Q2 2024 Senstar Technologies Corp Earnings Call

August 26, 2024

Speaker Change: Greetings, and welcome to the SEMS Star Second Quarter 2024 Finance Results. At this time, all participants are in a listen-only mode.

Operator: At this time, all participants are in a listen-only mode.

Operator: A question and answer session will follow the formal presentation. If you require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded.

Speaker Change: Wood. A question and answer session will follow the formal presentation.

Speaker Change: If you require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce you to your host Kim Rogers with Haydn IR. Thank you Kim. You may begin.

Kimberly Rogers: It is now my pleasure to introduce you to your host, Kim Rogers, with Hayden IR.

Operator: Thank you, Kim. You may begin.

Kimberly Rogers: Thank you, operator. I'd like to welcome everyone to the conference call and thank Senstar's management for hosting today's call. With us on the call today are Mr. Fabien Haubert, CEO of Senstar Technologies, and Ms. Alicia Kelly, CFO.

Speaker Change: Thank you, operator.

Speaker Change: I'd like to welcome everyone to the conference call and thank Sen Star's Management for hosting today's call.

Speaker Change: with us on the call today, our Mr. Fabien Haubert, CEO of Sensor Technologies, and this Alicia Kelly, CFO.

Kimberly Rogers: Fabien will summarize key financial and business highlights, followed by Alicia, who will review Senstar's financial results for the second quarter of 2024. We will then open the call for a question-and-answer session.

Fabien Haubert: Fabien will summarize key financial and business highlights followed by Alicia who will review some stars financial results for the second quarter of 2024. We will then open the call for a question and answer session.

Speaker Change: Before we begin, I'd like to point out that this conference call may contain projections or other forward-looking statements regarding future events.

Speaker Change: or the company's future performance. These statements are only predictions, and since start cannot guarantee that they will, in fact, occur. Since start does not assume any obligation to update that information.

Kimberly Rogers: Actual events or results may differ materially from those projected, including as the results of changes in market trends, reduced demand, and the competitive nature of the security systems industry, the unanticipated and unknown effects of COVID-19, 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.

Speaker Change: Actual events or results may differ materially from those projected, including as a result of changes in market trends, reduced demand and the competitive nature of the security systems industry. The unanticipated and unknown effects of COVID-19, including on our operations and our clients, as well as other risks identified in the documents filed by the company with the Security and Exchange Commission.

Kimberly Rogers: 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. Please note that in our press release, we have reconciled non-GAAP financial measures to the most directly comparable GAAP measures in accordance with Reg G requirements. You can also refer to the company's website at www.senstartechnologies.com for the most directly comparable financial measures and related reconciliation.

Speaker Change: In addition, during the course of the conference call, we will describe certain non-dap financial measures that should be considered in addition to, and not in lieu of comparable debt financial measures.

Speaker Change: Please note that in our press release, we have reconciled non-gap financial measures to the most directly comparable gap measures in accordance with reggae requirements.

Speaker Change: You can also refer to the company's website at www.sensartechnologies.com for the most directly comparable financial measures and related reconciliation.

Fabien Haubert: With that, I'd now like to hand the call over to Senstar, CEO, Fabian Huber. Please go ahead.

Speaker Change: With that, I'd now like to hand the call over to SunStar CEO, Fabien Haubert. Please go ahead. Thank you Kim.

Fabien Haubert: Thank you, Kim. Thank you for joining us today to review Senstar's technologies. Sick of clutter 2020-24 financial results. Our second quarter revenue of 8.3 million was nearly on par with the same quarter last year, just down 1.6%. One highlight from this quarter is the continued improvements in our profited worthy performance. Our gross margin reached 63.2%, the best we have delivered in the last 8 quarters. This improvement was mostly due to a shift in product mix, the improvements of supply and chain challenges and cost relicments with the last year. Operating expenses decreased by 9% and represented 55 to 2% of revenue compared to 59.7% in the euro-go quarter.

Fabien Haubert: Thank you for joining us today to review Sam's toss technologies sick of a quarter of 2024 financial results.

