Vicon Operations & Outlook

• No budget cuts despite decrease in revenue as management views this as a short-term impact due to COVID
• Overall outlook on revenue remains optimistic for a return to growth over FY20 revenue numbers
• Increased engineering and product teams substantially with 7 key hires from competitors over last year to build industry leading products
• Expect short term operating expenses to be higher as the products under development are starting to be rolled out
• Expect ROI to start yielding results 2-3 years out and beyond Revenues

Product Focus

• AI Based Analytics solutions – Launching in Q2 FY23
• Cloud based Video Surveillance as a Service offering – Launching in Q3 FY23
• Both products have opportunities for recurring revenue and attractive margins
• Software Development done in low-cost countries for competitive advantage

Valerus VMS

• The Security Management System Hub Centralized security –Monitor, search and respond to LPR, Access Control and video events
• Simplify day-to-day maintenance –Track, troubleshoot and identify potential system issues with a global dashboard
• Manage alarms –Customize alerts so the right person gets the right info at the right time
• Expedite forensic searches –Expedite investigations with a suite of powerful search tools to find, review and export events

• Protects data –Protects data in the case of hardware failures with redundancy and failover options
• Streamline installation –Expedite installation and setup with auto- discovery and configuration tools
• Secures the system –Protects the system with advanced cybersecurity settings and notifications
• Monitor on-the-go –Access Valerus anytime and anywhere, and stream mobile video directly to the VMS

• Refocused efforts on core businesses Vicon Industries and AIS
• Vicon shift to AI Based Analytics solutions & Cloud based VSaaS to drive recurring revenue growth in high gross margin businesses
• AIS set to expand with strong growth in the Industrial Services market
• Generating cash flow and margin improvement through increasingprices and reducing overhead where possible
• Operating income at the corporate level to improved markedly with cash burn of ~$2.0 million in 2023
• Core business provides a strong foundation to continue organic growth in high tech areas
• M&A strategy targeting acquisitions in high growth markets with strong ROE and attractive gross margins
• Large, addressable and mature markets in Security, Business, Manufacturing, Government & Industrial

Q1’23 Revenue Increased 27% to $12.0M, Security Segment Revenues Increased 61% to 7.0M in Q1’23

Gross Margin up 790 basis points to 42% in Q1’23

Management to Host Conference Call Today at 5:00 p.m. Eastern Time

Brooklyn, NY, Feb. 14, 2023 (GLOBE NEWSWIRE) — – Cemtrex Inc. (NASDAQ: CETX, CETXP), an advanced security technology and industrial services company, has reported its financial and operational results for the first quarter ended December 31, 2022.

Key First Quarter FY 2023 and Subsequent Highlights

• Revenue for Q1’23 increased 27% to $12.0 million, compared to revenue of $9.4 million for Q1’22.
• Gross margin up 790 basis points to 42% in Q1’23 from 34% in the prior year quarter
• Operating loss for Q1’23 declined 41% to $2.0 million from $3.3 million in Q1’22.
• Completed divestiture of non-core assets to focus on accelerating its Vicon and AIS brands, a transformative business restructuring that will result in approximately $6.2M in operating expense reduction to be realized going forward from Nov 2022.
• Announced a capitalization restructure, effecting a 1-for-35 reverse stock split.
• The Company’s common stock regained full compliance with the minimum bid price requirement for continued listing on The Nasdaq Capital Market.
• Received a $1.5 million order through Vicon Industries, in January, from a current large border protection customer in Texas to expand its security technology system with new security solutions.
• Appointed Shane Compton as Chief Operating Officer of Vicon, a 20-year industry veteran who will lead operational growth, oversee sales and engineering, and spearhead efficiency initiatives.
• Cash and equivalents as of December 31, 2022 was $5.8 million.

Management Commentary

Cemtrex Chairman and CEO, Saagar Govil, commented on the results: “The first quarter of fiscal year 2023 was highlighted by continued topline growth as we grew sales by 27% year over year. Additionally, the different steps we have taken operationally have led to a gross margin improvement of 790 basis points to 42%. We expect to see continued increases in our gross margin over the next couple quarters as we drive improvements in Vicon’s business. Overall operating income improved with the operating loss for the quarter declining by 41%. We are pleased with the progress we are making to drive better operational results since our shift in focus to our Vicon and Advanced Industrial Services (AIS) businesses. The substantial cost savings from the divestment of non-core assets and reduced expenses at the Cemtrex corporate level are now beginning to reflect more fully in our quarterly performance and will continue into the future.

“Year over year improving revenues in our Security segment were led by Vicon with a 61% increase, driven by strong demand from customers for its award-winning Roughneck cameras and Valerus video management software solutions. Recently Vicon received a $1.5 million order from a current large border protection customer in Texas to expand its security technology system with new security solutions. With Vicon’s software solution currently deployed at the site, the new order expands the customer’s state-of-the-art video surveillance security capabilities with the addition of award-winning Roughneck multi-sensor cameras and servers. We continue to believe revenues for Vicon Industries, based on our current demand, should increase by approximately 16% to $28.0 million for fiscal year 2023 given the launch of its AI based analytics solution, improvements to Valerus and additional sales. Additionally, Gross Profit Margin for Vicon is expected to increase to approximately 48% for fiscal year 2023.

