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Greetings. And welcome to the Cemtrex’s Third Quarter 2024 Financial Results Conference Call. At this time, all participants are in listen mode only. A question-and-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. You are cautioned not to place undue reliance on these 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 10-Q for a more complete discussion of these factors and other risks, particularly under the heading Risk Factors. A press release detailing these results was issued this afternoon and is available in the Investor Relations section of our company’s website, cemtrex.com. Your hosts today, Saagar Govil, Chief Executive Officer; and Paul Wyckoff, Chief Financial Officer, will present unaudited results of operations for the fiscal third quarter ended June 30, 2024. At this time, I will turn the call over to Cemtrex Chief Executive Officer, Saagar Govil.

Thank you, Operator. Good afternoon, everyone. I’m pleased to welcome you to today’s third quarter 2024 financial results conference call. We continue to see momentum in our segments during the third quarter, sustaining revenue year-over-year at $14.7 million, significant demand for AIS products and services drove a 49% increase in revenue to $8.5 million, which was offset by decreases in Vicon revenue, primarily due to the delay of multiple projects. Operating loss for the third quarter was $3.2 million, compared to operating income of $0.1 million a year ago, mainly due to decreased gross profit in our Security segment and increased G&A expenses. The operating loss for the nine-month period was $5 million, compared to $1.5 million a year ago, despite the higher sales. However, these results include approximately $2 million in one-time expenses related to employee related one-time charges and legal expenses, and some bad debt write-offs. We remain committed to our goal of achieving a full year operating profit and are working hard to drive revenue while maintaining tight cost controls. In our Security segment, despite project delays, the team at Vicon continues to push the deployment of new technologies and products with investments into sales and marketing resources that we believe will drive sales over the next several quarters. We also were able to reduce our inventory by over $1 million this fiscal year as we strive to make our operations more efficient. We expect with the launch of the innovative new cloud security platform Anavio, along with new technologies to be release later this year and continued improvements to our core software platform Valerus, we are confident that in fiscal year 2025, Vicon will see strong growth in revenue. Our industrial Services segment delivered another strong quarter on orders from leading companies, building a pipeline of growth that we believe will produce a record year of revenue. We continue to believe with additional orders ahead, AIS has the potential to reach more than 30% annual revenue growth in fiscal year 2024, with further growth in fiscal year 2025. During the quarter we took the opportunity to improve our balance sheet with a $10 million upsized underwritten public offering, of which a portion of the proceeds were used to pay off some of our indebtedness. Looking ahead, we are now well positioned for additional growth and to reach our goal of achieve positive operating income in the future. The strengthened balance sheet also provides the ability to explore acquisition opportunities that can enhance our market reach and service capabilities, as we continue to seek long-term value for our shareholders. I will now turn the call over to Paul Wyckoff our CFOs to discuss the financials.

Thank you, Saagar. Revenue for the third quarters of 2024 and 2023 was a flat $14.7 million. The Security segment revenues for the third quarter of 2024 decreased by 31% to $6.2 million. The Security segment decrease was due to a delay of multiple projects for the segment’s services, products and services, and overall economic conditions in the industry. The Industrial Services segment revenues for the quarter increased by 49% to $8.5 million, mainly due to the increased demand for the segment’s services, as well as additional revenue due to Heisey acquisition completed during the fourth quarter of fiscal year 2023. Gross profit for the third quarter of 2024 was $5.9 million or 40% of revenues, as compared to gross profit of $6.5 million or 44% of revenues for the third quarter of 2023. Total operating expenses for the three months into June 30, 2024 were $9.1 million, compared to $6.4 million in the prior year’s quarter. Operating loss for the third quarter of 2024 was $3.2 million, as compared to operating income of $0.1 million for the third quarter of 2023. The operating loss was primarily due to the decrease in gross profit in our Security segment and overall increase in G&A expenses. Net loss for the third quarter of 2024 was $9.1 million, as compared to a net loss of $1.2 million in the third quarter of 2023. Cash and cash equivalents and restricted cash rose $7.6 million on June 30, 2024, as compared to $6.3 million on September 30, 2023. Inventories decreased to $7.5 million on June 30, 2024, from $8.7 million on September 30, 2023. I will now turn the call back to Saagar for a review of our 2024 outlook.

Thank you, Paul. In summary, with a fortified balance sheet from the $10 million upsize offering we closed, we are making steady progress toward our goal of achieving positive operating income in the future. On the acquisition front, we are consistently evaluating potential value-add acquisition opportunities that can further accelerate our growth. As we execute on our strategic initiatives while prudently managing our balance sheet, we are well-positioned for long-term growth. We look forward to providing additional updates in the months to come as we work to build long-term value for our shareholders. I thank you all for attending and now would like to answer your questions. Operator?