Speaker Change: I was second quarter ready to be.

Speaker Change: of 8-3 million with Nadion Park with the same quarter last year, just down 1-6%.

Speaker Change: When highlight from this quarter is the continuity improvement in our Prophethood with the performance.

Speaker Change: and Robert Maas in H-63-2%.

Speaker Change: The best we have delivered in the last eight quarters.

Speaker Change: This improvement was mostly due to a shift in product mix, the improvements of supply and chain challenges and cost reliance with the list last year.

Speaker Change: Operating expenses decreased by 9% and represented 55% of revenue compared to 59.7% in the year ago quarter.

Fabien Haubert: The higher gross margin and lower operating expenses combined to lift our operating margin to 8% of revenue from 1% in Q2-2023. As a result, our net income climbed to $493,000, and our EBITDA margin increased to 10.2% of revenue. In the second quarter, our balance is trained and further with higher cash reserve and a million reduction in inventory since the end of Q1, thanks to diligent inventory management. Our incremental cash flow gives us the flexibility to continue driving growth in our key areas and investing in new product innovation.

Speaker Change: The higher gross margin and lower operating expenses combined to lift our operating margin to 8% of revenue from 1% in Q2223.

Speaker Change: As a result, our net income climbed to 493,000 US dollars and our EBITDA margin increase to 10% of revenue.

Speaker Change: In the second quarter, our balance should strengthen further with higher cash reserve and a million reduction in inventory since the end of Q1. Thanks to diligent inventory management.

Speaker Change: Our incremental cash flow gives us the flexible to continue driving growth in our key areas and investing in new products innovation.

Fabien Haubert: Now, let's dive into the specifics of our performance across various regions and sectors. In the U.S., we saw a modest increase in revenue of 2% in Q2 compared to last year, and revenue in this important region remains steady, with a strong correction on market and growing demands in the utilities sector. A patch was a standard performing Q2 with revenue surging 135 persons versus Q2-2023. Revened primarily by major wins in the utilities and transport sectors throughout the whole region and several projects. Europe, however, faced some challenges, with revenue down 33% in Q2, mainly due to customer delays in project.

Speaker Change: Now let's dive into the specifics of our performance, the first various regions and sectors.

Speaker Change: In the U.S., we saw a molesting crease in revenue of 2% in due to compared last year.

Speaker Change: and Revenue in this important region remains tally with a strong correction on markets and growing demands in the utilities sector.

Speaker Change: Eight Touch was a stand-up performer in Q2, with revenue surging a 135-person versus Q2-2023.

Speaker Change: Reef and primarily, my major wings in the utilities and transport sectors throughout the whole region and several projects.

Speaker Change: Europe, however, face some challenges with revenue down 33% in YouTube. Mainly due to customer delays in project.

Fabien Haubert: However, we believe this project will catch up in Q3 and Q4. Despite this delays, when dissipates substantial activity in the utility, energy, and transport sectors throughout the region. Our full key verticals delivered solid growth, rising 5% in Q2 year over year and 14% year to date. These growths were driven by major increases in sales and demands in the utility sector worldwide, particularly in solar farms, power stations, nuclear plants, and data centers. Additionally, we seen significant growth in the airport environments with interest reinforcing on a global scale.

Speaker Change: However, we believe this project will catch up in Q3 and Q4. Despite this delays, one TCB substantial activity in the utility, energy and transport sectors throughout the region.

Speaker Change: Our four key verticals, Galavas Solid Growth, writing 5% and then Q2 year over year and 14% year to date.

Speaker Change: This growth was driven by nature and trees in thousands of months in the utility sector worldwide, particularly in solar farms, power stations, nuclear plants and data centers.

Speaker Change: Additionally, we've seen significant growth in the airport environments with interest reinforcing on a global scale.

Fabien Haubert: In terms of new product development, was a thrill with the successful launch of our latest innovation, the Sensor Multi-Sensor. Sensor commitment to delivering innovation solution to the market is paying off. Securing industry professionals are dealing with increasingly complex and frequent security events and need solutions to enhance operational efficiency. One of their biggest challenges is news and salons. Polk salons treated by non-interested events like someone standing too close to a fence or debris blowing against it. These alarms waste time and resources. The multi-sensor stands out in the market with advanced capability, allows us to tackle one of the industry's most pressing issues: reducing news and salons to zero.

