Q4 2023 Senstar Technologies Corp Earnings Call
Greetings and welcome to the sensor technologies fourth quarter and full year 2023 results conference call.
Operator: Greetings. Welcome to the Senstar Technologies fourth quarter and full year 2023 results conference. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I'll now turn the conference over to your host, Kim Rogers of Hayden IR. You may begin.
At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad.
Please note this conference is being recorded.
Now I'll turn the conference over to your host Kim Rogers of Hayden IR.
Kimberly Rogers: Thank you again.
Kimberly Rogers: Thank you Shelly.
Kimberly Rogers: I would like to welcome all of you to the conference call and thank Senstar Technologies Management for hosting today's call. With us on the call today are Mr. Fabien Haubert, CEO of Senstar Technologies, Ms. Alicia Kelly, CFO, and Mr. Tomer Hay, former CFO of Senstar Technologies. Fabien will summarize key financial and business highlights, followed by Alicia, who will review Senstar's financial results for the fourth quarter and full year 2023. We will then open the call for questions and answers.
Kimberly Rogers: I would like to welcome all of you to the conference call and Thank Sun Star Technologies management for hosting today's call.
Kimberly Rogers: With us on the call today are Mr. Fabien Habash CEO of Sun Star Technology News, Alicia Kelly, CFO and Mr. Tomer Hay prior CFO of sensor technology.
Tomer Hay: They'd be in will summarize key financial and business highlights followed by Alicia who will review some financial results for the fourth quarter and full year 2023, We will then open the call for a question and answer session.
Kimberly Rogers: Before we start, I'd like to point out that this conference call may contain projections or other forward-looking statements regarding future events or the company's future performance. These statements are only predictions, and Senstar cannot guarantee that they will, in fact, occur. Furthermore, Senstar does not assume any obligation to update that information.
Tomer Hay: Before we start I'd like to point out that this conference call may contain projections or other forward looking statements regarding future events or the company's future performance. These statements are only predictions and sunstar cannot guarantee that they will in fact occur then started to just see them any obligation to update that information.
Tomer Hay: Actual events or results may differ materially from those projected including as a result of changing market trends reduced demand and the competitive nature of the security systems industry, the unanticipated and unknown effect of the Corona virus, including on our operations and our clients as well as others.
Kimberly Rogers: Actual events or results may differ materially from those projected, including as a result of changing market trends, reduced demand, and the competitive nature of the security systems industry, the unanticipated and unknown effect of the coronavirus, including on our operations and our clients, as well as other risks identified in the documents filed by the company with the Securities and Exchange Commission. In addition, during the course of the conference call, we will describe certain non-GAAP financial measures that should be considered in addition to and not in lieu of comparable GAAP financial measures.
Tomer Hay: Risks identified in the documents filed by the company with the security and Exchange Commission.
Tomer Hay: In addition, during the course of the conference call, we will describe certain non-GAAP financial measures, which should be considered in addition to and not in lieu of comfortable financial measures.
Kimberly Rogers: Please note that in our press release, we have reconciled our non-GAAP financial measures to the most directly comparable GAAP measures in accordance with Reg G requirements. You can also refer to our website at www.senstartechnologies.com for the most directly comparable financial measures and related reconciliations. And with that, I would now hand the call over to Fabien. Fabien, please go ahead.
Tomer Hay: Please note that in our press release, we have reconciled our non-GAAP financial measures to the most directly comparable GAAP measures in accordance with Reg G. Requirements. You can also be sort of our website at www Sunstar technologies Dot com for the most directly comparable financial measures and be ready.
Tomer Hay: Reconciliation and with that I will now hand, the call over to Fabian Fabian. Please go ahead.
Fabian: Thank you Kim.
Fabien Haubert: Thank you for joining us today to review Senstar Technology's fourth quarter and full year 2023 financial results, and Zeltlang in a WordPress release last month. Senstar successfully completed this process of re-domiciling from Israel to Canada, marking a pivotal moment for the company. This strategic move enables us to streamline our corporate structure and empower our Canadian team to lead Senstar forward. With this transition, I assume the role of CEO, and Alicia Kelly steps into the position of CFO, succeeding Tomer Hay, who will report in an advisory role, continuing to support and close out the final activities of the re-domiciliation. I extend my heartfelt gratitude to Tomer for his dedication to Senstar. He has been instrumental in the successful completion of the RITO miscellation.
Fabian: Thank you for joining us today to review sensor technologies fourth quarter and full year 2023 financial results.
Fabian: I'd say, we're finding in our press release last month.
Fabian: Since our successfully completed these processes with them is sailing from Israel to Canada, marking a pivotal moment for the company.
Fabian: This strategic move enables us to streamline our corporate structure and empower our Canadian team to lead <unk> forward.
