Senstar Technologies Corporation Reports First Quarter 2024 Financial Results

Rhea-AI Summary

Senstar Technologies (NASDAQ: SNT) reported its Q1 2024 financial results, showcasing a 17% revenue increase to $7.5 million, up from $6.4 million in Q1 2023.

Gross margin improved to 59.6%, and operating expenses decreased by 15%.

The net loss narrowed to $0.7 million from $1.9 million, with positive EBITDA of $114,000 compared to a negative EBITDA of $1.4 million in the same period last year.

Cash and short-term deposits stood at $15.8 million with no debt as of March 31, 2024.

The company completed its redomiciliation to Canada and made strategic leadership appointments.

Preparations for the launch of the MultiSensor AI-based intrusion detection system are on schedule, with sales expected to begin in the fall of 2024.

Positive

• Revenue increased by 17% to $7.5 million in Q1 2024.
• Gross margin improved to 59.6% from 55.7%.
• Operating expenses decreased by 15%.
• Net loss reduced to $0.7 million from $1.9 million.
• Positive EBITDA of $114,000 compared to negative $1.4 million.
• Cash and short-term deposits stood at $15.8 million with no debt.
• Completed redomiciliation to Canada, streamlining corporate structure.
• Launch of the MultiSensor AI-based intrusion detection system is on schedule.

Negative

• Net loss of $0.7 million, although reduced, still indicates financial instability.
• Operating loss, while improved, was still negative at $73,000.
• Despite increased revenue, the company experienced a gross profit of only $4.5 million.

Insights

Financial Analyst

Senstar Technologies Corporation reported a significant improvement in financial performance for the first quarter of 2024. The company's revenue increased by 17% to $7.5 million from $6.4 million in the first quarter of 2023. This growth is noteworthy, especially given the company's previous struggles. Additionally, the gross margin improved to 59.6% from 55.7%, showcasing better cost management and a favorable product mix.

Another key highlight is the reduction in operating expenses by 15%, reflecting effective cost control measures following the company's redomiciliation to Canada. The net loss was reduced significantly to $0.7 million from $1.9 million and the company achieved a positive EBITDA of $114,000 compared to negative EBITDA of $1.4 million in the same period last year. These results point towards a healthier financial structure and operational efficiency.

From a balance sheet perspective, the company maintained a robust cash position with $15.8 million in cash and short-term bank deposits and notably, no debt. This financial stability can support future investments and growth initiatives, especially the upcoming launch of the MultiSensor AI-based intrusion detection system.

While the overall financial results are positive, investors should remain cautious about the company's ability to sustain this performance in the coming quarters. The upcoming product launch could provide a significant boost, but competitive pressures and market acceptance will play a important role.

Market Research Analyst

The reported financial results of Senstar Technologies not only demonstrate improved financial health but also indicate promising market dynamics. A 17% increase in revenue, especially achieved across multiple geographic regions and key verticals, suggests that the company is successfully capturing market share. The improved gross margin of 59.6% reflects a strategic shift in product mix and pricing adjustments, which are resonating well with customers.

An essential aspect to consider is the company's focus on innovation, highlighted by the upcoming launch of the MultiSensor AI-based intrusion detection system. This new product is expected to significantly expand Senstar's addressable market and provide a competitive edge in the asset protection space. Early customer engagement and positive feedback indicate a favorable market reception, which could drive substantial revenue growth post-launch.

However, market analysts should monitor potential risks associated with the product launch, such as market adoption rates and competitive responses. The successful execution of the product strategy will be critical in maintaining the company's growth trajectory and improving investor confidence.

OTTAWA, ON, June 13, 2024 /PRNewswire/ -- Senstar Technologies Corporation (NASDAQ: SNT), a leading international provider of comprehensive physical, video and access control security products and solutions, today announced its financial results for the three months ended March 31, 2024. Management will hold an investors' conference call later today (at 5 p.m. Eastern Time) to discuss the results.

First Quarter 2024 Business Summary:

(First quarter 2024 results for the three months ended March 31, 2024, compared to the comparable three-month period of 2023, except as mentioned. Results for the three months ended March 31, 2023 were for the Company's predecessor, Senstar Technologies Ltd.)