Speaker Change: In terms of new product development, we're thrilled with the successful launch of our latest innovation, the Sensor Multi-Sensor.

Speaker Change: Center Commitment to Delabring Innovation solution to the market is paying off.

Speaker Change: Security and Dufri professionals are dealing with increasing the complex and frequent security events and needs solution to enhance operational efficiency.

Speaker Change: One of their biggest challenges is news and so on, all salons traded by non-interest even, like someone standing too close to a fan, or Deborah's blowing against it.

Speaker Change: This learns waste time and resources.

Speaker Change: The multisensors stands out in the market with advanced capability, allows us to tackle one of the industries, most pressing issues, reducing the use of salons to zero.

Fabien Haubert: The multi-sensors for the ability of detection vastly exceeds trust and traditional sensors, and its unique ability to synthesize data for multiple sensing technologies provides full situational awareness and decreases new sense alarms next to zero. These are key metrics for the security industry, and we're proud to be the first to market with a device that can deliver these outcomes. With the multi-sensor now available to sell, we are already seeing significant market interest. We believe this product will be a key growth driver for Senstar as we build our momentum in core verticals and expand into new markets.

Speaker Change: The Multi-Sensors Provedonty of Detection

Speaker Change: Wastly Exceeds, Dressman, Traditional Sancers

Speaker Change: and his unique ability to synthesize data from multiple sensing technologies.

Speaker Change: Provide full situational awareness and decreases nuisance alarms next to zero.

Speaker Change: These are key metrics for the security industry and we're proud to be the first to market with a device that can deliver these outcomes.

Speaker Change: with a multi-sensor now available to sale.

Speaker Change: We are already seeing significant market interest.

Speaker Change: We believe this product will be a key growth driver for the same start as we build our momentum in core vertical and expand into new markets.

Fabien Haubert: The multi-sensor versatility makes it ideal for securing critical areas within non-critical infrastructure, in addition to our traditional markets, which opens up exciting opportunities for us to address higher market volumes.

Speaker Change: The multi-sensor versatility makes you ideal for securing critical areas within non-critical infrastructure.

Speaker Change: in addition to our traditional markets, which opens up exciting opportunities for us to address higher market volumes.

Fabien Haubert: In closing, I'd like to thank you for your continued support of Senstar Technologies. Our performance in the first half of 2024 underscores the strength of our strategy and the dedication of our team. We're encouraged by the solid momentum we've built across our key verticals, and we're excited by the opportunities that lie ahead, particularly with the launch of the multi-sensor. As we move forward, we remain committed to driving growth and enhancing profitability, and delivering innovative solutions that meet the evolving needs of our customers. We believe that the investment we've made in our product of volume alongside our improved operational efficiencies position us well for continuous success.

Speaker Change: In closing, I'd like to thank you for your continuous support of scientific knowledge.

Speaker Change: Our performance in the first half of 2024, and of course this trend of our strategy and the dedication of our team.

Speaker Change: We're encouraged by the solid momentum we built across our key verticals and we're excited about the opportunities that lie ahead, particularly with the launch of the multisensory.

Speaker Change: As we move forward, we remain committed to driving growth and hunting profitability and delivering innovative solution that may be evolving needs of our customers.

Speaker Change: We believe that the investment we've made in our product portfolio alongside our improved operational efficiencies, position us well for continuous success.

Alicia Kelly: I will now turn the call over to Alicia for a review of the financial results in more detail. Thank you, Fabian. Our reported revenue for the second quarter of 2024 was $8.3 million. A modest decrease of 1.6% compared with reported revenues of $8.4 million in the second quarter of 2023. The decrease was primarily due to delays in projects in the media.

Speaker Change: I will now turn the call over to Alicia for a review of the financial results in more details.

Speaker Change: Thank you, Fabien. Our report is revenue for the second quarter of 2024 and was paid.