Fabian: With this transition I assumed the role of CEO and Alicia Kelly stepped into the position of CFO, succeeding Tomer Hay, who will report in the dietary and who will remain in an advisory role continuing to support and close out the final activities.
Fabian: The re domiciliation.
Fabian: I extend my heartfelt gratitude to tomer for his dedication to Samsung.
Fabian: Tomer has been instrumental in decision successful completion of the re domiciliation.
Fabien Haubert: His contribution over many years of service has positioned Senstar for growth. We're energized to embark on this new phase of Senstar's journey, and I'm eager to guide our team toward sustained growth and profitability. I would like to begin my review of 2023 and the fourth quarter by drawing your attention to a few key messages about our financial results. First, While full year-end QPOR revenue declined year over year, mostly due to a non-recurring African project, quarterly revenue and profitability improved throughout 2023. From Q1 to Q4, revenue rose from $6.4 million to almost $9 million. Operating expenses as a percent of revenue fell from almost 83% to 54%.
Fabian: His contribution over many years of service as position sensor for growth.
Fabian: We're energized to embark on this new face obsessive journey and I'm eager to guide our team towards sustained growth and profitability.
Fabian: I would like to begin my review of 2023 in the fourth quarter by drawing your attention.
Fabian: To a few key messages, but there were financial results.
Fabian: First one full year rent to core revenue declined year over year, mostly due to a nonrecurring African project quarterly revenue and profitability.
Fabian: Improved throughout 2023.
Fabian: From Q1 to Q4 revenue rose from $6 4 million to almost 9 billion operating expenses as a percent of revenue fell from the most 83% to 54% and profitability improved from a net loss of one 9 million in Q1.
Fabien Haubert: And profitability improved from a net loss of $1.9 million in Q1 to a net income of $0.4 million in Q4. Second, the decline in 2023 revenue was mostly due to large projects in Asia and Africa which did not renew in 2023, and weakness in the Keynesian market while the U.S. was flat year over year. On a positive note, we experienced strong growth in Europe and Latin America in 2020. And lastly, in the fourth quarter, we made notable progress in several regions.
Fabian: To net income of <unk> 4 million in Q4.
Fabian: Second the decline in 'twenty or 'twenty revenue was mostly due to large project in Asia, and Africa, which did not for you in 2023.
Fabian: And weakness in the Canadian market, while the U S was flat year over year.
Fabian: On the positive note, we experienced strong growth in Europe, and Latin America in 'twenty one.
Fabian: And lastly in the fourth quarter, we made notable progress in several regions.
Fabian: In Europe.
Fabien Haubert: One of our largest markets, revenue rose by 20% in the fourth quarter due to investments in Germany, France, Iberia, Eastern Europe, and Benin. Market demand in Europe is strong, especially in the utilities and energy sectors, particularly for renewable energy production sites.
Fabian: One of our largest markets revenue rose by 20% in the fourth quarter due to investments in Germany, France, Iberia, Eastern Europe and Benelux.
Fabian: Market demand in Europe is strong.
Especially in the utilities and energy sector.
Fabian: Particularly for renewable energy production sites.
Fabien Haubert: We will continue investing to reinforce our position in these high-growth segments in the coming years since we believe they are highly scalable and align with Senstar's capacity to differentiate. Furthermore, APAC, our third-largest market, demonstrated a commendable 18% growth in Q4 2023 compared to the previous year's post-quarter, primarily driven by transportation, utilities, and energy projects. In the prior quarters of 2023, APAC's year-over-year comparison was negatively impacted by a large one-time project that did not come to fruition.
We will continue investing to reinforce our position in these high growth segments in the coming years.
Fabian: Since we believe they are highly scalable.
Fabian: And in line with sensors capacity to differentiate.
Fabian: Furthermore.
APAC with third largest market.
Fabian: Demonstrated a commendable 18% growth in Q4 2023 compared to the previous year's fourth quarter.
Fabian: Primarily driven by transportation utilities energy project.
Fabian: In the prior quarters of 'twenty or 'twenty three.
Fabian: Eight bucks year over year comparison were negatively impacted.
Fabian: But your lunch one thing punches that did not recur.
Fabien Haubert: Going forward, we expect to see this region's true performance without this headwind. Lastly, South and Latin America, a smaller portion of our business, reported tremendous growth, primarily as a result of our efforts to reposition the region, driven by wins in corrections and utilities. These successes strengthen our position in these verticals, where we're driving, where we're driven to increase our market share. Looking at the revenue contribution from our four key verticals, revenue increased with major wins from correction, one of our strongest categories.
Going forward, we expect to see this region's true performance without this headwind.
Fabian: Lastly, so kind of Latin America, a smaller portion of our business reported tremendous growth primarily as a result of our efforts to reposition the region driven by wins in the correction in utility surgical's.
Fabian: These successes strengthen our position in these verticals, where we're driving where we're driven to increase our market share.
