Greetings and welcome to the Cemtrex Third Quarter 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A 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, we are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned 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 released 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 cross the wires this afternoon at 4:01 PM Eastern Time, and is available in the investor relations section of our company's website centrex.com.

Your host today, Saagar 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 Centrex's Chief Executive Officer, Saagar Govil. Please go ahead..

Thank you, operator, and good afternoon, everyone. 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 improvement in our advanced technologies and industrial services segment, 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 trend.

We believe Vicon can move towards $5 million to $10 million of recurring revenues 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 environment.

We believe this shifting 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 Shain, a Senior Vice President of Product Management at Vicon, a dynamic and an accomplished leader in the security industry.

In this new role, Haim will oversee the strategy and implementation behind Vicon expanding product line from the award winning roughnecks surveillance cameras and Vax access control system to centralized video management platforms Valerus.

Under his leadership Vicon's product teams will further drive innovation including cloud based video management and AI enabled video analytic solution.

We have also recently seen increasing demand for AIF our single source industrial contractor driven by an increasing demand for predictive maintenance services and the rise in the complexity of manufacturing equipment.

With this strong balance sheet comparing 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 higher 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 help to improve gross margins from 32% in the second quarter 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 remain 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 financial.

Paul?.

Thank you Saagar. Revenue for the three months ended June 30, 2022, and 2021 was $13.6 million and $10.3 million respectively, an increase of 32%. Revenue for the nine months ended June 30, 2022 and 2021 was $37 million and $28.4 million 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 30, 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 30, 2022 compared to using $6.2 million of cash for the nine months ended June 30, 2021.

Net loss for the quarter ended June 30, 2022 was $0.7 million as compared to a net income of $1.1 million in 2021. Net loss increase in the first quarter as compared to the same period last year primarily due to cost of revenues and operating expenses.

Cash and cash equivalents totaled $11.1 million at June 30, 2022 as compared to $15.4 million at September 30, 2021. I will now turn the call back to Saagar for closing thoughts.

Saagar?.

Thank you Paul. In summary, we are well-positioned to create long term value for our shareholders. During the third quarter we continue to operate from a position of strength, refocusing efforts on our core businesses and positioning the company for growth.

Looking ahead, we remain focused on disciplined top line growth with 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 Valerus which we expected 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 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 we'd like to answer your question.

Operator?.

Thank you. We will now begin our question and answer session. [Operator Instructions] And the first question is from a private investor, Steven [indiscernible]. Please go ahead..

Yes, Saagar, can you just in light of your refocusing, could you comment on the future of your Smartdesk efforts and the VR game you've been promising since 2019?.

Sure. So as the company has reevaluated its strategic priority, 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 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.

These other business units are more like startups within the company and have 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 and so that we can drive the most amount of value going forward..

So nothing specific for the VR game and your launch date for that or that shelf as of now?.

In an effort to get closer to profitability, we've reduced some of the operating expenses associated with that project. So what I would say is that the company is exploring ways for its shareholders to 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 cash flow positive in the areas where we see most upside where we've reduced the spend in some of those other business units to refocus on our core business..

Okay, thank you..

Thank you. [Operator Instructions] Ladies and gentlemen, this concludes our question and answer session. I would like to turn the conference back over to Mr. Govil for any closing remarks..

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. We were unable to answer any of your questions today. Please reach out to our IR firm and the group would be more than happy to assist. Thank you, everyone..

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