Senstar Technologies (SNT) 19 Apr 242023 Q4 Earnings call transcript

Greetings. Welcome to the Senstar Technologies Fourth Quarter and Full Year 2023 Results Conference Call. [Operator Instructions] Please note, this conference is being recorded.

I will now turn the conference over to your host, Kim Rogers of Hayden Ir.

You may begin.

[indiscernible]. you, Thank to call like today's of to you I thank welcome Senstar conference and hosting Technologies the would all management call. for on are us call With the Mr. today Senstar of Haubert, Fabien Ms. CEO Technology; Alicia Kelly, CFO; Mr. and of CFO prior Hay, Senstar Tomer Technologies.

will by who followed for fourth will business year full results Alicia quarter financial summarize and key Senstar's XXXX. Fabien and the highlights, financial review

We session. will then open the call for a question-and-answer

the contain regarding to that start, out occur. that Senstar or may I'd future information. any call assume statements forward-looking like and point does to future Senstar statements projections we they These other update Before conference or predictions fact, performance. are that company's events this obligation not will, only in guarantee cannot

a competitive operations changing Exchange the and clients effect result reduced the as demand Commission. Actual and of the including nature by trends, on of our with and the documents from or events may as differ market the and results security the Securities filed coronavirus, company unknown materially other unanticipated in our systems the of risks industry, identified well including those as projected,

accordance In financial non-GAAP the measures, lieu in should directly of call, considered the addition, Reg to most we non-GAAP not be requirements. with and addition in our measures. G GAAP comparable have financial Please in release, to note of measures which press describe will comparable during in the GAAP our financial we course certain conference that measures reconciled

please call over measures You now the I related Fabien. that, www.senstartechnologies.com the Fabien, reconciliations. And would also for most directly can to and go comparable financial our refer at website hand ahead. to with

to results. you Technology for Senstar Full Quarter Thank you, Year Fourth review XXXX Thank us and joining today financial Kim.

to marking Senstar Canadian press and outlined us pivotal completed month, strategic a our Israel to release moment Canada, to this lead corporate forward. process team As move empower successfully the enables for our of streamline This structure redomiciling from company. our Senstar in last

assume will the position in final I dedication instrumental Alicia transition, who to stepped redomiciliation. -- this into CEO CFO, advisory my his in an and the Tomer and who remain report Kelly of advisory activities role With Hay, of has of to an Tomer role for the heartfelt succeeding out continuing the extend Senstar. to redomiciliation. gratitude close successful completion Tomer been support I in of the will the

many of for years His growth. has over Senstar contribution positioned service,

eager We to are on profitability. to our energized Senstar this towards growth phase team I'm journey, new embark of sustained and and guide

the quarter like attention I would and fourth review your messages our by about to XXXX a drawing few to of key results. begin my financial

full year while XX% and $X revenue QX, fell revenue profitability and QX net a percent a of mostly First, XXXX. $X.X revenue as profitability rose improved expenses million year-over-year, declined Operating almost throughout quarterly income XX% to million nonrecurring From million. in loss net from to QX improved a million QX African $X.X project, and almost to to QX. from to in due of of from revenue $XXX

markets, In Africa, and the was quarter, experienced lastly, we notable And decline positive to regions. America Canadian to in in of fourth XX% XXXX. rose and several growth in one weakness quarter, France, the Germany, Eastern large Europe, a Europe Latin renew And XXXX revenue in XXXX. Europe and year-over-year. strong U.S. investments made due mostly in largest flat the in in the note, fourth we Asia progress while in did which Second, due revenue was in not Benelux. by On Iberia, projects the in market, our

energy sector, in for production especially strong, demand renewable utilities Market energy the particularly sites. in Europe and is

capacity are highly to investing segments differentiate. the we with Senstar in high-growth our coming believe and continue years We since to in these they will align reinforce position scalable

energy impacted third Furthermore, by year's negatively by APAC, onetime the fourth year-over-year comparison that a growth utilities large demonstrated largest primarily XXXX, quarter, the were project recur. did and APAC quarters to XXXX In driven commendable not transportation, previous a market, QX our projects. in compared prior XX% of

expect performance we forward, to Going this see without headwind. this true region's