Fabian: Looking at the revenue contribution from our four key verticals revenue increased with major wins from correction.
Fabian: One of our strongest categories.
Fabian: Going forwards, we intent to increase market share in this high growth verticals globally.
Fabien Haubert: Going forward, we intend to increase market share in these high-growth verticals globally, with a keen focus on our international future. To better achieve this goal, we executed a strategic re-evaluation of our overall investment in the global present at year end 2023 to optimize our organization and footprint to best match our growth strategy and improve our profitability. In addition, Canada and the United States, regions where we faced challenges in 2023, we made changes to the team, and, in the case of the U.S., added new leadership.
Fabian: With a keen focus on our international acute guns.
Fabian: To better achieve these goals, we executed the strategy reevaluation.
Fabian: Although our overall investment in global prison.
Fabian: And 'twenty two 'twenty three to optimize our organization and footprint to best match, our growth strategy and improve our profitability.
Fabian: In addition in Canada and in the U S that just teach regions, where we faced challenges in 'twenty two 'twenty three we made changes to the team and in the case of the U S added new leadership.
Fabien Haubert: As we exit 2023, we expect improvements in these regions bolstered by strong demand from our key verticals in this important market. Switching to Margin Performance. Growth margin was 58% for the food year compared to 61% for persons in 2022 due to an unfavorable product mix and post-COVID company cost increases, particularly in the first quarter.
Fabian: How do we exit 2023 we expect improvements in these regions bolstered by strong demand from our key verticals in this important market.
Switching to margin performance gross margin was 58% for the full year, some 50 to 61.
Fabian: Person in 2022 due to unfavorable product mix and post to the company and coast increases.
Fabian: In the first quarter.
Fabien Haubert: Better cost control and price adjustments occurred throughout 2023 and in Q4 enabled a growth margin that was roughly on par with the previous year's Q4 growth model. We plan to manage growth closely with the goal of achieving the target 60% growth margin. Looking ahead, we will continue investing and maximizing our resources to grow our market share across key regions while identifying efforts to excel in utilities, corrections, energy, and logistics projects.
Fabian: Better cost control and price adjustments or chewed through at 2023.
Fabian: And in Q4 enabled the gross margin that was roughly on par.
With the previous year Q4 gross margin.
Fabian: We plan to manage gross margin closely with the goal of achieving that target 60% gross margin.
Fabian: Looking ahead, we will continue investing in maximizing our resources to grow our market share across key region.
Fabian: While intensifying efforts to excel in the utilities correction energy and logistics verticals.
Fabien Haubert: Our strategic focus on Business Development will be instrumental to achieving these objectives and driving sustained success in the coming years. In the U.S., our recently appointed VP of sales is focused on setting and implementing a growth strategy in the region, mainly focused on the verticals we're targeting. In Europe and Africa, we are committed to continue growing our market share by actively deploying our resources.
Fabian: I was trying to juxtapose focus on business development will be instrumental to achieving these objectives and driving sustained success in the coming year.
Fabian: In the U S. We recently, our recently appointed VP of sales. He is focused on setting and implementing a growth strategy in the region, mainly focused on the verticals we're targeting.
Fabian: In Europe and Africa, we're committed to continue growing our market share, but actively deploying our resources.
Fabien Haubert: In AIPAC, without the headwind that hurt us in 2023 and the realignment of our focus in the region, we're targeting growth in our targeted vertical. The appointment of a new local leader in Q4 2023 will assist us in completing our repositioning in the region and developing a Sustainable Growth Strategy, switching us to look at product and solution. During my time at Senstar, improving our solution has been a top priority, and with our sustained investment in R&D, we have made big strides.
Fabian: In APAC, we do.
Fabian: The headwind that hurt us in 'twenty to 'twenty three on the realignment of our focus in the region, we're targeting growth in our targeted verticals do your appointment.
Fabian: When you look a leader in Q4, 2023 will assist us in completing our repositioning in the region.
Fabian: In developing a sustainable growth strategy.
Fabian: Switching now to look at product that solution.
Fabian: Dream My stomach cancer are improving our solution has been a top priority.
Fabian: And with our sustained investments in R&D.
Fabian: We have made big strides.
Fabien Haubert: Last year, we introduced an exciting new product, the multi-sensor, a product that will further differentiate Senstar in the marketplace. The multicenter is to be launched in Q2 2024. The MOCTIS sensor is our new AI-based intrusion detection system that uses an embedded sensor fusion engine to intelligently synthesize data from multiple sensing technologies, providing full intrusion situational awareness and reducing false alarm rates close to 0%. The system includes short-range radar, PIR, accelerometer, high-frequency vibration, and image sensor.
Fabian: Last year, we introduced an exciting new product the multi sensor.
Product that will further differentiate the marketplace.
Fabian: The multi sensors to be launched in Q2 'twenty 'twenty four.