Thank you. [Operator Instructions] We have one who raised hands, which is Richard Arnold [ph]. However, I think the line or he declined from the polling process. As of right now, there is no analyst or participant who is raising hands for any questions. [Operator Instructions] There are no further questions at this time. I would now like to turn the call back over to Mr. Saagar Govil for his closing remarks. : :

Thank you, Operator. I would like to thank each of you for joining our earnings call today and look forward to continuing to update you on our ongoing progress and growth. If we were unable to answer any questions, please feel to reach out to our IR firm, MZ Group, who would be more than happy to assist. Thanks, everyone. Bye-bye.

Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now disconnect.

Greetings, and welcome to the Cemtrex Second Quarter 2024 Financial Results Conference Call. [Operator Instructions] 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. You are cautioned not to place undue reliance on these 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 of risk factors and other risks, particularly under the heading Risk Factors. A press release detailing these results was issued this afternoon and is available in the Investor Relations section of our company's website, cemtrex.com. Your host today, Saagar Govil, Chief Executive Officer; and Paul Wyckoff, Chief Financial Officer, will present unaudited results of our operations for the second quarter ended March 31, 2024. At this time, I will turn the call over to Cemtrex'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 Second Quarter 2024 Financial Results Conference Call. The second quarter of our fiscal year 2024 was highlighted by new technology deployments and continued overall growth across our business. For the second quarter, Cemtrex had revenue of $17.2 million, an increase of 7%, and our gross margin was 40%. Operating loss for the second quarter was $1 million compared to operating income of $0.4 million a year ago. Operating loss for the 6-month period was $1.8 million compared to $1.5 million in the prior year despite higher sales. However, these results include approximately $1 million in onetime expenses from employee-related charges and legal expenses that we do not anticipate incurring in the future. Our goal of reaching a full year operating profit remains and we are working hard to drive revenue and maintain tight cost controls. Revenues in our Security segment in the second quarter decreased by 18% to $8.1 million. The decrease was due to the delay of certain projects in the Security segments, products and services. Despite the delay in some of the Vicon projects, the segment is still showing year-over-year growth for the first half of the fiscal year. Vicon continued to introduce new technologies and products, including the deployment of Anavio, Vicon's innovative new cloud security platform. Anavio enabled users to manage their access control, video and intercom via a single tool to streamline and ultimately achieve complete situational awareness and control. Some of the new features of Anavio include face authentication that ensures only authorized people can access facilities and a powerful person of interest feature whereby users can forensically track a specific person or multiple people throughout a facility. We continue to invest in our sales and marketing resources in the Security segment, with the goal of driving sales growth over the next several quarters. We are also striving to increase operational efficiency and have reduced inventory by over $1 million for this fiscal year. With the launch of Anavio along with new technologies and continued improvement to our core software platform, Valerus, we expect to drive further growth and see additional opportunity to grow gross margin in 2024. Revenue for our Industrial Services segment, AIS, increased 47% to $9.1 million, mainly due to increased demand for our services as well as additional business from the highly synergistic acquisition of Heisey Mechanical. We believe this segment will produce a record year of revenue driven by new orders from leading companies and a robust growth pipeline. We continue to believe with additional orders ahead, AIS has the potential to reach more than 30% annual growth in fiscal year 2024. During the second quarter, AIS secured orders, including a $1.6 million order for 2 relocation projects from the leading printing and graphics company and a $0.5 million order to remove existing equipment for an engineering and construction company, which affirms AIS' commitment to delivering excellence across its service offerings. I'll now turn the call over to Paul Wyckoff, our CFO, to discuss financials.

Thank you, Saagar. Revenue for the second quarter of 2024 and 2023 were $17.2 million and $16.1 million, respectively, an increase of 7%. The Security segment revenues for the first quarter of fiscal 2024 decreased by 18% to $8.1 million. The Security segment decrease was due to a delay of multiple projects for the segment's products and services. The Industrial Services segment revenues for the quarter increased by 47% to $9.1 million, mainly due to increased demand for the segment services as well as additional revenue due to the Heisey acquisition completed during the fourth quarter of fiscal year 2023. Gross profit for the second quarter of 2024 was $6.9 million or 40% of revenues as compared to gross profit of $7.3 million or 46% of revenues for the second quarter of 2023. Total operating expenses for the 3 months ended March 31, 2024, were $8 million compared to $7 million in the prior year's quarter. Operating loss for the second quarter of 2024 was $1 million as compared to an operating income of $0.4 million for the second quarter of 2023. The operating loss was primarily due to a decrease in gross profit in our Securities segment and overall increased payroll expenses. Net loss for the second quarter of 2024 was $1.6 million as compared to a net loss of $0.6 million in the second quarter of 2023. Cash, cash equivalents and restricted cash totaled $4.1 million at March 31, 2024, as compared to $6.3 million at September 30, 2023. Subsequent to the second quarter, the company closed a firm commitment under in public offering with gross proceeds of the company of approximately $10 million. Inventories decreased to $7.4 million at March 31, 2024, from $8.7 million at September 30, 2023. I will now turn the call back to Saagar for a review of our 2024 outlook.

