Cemtrex, Inc. Q1 FY2024 earnings call

• The first quarter of fiscal year 2024 was marked by realignment and operating performance improvement.
• In the Security segment, Vicon's revenues improved 31% to $9.2 million, with repeat customer orders and the launch of the Anavio cloud security platform.
• The Industrial services segment (AIS) saw a 55% revenue increase to $7.7 million due to increased demand and the acquisition of Heisey Mechanical.
• The company reduced operating expenditures by $1 million in the security segment's overhead, which will start to be realized in the fiscal second quarter.
• Operating loss improved to $0.7 million in Q1 2024 from $2 million in Q1 2023.

For the first quarter of 2024, Cemtrex had total revenue of $16.9 million, a 41% increase from the prior year's $12 million. The Security segment saw revenues increase 31% to $9.2 million, contributing approximately 54.4% of total revenue. The Industrial services segment (AIS) had revenue of $7.7 million, a 55% increase, contributing around 45.6% of total revenue. Gross profit for the first quarter was $7.1 million, or 42% of revenues, consistent with the prior year's first quarter.

• The company is focused on driving top-line growth and maintaining tight cost control to achieve positive operating income in fiscal year 2024.
• Vicon is expected to grow 15-20% on average over the next couple of years due to new products and a recurring revenue model.
• AIS is expanding into new markets and exploring additional acquisition opportunities to drive growth.

Q: For the security and industrial segments, what drove the strong performance, and do you see the same trends continuing in the fiscal second quarter?

A: Saagar Govil noted macro trends like security being a priority and industrial services demand, along with micro factors like Vicon's new products and AIS's acquisition integration, expecting trends to continue.

Q: How should we think about operating income for Q2, given the slight sequential decline?

A: Mentioned one-time expenses and overhead reduction, stating the company remains committed to operating profit in FY 2024 despite lumpy orders.