Fabian: The multi sensor is the only new AI based intrusion detection system that uses an embedded sensor fusion and Gs MTN Dew Intel generally synthesize data from multiple sensing technology, providing food intrusion situational awareness and reducing false alarms rates.
Fabian: Close to zero percent.
Fabian: The system includes short range radar P. A R accelerometer.
Fabian: High frequency vibration and image sensor.
Speaker Change: I'm delighted with the reception of the multi sensor by customers in the industrial.
Fabien Haubert: I'm delighted with the reception of the multi-sensor by customers and the industry. It received the Astros Homeland Security 2023 Platinum Award for the best intrusion detection and prevention solution, and discover our opinion that this groundbreaking new system is unlike anything else on the market. In 2024, we will focus on improving our bottom line results, with the intention of returning to top line growth, increasing growth margins, and now, with better cost optimization, improving our business efficiency and scale.
Speaker Change: Multi sensor receives the asterisk homeland security twenty-twenty, reflecting in the woods.
Speaker Change: The best intrusion detection and prevention solution and discovering a real opinion that this drama breaking your system is unlike anything else on demand.
Speaker Change: In 'twenty 'twenty four will be focused on improving our bottom line results.
The intention of returning to topline growth increasing gross margin.
Speaker Change: And now with better cost optimization, and improving our business efficiently efficiency and scale.
Speaker Change: That's a solution.
Fabien Haubert: Senstar Solutions protect important assets and installations around the world in a wide range of applications, and we aim to strengthen our global presence in our key regions. Our newest product, the multi-sensor, supports this long-term goal. The market reception is extremely encouraging, and as we approach the general market release of Multisensor later this year, we anticipate building a pipeline of orders. Longer term, we see the multisensor playing an important role in expanding our addressable market.
Speaker Change: Protect important assets in installation around the world in a wide range of application.
Speaker Change: And we aim to strengthen our global presence with key region.
Speaker Change: I wouldn't use the.
Speaker Change: The multi sensor supports this long term goal.
The market reception is extremely encouraging and as we approach the general market's relieves us multi sensor later this year.
Speaker Change: We anticipate building the pipeline and the holders.
Speaker Change: Longer term, we see the multi sensor playing an important role in extending our addressable markets.
Fabien Haubert: In closing, I want to express my gratitude to the Senstar employees for their ongoing commitment to deliver excellence in our product and service. Now, I will pass the call to our CFO, Alicia Kelley. Alicia, please go ahead. Thank you.
Speaker Change: In closing I wanted to express my gratitude to the status of our employees for their ongoing commitment to deliver excellence.
Speaker Change: And services.
Speaker Change: Now I will pass the Cold War CFO Elisha Kelly.
Elisha Kelly: Please go ahead.
Thank you Fabian before I begin my financial review I too would like to join Fabian and wishing tumor success on the next leg of his journey working alongside Tomer for nearly the last five years as VP of finance has been an extremely fulfilling experience.
Alicia Kelly: Thank you, Fabien. Before I begin my financial review, I too would like to join Fabien in wishing Tomer success on the next leg of his journey. Working alongside Tomer for nearly the last five years as VP of Finance has been an extremely fulfilling experience. Tomer's dedication, expertise, and strategic guidance have been invaluable in steering our financial operation. I've benefited greatly from his...
Elisha Kelly: His dedication expertise and strategic guidance has been invaluable in sharing our financial operations.
Elisha Kelly: Benefited greatly from his.
Alicia Kelly: I have benefited professionally and personally from his experience and guidance, and I extend my deepest gratitude for his contributions and wish him all the best in his future endeavors. For the fourth quarter results, our reported revenue was $8.9 million, a decrease of 9.8%, compared with reported revenues of $9.9 million in the fourth quarter of 2022. As Fabien discussed, the decrease was primarily due to softness in the U.S. and Canada due to large non-reoccurring energy and utility projects generated in Q4 of 2022.
Elisha Kelly: I have benefited professionally.
Elisha Kelly: Professionally and personally from his experience and guidance and I extend my deepest gratitude for his contribution and wish him all the best in his future endeavors.
Elisha Kelly: In the fourth quarter results, our reported revenue was $8 $9 million a decrease of nine 8% compared with reported revenues of $9 9 million in the fourth quarter of 2022.
Elisha Kelly: As Fabian discussed the decrease was primarily due to softness in the U S and Canada due to large nonrecurring energy and utility projects generated in Q4 2022.
Alicia Kelly: A decline was also seen from a large project in Africa that was sold in partnership with Miguel Israel in Q4 of 2022. The geographic breakdown as a percentage of revenue for the fourth quarter of 2023 compared to the year before is as follows: North America, 36 versus 47 percent. Europe, 36 versus 27 percent. APAC, 14 versus 10 percent.
Klein was also seen from a large project in Africa that was sold in partnership with Miguel Israel in Q4 2022.
