Senstar Technologies (SNT)

Doron Kerbel Company Secretary & V.P. General Counsel
Dror Sharon Chief Executive Officer
Tomer Hay Chief Financial Officer
Call transcript
Due to licensing restrictions, you must log in to view earnings call transcripts.

Greetings. Welcome to Senstar Technologies Second Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. the to turn Technologies’ Kerbel, now Secretary. Company will conference Doron over Senstar I you. Thank

begin. may You

Doron Kerbel

Thank welcome Dror results Senstar's Operator. Dror highlights With Senstar you, followed And quarter. and for will me conference quarter Technologies who financial today the call. summarize earnings by the second are, and Hay, Tomer, financial Mr. Tomer Sharon, key of to CEO CFO. our business second review will

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

conference coronavirus, to may or from the that filed industry, like predictions, materially demand contain unanticipated, effect point update reduced result projected, by security performance. I'd call start, a Exchange well Senstar the Actual this and statements systems events with may cannot they Securities Commission. as the the the or or that risks as future These we and occur. to on fact, the information. those market unknown identified events the does forward-looking other guarantee differ documents the other Before in of trends, and Senstar only projections assume out not changing in obligation our clients, including future results including will, statements competitive regarding and are company's our as of company operations nature and of any

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

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

Dror Sharon

Technologies' large review financial Thank in our joining XXXX, today second verticals. several closed Thank key projects Senstar you, you for we've to us In quarter Doron. results.

we win customers and customers, since critical that us with it recent customers countries infrastructure large requested significant with terminals. wins vertical been have logistics power keep deployed high course airport landed successfully facility closed a successful airports to we secured been region infrastructure our as In Americas, EMEA, A plants. announce new in we and have ports, site. We profile in APAC several has two have cannot in as -- win the and large also such and In then sites solution software critical been a including a productive our PIDS well. has confidential. government

be will five upgrading our to terminal additional product. out with the an We rolling and equipment years over updated purchased ago

have closed standing long a power with upgrading and corrections systems with company facility also new We Senstar a customers products. project contract its

business that new However, Federal to second several delays longer experienced in quarter, close, projects in the U.S, factors the due cause particularly to tied while fundings. to many take to we are

subsidies from result, favor second operating second cost to expired Wages approximately of quarter world Notably, year, coming we XX% we to which third the Canadian the has in not operation to in Emergency expenses. a -- the business, the the months. $X.X received As lost we million in expect year-over-year by goods and have Subsidy XXXX. continue in to of and Program our revenue Last sold declined million. $X.X comparison quarter the impacted This quarter,

of the prices. by our despite mitigating some cost increase goods impacted the prices higher raising of Additionally, sold

XXXX. expected the first half stated On we into prior challenges that we chain continue of to call, the supply

increase its within oil pumps. significantly protect the secure fields. raise taking combined order awareness with in our excited maintain a company a multinational facilities, globally. is advanced agreement us Senstar oilfield cost brand energy is sector. our we run large pipeline necessary margin gross having price of particularly we facility boost more vertical an One subsidies One to In the allowed African secured payments logistics, we’re project of and and expect storage are multiple our we're blanket an with blanket anticipated going solutions. energy normalized and The and to sector agreement for is interest reserves, rate increases. and XXXX, would after energy and further energy products power oil we discussion pipelines anticipate prices, to in and components we with of concern XX% a in raising other advanced expenses meet negotiations half these deal build in experiencing result Securing to the the of second the will and a effect with facility Senstar inventory increased are past to deals string facilities absence This, demand, above final the has improvement, in the its energy several communication products network manufacture to year. close global a a embodied opportunities customers’ to continuous Currently have logistics fulfillment We and the company enable solution. able over a to As been of for solution mitigate FiberPatrol is a of to provide new forward. with that fiber contract fiber optics about countries our global secure international a culture of XXXX. XXXX. With with production leading QX in testing with across help and has

by Our our awareness new are industry detection two products good North products XXXX new significant is We to geographies. together entered be working all award new The XXXX APAC. pipeline Senstar latest expected technology, Engine Patrol improve QX pipeline perimeter innovation deals with and America in Sensor The and from growing are releasing winning year our are software attention anticipate contracts in launched for We and sales business security date, sensor Europe, several this and later year. our industry solutions, momentum prizes like closed. with to and verticals with and in to and gaining drivers. increased growth created and Fusion along

of our is remainder pipeline in robust orders several process with the closing. the of XXXX, For large

and continue business to vertical, we energy We are significant logistics. critical in regions the logistics. the and new APAC EMEA strong infrastructure in closed where win and infrastructure, contracts energy have critical

New solutions gaining and drivers. Fusion like be are will FiberPatrol sensor future detection growth attention industry Engine our Sensor and

ended upselling and remainder are with verticals. products solutions equivalents we increase XXXX on good cross-selling in around second existing capital addition, addition specifically to business in higher anticipate key purposes, revenue XXXX receivable EBITDA In cash cash our and XXXX. see in to and $XX.X We the and quarter decline X in first in payable. million. reduction X and customers inventories accounts primarily other momentum significant the based for accounts margins We the for our and a was of working cash The months in of the investment of

we research and invest addition, continue In development. to in

Our and is future. industry are in our significant most our innovation. customers and solution the analysis working will our be growth use of recognizing product innovative capital This lever

a investment, offering. As we innovative comprehensive of result this a have built extremely

our vital brand the Senstar our close is global lever us and our brand Another verticals. in enabling our believe get to getting brand for that deals growth We key will stronger, is stronger large companies future. in with

new we establishment presence. year, and have distribution, customers sales regions and lever we have built relationships where in here. Our enhanced with also and our an we sales have our partners This did is invested growth team not

distribution, capabilities. look have we As at brand product, Senstar expanded levers: growth we and and investments our X

each levers long-term activating achieve growth our We the profitability. are and of for to objectives