Speaker Change: 23 million, a modest decrease of 1.6% compared with reported revenues, how 8.4 million in the second quarter of 2023. If the decrease was primarily due to delayed in projects in the Mia.

Alicia Kelly: The geographical breakdown as the percentage of revenue put the second quarter of 2024 compared with the prior year quarter is as follows. North America, 47% in each period. EU, 27% versus 40%. Apex, 23% versus 10%. Latin America, 1% versus 3%. And all other regions, less than 1% in both periods.

Speaker Change: The geographical breakdown at the percentage of revenue puts second quarter of 2024 compared with a prior year quarter is as follows.

Speaker Change: North America, 47 percent in each period. EU, 27 percent versus 40 percent, 8%, 23% versus 10% Latin America, 1% versus 3% and all of their region, less than 1% in both periods.

Alicia Kelly: Supported growth margin was 63.2% of revenue for the second quarter of 2024 compared to 60.7% of revenue for the second quarter of 2023. This margin improvement was primarily the result of a shift in our product mix to higher margin product in the product in the quarter and price adjustments taken in 2020. Treats.

Speaker Change: Supported Girl's margin was 63.2% of revenue for the second quarter of 2024 compared to 60.7% of revenue for the second quarter of 2023.

Speaker Change: This marketing improvement was primarily the result of the shift in our product mix to higher margin products in the product in the corner and price adjustments taken in 2023.

Alicia Kelly: Our reported operating expenses were $4.6 million, a decrease of 9.1% from the prior year's quarter's operating expenses of $5 million. The year-over-year decrease in operating expenses is due primarily to lower GNA expense, lower sales and marketing expense, as a result of our efforts to streamline operations and diligently manage our over-the-cost. Our operating income improved in the second quarter to $666,000 compared to $83,000 in the year-of-go period. The year-over-year improvement was due to higher gross margins on higher sales and a lower operating cost.

Speaker Change: I reported operating expenses were $4.6 million, a decrease of $9.1 per cent from a prior year's quarter operating expenses of $5 million.

Speaker Change: The Euro-Virier decrease in operating expenses is due primarily to lower DNA expense, lower sales and marketing expense as a result of our efforts to streamline operations and diligently manage our over-the-cult.

Speaker Change: Our operating income improves in the second quarter to 666,000 compared to 83,000 in the year ago period. The year over year improvement was due to higher course margins on higher self and a lower operating cost.

Alicia Kelly: Financial income was $103,000 compared to financial expense of $74,000 in the second quarter of last year. This is mainly a non-chashot telling effect we regularly report due to the adjustments to the evaluation of our monetary assets and liabilities, denominated in current fees, other than the functional currency of the operating entities in the group, in accordance with gas. Net income attributable to Senstar Technology shareholders in the quarter was not $493,000, or two cents per share, versus $275,000, or less than one cent per share in the second quarter of last year. The company reported EBIDA for the second quarter of $846,000, versus $290,000 in the second quarter of last year.

Speaker Change: Financial income with 13,000 compared to financial expense of 74,000 in the second quarter of last year.

Speaker Change: This is mainly a non-touched telling effect we regularly report due to the adjustment to the evaluation of our monitoring after some liability.

Speaker Change: D'Nomedy didn't current use others in a functional career to be operating entities in the group in accordance with GALS. Net income attributable to some start technology shareholders in the quarter with $493,000.

Speaker Change: Or two cents per share, birth to 225,000 or less per one cents per share in the second quarter of last year.

Speaker Change: The Company Report is EBITDA for the second quarter of 846,000.

Alicia Kelly: Taxes on income were $276,000 compared to a tax benefit of $266,000 in the second quarter of last year. Senstar operating expenses include public platform and optimization of intangible assets from historical acquisition. The corporate expense and optimization expense for the second quarter were $400,000, the same as in the previous year's quarter.

Speaker Change: First is 290,000 in the second quarter of last year.

Speaker Change: Taxes on income, or 276,000, compared to a tax benefit of 260,000 in the second more of last year. Since third operating expenses include public platform and implementation of intangible assets from control for acquisitions.

