PR Newswire | Nov 16, 2021 09:03AM EST

11/16 08:00 CST

Senstar Technologies Reports Third Quarter 2021 Financial Results YEHUD, Israel, Nov. 16, 2021

YEHUD, Israel, Nov. 16, 2021 /PRNewswire/ -- Senstar Technologies Ltd. (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 and nine months ended September 30, 2021. Management will hold an investors' conference call later today (at 10 a.m. Eastern Time) to discuss the results.

SUMMARY FINANCIAL RESULTS

($ in thousands) Three months ended Nine months ended September 30, September 30,

2021 2020 2021 2020

Revenue 9,263 8,379 25,905 23,720

Gross profit 5,627 5,375 16,744 15,500

Gross margin 60.70% 64.10% 64.60% 65.30%

Operating income 779 970 2,324 1,779

Net income (loss) (222) 616 9,597 1,208

EBITDA from continuing 1,129 1,258 3,302 2,644operations*

EBITDA margin* 12.20% 15.00% 12.70% 11.10%

*Non-GAAP measure

BUSINESS HIGHLIGHTS:

* Revenues up 9% to $25.9 million for the nine months ended September 30, 2021 compared with comparable period in 2020. * Net income increased to $9.6 million for the nine months ended September 30, 2021 up from $1.2 million in the 2020 period, reflecting income from discontinued operations * EBITDA up 25% to $3.3 million for the nine months ended September 30, 2021 compared with comparable period in 2020. * As part of our growth engine for 2022 and on, we introduced the Senstar TC200 thermal-visible, dual-video detection camera for outdoor site security and announced our new sensor fusion engine, which synthesizes data from multiple sensors to generate actionable information and address nuisance alarms. * Completed a one-time cash distribution to shareholders in the amount of $1.725 per share (approximately $40 million in the aggregate). * Strong balance sheet with cash of $24.0 million (following the ~$40 million cash distribution), or $1.03 per share, and zero debt as of September 30, 2021.

Mr. Dror Sharon, Chief Executive Officer of Senstar Technologies, said, "We delivered 11% revenue growth in the third quarter, as a result of our solid performance, especially in the APAC region, attributable to a large infrastructure contract that was announced in the second quarter of this year. Our US business experienced contract delays related to COVID, including our difficulty in fulfilling customer orders due to supply chain constraints that created a shortage of semiconductors. On a positive note, we increased our trade show activities this quarter and had numerous productive meetings at events in the US, Europe, and the UK. The upturn in our marketing activity increased our operating expenses in the quarter as business processes recovered from COVID restrictions. Opportunities to engage with customers face-to-face are helping to build our pipeline of new business for future growth.

"A key growth lever for Senstar Technologies is adding new products and enhancing our current product offering," continued Mr. Sharon. "This quarter we enhanced our PIDS offering with the release of our thermal camera, creating a powerful perimeter solution. We also released our game-changing Fusion Hardware-Software engine, which we anticipate will drive increased software sales and raise gross margins over time. Customer response to these new products has been overwhelmingly positive. In order to leverage the improving business environment in the APAC region and sustain our momentum there, we announced a new Senior Regional Director based in Hong Kong. These business drivers, in combination with our excellent balance sheet, positions Senstar Technologies to deliver growth, improve profitability and deliver value for our shareholders."

THIRD QUARTER 2021 RESULTS

Revenue for the third quarter of 2021 was $9.3 million, an increase of 10.6% compared with $8.4 million in the third quarter of 2020. The increase in third quarter revenue was primarily due to a solid performance in the APAC region from a large infrastructure contract announced in the prior quarter.

Third quarter gross profit was $5.6 million, or 60.7% of revenue, compared with $5.4 million, or 64.1% of revenue. The decrease in gross margin was primarily due to a shift in the mix of products sold during the quarter, a higher cost of materials driven by global supply chain challenges and unfavorable foreign currency valuations.

Operating expenses were $4.8 million, an increase of 10.1% compared to the prior year's third quarter operating expenses of $4.4 million. The increase in operating expenses is primarily attributable to increased sales and marketing activity compared to the 2020 period when there was slowdown in similar activities due to the global pandemic.

Operating income for the third quarter was $0.8 million compared to $1 million in the year-ago period.

Financial expense was $0.4 million compared to $0.1 million in the third quarter last year. This is due to the adjustment of monetary assets and liabilities, denominated in currencies other than the functional currency of the operational entities in the group. At the end of each period, a change in currency valuation of monetary assets and liabilities is recorded as a non-cash financial expense or income.

Income from continuing operations was $44,000 in the third quarter of 2021 compared to $533,000 in the year ago quarter.

Net loss in the quarter was $0.2 million or ($0.01) per share versus net income of $616,000 or $0.01 per share in the third quarter of last year. The net loss in the current period includes a net loss of $0.3 million from discontinued operations versus net income from discontinued operations of $0.1 million in the year ago quarter.

EBITDA from continuing operations for the third quarter was $1.1 million versus $1.3 million in the third quarter of 2020.

On September 22, 2021, the Company made a cash distribution to shareholders in the amount of $1.725 per share, or approximately $40 million in the aggregate.

Cash and cash equivalents and restricted cash and deposits related to continuing operationsas of September 30, 2021, was $24.0 million, or $1.03 per share, compared with cash and cash equivalents and restricted cash and deposits related to continuing operations of $24.5 million, or $1.06 per share, at December 31, 2020.