• Revenue of $7.5 million with gross margin of 59.6% versus revenue of $6.4 million with gross margin of 55.7%
• Net loss of ($0.7) million versus a net loss of ($1.9) million; positive EBITDA of $114,000 versus negative EBITDA of ($1.4) million
• Cash and short term bank deposits balance of $15.8 million and no debt as of March 31, 2024
• Completed redomiciliation process to Canada and appointed leadership to the seasoned Canadian executive team

Mr. Fabien Haubert, Chief Executive Officer of Senstar Technologies, stated, "We successfully completed the process of redomiciling to Canada in this first quarter, enabling us to streamline our corporate structure and empower our Canadian team to lead Senstar forward. We delivered strong first quarter results compared to the first quarter of last year, including revenue growth of 17%, higher gross margin, and positive EBITDA. Importantly, the growth was derived across most of our geographic regions and in our four key verticals. Recent leadership appointments, particularly in sales, and the actions we took to realign resources are having a clear and positive impact on our business. We intend to maintain our focus on continuous improvement across our key metrics for the remainder of 2024."

Mr. Haubert continued, "Preparations for the launch of MultiSensor, our new AI-based intrusion detection system, are progressing according to schedule and we anticipate sales to begin in the fall of this year. The MultiSensor not only expands our addressable market but also provides us with a tremendous competitive advantage in asset protection. We are increasingly encouraged by the level of customer engagement and positive feedback we are receiving ahead of the launch."

First Quarter 2024 Financial Results Summary

Revenue for the first quarter of 2024 was $7.5 million, an increase of 17% compared with $6.4 million in the first quarter of 2023. First quarter gross profit was $4.5 million, or 59.6% of revenue, compared with $3.6 million, or 55.7% of revenue, in the year ago quarter. The increase in gross margin was primarily due to a shift in product mix and price adjustments in the fourth quarter of 2023.

Operating expenses were $4.6 million, a decrease of 15% compared to the prior year's first quarter operating expenses of $5.3 million. The decrease in operating expenses is primarily attributable to streamlining of the corporate structure and realignment of resources.

Operating loss for the first quarter of 2024 was ($73,000) compared to ($1.7) million in the year-ago period. The improvement is primarily attributable to increased revenue, higher gross margins and lower operating expenses both on a dollar basis and as a percentage of revenue.

Financial income was $54,000 compared to $40,000 in the first quarter last year.

Net loss in the first quarter of 2024 was ($0.7) million, or ($0.03) per share compared to ($1.9) million, or ($0.08) per share, in the first quarter of last year.

EBITDA for the first quarter of 2024 was $114,000 versus negative  EBITDA of ($1.4) million in the first quarter of 2023.

Cash and cash equivalents and short term bank deposits of $15.8 million, or $0.68 per share, as of March 31, 2024, compared with $14.9 million, or $0.64 per share, at December 31, 2023.  

Earnings Conference Call Information:

The Company will host a conference call later today, June 13, 2024. The call will begin promptly at 5 p.m. Eastern Time, 10 p.m. UK Time. The Company requests that participants dial in 10 minutes before the conference call commences and use the conference ID number 13747073.

Participant Dial-in Numbers:
Toll Free: 1-877-407-9716
Toll/International: 1-201-493-6779
UK Toll Free: 0 800 756 3429

The conference call will also be available via a live webcast at https://viavid.webcasts.com/starthere.jsp?ei=1675416&tp_key=db811a0661.

Replay Dial-in Numbers:
Toll Free: 1-844-512-2921
Toll/International: 1-412-317-6671
Replay Pin Number: 13747073

About Senstar Technologies Corporation

With innovative perimeter intrusion detection systems (including fence sensors, buried sensors, and above ground sensors), intelligent video-management, video analytics, and access control, Senstar offers a comprehensive suite of proven, integrated solutions that reduce complexity, improve performance, and unify support. For 40 years, Senstar has been safeguarding people, places, and property for organizations around the world, with a special focus on utilities, logistics, correction facilities and energy markets.

Cautionary Statement Regarding Forward-Looking Statements

This communication contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of the Securities Act (Ontario), which we refer to collectively as forward-looking statements. These forward-looking statements are not limited to historical facts, but reflect Senstar's current beliefs, expectations or intentions regarding future events. Words such as "may," "will," "could," "should," "expect," "plan," "project," "intend," "anticipate," "believe," "seek," "estimate," "predict," "potential," "pursue," "target," "continue," and similar expressions are intended to identify such forward-looking statements. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties that could cause our actual results to differ materially from any future results expressed or implied by the forward-looking statements. Many factors could cause actual activities or results to differ materially from the activities and results anticipated in forward-looking statements. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including those risks discussed under the heading "Risk Factors" in Senstar's most recent Annual Report on Form 20-F filed with the SEC and in other filings with the SEC. These forward-looking statements are made only as of the date hereof, and, except as required by applicable law or regulation, Senstar undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

For more information:                                                          
Senstar Technologies Corporation                                                          
Alicia Kelly,                                                                              
Chief Financial Officer     
Alicia.Kelly@senstar.com 

