of $45,684,285 in electronics manufacturing and $42,024,611 in Industrial Technology.
- Net Loss for the nine months ended June 30, 2018 was $1,427,749 down by 148% as compared to net income of $3,001,743 for nine months ended June 30, 2017.
- Earnings per share for the nine months ended June 30, 2018 were $(0.22) per share as compared to $0.27 per share for the nine months ended June 30, 2017.
- Adjusted EBITDA was income of $4,837,259 in the nine months ended June 30, 2018 as compared to $5,896,087 in the nine months ended June 30, 2017.
The Company began taking preorders for its SmartDesk on May 22nd, 2018 with customers receiving delivery of the SmartDesk in FY Q1 2019. The SmartDesk’s selling price is between $4000 and $6000 per desk based upon its configuration. The Company received the following number of preorders for the SmartDesk: May: 9 units, June: 128 units, July: 165 units, August: 355 units for a total number of 657 preorders as of August 10th, 2018. The Company expects to convert these preorders in to deliverable orders in its Q1 Fiscal Year 2019 and thus realize the revenue. The Company anticipates that demand will continue to rise for the SmartDesk as the Company increases its marketing efforts and deliveries start taking place.
The Company’s Industrial Technology revenues are lower since it continues to experience weakness in new orders in its environmental instruments and control products markets both domestically and internationally. As fewer number of projects are being decided and awarded due to relaxation and non-enforcement of environmental regulations under the current administration, the Company will continue to reduce its presence in the environmental instruments and control products markets in the coming year and shift its focus into smart devices and virtual reality applications. However, Company anticipates the industrial technology & electronics manufacturing quarterly revenues to stabilize at the current level. Company further anticipates that its Advanced Technology revenues will continue to rise as the sales of its SmartDesk increase and the company launches its VR applications.
Cemtrex’s Chairman and CEO, Saagar Govil, commented on the results, “We had a decrease in sales due to lower sales in our industrial products business arising from a weakness in environmental markets, however we remain optimistic about the long-term demand for our products and services. Based on the incoming orders over the past few months, we anticipate that our legacy business revenues have now stabilized on a quarterly basis and we can expect moderate organic growth over the medium term.”
“Our progress in launching SmartDesk and securing orders in 2018 gives us confidence to reach our strategic goal of making Smart Desk a vital part of modern workspace globally. I am proud of our team of dedicated employees and the culture we have created that has worked hard to create and launch this revolutionary product at a rapid pace. We continue to spend on Research & Development which will reduce our earnings in the short-term however the investments that we are making today will provide long-term benefits and I continue to feel excited about our future,” continued Mr. Govil.
Cemtrex, Inc. is the manufacturer of the SmartDesk, the world’s most advanced workstation. Cemtrex is a diversified technology company that’s driving innovation in a wide range of sectors, including smart technology, virtual and augmented realities, advanced electronic systems, industrial solutions, and intelligent security systems. For more information, click here.