As to regional we play and and performance deals in pipeline global verticals our continue in Senstar product economics. a close role key with innovation, critical

distraction X of past infrastructure restructuring and in the years, ripple goods, on seen As a the in we disruption economy. have critical production energy delivery or of supply have the tremendous the effect the

from potential valuable harm. there As protect an or result, urgency is to intruders sense a of increased those assets

in innovative providing border relevant security of integrated suite high an in geographical become has protecting solutions. provide role disruption. robust high-risk also Senstar We security and by market proven that essential solution comprehensive recent technology plays in increasingly assets

We have over this years. doing been for XX

worldwide. balance. strong be and energy logistics, no has can summary, critical with debt sheet infrastructure, and Senstar correction products Our thousands in In cash high found sites of balance a

create with our a on using cash to are We focus value growth.

the I company success factors and Our in All services to like excited Hay. commitment results. productization, business. our is and are advancing our global to having suits pass for the would in Tomer, the strength CFO, brand footprint continued by now closing, our brand. ahead we the and review and and hard capability Tomer growth. for excellence global would In to the committed product our shareholders' work Mr. those thank to with their the to our like And Senstar value. leveraging financial the ultimately, go please commitment -- and increasing increasing and call product team I team their position for our success of to remains

Tomer Hay

Thank you, Dror.

compared Our $XX.X decrease of for million, reported with revenues the XXXX. was quarter million of reported second second the XXXX X.X% revenues $X.X a in of quarter the of

As decrease quarter North X%. The a Dror XXXX both in as of XX% versus the breakdown particularly to primarily XX%; and in geography to percentage U.S. versus to close, the discussed, periods; second APAC, is of Europe, quarter business year a new for taking America, America, as XX% compared due X% was XX%; the revenues the ago Latin longer XX% follows: versus

the second The due the revenues challenging XX.X% was decline gross to quarter. XX% of in reported gross quarter margin The year-ago in margin was versus primarily comparables.

Emergency to XXXX Subsidy Canadian our as of that Wages partially of the were granted The Canadian plan to goods second cost quarter subsidiary included allocated the subsidy sold. of part

mitigating sold Additionally, prices. price increases by by cost our of some higher impacted despite raising the was goods of

in by allocated due is in also and operating $X.X in quarter. million. increase operating the XX.X% operating goods operating subsidies Canadian an portion a reported year million, sales-related from expenses an increase sold, the Our of were year-over-year operating expenses expenses. quarter primarily prior the of year was driven to the expenses of in expenses Similar increase expenses the in cost The being prior travel of to second $X.X increase to increase

of year. accounting with the and reported regularly This noncash compared group adjustment quarter monetary functional the in in quarter Our million million assets quarter of a entities last liabilities this $X.X accordance currency due ago to in to reported we to of period. income in $X.X the $X.X were second year for operational of the expenses the second effect GAAP. financial year was compared valuation the million our is million other in the currencies the The $X.X operating in second than denominated to mainly

year. Our to million second second now. XXXX, $X.XX were $XX.X were loss cash year. $X.X the quarter of in company corporate million The call million versus the ago million reported of was $XX.X $X.X for in the year for like $X.X million operation -- operation concludes in the historical amortization continuing the from last the discontinued discontinued EBITDA from and operation million and we acquisitions. to quarter the $X.X quarter. Operator, million of million second reported of intangible the of XXXX That public quarter This open was income Added quarter from last contribution versus XXXX. the the continuing Technology The $X.X share a compared second income year. to of was equivalents last million second of of of versus to in quarter net from share per to quarter to from questions or year The $X.XX share. quarter prior $XX.X net Senstar of the in are amortization XX, expenses net Cash quarter operation. income income operational $X.X or $X.XX reported Senstar Net the platform included second in as of $X.X per assets shareholders my expenses second second million attributed of per income or in $X.X quarter net million in remarks. would second compares June and


Pasternak], [Operator Private Investor. [Barry Instructions] is Our first question from

Unidentified Analyst

onetime tax make that to still and question tax My first the the were regarding a almost Israeli since for X XXXX It's XXXX. payment? dividends dividend waiting in the Are decision regarding September years treatment? is December been the paid we authority

Tomer Hay

for It's XXXX of the So decision and struggle is and order are both in They the thanks I a combine can returns they of it. tax forth, for there filed to some They long question. be to tax the receive a them. just calculations. waiting kind back now authorities. tell for of you waiting with were

a So Everybody yes, is we as struggle. as involved much can. it's

in we all pushing results know, We X are months, I some what struggling we are don't upcoming pushing get and months, and hopefully, we can. with will but the

Unidentified Analyst


but a a the decision tax before final is filed be return to -- has So decision made? -- XXXX

Tomer Hay

to But they I more than after want want call. the don't previous based they they're on become why those an That's hold, are much the numbers that They we are assessment. Yes, want That's positive was use is there of hope the the why impact waiting. more detailed they to results. decided they to examine know numbers in what project the there divestiture there. division will what because getting

So more on be our I'll information. call, hopefully, give next -- investor more


the are questions. There over no for like I would Instructions] more conference comments. management [Operator closing to back to hand

Doron Kerbel

of Thank of around your and for you, support you Senstar, thank a forward Have management in good I and you Operator. X On I long-term to day, of updating our the behalf months. business. thank quarter continuous like would look next you. interest to


This Thank conclude does you. conference. today's

You may disconnect day. lines, pleasant and a your have