Thank you, Paul. Looking ahead, we are well positioned to build on our momentum and remain focused on our goal to achieve positive operating income in fiscal year 2024 on a full year basis. We have strengthened our balance sheet from the $10 million upsized underwritten public offering we closed, of which a portion of the proceeds were used to pay off some of our indebtedness. We continue to explore acquisition opportunities that have the potential to enhance our market reach and service capabilities and further drive growth in the months and years ahead. We remain focused on delivering incremental growth and positive operating results, along with diligent balance sheet management, and we are committed to achieving positive operating income for the full year fiscal year 2024. Thank you all for attending. And now I would like to answer your questions. Operator?

[Operator Instructions] And your first question comes from the line of Jared Cohen with JM Cohen & Company. [Operator Instructions] And we currently have no questions at this time. I would like to turn it back to Saga Govil for further remarks.

Thank you, operator. I would like to thank each of you for joining our earnings conference call today and look forward to continuing to update you on our ongoing progress and growth. If we were unable to answer any of your questions, please feel free to reach out to our IR firm, MZ Group, who would be more than happy to assist. Thank you.

Thank you, presenters. And ladies and gentlemen, this concludes today's conference call. Thank you all for participating. You may now disconnect.

Greetings, and welcome to the Cemtrex First Quarter 2024 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, they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these 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 of these factors and other risks, particularly under the heading “Risk Factors”. A press release detailing these results was issued this afternoon and is available in the Investor Relations section of our company's website, cemtrex.com. Your hosts today are, Saagar Govil, Chief Executive Officer; and Paul Wyckoff, Chief Financial Officer, will present unaudited results of operations for the first quarter ended December 31, 2023. At this time, I will turn the call over to Cemtrex’s Chief Executive Officer, Saagar Govil.

Thank you, Operator, and good afternoon, everyone. I'm pleased to welcome you to today's first quarter 2024 financial results conference call. The first quarter of fiscal year 2024 was highlighted by the company's realignment and operating performance improvement. For the first quarter, Cemtrex had revenue of $16.9 million, an increase of 41%. For the first quarter, our gross margin held at 42%, supported by operational improvements. We continue to expect increases in our gross margin going forward over time as we make further enhancements in our business. During the quarter, we took additional steps to reduce operating expenditures, including a $1 million reduction in our overhead in our security segment that should start to be realized in our fiscal second quarter going forward. Operating loss for the first quarter improved to $0.7 million, compared to an operating loss of $2 million a year ago. We also believe that there's room within our inventory and asset base to draw extra liquidity in order to maintain a healthy cash position. Revenues in our security segment were led by Vicon with first quarter revenues improving 31% to $9.2 million. Vicon orders during the first quarter reflected its ability to capture repeat customers with a recent $0.8 million second phase order from a current school district customer in New Jersey to develop its security technology system with new solutions, expanding on the customer's previous order. Vicon's award-winning Roughneck cameras and Valerus video management software solutions are being chosen to meet the unique challenges and locations ranging from border protection, correction facilities, and schools that require an advanced solution of technologies to monitor people and protect areas. Increasing modernization of the current security infrastructure is accelerating the growth of the border security market, driven by the rise of geopolitical instabilities and an increase in border threat. As customers seek to modernize their current security infrastructure, Vicon continues to stand out with its advanced technologies and products. Vicon launched a new cloud security platform called Anavio that integrates video access and intercom in one easy-to-use system powered by AI and face-based authentication. This new cloud platform allows us to create more value in our business overtime by evolving Vicon into a recurring revenue business model. Additionally, with AI at the core of our roadmap and Anavio, we're excited to layer in new capabilities and benefits for our customers to deliver the most cutting-edge security solutions over the months and years to come. With the launch of Anavio, along with continued improvements to our core software platform, Valerus, we expect to drive further growth and see additional opportunity to grow gross margin percent in 2024. Revenue for our industrial services segment, AIS, increased 55% to $7.7 million. The increase was mainly due to an increased demand for our services and supported by the close of our highly synergistic acquisition of Heisey Mechanical. This continued growth was highlighted by our recent announcement of $3.8 million in new orders for two projects, including a $2.2 million order for a geothermal system update for a northeastern school district and a $1.6 million order for the fabrication of a key component for a motion control technology company. AIS continues to build profitable revenue growth with additional wins in new government and industrial verticals in a variety of service industries and new geographies. I'll now turn the call over to Paul Wyckoff, CFO, to discuss financials. Paul?