Speaker Change: We quote and sent an optimization experience for the second quarter was 100,000, the plane of the team of previous quarters.

Alicia Kelly: Cash and cash equivalents as of June 30, 2024, for $15.2 million, for $65 per share, as compared to $14.9 million, or $64 cents per share, as of December 31, 2023.

Speaker Change: Cash and Cash, and Chris Woodland, as of June 20, 24 for 15.2 million, 4.65 cents per share. As compared to 14.9 million or 64 cents per share, as of December 31, 2023.

Alicia Kelly: That includes my remarks.

Alicia Kelly: All for it.

Operator: We would like to open the call to questions now. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. The confirmation tone will indicate your client is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Thank you.

Speaker Change: That concludes my remarks. All right, because we would like to open the call to questions now.

Speaker Change: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press R1 on your telephone keypad. He confirmation to indicate your line is in the question too.

Speaker Change: and May Press start to, if you would like to remove your question from the queue.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker Change: One moment please while we pull for questions.

Speaker Change: [inaudible]

Ted Litty: Our first question comes from the line of Ted Litty with Oppenheimer. Please proceed with your question.

Speaker Change: Thank you. Our first question comes from the line of Ted Litty with Oppenheimer. Please proceed with your question.

Fabien Haubert: Hi, I was wondering when you would expect the multi-sensor to have a material impact on revenue or revenue growth. Hi. Thank you very much for your question.

Speaker Change: Hi, I was wondering when you would expect the multi-censor to have a material impact on.

Speaker Change: Revenue or revenue growth.

Fabien Haubert: So the product just got released for sales. So the first delivery is to happen in the next coming week. It's a bit early to say. We hope to provide more information to the next release. That is the product just got officially released for selling. And the first order has come already that not significant at this stage. This is less than for a couple of weeks. Go.

Speaker Change: Nice, and thank you very much for your question. So the product just got released for sales, so the first delivery are to happen in the next coming week. It's a bit early to say we hope to provide more information to the next release.

Speaker Change: But he's the product just got officially released for selling and the first order has come already, but not significant at this stage, because he's less than a couple of weeks ago.

Fabien Haubert: And there's a company currently have a backlog of orders expected in the next 12 months. So yes, unfortunately, we're not commenting that. I can only mention that we had a good trend of booking in the first part of the year, but unfortunately we're not commenting the backlog or other expectations.

Speaker Change: and the company currently have a backlog of orders expected in the next 12 months.

Speaker Change: So yes, unfortunately, we're not commenting that. I can only mention that we had a good friend of booking in the first part of the year, but unfortunately, we're not commenting the backlog or further expectations.

Fabien Haubert: Do you expect to increase revenue at the second half of the year compared to the 18 million did roughly last year for the second half of 2023? Unfortunately, we're not providing forward-looking statements, but we're striving and working hard on it.

Speaker Change: Do you expect to increase revenue, the second half of the year compared to the 18 million dig roughly last year for the second half of 2023?

Speaker Change: Unfortunately, we're not providing forward-looking statements, but we're striving and working hard on it.

Fabien Haubert: Okay, thanks for taking away questions.

Speaker Change: Okay, thanks for taking my questions.

Operator: There are no further questions at this time.

Fabien Haubert: I'd like to pass the call back on all of Fabien for any closing remarks. Thank you again. And we look forward to updating you on our progress in the coming quarters.

Speaker Change: Thank you. There are no further questions at this time. I'd like to pass the call back along with Fabien.

Speaker Change: for any closing remarks.

Speaker Change: Thank you again.

Fabien Haubert: Please feel free to contact our IR firm for further work on this call or to learn more about sensor technologies. That contact information is at the bottom of today's press release.

Speaker Change: and we look forward to updating you and our progress in the coming quarters. Please give free to contact our IAR firm for further follow up on this call. Or to learn more about scientific launches.

Operator: Good day.

Speaker Change: The contact information is at the bottom of the list personally, a good day.

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

Speaker Change: This concludes today's teleconference.