“Revenue for our Industrial services segment, AIS, decreased slightly during the quarter mainly due to products and services revenue recognition timing. We continue to see increasing demand and monetizing opportunities for AIS with the need for predictive maintenance services, reshoring of manufacturing back to the US, and an growing complexity in industrial equipment. We believe AIS will continue to expand revenues by 3% to $21.8 million for fiscal year 2023 driven by continued strength in the Industrial Services market, and Gross Profit Margin for AIS is expected to improve to approximately 34% for the FY 2023 for Advanced Industrial Services.

With all the combined actions taken to drive business improvement, we believe the Operating Loss over the next four quarters to be under approximately $2.5 million. The effects of these changes were only partially demonstrated in our December quarter performance due to the timing of the restructurings, and we expect our March and June quarters performance to reflect the improvements more fully. We also believe that we can reduce inventory by more than $1.5 million over the course of FY 2023 as we have seen supply chain constraints improve. This will allow us to offset the cash loss from the expected operating loss over the next couple quarters by the cash obtained from the reduction in inventory, reducing the burden on our overall cash position.

“Looking ahead, we continue to see escalating demand for our businesses and believe this shift in focus to capture significant near-term opportunities will help us to reach positive operating income by 2024 and maximize shareholder value over the next several years,” concluded Govil.

First Quarter FY 2023 Financial Results

Revenue for the three months ended December 31, 2022, and 2021 was $12.0 million and $9.4 million, respectively, an increase of 27%. This increase is mainly due to increased demand for the Company’s products and services. The Security segment revenues for the three months ended December 31, 2022, increased by 61% to $7.0 million. The Security segment increase was due to an increased demand for security technology products under the Vicon brand. The Industrial Services segment revenues for the quarter decreased by 2% to $5.0 million, mainly due to timing of the recognition of revenue for the segment’s products and services.

Gross Profit for the first quarter of 2023 was $5.0 million, or 42% of revenues as compared to gross profit of $3.2 million, or 34% of revenues for the year ago period, mainly attributed to increased prices and lower subcontractor costs.

Total operating expenses for three months ended December 31, 2022, were $7.0 million, compared to $6.5 million in the prior year’s quarter. The increase was due to an increase in research and development expenses for the period.

Operating loss for the first quarter of 2023 was $2.0 million, a 41% decline as compared to an operating loss of $3.3 million for first quarter of 2022. The decrease was primarily due to an increase in gross profit for the period.

Net loss for the quarter ended December 31, 2022 was $6.1 million, as compared to a net loss of $4.5 million in 2021. Net loss increased in the first quarter as compared to the same period last year primarily due to the loss on discontinued operations.

Cash and cash equivalents totaled $5.8 million at December 31, 2022, as compared to $9.9 million at September 30, 2021.

Inventories increased by $0.1 million or 1% to $8.6 million at December 31, 2022, from $8.5 million at September 30, 2022.

Cemtrex’s Vicon Launches New Suite of AI-Based Analytics with Enhanced Lineup of Vicon Roughneck AI Camera Series

Novel Edge-based Analytics Provide More Efficient Searches and Real Time, Meaningful Alarms

Brooklyn, NY, March 14, 2023 (GLOBE NEWSWIRE) —  Cemtrex Inc. (NASDAQ: CETX, CETXP), an advanced security technology and industrial services company, today announced Vicon Industries has released a new suite of AI-based analytics in an enhanced Vicon Roughneck® AI Camera series, further improving its unified VMS platform for controlling video, access control, license plate recognition (LPR), and other integrated applications.

Vicon’s enhanced lineup of Roughneck AI Cameras and latest VMS release — Valerus 23.1 — combine to deliver powerful object classification, tracking, recording and forensic searching. Vicon’s Roughneck AI Cameras, with impressive features including advanced analytics, smart/adaptive IR, Starlight low-light technology, and -40° operating temps, now include built-in AI-based analytics. Vicon’s AI-based analytics intelligently identify people and vehicles to help customers perform more meaningful searches in Valerus and diminish nuisance alarms triggered by irrelevant motion. This tight integration between its enhanced cameras and Valerus further improves Vicon’s established position as an end-to-end solutions provider.

Benefits include:

• More efficient searches. Filtering out non-relevant video in post-incident searches so users can find needed info faster and easier.
• Real time, meaningful alarms. Users are instantaneously notified about events that are important, such as people or vehicles in a restricted area, without being distracted by meaningless nuisance alarms.
• Edge-based analytics. Analytics reside on the camera, which allows users to be more efficient with server resources, ultimately saving money.
• Object based recording. Valerus can perform object-based recording, meaning motion-triggered events will be recorded only when they involve a person and/or vehicle, allowing for reduced storage costs.
• Plug-and-play. The cameras will detect people and vehicles out of the box, allowing users to immediately take advantage of object-based recording and intelligent searches. For customers who deploy dozens or even hundreds of cameras, this feature can save several hours—if not days—of installation and setup time.