The geographic breakdown as a percentage of revenue for the fourth quarter of 2023 compared to the year before is as follows.
Elisha Kelly: North America, 36 versus 47% Europe 36 versus 27%.
Elisha Kelly: APAC 14 versus 10% Latin America, 11%, 4% and others made up 3% versus 12% in the prior year.
Alicia Kelly: Latin America, 11 versus 4 percent, and others made up 3 percent versus 12 percent in the prior year. Our reported operating expenses were $4.8 million, an increase of 2.2 percent compared to the prior year's fourth quarter operating expenses of $4.7 million. The increase in operating expenses is primarily due to one-time exceptional expenses necessary to streamline the business for future business requirements and are redomiciled to Canada, partially offset by a decrease in general and administration expenses compared to 2022.
Elisha Kelly: Our reported operating expenses were $4 8 million, an increase of 2.2% compared to prior year's fourth quarter operating expenses of $4 7 million.
Elisha Kelly: The increase in operating expenses is primarily due to onetime exceptional expenses necessary to streamline the business for our future business requirements and a re domicile to Canada, partially offset by a decrease in general and.
Elisha Kelly: And the administration expenses compared to 2022.
Alicia Kelly: Reported operating income for the fourth quarter was $262,000 compared to $917,000 in the year-ago period. The decline in operating income was primarily due to lower revenue. Financial income was $34,000 compared to $277,000 in the 4th quarter of last year. This is mainly a non-cash accounting effect. We regularly report due to the adjustment to the evaluation of our monetary assets and liabilities denominated in currencies other than the functional currency of the operating entities in the group, in accordance with GAAP.
Elisha Kelly: Reported operating income for the fourth quarter was.
Elisha Kelly: 262000, compared to 917000 in a year ago period.
Elisha Kelly: The decline in operating income was primarily due to lower revenue.
Elisha Kelly: Financial income with 34000 compared to 277000 in the fourth quarter of last year. This is mainly noncash accounting effect.
Elisha Kelly: Regularly report due to the adjustments to the valuation of our monetary assets and liabilities denominated in currencies other than the functional currency of the operating entities in the group in accordance with GAAP.
Elisha Kelly: Net income attributable to sensor technology shareholders in the quarter was 433000 or two cents per share versus $3 5 million or <unk> 15 per share in the fourth quarter of last year.
Alicia Kelly: Net income attributable to Senstar Technology shareholders in the quarter was $433,000 or $0.02 per share versus $3.5 million or $0.15 per share in the fourth quarter of last year. The company's reported EBITDA for the fourth quarter was $450,000 versus $1.2 million in the fourth quarter of last year. Added to Senstar's operational contribution is the public platform expenses and amortization of intangible assets from historical acquisitions.
Elisha Kelly: The company's reported EBITDA for the fourth quarter was 450000 versus 1.2 million in the fourth quarter of last year.
Elisha Kelly: I don't just starting with operational contribution is a public platform expenses and amortization of intangible assets from historical acquisition.
Elisha Kelly: The corporate expenses and amortization expenses for the fourth quarter were 700, K versus $1 2 million in the fourth quarter of the year before.
Elisha Kelly: For the full year results revenue for the year ended December 31, 2023 was $32.8 million compared to $35 $6 million in the prior year.
Elisha Kelly: The year over year decrease of seven 8% relates primarily to a decline in the APAC region.
Alicia Kelly: The corporate expenses and amortization expenses for the fourth quarter were $700K versus $1.2 million in the fourth quarter of the year before. For the full year results, revenue for the year ended December 31, 2023, was $32.8 million, compared to $35.6 million in the prior year. The year-over-year decrease of 7.8% relates primarily to a decline in the APAC region, where overall sales declined by 2.7 million, or 41%, due to lower sales from transportation and utility projects.
Overall sales declined by $2 7 million or 41% due to lower sales from transportation and utility projects.
Elisha Kelly: North America revenue declined slightly due to a 37% decline in Canada with a large utility sale not repeating in 2023 and flat year on yourselves in the U S.
Elisha Kelly: These declines were partially offset by an 11% growth in Europe with sales expanding in all of our key verticals and South and Latin America, which grew 65% year over year as some star benefited from sales and corrections logistics and energy projects.
Elisha Kelly: The geographical breakdown as a percentage of revenue for 2023 compared to 2022 is as follows.
Elisha Kelly: North America, 45% in both periods, Europe, 35 versus 29% APAC 12 versus 18%.
Alicia Kelly: North America revenue declined slightly due to a 37% decline in Canada with a large utility sale not repeating in 2023 and flat year-on-year sales in the U.S. However, these declines were partially offset by 11% growth in Europe, with sales expanding in all of our key verticals. In South and Latin America, which grew 65% year-over-year, as Senstar benefited from sales and correction, logistics, and energy projects. The geographical breakdown as a percentage of revenue for 2023 compared to 2022 is as follows. North America 45% in both periods; Europe 35 versus 29%. APAC 12 versus 18%; Latin America 7 versus 4%; and others made up 1% versus 4% in the prior year.