Thank you, Saagar. Revenue for the first quarter of 2024 and 2023 was $16.9 million and $12 million, respectively, an increase of 41%. The Security segment revenues for the first quarter of 2024 increased by 31% to $9.2 million. The Security segment increase was due to an increase for demand for security technology products under the Vicon brand. The Industrial service segment revenues for the quarter increased by 55% to $7.7 million, mainly due to increased demand for the segment services as well as additional revenue due to the Heisey acquisition. Gross profit for the first quarter of 2024 was $7.1 million, or 42% of revenues, as compared to gross profit of $5 million, or 42% of revenues, for the first quarter of fiscal year 2023. Total operating expenses for the three months ended December 31, 2023, were $7.8 million compared to $7 million in the prior year's quarter. Operating loss for the first quarter of 2024 was $0.7 million as compared to an operating loss of $2 million for the first quarter of 2023. The improvement was primarily due to an increase in the gross profit for the period due to growing revenues in both segments of our business. Net loss for the first quarter of 2024 was $1.2 million as compared to a net loss of $6.3 million in the first quarter of 2023, an improvement of $5.1 million. Cash and cash equivalents and restricted cash totaled $4 million at December 31, 2023, as compared to $6.3 million at September 30, 2023. Inventories decreased to $7.9 million at December 31, 2023, from $8.7 million at September 30, 2023. I will now turn the call back to Saagar for a review of our 2024 outlook.

Thank you, Paul. Looking ahead, we are highly focused on delivering larger operating profits by driving top-line growth while maintaining tight cost control measures in our two operating businesses. Vicon has the ability to disrupt the status quo of how the security industry traditionally operates with its Anavio next generation, state-of-the-art surveillance cameras, and VMS software. Along with its next-generation technology, Vicon's evolution into a recurring revenue business model will help drive additional market share gains. AIS is rapidly expanding into new markets and customer opportunities supported by its recent acquisitions. We also continue to explore additional acquisition opportunities that could drive further growth and expansion within our business segment. Looking ahead, we are focused on delivering attractive operating results, driving growth, and combined with tight expense control, are committed to achieving positive operating income in fiscal year 2024 on a full-year basis. We are confident that as we stay on this path, we can deliver strong long-term value for our shareholders going forward. Thank you all for attending, and now I would like to answer your questions. Operator?

Thank you. [Operator Instructions]. Our first question is from Larry Holub with Holub Family Office. Please proceed with your question.

Thanks for taking my question, and I just want to say congratulations on the Q1 pipeline performance. My question is, for the security and industrial segments, what drove the strong performance, and do you see the same trends continuing in the fiscal second quarter?

Thanks for the question, Larry. So, I think within both of our businesses, maybe I'll start with each one at a time. So, in our security segment, I like to look at things both at the macro level and the micro level. So, at the macro level, we continue to see strong tailwinds as organizations, both big and small, continue to make security a priority, and that's just a reflection of the environment that we live in and the times. So, security continues to remain a big, big priority, and we're continuing to see investments made to upgrade security solutions, expand security infrastructure, and continue to invest in the latest and greatest technologies. So, I think that's what's happening in the background. At the organization level, I think Vicon's doing a lot of great things. We're continuing to put out new products, upgrade old products, and continue to stay really competitive in the market with our award-winning Roughneck cameras. Valerus is continuing to win the hearts and minds of our customers, and so we're seeing a lot of expansion opportunities with that core product that we've been continuing to make better every day. And then, Anavio, really, we just started the marketing and sales activities for Anavio, so we're starting to ramp that up really this quarter. So, we're already getting interest from customers, and we're starting to ramp that up. And so, all of these things are kind of layering on top of each other to build really positive momentum for the company. So, we're excited about that, and I think that allows us to have confidence going forward that Vicon will continue to grow on the order of 15% to 20% on average over the next couple years. So, we're feeling really good about that. On the industrial side of our business, we continue to see at the macro level that demand for industrial services continues to trend higher. We're not seeing any weakness from that regard, which gives us, again, confidence that the outlook remains positive for us. As reshoring of manufacturing back to the United States, investment in infrastructure here in the U.S. all contribute to the growing demand for industrial services and capabilities, which AIS is a leader in. And so, that's really what's happening, in sort of the larger picture. And then, organizationally, again, AIS is operating on all cylinders. The integration of the acquisition has gone really well, and we're continuing to see that drive growth at the top line as well as at the operating income line with the business. So, overall, we're quite pleased with the results, and we're optimistic and hopeful that that'll continue to happen as we go forward. And then, we're going to continue to look for additional bolt-on acquisitions that could continue to drive further growth in that segment as well. So, I think it's on both sides of the business, there's a lot to be excited about.