“Vicon continues to push the boundaries of next-generation AI security technology with these latest additions to the award-winning lineup of Roughneck Cameras,” said Saagar Govil, Chairman and CEO of Cemtrex. “As the hub of an integrated security solution, Valerus continues to provide features users count on to make their job easier and more intuitive and adding AI edge-based analytics further enhances its complement of advanced features.

“We view this release as the first step in our AI roadmap and ultimately believe that AI is going to contribute massively to improving the security industry. With the advent of GPTs and multimodal large language models, we believe there is significant opportunity to disrupt the status quo of how the security industry traditionally operates. Vicon’s product roadmap is intensely focused on leveraging these new AI tools to deliver features and benefits, over the coming months and years, that allow our customers to efficiently identify and respond to genuine threats quicker, and with fewer resources,” concluded Govil.

Cemtrex Announces Vicon End-to-End Security System Order for Next Generation Zero-Carbon Prison System in United Kingdom

$0.8 Million in Vicon Surveillance Equipment with Latest Smart Technologies to Better Protect Prisoners, Staff and Public

Brooklyn, NY, March 22, 2023 (GLOBE NEWSWIRE) —  Cemtrex Inc. (NASDAQ: CETX, CETXP), an advanced security technology and industrial services company, has received a $0.8 million order through Vicon Industries for a new prison being built in the United Kingdom to install a full end-to-end system of Vicon’s surveillance products including hardware and software.

The new Category C prison, with cell space for 1,400 prisoners, has been designed to incorporate the latest smart technologies to better protect prisoners, staff and the public. It will also be the first new prison in the U.K. set to operate as zero-carbon in the future, with an all-electric design, solar panels, heat pumps and energy-efficient lighting systems.

The new system from Vicon will include state-of-the-art video surveillance security capabilities utilizing the Valerus Video Management System (VMS) and award-winning Roughneck cameras and servers. The Roughneck is a powerfully advanced, NDAA-compliant, camera lineup designed for effortless remote configuration, eliminating tedious and frustrating installations. This extensive line of vandal-resistant cameras provides models for every application, ranging from corner-mounted cameras for in-cell use and super-high resolution, hemispheric models that can capture every detail in larger spaces like mess halls and exercise yards. The order is expected to be shipped partially in the current quarter and into the following quarter. Details of the customer were not provided due to confidentiality agreements in place.

“We are delighted to garner another major enterprise, mission critical project with this full system order for Vicon’s surveillance solutions. From penitentiaries in the U.S. to the U.K., our internationally recognized brand Vicon keeps operations safe for prisoners, workers, and visitors,” said Saagar Govil, Chairman and CEO of Cemtrex. “The order also reaffirms our expectation for driving 16% revenue growth to $28 million this year for Vicon. In the U.S and internationally, corrections facilities are increasingly focusing on deploying the latest and greatest technologies and our Valerus system is an example of that. Vicon’s full-featured video management systems are engineered to streamline every aspect of the security operation. We expect to see increasing demand as the corrections industry continues to invest into their operations in newer and more efficient technology.

Cemtrex Announces $1.5 Million Vicon Industries Order

Existing Border Protection Customer in Texas to Install New Surveillance Equipment

Brooklyn, NY, Jan. 11, 2023 (GLOBE NEWSWIRE) —  – Cemtrex Inc. (NASDAQ: CETX, CETXP), an advanced security technology and industrial services company, today announced it has received a $1.5 million order through Vicon Industries from a current large border protection customer in Texas to expand its security technology system with new security solutions.

With Vicon’s software solution currently deployed at the site, the new order expands the customer’s state-of-the-art video surveillance security capabilities with the addition of award-winning Roughneck multi-sensor cameras and servers. The Roughneck multi-sensor is an advanced NDAA-compliant camera designed for effortless remote configuration, eliminating tedious and frustrating installations. These powerful cameras boast advanced features such as starlight low-light imaging along with analytics to proactively alert operators of suspicious activity. The order is expected to be fulfilled by the first quarter of the calendar year. Details of the customer were not provided due to confidentiality agreements in place.

“We are pleased to see increasing demand at Vicon with a significant order for new solutions from a major customer,” said Saagar Govil, Chairman and CEO of Cemtrex. “The upward growth trend of the surveillance industry is being driven by the increased need for video surveillance and access control technologies to safeguard highly dynamic environments at government borders, businesses, schools, municipalities, hospitals, and cities across the world. Strong demand for our Roughneck cameras and Valerus video management software solutions will continue to support our position for continued growth for the fiscal year and maintaining our positive revenue outlook. With Vicon on track to launch more products this year, including proprietary AI based analytics solutions this year, as well as major improvements to our core software platform Valerus, we expect to drive further growth.”