Speaker Change: You may disconnect your lives at this time. Thank you for your participation.

Speaker Change: [inaudible]

Operator: At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. If you require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded.

Operator: At this time, all participants are in a listen only mode.

Operator: A question and answer session will follow the formal presentation. If you require operator assistance during the conference, please press star zero on your telephone keypad.

Operator: As a reminder, this conference is being recorded.

Kimberly Rogers: It is now my pleasure to introduce you to your host, Kim Rogers, with Hayden IR. Thank you, Kim. You may begin. Thank you, operator. I'd like to welcome everyone to the conference call and thank Senstar's management for hosting today's call.

Kimberly Rogers: It is now my pleasure to introduce you to your host, Kim Rogers, with Hayden IR. Thank you, Kim. You may begin.

Kimberly Rogers: Thank you, operator. I'd like to welcome everyone to the conference call and thank Senstar's management for hosting today's call.

Kimberly Rogers: With us on the call today are Mr. Fabien Haubert, CEO of Senstar Technologies, and this Alicia Kelly CFO. Fabien will summarize key financial and business highlights, followed by Alicia, who will review Senstar's financial results for the second quarter of 2024. We will then open the call for a question and answer session.

Kimberly Rogers: Before we begin, 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. Senstar does not assume any obligation to update that information. Actual events or results may differ materially from those projected, including as the results of changes in market trends, reduced demand, and the competitive nature of the security systems industry, the unanticipated and unknown effects of COVID-19, including on our operations and our clients, as well as other risks identified in the documents filed by the company with the Security and Exchange Commission.

Kimberly Rogers: In addition, during the course of the conference call, we will describe certain non-gap financial measures that should be considered in addition to and not in lieu of comparable gap financial measures. Please note that in our press release, we have reconciled non-gap financial measures to the most directly comparable gap measures in accordance with RegGee requirements. You can also refer to the company's website at www.senstartechnologies.com for the most directly comparable financial measures and related reconciliation.

Fabien Haubert: With that, I'd now like to hand the call over to Senstar, CEO, Fabian Huber. Please go ahead. Thank you, Kim. Thank you for joining us today to review Senstar's technologies sick of clutter 2020-24 financial results. Our second quarter revenue of 8.3 million was nearly on par with the same quarter last year, just down 1.6%. One highlight from this quarter is the continued improvements in our profited worthy performance. Our gross margin reached 63.2%, the best we have delivered in the last 8 quarters.

Fabien Haubert: This improvement was mostly due to a shift in product mix, the improvements of supply and chain challenges and cost relicments with the last year. Operating expenses decreased by 9% and represented 55 to 2% of revenue compared to 59.7% in the euro-go quarter. The higher gross margin and lower operating expenses combined to lift our operating margin to 8% of revenue from 1% in Q2-2023. As a result, our net income climbed to $493,000 and our EBITDA margin increased to 10.2% of revenue.

Fabien Haubert: In the second quarter, our balance is trained and further with higher cash reserve and a million reduction in inventory since the end of Q1, thanks to diligent inventory management. Our incremental cash flow gives us the flexibility to continue driving growth in our key areas and investing in new product innovation.

Fabien Haubert: Now, let's dive into the specifics of our performance across various regions and sectors. In the U.S., we saw a modest increase in revenue of 2% in Q2 compared last year and revenue in this important region remains steady with a strong correction on market and growing demands in the utilities sector. A patch was a standard performing Q2 with revenue surging 135 persons versus Q2-2023. Revened primarily by major wins in the utilities and transport sectors throughout the whole region and several projects.

Fabien Haubert: Europe, however, faced some challenges with revenue down 33% in Q2 mainly due to customer delays in project. However, we believe this project will catch up in Q3 and Q4. Despite this delays when dissipates substantial activity in the utility, energy, and transport sectors throughout the region. Our full key verticals delivered solid growth rising 5% in Q2 year over year and 14% year to date. These growths were driven by major increases in sales and demands in the utility sector worldwide, particularly in solar farms, power stations, nuclear plants, and data centers. Additionally, we seen significant growth in the airport environments with interest reinforcing on a global scale.

