Cemtrex issues letter to shareholders

Cemtrex issued a letter to shareholders from Chairman and CEO Saagar Govil. “I wanted to provide you with a detailed update on Cemtrex’s activities over the last several months… While we remain bullish in the emerging opportunities that Cemtrex invested in over the last five years, like Virtual Reality and SmartDesk, it became readily apparent that we could not effectively drive the best outcomes with these long-term investments due to the enormous cash requirements and operating losses that would be required to see these through… Looking ahead, we can confidently say that the path we are on today is clearer than ever, with the highest assurance of success that we have had since the Company’s inception. But what does success mean? For us, a company over the long term should be able to generate a higher return with its cash than would be possible by investing it in the S&P 500 index. Everything starts with this fundamental premise… we remain well poised for a positive turnaround on this front. Based on the numerous changes over the last twenty four months and restructuring of our business that we undertook in November of 2022, I am confident that we are on the right track to start consistently driving above average returns. With the restructuring completed Cemtrex owns two great businesses: Vicon Industries, which comprises our Security segment, and Advanced Industrial Services, which comprises our Industrial segment… Furthermore, when we look at our second measure for this business, the annual return on equity, we see additional encouraging results. The annual return on beginning shareholder’s equity for AIS, on average, over the last 8 years, again excluding PPP benefits in 2021, has been approximately 35%…In FY 2023, Vicon produced significantly better results, with sales growing from $23.8 million in FY 2022 to $34.7 million in FY 2023, an increase of 46%. Gross Profit improved from $8.5 million in FY 2022 to $15.6 million in FY 2023, an increase of 85%. The operating loss at Vicon was reduced from $6.1 million in FY 2022 to $0.6 million in FY 2023, a reduction of 92%, and the Company has had an operating profit three of the last four quarters. The exciting part is that we believe relative to our current investment, limited additional capital, if any, will be required on Cemtrex’s behalf to drive further growth at Vicon… All the above certainly doesn’t summarize all the accomplishments that have taken place within our Company this past year… We feel, based on the results above, that FY 2023 represents a key turning point for us, as we have a renewed focus, clarity, and resolve to deliver exceptional results going forward.”