Elisha Kelly: Latin America, seven versus 4% and others made up 1% versus 4% in the prior year.
Elisha Kelly: Gross profit in 2023 was $18 $8 million or 57, 5% of revenue compared with 21 5 million or 65% of revenue in 2022.
Elisha Kelly: The decrease in gross margin was primarily due to revenue mix in the first quarter of 2023, and some increases in material costs, we have taken the appropriate measures to improve gross margin going forward.
Operating expenses in 2023 were $21 million, an increase of 0.5% compared to the prior year's operating expenses of $20 million.
The increase in operating expenses, primarily due to one time exceptional expenses.
Speaker Change: Sorry to streamline the business for our future business requirements and are re domicile to Canada par.
Speaker Change: Partially offset by a decrease in G&A expenses compared to 2022 period.
Alicia Kelly: Gross profit in 2023 was $18.8 million, or 57.5% of revenue, compared with $21.5 million, or 60.5% of revenue, in 2022. The decrease in gross margin was primarily due to revenue mix in the first quarter of 2023 and some increases in material cost. We have taken the appropriate measures to improve gross margin going forward.
Speaker Change: Operating loss was $1.3 million compared with operating income of one five and 2022.
Speaker Change: The operating loss was primarily due to lower gross margins on lower revenue.
Speaker Change: Net loss attributed both sensor technology shareholders for 2023 was $1.3 million or negative six cents per share versus net income of $3 $8 million or 16 cents per share in 2022.
Alicia Kelly: Operating expenses in 2023 were $20.1 million, an increase of 0.5% compared to the prior year's operating expenses of $20 million. The increase in operating expenses was primarily due to one-time exceptional expenses necessary to streamline the business for our future business requirements and our redomicile to Canada, partially offset by a decrease in G&A expenses compared to the 2022 period. Operating loss was $1.3 million compared with operating income of $1.5 million in 2022
Speaker Change: The reported net income in 2022 includes a net loss of $198000 from discontinued operations.
Speaker Change: In 2023, our EBITDA was a loss of 348000 compared with positive EBITDA of $2 $9 million in 2022.
Speaker Change: Corporate expenses and amortization expenses for the public platform with 2.9 million versus $4 5 million in 2022, the year over year change is attributable to a decline of $1 1 million in corporate expenses and a decline of <unk> 5 million in intangible assets amortization from purchase accounting assets.
Speaker Change: Cash and cash equivalents as of December 31, 2023 remain healthy with $14 $9 million or 64 cents per share the same level as last year.
Alicia Kelly: The operating loss was primarily due to lower gross margins on lower revenue. Net loss attributable to Senstar Technology shareholders for 2023 was $1.3 million or negative $0.06 per share versus net income of $3.8 million or $0.16 per share in 2022. The reported net income in 2022 includes a net loss of $198,000 from discontinued operations. In 2023, our EBITDA was a loss of $348,000 compared with a positive EBITDA of $2.9 million in 2022.
Speaker Change: That includes concludes my remarks, operator, we would like to open the call to questions now.
Speaker Change: Okay.
Speaker Change: Thank you at this time, we will be conducting a question and answer session if you'd like to ask a question.
Star one on your telephone keypad.
Speaker Change: Confirmation tone will indicate your line is in the question do you May Press Star two if he would like to remove your question from the queue.
Speaker Change: Participants using speaker equipment, it may be necessary to pick up your handset before pressing these darcie.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: And our first question comes from the line of Ted Liddy with Oppenheimer. Please proceed with your question.
Speaker Change: Yeah.
Ted Liddy: Hi, good morning.
Ted Liddy: I just wanted to know with the multi sensor are you expecting that to be a.
Ted Liddy: To schedule gross driver.
Ted Liddy: In 'twenty 'twenty four 'twenty 'twenty five.
Yeah.
Speaker Change: Okay, Hi, Thank you for your question.
Alicia Kelly: Corporate expenses and amortization expenses for the public platform were $2.9 million versus $4.5 million in 2022. The year-over-year change is attributable to a decline of $1.1 million in corporate expenses and a decline of $0.5 million in intangible assets amortization from purchase accounting assets. Cash and cash equivalents as of December 31st, 2023 remain healthy with $14.9 million or 64 cents per share, the same level as last year. That concludes my remarks. Operator, we would like to open the call to questions.
Speaker Change: It's clearly the intention.
Speaker Change: The multi center has to basically our goals one is to provide.
Speaker Change: A high rate of higher range technological solution in our key verticals to basically provide.
Provide and and that's been solution and provide further value and number two to expand.