Great. Thank you. My second and last question, how should we think about operating income for Q2, given the slight sequential decline? And then, because I think, we touted the third consecutive quarter of operating income in the last reporting period.

So, a couple things to point out there. Operating income didn't land where we were hoping it would. There were some one-time expenses that we encountered in this past quarter, some of them around payroll expenses and so forth. So, I think, in general, the quarter was a little bit higher than the priority quarters from an OpEx perspective. So, that certainly contributed to that. I don't expect subsequent quarters to have as high of an OpEx because of the timing of some of those expenses. And then, on top of that, we did reduce overhead by about $ 1 billion and change or so, give or take. So, that should also continue to make, profitability a little bit more manageable and a little bit, as we continue to grow and really tuck those profits into our belt. So, that's in terms of how we think about it. So, I think, overall we remain committed to having an operating profit this fiscal year. Our business is, unfortunately, a little bit lumpy. So, it's always hard to predict exactly when, orders will land and get booked and invoiced. But, based on the overall macro picture and the overall environment, we still feel good about that despite, the loss in the first quarter.

Great. Thank you.

[Operator Instructions] Thank you. There are no further questions at this time. I would now like to hand the floor back over to Mr. Govil for his closing remarks.

Thank you, operator. I would like to thank each of you for joining our earnings call today and look forward to continuing to update you on our ongoing progress and growth. If you have any further questions after this call, please feel free to reach out to our IR firm, MZ Group, who would be more than happy to assist and get your questions answered. Thank you for your time.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

Greetings, and welcome to the Cemtrex Fourth Quarter and Full Fiscal Year 2023 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, they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these 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 of these factors and other risks, particularly under the heading Risk Factors. A press release detailing these results was issued on December 21 and is available in the Investor Relations section of our company's website, cemtrex.com. Your hosts today are, Saagar Govil, Chief Executive Officer; and Paul Wyckoff, Chief Financial Officer, will present unaudited results of operations for the fourth quarter and full fiscal year ended September 30, 2023. At this time, I will turn the call over to Cemtrex Chief Executive Officer, Saagar Govil.

Thank you, Operator. And good afternoon, everyone. I'm pleased to welcome you to today's fourth quarter and full fiscal year 2023 financial results conference call. The fourth quarter of fiscal year 2023 was highlighted by a third consecutive quarter of operating profit, driven by the company's realignment and operating performance improvement. For the full-year, Cemtrex had revenue of $59.7 million, an increase of 33%. In combination with operational improvement, the full-year also led to a gross margin improvement of 680 basis points to 44%. We continue to expect increases in our gross margin going forward over time as we make further enhancements in our businesses. Overall, fourth quarter operating income was positive for the third quarter in a row at $0.2 million, compared to an operating loss of $3.1 million a year ago. We also believe that there is room within our inventory and asset base to draw extra liquidity in order to continue to maintain a healthy cash position. Revenues in our security segment were led by Vicon, with full-year revenues improving 46% to $34.7 million, exceeding our earlier expectations of $28 million for fiscal year ‘23. Revenue was driven by orders from border protection, corrections facilities, and other customers for our award-winning Roughneck cameras and Valerus video management software solutions. Vicon orders included a large correctional facility and current end customer that upgraded its security technology system with the new Valerus software and hardware with a $1.5 million order. Increasing modernization of the current security infrastructure is accelerating the growth of the border security market, driven by the rise of geopolitical instabilities and an increase in border threat assessment. As customers seek to modernize their current security infrastructure, Vicon continues to stand out with its advanced technologies and products. Recently, Vicon launched a new cloud security platform called Anavio that integrates video, access, and intercom into one easy-to-use system powered by AI and face-based authentication. This new cloud platform allows us to create more value in our business over time by evolving Vicon into a recurring revenue business model. Additionally, with AI at the core of our roadmap in Anavio, we're excited to layer a new capabilities and benefits for our customers to deliver the most cutting-edge security solutions over the months and years to come. With the launch of Anavio, along with continued improvements to our core software platform Valerus, we expect to drive further growth and see additional opportunity to grow gross margin percent in 2024. Revenue for our industrial services segment, AIS, increased 18% during the full-year to $25 million, exceeding our original target of $21.8 million for fiscal year 2023, and up from $21.2 million in 2022. The increase was mainly due to increased demand for our services and supported by the close of our highly synergistic acquisition of Heisey mechanical. Based in Columbia, Pennsylvania, Heisey is focused on steel fabrication and contracting, primarily to the commercial and industrial water treatment industry, as well as other service industries. Heisey provides the water treatment industry with a variety of fabricated vessels and equipment, including ASME pressure vessels, heat exchangers, mixed tanks, reactors, and other specialized fabricated equipment. With the acquisition enabling AIS to expand into new markets, including government and industrial verticals. During the quarter, AIS received a million-dollar order for the Pennsylvania, Stewartstown Borough Authority’s, Stewartstown Wastewater Treatment Sludge Dewatering improvements project. The acquisition brings over approximately $11 million in immediately accretive annual revenue at approximately $775,000 in adjusted EBITDA when averaged over the last four years. With its client list of commercial and industrial facilities, a seasoned team, and extensive manufacturing equipment. The transaction was accretive in the fourth quarter of fiscal year 2023. Along with the business purchase, the company also acquired the real estate, the business occupies in Columbia, Pennsylvania. The gross profit margin for AIS improved to 34% for the year, compared to 30% for the year prior, driven by increased prices and lower subcontractor cost. I'll now turn the call over to Paul Wyckoff, CFO to discuss financials. Paul?

