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spk05: And welcome to the CEMTREX third quarter 2022 financial results conference call. At this time, all participants are in a listen only mode. The question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. 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. Your caution not to place undue reliance on the forward-looking statements, which reflect our opinions only as of the date of this 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 on these factors and other risks, particularly under the heading Risk Factors. A press release detailing these results crossed the wires this afternoon at 4.01 p.m. Eastern Time and is available in the investor relations section of our company's website, centrex.com. Your hosts today, Sagar Govil, Chief Executive Officer, and Paul Wyckoff, Chief Financial Officer, will present results of operations for the third quarter ended June 30, 2022. At this time, I will turn the call over to CEMTREC's Chief Executive Officer, Sagar Govil.
spk02: Please go ahead. Thank you, operator. And good afternoon, everyone.
spk04: I'm pleased to welcome you to today's third quarter 2022 financial results conference call. The third quarter was highlighted by our third straight quarter and year over year of improving revenues, as well as continued quarterly improvements in our advanced technologies and industrial services segments due to increased demand in the market for our products and services, along with increased pricing. During the quarter, we continue to make significant progress in our strategic shift toward refocusing efforts on our core businesses, ViCon and AIS. ViCon continues to experience elevated demand for its security portfolio from major customers, validating its technology and reaffirming its upward growth trends. We believe Vicon can move towards 5 to 10 million of recurring revenue in the next three to five years as a global leader in advanced security and surveillance technology to safeguard businesses, schools, municipalities, hospitals, and cities across the world. Vicon is seeing growing demand for its video surveillance and access control technologies as the industry is rapidly shifting to SaaS solutions leveraging AI and cloud technologies for today's highly dynamic environments. We believe this shift in focus to capture significant near-term recurring revenue and opportunities in Vicon will maximize shareholder value over the next several years. Recently, we were delighted to welcome Haim Shane, a Senior Vice President of Product Management at Vicon, a dynamic and accomplished leader in the security industry. In this new role, Haim will oversee the strategy and implementation behind Vicon's expanding product line, from the award-winning Roughneck Surveillance Cameras and Vax Access Control System, to the centralized video management platform, Valeris. Under his leadership, FICON's product teams will further drive innovation, including cloud-based video management and AI-enabled video analytics solutions. We have also recently seen increasing demand for AIS, our single source industrial contractor, driven by an increase in demand for predictive maintenance services and the rise in the complexity of manufacturing equipment. With its strong balance sheet empowering the ability to offer more comprehensive services due to inventory of equipment, we believe the company has enormous untapped potential in the industrial services market. Our industrial services segment continues to be a strong source of cash flow with high repeat business and a well-known reputation. We expect to see continued growth in this segment, driven by an increase in demand for industrial contracting and predictive maintenance services, as the industrial and manufacturing economy in the U.S. continues to thrive. After a thorough strategic review of our business units by management and our board of directors, we continue to evaluate a range of operational and financial alternatives, including the sale of one or more of the company's non-core business units. During the quarter, we addressed rising costs by increasing prices and reducing overhead wherever possible. These steps helped to improve gross margins from 32% in the second quarter of 2022 to 43% in the third quarter, with a goal to return to positive EBITDA for fiscal year 2023. Our operating loss came down sequentially in the second quarter due to increased sales, and we remained comfortable with our cash position of $11 million at quarter end. I will now turn the call over to Paul Wyckoff, Interim CFO, to discuss financials.
spk02: Paul?