Lastly, where to result South the wins verticals. and our market America, region, primarily portion our where these position to driving efforts a These business verticals, share. and reported in growth, reposition increase our driven tremendous smaller our utilities strengthened we're by as the driven of we're successes a -- in of in correction

the our one categories. of key X revenue correction, major from revenue from at contribution Looking wins strongest our verticals, increased with

to high-growth growth international our reevaluation intend strategy better with optimize XXXX a improve and match strategic we we a achieve of our and presence executed To to profitability. this best keen forward, in investment share increase goal, verticals year-end key at to our accounts. on globally global overall in footprint organization our market Going focus our this

challenges face changes in we new in case and addition, made the the In and States, team the in regions of U.S., United added Canada to leadership. where the XXXX, we in

quarter, exit to cost and from As margin key particularly strong adjustments XXXX. performance. in bolstered control mix in regions margin we our XXXX, verticals these Gross due to increases, unfavorable cost price these product XX% and occurred for XX% post-COVID throughout was expect better the XXXX compared in full by important demand year in the first improvements we company to markets. Switching

We enabled the achieving target with XX% of gross manage gross QX, with year's closely goal margin. margin margin. gross And margin gross previous that was roughly the the in plan par QX to a on

market regions, utilities, the share Looking ahead, in efforts and intensifying maximizing will our excel to energy logistics we investing verticals. key correction, grow and continue while to resources across our

coming appointed be and deploying objectives share on focused business resources. growth region, verticals Europe In driving -- on success development our and the to our actively our committed on will focus in implementing growing in the targeting. by setting year. sustained U.S., we're achieving In and focused recently a continue we're strategic the mainly strategy VP these is we Sales the instrumental of Our recently Africa, to market

without our appointment The XXXX the XXXX us in region look hurt in of the local at Switching assist targeting of in a realignment our headwind to new our verticals. QX APAC, in strategy. that focus growth the at developing targeted and will and the leader growth completing a Product Solutions. us in region, we're sustainable In repositioning in &

X%. product, During we sensor my product term year, solution priority. been a MultiSensor, at top that an our in has And investment embedded strides. that XXXX. will situational multiple new synthesize our rates exciting be fusion to reducing QX made MultiSensor AI-based uses Senstar, is to intelligently further from big sensor technology we engine providing improving a and marketplace. in awareness launched an sustained our The full have close Last with is the in The, sensing data MultiSensor new alarms detection differentiate the intrusion introduced R&D, system false to intrusion

image anything the ASTORS' The high radar, is delighted intrusion frequency vibration and system MultiSensor and the new market. of system the for Homeland detection industry. Platinum [ in unlike sensor. else with I'm Award Security and the prevention PIR, accelerometer, by this groundbreaking the received our opinion reception ] that in MultiSensor XXXX the best customers short-range includes The discovering solutions

growth, aim results will In top in our now important applications, better around and improving the presence with optimization, returning with global increasing strengthen improving we a Solutions wide efficiently our XXXX, our gross of scale. line and we line and cost Senstar the bottom margin -- regions. focus installation business range on to of and assets world our key to protect efficiency in intention

building we market as is the approach see MultiSensor Our goal. release markets. long-term extremely pipeline a market Longer encouraging newest the and later we our The important orders. product, role expanding anticipate the term, reception playing MultiSensor of an of MultiSensor supports in year, this general addressable we this

to Senstar their employees express deliver to in the to my want gratitude for products ongoing our I closing, commitment and services. excellence In