Thank you, Saagar. Revenue for the full-year of 2023 totaled $59.7 million, compared to revenue of $45 million for the full-year of 2022, a 33% increase year-over-year. Revenues for the fourth quarter of 2023 were $16.9 million, compared to the $11.8 million for the fourth quarter of 2022, an increase of 44%. The increase in revenue for the year was due to increased demand for our company's products and services. The security segment revenues for the years ended September 30, 2023 and 2022 were $34.7 million and $23.8 million respectively, an increase of 46%. The increase was due to an increase in demand for security technology products under the Vicon brand. Industrial services segments revenues for the full-year of 2023 increased by 18% to $25 million, primarily due to the increase in demand for its products and services and the additional revenue from the business related to the acquisition of Heisey Mechanical. Gross profit for the full-year of 2023 was $26 million or 44% of revenues, compared to gross profit of $16.6 million, or 37% of revenues, for the same period a year ago, mainly attributed to increased demand for products and services along with increased prices and lower subcontractor costs. Fourth quarter gross profits of $7.2 million increased 58% from $4.5 million in the prior year's fourth quarter. Total operating expenses for 2023 were $27.3 million, of which $6.9 million were incurred in the fourth quarter. Total operating expenses for 2022 were $30.7 million. The decrease in total operating expenses was primarily driven by decreases in depreciation, legal and accounting fees, and research and development expenses related to the security segments development of proprietary technology and next generation solutions associated with security and surveillance system software. Operating loss for the full-year of 2023 improved to $1.3 million, as compared to an operating loss of $14.1 million for the full-year of 2022 due to increased revenues, increased gross profit, and reduced operating expenses. Operating income for the fourth quarter of 2023 was $0.2 million, as compared to an operating loss of $3.1 million for the fourth quarter of 2022. The increase was primarily due to an increase in gross profit for the period. Operating activities used $2.3 million worth of cash for the year ended September 30, 2023, compared to using $16.1 million for the year ended September 30, 2022. Net loss for the full-year of 2023 was $9.3 million, as compared to a net loss of $13.3 million in 2022. Net loss in the fourth quarter of 2023 totals $1.2 million, compared to a net income of $0.09 million for the fourth quarter of 2022. Cash and cash equivalents and restricted cash totaled $6.3 million at September 30, 2023, as compared to $11.5 million at September 30, 2022. Inventory has increased to $8.7 million at September 30, 2023, from $8.5 million at September 30, 2022. I will now turn the call back to Saagar for a review of our 2024 outlook.

Thank you, Paul. Looking ahead, we are highly focused on delivering larger operating profits by driving top-line growth while maintaining tight cost control measures in our two operating businesses. Vicon has the ability to disrupt the status quo of how the security industry traditionally operates with its Anavio Next Generation version of state-of-the-art surveillance cameras and VMS software. Additionally, we see continued opportunity for organic growth and subsequent built-on acquisitions at AIS that will drive attractive returns going forward for us. After achieving operating profit consecutively for three quarters, we are committed to achieving positive operating income in fiscal year 2024 on a full-year basis. In 2023, we demonstrated our commitment and focus to delivering attractive operating results, and we are confident that as we stay on this path, we can deliver strong long-term value for our shareholders going forward. Thank you all for attending this call. And now I would like to answer your questions. Operator?