Speaker Change: Where our addressable markets by addressing it as a single unit to secure critical sports of non critical infrastructure. So yes in a word it's our intention and we'll do our best for efforts to.
Speaker Change: That's in 'twenty to 'twenty, four, but mainly 'twenty 'twenty five in future years.
Operator: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in question view. You may press star 2 if you would like to remove your question. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start key. And our first question comes from the line of Ted Liddy with Oppenheimer. Please proceed with your question.
Speaker Change: As far as the first half of the year are you seeing a.
Speaker Change: Likely growth on the top line in the first half of 'twenty 'twenty four.
Speaker Change: So we're not providing forward looking statements in terms of expectations, especially for such short term, but clearly we hope that the multi sensor will be a major driver in to help us getting growth in the second part and mainly 2000.
Ted Liddy: Hi, good morning. I just wanted to know whether with the multi-sensor, are you expecting that to be a substantial growth driver in 2024-2025.
Speaker Change: Second part of the 'twenty 'twenty, four but mainly 2025.
Speaker Change: And what what verticals is the multi sensor most suited for.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: So.
Speaker Change: Without getting into many details the solution basically.
Fabien Haubert: Hi, thank you for your question. It's clearly the intention. The multi-center basically has two basic goals. One is to provide a higher-range technological solution in our key verticals, to basically provide an advanced solution and provide further value. And number two, to expand our addressable market by addressing it as a single unit, to secure critical spots of non-critical infrastructure. So yes, in a word, that's our intention. I will do our best for efforts to achieve that in 2024, but mainly in 2025 and future years.
It's meant to provide a higher end oh.
Speaker Change: Yeah.
Speaker Change: Situational awareness.
Speaker Change: And Regis you can totally false alarm. So the first place we're going to use it is that were existing vertical markets, which are the full one we're targeting correction utilities.
Speaker Change: Energy and.
Speaker Change: Logistics on top of which we work gloves as well on the airports and our military and borders.
Speaker Change: But on top of it we expect to address much broader verticals like industrial like cell towers like.
Speaker Change: Yeah.
Speaker Change: Critical spots, we then typically universities windup.
Fabien Haubert: As far as the first half of the year, are you seeing... likely growth of the top line in the first half of 2024?
Speaker Change: It's always find out logistics retail and then so long because it would be sold as a single unit and industrial application. So the goal will be to broaden.
Fabien Haubert: So we're not providing a forward-looking statement in terms of expectations, especially for such a short term, but clearly, we hope that the multi-sensor will be a major driver to help us achieve growth in the second part and, mainly, 2000, the second part of 2024, but mainly 2025.
Speaker Change: The verticals, we're gonna search.
Speaker Change: <unk> of our existing verticals, so within the verticals, but to gain market share outside of it.
Speaker Change: Yeah.
Speaker Change: Would you say that the multi sensor.
Speaker Change: Okay.
Speaker Change: I've been involved with your company for many years and it seems to you've had great success with.
Fabien Haubert: And what verticals is the multi-sensor most suited for?
Speaker Change: Technology, not such a great success with.
Fabien Haubert: without getting into many details, the solution is basically meant to provide a higher-end... Situational Awareness, and Reducing Totally False Alarms. So the first place we're going to use it is our existing vertical marker, which are the four ones we're targeting, correction, utilities, energy, and logistics, on top of which we work a lot as well on airports, the military, and borders. But on top of that, we expect to address much broader verticals, like industrial, like cell towers, like..., critical spots within, typically, universities, why not? Hospitals, why not?
Speaker Change: Growing revenue.
Speaker Change:
Speaker Change: Would you say that the multi sensor is something that sets itself apart from other.
Speaker Change: Innovative products.
Speaker Change: But how did the pass.
Speaker Change: Yeah.
Speaker Change: Yes, we we believes that.
Speaker Change: We've put a lot of efforts to come with a strong evolution something that the market need them.
Speaker Change: We've been searching for what would be the next technology that could replace some of those and bringing something more.
Speaker Change: So.
Speaker Change: We will keep trying to secure perimeter as per se number one critical infrastructure.
Are we supposed to just where the growth is sold as a single unit to basically secure.
Fabien Haubert: Logistics, retail, and so on because it would be sold as a single unit and for industrial applications. So the goal will be to broaden the verticals we're going to search outside of our existing verticals. So within the verticals, but to gain market shares outside of them.
Speaker Change: Spots, which are not in full perimeter detection.
Speaker Change: But today, we're not selling over the years. So we hope and we strive to have them up and sensor securing some spots, replacing the addition of six energy today and it's.
Fabien Haubert: I've been involved with your company for many years, and it seems you've had great success with technology, not such great success with, you know, growing revenue. Would you say that the multi-sensor is something that sets itself apart from other innovative products that you've had in the past?
Speaker Change: Indeed, extending tremendously I would address that.
Speaker Change: Addressable market.
Speaker Change: In the past you've had some.