Fabien Haubert: In terms of new product development was a thrill with the successful launch of our latest innovation, the Sensor Multi-Sensor. Sensor commitment to delivering innovation solution to the market is paying off. Securing industry professionals are dealing with increasingly complex and frequent security events and need solutions to enhance operational efficiency. One of their biggest challenges is news and salons. Polk salons treated by non-interested events like someone standing too close to a fence or debris blowing against it.

Fabien Haubert: One of their biggest challenges is news and salons. Polk salons treated by non-interested events like someone standing too close to a fence or debris blowing against it. These alarms waste time and resources. The multi-sensor stands out in the market with advanced capability, allows us to tackle one of the industry's most pressing issues, reducing news and salons to zero. The multi-sensors for the ability of detection vastly exceeds trust and traditional sensors and its unique ability to synthesize data for multiple sensing technologies, provide full situational awareness and decreases new sense alarms next to zero.

Fabien Haubert: These alarms waste time and resources. The multi-sensor stands out in the market with advanced capability, allows us to tackle one of the industry's most pressing issues, reducing news and salons to zero. The multi-sensors for the ability of detection vastly exceeds trust and traditional sensors and its unique ability to synthesize data for multiple sensing technologies, provide full situational awareness and decreases new sense alarms next to zero. These are key metrics for the security industry and we're proud to be the first to market with a device that can deliver these outcomes.

Fabien Haubert: These are key metrics for the security industry and we're proud to be the first to market with a device that can deliver these outcomes. With the multi-sensor now available to sell, we are already seeing significant market interest. We believe this product will be a key growth driver for Senstar as we build our momentum in core vertical and expand into new markets. The multi-sensor versatility makes it ideal for securing critical areas within non-critical infrastructure, in addition to our traditional markets, which opens up exciting opportunities for us to address higher market volumes.

Fabien Haubert: With the multi-sensor now available to sell, we are already seeing significant market interest. We believe this product will be a key growth driver for Senstar as we build our momentum in core vertical and expand into new markets. The multi-sensor versatility makes it ideal for securing critical areas within non-critical infrastructure, in addition to our traditional markets, which opens up exciting opportunities for us to address higher market volumes.

Fabien Haubert: In closing, I'd like to thank you for your continued support of Senstar Technologies. Our performance in the first half of 2024 underscores the strength of our strategy and the dedication of our team. We're encouraged by the solid momentum we've built across our key verticals and we're excited by the opportunities that lie ahead, particularly with the launch of the multi-sensor. As we move forward, we remain committed to driving growth and enhancing profitability and delivering innovative solutions that meet the evolving needs of our customers. We believe that the investment we've made in our product of volume alongside our improved operational efficiencies position us well for continuous success.

Alicia Kelly: I will now turn the call over to Alicia for a review of the financial results in more details. Thank you, Fabian. Our reported revenue for the second quarter of 2024 was $8.3 million. A modest decrease of 1.6% compared with reported revenues of $8.4 million in the second quarter of 2023. The decrease was primarily due to delays in projects in the media.

Alicia Kelly: The geographical breakdown as the percentage of revenue put the second quarter of 2024 compared with the prior year quarter is a follow. North America, 47% in each period. EU, 27% versus 40%. Apex, 23% versus 10%. Latin America, 1% versus 3%. And all other regions, less than 1% in both periods. Supported growth margin was 63.2% of revenue for the second quarter of 2024 compared to 60.7% of revenue for the second quarter of 2023.

Alicia Kelly: This margin improvement was primarily the result of a shift in our product mix to higher margin product in the product in the quarter and price adjustments taken in 2020. Treats. Our reported operating expenses were $4.6 million, a decrease of 9.1% for the prior year's quarter's operating expenses of $5 million. The year-over-year decrease in operating expenses is due primarily to lower GNA expense, lower sales and marketing expense, as a result of our efforts to streamline operations and diligently manage our over-the-cost.