Thank you. At this time, we will be conducting a question-and-answer session. [Operator Instructions] And our first question comes from the line of Larry Holub with Holub Family Office. Please proceed with your questions.

Congratulations on another great quarter. A couple of questions if you have time. First one is, can you talk more about any traction you're seeing already with Anavio?

Sure, so we just started getting that product out into the field and we're starting to get some early pilot projects with them. So, it's a new project, a new product rather, so it's going to take a little bit of time to really explain it and get some of these systems stood up, but we're already getting interest in the product and we're going to start ramping that up into 2024. So, with any new product, it's just a little bit of a learning curve for folks. And we have to mobilize the whole organization to really ramp up these efforts. But the interest is certainly there. And I think we're going to certainly start to hit some solid momentum into 2024.

Great, thanks. And second question is, can you provide any additional updates to the anticipated Vicon growth beyond what you've already messaged?

Yes, listen, you know, it’s -- I think generally speaking the demand for Vicon products is growing. We have great products and services from our cameras to the current Valerus offering as well as with Anavio. So I think in terms of our core offering that's generating more and more interest in the organization's products and so and especially many of our core customers are getting more and more interested in improving and updating their security systems and leveraging the latest and greatest technology. So we are seeing demand sort of pull through from that. And I think generally speaking, just globally, the demand for security solutions is just increasing naturally just because of the world that we're living in today with wars and crime and so forth. So I think from a macro perspective, we have a tailwind. And then in terms of what we're doing sort of at the micro level within our own company, we're able to drive growth, right? And so, and I think, you know, in terms of our product roadmap too, we have a lot of exciting things to look forward to. So, you know, in Anavio in terms of what it exists today is really just the first incarnation and we have more features, you know, as far as AI that we're looking to do. We have some exciting new hardware that we're going to be launching next year too. So we're constantly putting out new products into the market, and we have an exciting product roadmap. And I think everything we're doing is kind of layering on top of each other. This is not the kind of industry where you come out with some hot, sexy product and you conquer the world. Basically, Vicon has been around for 55 years and we want to steadily continue to build on the legacy that we've established in the market. And that just comes from continuing to serve our customers well, continuing to deliver exciting new products that improve their overall security and environment and so forth. So I think we're doing that and we're steadily just gaining more and more momentum each year as we continue to execute.

Great. And then any new markets that you're thinking about entering, leveraging and utilizing AI?

All right, can you just repeat that question? I got…

Can you talk about any new markets that you're considering entering with, you know, leveraging and utilization of artificial intelligence?

You mean outside of Vicon core markets or?

Yes.

You mean?

Or even within right if there's a new channel or segment, because, I mean, I guess to the point I did see yesterday's Valerus news right? The integration of VMS into un-alerts AI visual gun detection systems. So, you know, kind of, thinking along that lines and how maybe those kinds of things position you for an expanded reach, for example, into the municipal and government security segment?

Yes, so I think in terms of how we think about AI, yes, I mean, this could be a long answered question, but I'll do my best. So basically, we want to -- the way we see our growth in this industry is by focusing on delivering value to customers, who are willing to pay more for better and better security solutions. So what I mean by that is if you think about organizations that require better and better security and they're willing to pay for it, those are organizations like hospitals, like universities, schools, and so forth, right? So we really focus on sort of that part of the market where they need a professional grade solution or an enterprise grade solution. And so there's a number of verticals in those markets that we serve already quite well in terms of corrections, border protection, you know, we obviously do a number of schools, healthcare as well. And really for us, it's not necessarily about expanding outside of that, but it's about building better and better solutions so that we can take more and more market share within those areas where there's a high willingness to play, because we think that ultimately it's about growing the solution sales and for all the solution sales that we make, we sell more and more software, right? And ultimately, the more software we sell, the more stickiness there is with our customers and the more we can grow our gross margin. And so that's really the sort of North Star in terms of how we think about success in this market and what drives how we think about it. So we wouldn't want to use AI to go capture a part of the market where there isn't a lot of willingness to pay for that incremental innovation. So if that's helpful.

Okay, no, very helpful. Thank you very much for your time. Appreciate it.

Sure.

Our next question comes from the line of [Alan Rosenthal] (ph) with Scarlett Knight Capital. Please proceed with your question.

Hi. So I've got a great quarter. Thank you for taking my questions. I have two, can you discuss the geographic composition really of the Vicon business that's growing so rapidly right now, how much is domestic here in the United States, how much is foreign? And then a little add on to that, and also, you know, kind of where you see the growth in each, whether it's outside the USA versus inside?