Speaker Change: Optimism in the energy markets.
Speaker Change: And some wins here and there over the last five years is that a market that looks out.
Speaker Change: Promising currently.
Speaker Change: Yeah.
Speaker Change: So the energy market was split it.
Fabien Haubert: Yes, we believe that we've put a lot of effort into coming up with a strong evolution, something that the market didn't have. We've been searching for what would be the next technology that could replace some of this and bring in something more. So we will keep trying to secure perimeters, per se, number one, in critical infrastructure. Where we foresee growth is sold as a single unit to basically secure spots which are not in full perimeter detection, where today we're not selling our gear. So we hope and we strive to have the multi-sensor securing some spots replacing other editions of technology today, indeed expanding tremendously our addressable market.
Speaker Change: Between the different production of energy basically traditionally it was old and guess N D depends a lot on the international situation of the bedroom, which you know heavier growth in sustainable energy plants solar farms.
Speaker Change: And indeed, we're working hard to take market share and disabling grain market, which has a radio insurers in Europe, and we're going to work very hard to getting market share in North America, and then remember it goes in general there that's consistent indeed umbrella.
Speaker Change: Given the geopolitical turmoil.
Speaker Change: World right now.
Fabien Haubert: In the past, we've had some optimism in the energy market and some wins here and there over the last five years. Is that a market that looks... (inaudible)
Speaker Change: Our military.
Speaker Change: Uses and bases are done.
Speaker Change: Our borders looking like areas of growth for the company.
Speaker Change: Yeah.
Speaker Change: Yes. It is cannot comment too much on this because we're working on some project, which indeed with confidentiality, but yes, it might provide some opportunities.
Fabien Haubert: So the energy market was split in between the different production of energy, basically traditionally azole and gas, and this depends a lot on the international situation in the barrel. We see heavier growth in sustainable energy plants now. Solar Farms, and others. And indeed, we're working hard to take market share in a growing market, which has already occurred in Europe. And we're gonna work very hard to get market share in North America and the Americas, in general, there that could sustain our growth.
Speaker Change:
Speaker Change: And as far as your move from.
Speaker Change: Israel.
Speaker Change: To Canada.
Speaker Change: How much of that expense was that in the fourth quarter approximately.
Speaker Change: Yes.
Speaker Change: Yeah.
Speaker Change: So we're not providing a specific answer to that at this point in time.
Speaker Change: Yeah.
Speaker Change: Do you expect to save money ongoing from the move.
Speaker Change: Yes, absolutely and that was one of the.
Fabien Haubert: given the geopolitical turmoil in the world right now, uses and, or faces and, um, Borders are looking like areas of growth for the company.
Speaker Change: Things that we consider in making and making the move and but most importantly, you know it's a it provides the nucleus of our business in the place that we currently provide which isn't mostly in Canada and where most of the senior management resides at the moment.
Fabien Haubert: Yes, it is. Cannot comment to mention that because we're working on some project which will indeed have confidentiality. But yes, it might provide some opportunities.
Speaker Change: Yeah.
Speaker Change: Thank you.
Speaker Change: And again as a reminder, if anyone has any questions you May press star one on your telephone keypad to join the question and execute.
Fabien Haubert: And as far as your move from Israel to Canada, how much of an expense was that in the fourth quarter, approximately?
Speaker Change: And it appears there are no further questions at this time and I'll now turn the call back over to Brad for closing remarks.
Fabien Haubert: So we're not providing a specific answer to that at this point in time.
Fabien Haubert: Do you expect to save money ongoing from the move? Yes.
Brad: On behalf of sense of management I would like to thank our investor for the interest.
Fabien Haubert: Yes, absolutely, and that was one of the things that we considered in making the move, but most importantly, it provides the nucleus of our business in the place that we currently reside, which is mostly in Canada and where most of senior management resides as well. Thank you.
Brad: And long term support of her business have a great day.
Brad: Yeah.
Brad: Thank you. This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.
Brad: Thank you. Thank you.
Brad: Okay.
Hum.
Brad: Uh huh.
Brad: Hum.
Brad: Hum.
Brad: Hum.
Brad: [music].
Brad: Hum.
Brad: [music].
Brad: Hum.
Fabien Haubert: And again, as a reminder, if anyone has any questions, you may press star 1 on your telephone keypad to join the question and answer session. And it appears there are no further questions at this time, and I'll now turn the call back over to Fabien Haubert for a closing remarks.
Hum.
Brad: [music].
Brad: Yeah.
Brad: [music].
Hum.
Brad: [music].
Fabien Haubert: On behalf of Senstar management, I would like to thank our investor for the interest and long-term supporters of Harvard. Have a great day.
Operator: Thank you. This concludes today's conference, and you may disconnect your line at this time. Thank you for your participation.
Brad: Hum.
Brad: Uh huh.
Brad: [music].
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