Alicia Kelly: Our operating income improved in the second quarter to $666,000 compared to $83,000 in the year-of-go period. The year-over-year improvement was due to higher gross margins on higher sales and a lower operating cost. Financial income was $103,000 compared to financial expense of $74,000 in the second quarter of last year. This is mainly a non-chashot telling effect we regularly report due to the adjustments to the evaluation of our monetary assets and liabilities, denominated in current fees, other than the functional currency of the operating entities in the group, in accordance with gas.

Alicia Kelly: Net income attributable to Senstar Technology shareholders in the quarter was not $493,000, or two cents per share, versus $275,000, or less than one cents per share in the second quarter of last year. The company reported EBIDA for the second quarter of $846,000, versus $290,000 in the second quarter of last year. Taxes on income were $276,000 compared to a tax benefit of $266,000 in the second quarter of last year. Senstar operating expenses include public platform and optimization of intangible assets from historical acquisition.

Alicia Kelly: The corporate expense and optimization expense for the second quarter were $400,000, the same as in the previous year's quarter. Cash and cash was equivalent as of June 30, 2024, for $15.2 million, for $65 per share, as compared to $14.9 million, or $64 cents per share, as of December 31, 2023.

Alicia Kelly: That includes my remarks. All for it.

Alicia Kelly: We would like to open the call to questions now. Thank you.

Operator: We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. The confirmation tone will indicate your client is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we pull for questions. Thank you.

Operator: Our first question comes from the line of Ted Litty with Oppenheimer.

Ted Litty: Our first question comes from the line of Ted Litty with Oppenheimer. Please proceed with your question. Hi, I was wondering when you would expect the multi-sensor to have a material impact on revenue or revenue growth. Hi. Thank you very much for your question.

Fabien Haubert: Please proceed with your question. Hi, I was wondering when you would expect the multi-sensor to have a material impact on revenue or revenue growth. Hi. Thank you very much for your question. So the product just got released for sales. So the first delivery are to happen in the next coming week. It's a bit early to say we hope to provide more information to the next release. That is the product just got officially released for selling.

Fabien Haubert: So the product just got released for sales. So the first delivery are to happen in the next coming week. It's a bit early to say we hope to provide more information to the next release. That is the product just got officially released for selling. And the first order has come already that not significant at this stage. This is less than for a couple of weeks. Go. And there's a company currently have a backlog of orders expected in the next 12 months.

Fabien Haubert: And the first order has come already that not significant at this stage. This is less than for a couple of weeks. Go. And there's a company currently have a backlog of orders expected in the next 12 months. So yes, unfortunately we're not commenting that. I can only mention that we had a good trend of booking in the first part of the year, but unfortunately we're not commenting the backlog or other expectations.

Fabien Haubert: So yes, unfortunately we're not commenting that. I can only mention that we had a good trend of booking in the first part of the year, but unfortunately we're not commenting the backlog or other expectations. Do you expect to increase revenue at the second half of the year compared to the 18 million did roughly last year for the second half of 2023? Unfortunately we're not providing forward-looking statements, but we're striving and working hard on it. Okay, thanks for taking away questions. Thank you.

Fabien Haubert: Do you expect to increase revenue at the second half of the year compared to the 18 million did roughly last year for the second half of 2023? Unfortunately we're not providing forward-looking statements, but we're striving and working hard on it. Okay, thanks for taking away questions. Thank you.

Operator: There are no further questions at this time.

Fabien Haubert: I'd like to pass the call back on all of Fabien for any closing remarks. Thank you again. And we look forward to updating you on our progress in the coming quarters.

Fabien Haubert: Please feel free to contact our IR firm for further work on this call or to learn more about sensor technologies that contact information at the bottom of today's press release. Good day.

Operator: Please feel free to contact our IR firm for further work on this call or to learn more about sensor technologies that contact information at the bottom of today's press release. Good day.

Fabien Haubert: Please feel free to contact our IR firm for further work on this call or to learn more about sensor technologies that contact information at the bottom of today's press release.

Operator: Good day.

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

Q2 2024 Senstar Technologies Corp Earnings Call

Request a DemoDemo

SNT

Senstar Tech

Earnings