Yes, sure, happy to talk about that. So as we think about this past fiscal year, I would say most of the growth came domestically, you know. So, I would say it's almost, it's probably 85%, 90% U.S. or Domestic. I'd say probably 85% and 15% international out of that $34 million. Again, that's just me off the cuff here. But I think what's interesting really about this moment in time is that there's just a -- so in the United States, there's enormous growth in terms of the need for security for organizations that hadn't been as serious about it before. So schools, for instance, right, religious institutions, churches, synagogues. So they are now all spending more money than they ever had to because of just the nature of the world we live in today. And so we are seeing growth here, right? And then obviously the innovation is driving the adoption of new technologies, AI and so forth. So I think that's going to be the growth driver here in the U.S. Internationally it's a little bit of a different story. And what's really driving that there is just the growing middle class and the growing economies around the world, whether it's Saudi Arabia, whether it's India, Indonesia, Malaysia, and some of these economies that are starting to boom and have extremely high growth. And so in those economies you're seeing a more a widespread deployment of security solutions, because they're building so much infrastructure like train stations, like police stations, schools, hospitals. And so as these economies are building all of that, there's going to be massive, massive opportunity for growth there as well. And so I'd say we're excited about both markets. I certainly don't want to downplay the opportunity for us in the U.S., because I think it's extremely promising. But I think some of the growth in some of these emerging markets can also be pretty fantastic as well for us. So frankly, we're focused on both. But as I may have mentioned on prior calls, I mean, I think there's opportunities to make it maybe a 50-50 split over time in terms of the amount of business we're doing internationally versus domestically. And [Multiple Speakers] we're definitely focused on growing long-term in international markets.

That's excellent. It just actually made me think of another question here. What's the average, when you get a new contract here and so on, could you discuss what's the average, I guess, sale that you make? And if you see that number improving and kind of how that works, you know what I'm saying? So your average selling price on a solution, for example, kind of, describe how that works and if you've seen that number increase and what your expectation is? Because obviously, as you said, demand is surging here. So what are you seeing in terms of pricing?

Yes. I think giving you some rough math, I can tell you that a couple of years ago, our average order size was probably around 50,000. And I can tell you that this past year, that number was closer to 100,000, maybe even a little bit over.

Beautiful.

So I think there's just a natural growth in terms of the kinds of projects we're doing in terms of size. And we're hopeful and optimistic that, that number will continue to grow, right? But then there's also, there's a lot of, like if we sell let's say 100,000 systems over the next couple of years, we may sell a lot of smaller orders to continue to expand that system and support that customer. Maybe they expand the building or something like that. Maybe they want to add more cameras. So we do certainly benefit from some of that residual revenue. But I think in general, we are a systems solutions company. We sell generally on projects. And so I think the idea is that we want to be increasing the size of the number of orders, the size of the order -- the average order that we're getting in the organization.

That's great. One last question, I think the only overhang here is probably the piece of debt that you've got hanging out there with Chicago Ventures. I know we've discussed it in the past, but you've got positive cash flow right now. Can you just kind of give an overview of kind of the way you view how you want to handle that? Because I think once that's handled, the sky's your limit. And I'll just stop. I'm going to hang up right now. So I mean, and listen.

Yes, sure. No, I appreciate the question. Yes, listen. I think we do have that debt outstanding. You know, we've been fortunate to have a really fantastic relationship with them, and they've worked with us to extend that over time. And, you know, they've been very supportive of us as we continue to improve our business. So ultimately, I think there's, you know, ideally we continue to grow the business so that we can, you know, pay that down over time and get to a place. We've had three operating, you know, three quarters of operating profit. And, you know, I think as I hope that as we continue to improve, then we'll be in a position to start to reduce that debt over time and continue to work with them as best as possible to satisfy that debt. And I think as our business improves, I think we'll be in a better and better position to deal with that. So, you know, we've been, you know, we were able to get that extended and, you know, so we'll continue to work through that and, you know, I think as the business improves, it's only going to get easier and easier for us to manage that.

Great job. Happy holidays to you and wishing you a fabulous 2024. Thank you.

Thanks, Alan.

Thank you.

And we have reached the end of our question and answer session now. Now I'd like to turn the call back over to Mr. Govil for closing remarks.

Thank you, operator. I would like to thank each of you for joining our earnings conference call today and look forward to continuing to update you on our ongoing progress and growth. If we were unable to answer any of your questions, please feel free to reach out to our IR firm MZ Group would be more than happy to assist. Thank you, everyone. Happy holidays.

And this concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.