Alicia I Now call our CFO, to please pass Alicia, the Kelly. ahead. will go

Fabien. you, Thank

to my his been extend and wishing begin million his and X a financial Fabien endeavors. In the for in the I was quarter with contributions have $X.X would from fourth personally next future our leg X.X% Working his of his too from financial reported quarter fourth results, journey. guidance. I benefited million, the has I as in fulfilling -- review, decrease guidance VP and greatly strategic I all nearly best benefited alongside Finance compared deepest invaluable like for extremely on experience. And gratitude experience $X.X been of him revenue years wish of my last steering I've Tomer's and of revenues expertise the XXXX. dedication, Tomer in success of professionally our has reported Tomer an his operations. in Before join the

also of percentage the America, Latin fourth a year X% versus and partnership XX% in seen As The up to versus X%; due the as Africa the XX% XX%; breakdown the revenue utility versus in compared large XX% APAC, XXXX as that versus QX XX%; with generated A Fabien a decline others in Magal XXXX. XX% QX sold North was U.S. before energy Israel XX%; follows: in geographic projects project primarily was softness XXXX. large Europe, America, and of the is was in discussed, to made to and XX% quarter prior in for versus due from Canada of decrease nonrecurring year.

the onetime operating business reported quarter due increase compared prior of expenses compared decrease administration exceptional million. operating Canada, general and were a in in fourth an expenses our increase to expenses of for our operating necessary primarily $X.X XXXX. future to requirements Our by redomicile year's expenses offset expenses partially $X.X to to to streamline million, X.X% The and business is

the year a of monetary of The compared lower effect. decline income to fourth the quarter the with to and mainly of was quarter in the a income Reported is Financial for denominated $XXX,XXX last the in group to $XXX,XXX due operating assets $XXX,XXX regularly in operating the in primarily We period. compared $XX,XXX currencies in ago currency This year. revenue. other valuation GAAP. functional adjustment fourth in to our income operating than entities accordance accounting report was the to noncash liabilities due was

expenses or in or Senstar's in expenses the year. public Net were quarter the $XXX,XXX was fourth of of last expenses is in amortization contribution $X.X the Senstar quarter quarter quarter the from the versus $X.X for quarter last The fourth year. Technology's intangible the acquisitions. per fourth income per was fourth $XXX,XXX for assets company's historical corporate amortization the share and year fourth to Added the $X.XX versus of to reported The of share versus operational platform million million attributable shareholders quarter EBITDA in million before. $X.X and $X.XX $XXX,XXX

XX% For year to sales due decline a to XX, for in year-over-year ended XXXX, or $XX.X year $XX.X and million decrease utility overall where year. revenue from million relates APAC prior compared sales the in the December primarily projects. by to transportation lower The the the results, X.X% full was $X.X of declined million region,

America benefited made breakdown sales of from X% and decline South others grew a verticals. The prior in the year-over-year utility as sale Latin Senstar compared by as in APAC of a and and percentage declined America, in XX% America, not slightly our and were a North to flat geographical projects. sales XX%; as XX%; large XX% an corrections, sales X%; Latin versus all with In offset year. in declines to Europe, X% with Europe, in X% XXXX XX% revenue U.S. growth follows: year-on-year partially versus logistics These both the North America, energy due XX% periods; versus in versus key XXXX and in for XX% up is XXXX XX% revenue expanding Canada which repeating

to $XX.X Gross XX.X% The with in decrease in compared in in XXXX in of and revenue mix was material million the gross cost. some profit due first or revenue revenue XXXX. primarily margin quarter of XXXX, of or XX.X% was million $XX.X increases

EBITDA The $XXX,XXX for net $X.X from positive a million of $XXX,XXX, was million, appropriate share or X.X%, income margins versus to Operating was compared business Corporate income of $X.X a XXXX, a business per of have in compared revenues. XXXX. going the in and level million our increase shareholders expenses by equivalents million with operating streamline expenses million of on for or year's per $X.X $XX reported XXXX, compared and million in as to onetime same expenses share with in of to decline G&A intangible gross The year. future platform from operating offset loss in was and lower million per cash partially the Senstar $XX.X exceptional XXXX redomicile expenses operating $X.X of or negative expenses decline discontinued an change public $X.XX is the accounting as XXXX. We $X.X Canada, healthy $X.X assets. net in the to were and due a operating million of taken necessary amortization to in to The $XX.X XXXX expenses $X.X attributable primarily prior the assets loss period. Operating In $X.XX million loss expenses XXXX. Net of expenses to margins our in requirements last improve share, remained to with XXXX. loss are purchase our loss year-over-year primarily million. Cash compared $X.X XX, operations. measures XXXX for million December in gross in increase forward. versus was decrease attributable Technology lower net amortization The income EBITDA $X.X $X.XX XXXX corporate includes a of due million were to of

open like my That to concludes would Operator, call remarks. to questions the now. we