spk03: Thank you, Sagar. Revenue for the three months ended June 30th, 2022 and 2021 was 13.6 million and 10.3 million respectively, an increase of 32%. Revenue for the nine months ended June 30th, 2022 and 2021 was 37 million and 28.4% respectively. an increase of 30%. The advanced technology segment revenues for the three months ended June 30, 2022, increased by 40% to $8.2 million, and the industrial service segment revenues for the quarter increased by 22% to $5.5 million. Increases were due to an increased demand for both segments' products and services. Gross profit for the third quarter of 2022 was $5.9 million, or 43% of revenues, as compared to gross profit of $4.1 million, or 40% of revenues, for the same period in the prior year. Gross profits increased primarily due to price increases implemented throughout the company in response to rising costs of goods and transportation costs. Total operating expenses for the three months ended June 30th, 2022 were $8 million compared to $6.4 million in the prior year quarter. Operating activities for continued operations used $10.4 million for the nine months ended June 30th, 2022 compared to using $6.2 million of cash for the nine months ended June 30th, 2021. Net loss for the quarter ended June 30th, 2022 was 0.7 million as compared to a net income of 1.1 million in 2021. Net loss increased in the first quarter as compared to the same period last year, primarily due to costs of revenues and operating expenses. Cash and cash equivalents totaled $11.1 million at June 30th, 2022, as compared to $15.4 million at September 30th, 2021. I will now turn the call back to Sagar for closing thoughts. Sagar? Thank you, Paul.
spk04: In summary, we are well positioned to create long-term value for our shareholders. During the third quarter, we continued to operate from a position of strength refocusing efforts on our core businesses, and positioning the companies for growth. Looking ahead, we remain focused on disciplined, top-line growth, investments in our sales and marketing program, ongoing R&D, and advancing our technology partnerships. Vicon is on track to launch a proprietary AI-based analytics solution early next fiscal year, as well as major improvements to its core software platform, Valerian, which we expect to further drive growth. We are committed to building market-leading technology that is impactful and moves consumers and industry forward. We are highly focused on a return to profitability in fiscal 23 and believe our ongoing shift in strategy will enable us to move in that direction. I look forward to providing our shareholders with further updates in the near term. I thank you all for attending, and now I would like to answer your questions. Operator?
spk05: Thank you. We will now begin our question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two.
spk02: At this time, we will pause momentarily to assemble our roster. And once again, if you would like to ask a question, please press star then one. And the first question is from a private investor, Steven Rickner.
spk05: Please go ahead.
spk01: Yes, Sagar. Could you just, in light of your refocusing, could you comment on the future of your smart desk efforts and the VR game you've been promising since 2019?
spk02: Sure. So as the company has reevaluated its strategic priorities,
spk04: we recognize that we have finite resources and ultimately if we want to drive long-term value for our shareholders, it makes sense to focus those efforts on where we can see the most opportunity in the nearest amount of time. And so in discussions with board and other management within the company, you know, we have decided to focus our efforts on the core businesses of Vicon and AIS. So that's really where the company is going to be focusing its efforts going forward. Ultimately, the company is going to look for strategic options for some of the other smaller business units. You know, these other business units are more like startups within the company and have companies cash requirements that can be tremendous. And I think as we evaluate the different priorities in front of us, we think that it probably makes more sense to find strategic alternatives for some of those other operations so that we can drive the most amount of value going forward.
spk01: So nothing's specific for the VR game. Any launch date for that or is that shelf as of now?
spk04: In an effort to get closer to profitability, we've, uh, you know, reduced some of the, uh, operating expenses associated with that project. Uh, so what I would say is that the company, uh, is exploring ways for its shareholders to, um, you know, reap the benefit of some of that investment that we've made to date. And so it may take a little bit longer than expected. But ultimately, in an effort to get closer to a cash flow positive in the areas where we see most upside, you know, where we've reduced the spend in some of those other business units to, you know, refocus on our core business.
spk02: Okay, thank you. Thank you. And again, if you would like to ask a question, please press star and 1.
spk05: Ladies and gentlemen, this concludes our question and answer session. I would like to turn the conference back over to Mr. Goville for any closing remarks.
spk04: Thank you, Operator. I would like to thank each of you for joining our earnings conference call today, and I look forward to continuing to update you on our ongoing progress and growth. If we were unable to answer any of your questions today, please reach out to our IR firm and the group who would be more than happy to assist. Thank you, everyone.
spk05: And thank you, sir. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
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