IR Contact:
Hayden IR
Kim Rogers, 
Managing Director
Kim@HaydenIR.com 
+1-541-904-5075    

 

-- Tables follow –

 

SENSTAR TECHNOLOGIES CORPORATION  UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  (All numbers except EPS expressed in thousands of US$)
	Three Months Ended March 31,
	2024		2023	% change
Revenue	7,511		6,445	17
Cost of revenue	3,032		2,852	6
Gross profit	4,479		3,593	25
Operating expenses:
Research and development, net	982		1,040	(6)
Selling and marketing	2,095		2,446	(14)
General and administrative	1,475		1,840	(20)
Total operating expenses	4,552		5,326	(15)
Operating loss	(73)		(1,733)
Financial income, net	54		40
Income (loss) before income taxes	(19)		(1,693)
Taxes on income	727		182
Net loss attributable to Senstar's shareholders	(746)		(1,875)
Basic and diluted net loss per share	($0.03)		($0.08)
Weighted average number of shares used in computing basic and diluted net loss per share	23,309,987		23,309,987

 

 

SENSTAR TECHNOLOGIES CORPORATION  UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (All numbers except EPS expressed in thousands of US$)
	Three Months Ended March 31,
	2024 %	2023 %
Gross margin	59.6	55.7
Research and development, net as a % of revenues	13.1	16.1
Selling and marketing as a % of revenues	27.9	38.0
General and administrative as a % of revenues	19.6	28.5
Operating margin	-	-
Net margin	-	-

 

 

SENSTAR TECHNOLOGIES CORPORATION  RECONCILIATION OF EBITDA TO NET INCOME (LOSS) (All numbers expressed in thousands of US$)
	Three Months Ended March 31,
	2024	2023
GAAP net loss	(746)	(1,875)
Less:
Financial income, net	54	40
Taxes on income	727	182
Depreciation and amortization	(187)	(323)
EBITDA	114	(1,410)

 

 

SENSTAR TECHNOLOGIES CORPORATION UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (All numbers expressed in thousands of US$)
	March 31,		December 31,
	2024		2023
CURRENT ASSETS:
Cash and cash equivalents	$15,718		$14,806
Short-term bank deposits	114		116
Restricted cash and deposits	5		6
Trade receivables, net	7,179		9,545
Unbilled accounts receivable	217		240
Other accounts receivable and prepaid expenses	2,785		2,448
Inventories	6,569		7,178
Total current assets	32,587		34,339
LONG TERM ASSETS:
Deferred tax assets	1,494		1,525
Operating lease right-of-use assets	729		842
Total long-term assets	2,223		2,367
PROPERTY AND EQUIPMENT, NET	1,528		1,589
INTANGIBLE ASSETS, NET	766		881
GOODWILL	10,864		11,090
TOTAL ASSETS	$47,968		$50,266

 

 

SENSTAR TECHNOLOGIES CORPORATION UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (All numbers expressed in thousands of US$)
	March 31,		December 31,
	2024		2023
CURRENT LIABILITIES:
Trade payables	$1,261		$1,650
Customer advances	182		187
Deferred revenues	2,680		2,878
Other accounts payable and accrued expenses	5,050		5,052
Short-term operating lease liabilities	258		297
Total current liabilities	9,431		10,064
LONG-TERM LIABILITIES:
Deferred revenues	1,273		1,415
Deferred tax liabilities	602		606
Accrued severance pay	292		296
Long-term operating lease liabilities	504		580
Other long-term liabilities	101		113
Total long-term liabilities	2,772		3,010
TOTAL SHAREHOLDERS' EQUITY	35,765		37,192
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$47,968		$50,266

 

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SOURCE Senstar Technologies Corporation

FAQ

What were Senstar Technologies' Q1 2024 earnings?

Senstar Technologies reported a net loss of $0.7 million for Q1 2024.

What was Senstar Technologies' revenue in Q1 2024?

The company reported a revenue of $7.5 million in Q1 2024.

How did Senstar Technologies' gross margin change in Q1 2024?

Senstar Technologies' gross margin improved to 59.6% in Q1 2024.

What was Senstar Technologies' EBITDA in Q1 2024?

Senstar Technologies had a positive EBITDA of $114,000 in Q1 2024.

How much cash and short-term deposits did Senstar Technologies have as of March 31, 2024?

Senstar Technologies had $15.8 million in cash and short-term deposits as of March 31, 2024.

What is the significance of Senstar Technologies' redomiciliation?

Senstar Technologies completed its redomiciliation to Canada in Q1 2024, streamlining its corporate structure.

When is the MultiSensor AI-based intrusion detection system expected to launch?

Senstar Technologies anticipates the MultiSensor system to begin sales in the fall of 2024.