And of Oppenheimer. Ken [Operator the with from Liddy Instructions] comes line question our first

to substantial just be XXXX, driver MultiSensor, you in wanted the to are XXXX? I with that know expecting growth a

you secure question. advanced your Thank a noncritical our our so intention. Okay. an provide infrastructure. critical key provide as value. It's and MultiSensor to expand two, a by solution solution for One further has is unit spots provide technological And basically number verticals, to X range addressing in The higher roles. single the basically of it markets addressable to clearly

we'll in intention, our yes, future in a our that it's XXXX, So mainly to efforts XXXX best and word, years. but and do

top of likely line of the half you of seeing year, growth first are half first the the as in XXXX? far As the

So growth XXXX, second XXXX. the part we're terms getting hope second the short for term. that in mainly mainly But forward-looking a especially part clearly, in but be such and providing statements expectations, major driver not will we of help of -- MultiSensor the us to

suited for? And most the MultiSensor what verticals is

end a reducing basically So higher without getting solution meant alarm. many the awareness situational provide is false details, into and totally to

it we are work an expect spots of So borders. vertical lot finance, like because ] critical existing within sold utilities, our the would like hospitals retail which and and one is logistics be application. as top on first cell it, and universities well which military, top place we're correction, targeting, going verticals towers, so address single broader industrial to industrial, on it logistics, on we're But we typically X on to like [ much markets, and use energy finance, of a unit, airports a the as

be to going the will we're outside broaden existing goal verticals. to search the our So verticals of

So within the verticals, but to gain market shares outside of it.

that for that itself MultiSensor you've say company I've with years, apart innovative -- MultiSensor not seems with Would Would you success the that products been success in you involved sets that a is revenue. great great growing it your technology, say had the from such had and many you've the other past? with something

technology be Yes. some that efforts what evolution, of something believe searching the this and with We a been we've didn't have. next We've of bringing for something that would more. a could that strong lot the put to come replace market

parameters to in spots, #X a keep sold as basically and foresee are per we're selling where will perimeter detection, not secure as infrastructure where is we full se, well trying critical in which we today, growth unit single gears. secure our not So to

So other we expanding tremendously technology market. trying we're have replacing and additional today, MultiSensor our and addressable securing some the hope it's indeed to spots

some over some markets currently? in market Is the optimism had and you've past, a promising the years. here that that and wins looks there In the X energy last

[indiscernible]. hard growing occurred market North in work we're sustain market that getting oil plans, to general now this traditionally, take solar working the very in farms So indeed, on it and in We to on the market, going was international the Europe, which several has sustainable already heavier a between depends growth. we're situation And share gas, share our in and could Americas America and others. growth split see the basically of the to there indeed energy energy and in production energy, and different market was lot hard

growth Given right borders now, for company? areas the and our for -- of looking uses world and bases like the turmoil geopolitical military the or

I confidentiality. provide which to that it is. it some But yes, some working comment Yes, might because on projects, with indeed we're cannot opportunities. mention

far your to the fourth that quarter in move as expense much Israel Canada, was of from And how as an approximately?

time. a this to not specific in So we're providing point answer at that

to money Do you the expect save ongoing move? from

that nucleus the at and Yes, absolutely. considered one And place but of in most move. the we in reside, we importantly, And -- was that of currently mostly of in provides things business Canada the senior the making management which that it resides moment. is where in the -- most our

it at remarks. And turn appears the And questions Haubert to further time. for are now Fabien Instructions] call there [Operator I'll back no over this closing

of interest our support of I like behalf great On and investors day. the for would thank management, Have Senstar's a business. long-term to our

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

Thank you.

Thank you.