EARNINGS CONFERENCE CALL INFORMATION:

The Company will host a conference call later today, November 16, 2021. The call will begin promptly at 10 a.m. Eastern Time, 5 p.m. Israel Time, 3 p.m. UK Time. The Company requests that participants dial in 10 minutes before the conference call commences.

To participate, please call one of the following teleconferencing numbers and the conference ID number 13724320:

* Toll Free: 1-877-407-9716 * Toll/International: 1-201-493-6779 * Israel Toll Free : 1 809 406 247 * UK Toll Free: 0 800 756 3429

The conference call will also be webcast live at: https://78449.themediaframe.com/dataconf/productusers/vvdb/mediaframe/47094/indexl.html.

A replay link of the call will be available at senstartechnologies.com on November 16, 2021, after 1 p.m. Eastern time through November 30, 2021, at 11:59 p.m. Eastern time.

Replay Dial-in Numbers:

* Toll Free: 1-844-512-2921 * Toll/International: 1-412-317-6671 * Replay Pin Number: 13724320

About Senstar Technologies

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 in utilities , logistics , corrections , and energy markets.

For more information, visit the Company's website at www.senstartechnologies.com.

Use of Non-GAAP Financial Information

The Company reports financial results in accordance with U.S. GAAP. To supplement the consolidated financial statements presented in accordance with GAAP, the Company presents the Non-GAAP presentation of EBITDA. This non-GAAP measure is not in accordance with, nor is it a substitute for, a GAAP measure. The Company uses EBITDA to evaluate and manage the Company's operations internally. The Company is also providing this information to assist investors in performing additional financial analysis. Reconciliation between the company's results on a GAAP and non-GAAP basis is provided in a table below.

Forward Looking Statements

This press release contains forward-looking statements, which are subject to risks and uncertainties. Such statements are based on assumptions and expectations which may not be realized and are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual results, financial and otherwise, may differ from the results discussed in the forward-looking statements. A number of these risks and other factors that might cause differences, some of which could be material, along with additional discussion of forward-looking statements, are set forth in the Company's Annual Report on Form 20-F filed with the Securities and Exchange Commission. In addition, there is uncertainty about the spread of the COVID19 virus and the impact it will have on the Company's operations, the demand for the Company's products, global supply chains and economic activity in general.

For more information:

IR Contact:Senstar Technologies: Brett MaasDoron Kerbel, Adv. Managing PartnerV.P. General Counsel & Company Secretary Hayden IRTel: +972-3-5391500 +1 646-536-7331Doron.Kerbel@senstar.com Brett@HaydenIR.com

* Tables to follow *

SENSTAR TECHNOLOGIES LTD.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(All numbers except EPS expressed in thousands of US$)



Three Months Nine Months Ended September 30, Ended September 30,

2021 2020 % 2021 2020 % change change

Revenue 9,263 8,379 11 25,905 23,720 9

Cost of revenue 3,636 3,004 21 9,161 8,220 11



Gross profit 5,627 5,375 5 16,744 15,500 8

Operating expenses:

Research and 814 875 (7) 2,797 2,965 (6) development, net

Selling and 2,352 1,887 25 6,933 6,341 9 marketing

General and 1,682 1,643 2 4,690 4,415 6 administrative

Total operating 4,848 4,405 10 14,420 13,721 5 expenses



Operating income779 970 2,324 1,779

Financial income(416) (71) (619) 151 (expenses), net



Income (loss) before income 363 899 1,705 1,930 taxes



Taxes on income 319 366 1,724 428



Income (loss) from continuing 44 533 (19) 1,502 operations

Income (loss) from (266) 83 9,616 (294) discontinued operations, net



Net income (222) 616 9,597 1,208 (loss)



Income (loss) attributable to redeemable non-controlling - - - - interests and non-controlling interests



Net income (loss) attributable to (222) 616 9,597 1,208 Senstar's shareholders





Basic and diluted net income (loss) $0.00 $0.02 $0.00 $0.06 per share from continuing operations

Basic and diluted net income (loss) ($0.01) ($0.01) $0.41 ($0.03) per share from discontinued operations, net



Basic and diluted net ($0.01) $0.01 $0.41 $0.03 income (loss) per share







Weighted average number of shares used in computing basic 23,215,30923,153,985 23,182,40423,153,985 and diluted net income (loss) per share





SENSTAR TECHNOLOGIES LTD.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(All numbers except EPS expressed in thousands of US$)



Three Months Nine Months Ended September Ended September 30, 30,

2021 2020 2021 2020 % % % %



Gross margin 60.7 64.1 64.6 65.3

Research and development, net as a % of 8.8 10.4 10.8 12.5 revenues

Selling and marketing as a % of revenues25.4 22.5 26.8 26.7

General and administrative as a % of 18.2 19.6 18.1 18.6 revenues

Operating margin 8.4 11.6 9.0 7.5

Net margin from continuing operations 0.5 6.4 - 6.3

SENSTAR TECHNOLOGIES LTD.

RECONCILIATION OF EBITDA FROM CONTINUING OPERATION TO INCOME (LOSS) FROM CONTINUING OPERATION

(All numbers expressed in thousands of US$)



Three Months Nine Months Ended Ended September 30, September 30,

2021 2020 2021 2020



GAAP income (loss) from continuing operations44 533 (19) 1,502

Less:

Financial income (expenses), net (416) (71) (619) 151

Taxes on income 319 366 1,724 428

Depreciation and amortization (350) (288) (978) (865)

EBITDA from continuing operations 1,129 1,258 3,302 2,644

SENSTAR TECHNOLOGIES LTD.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(All numbers expressed in thousands of US$)

September 30, December 31,

2021 2020

CURRENT ASSETS:

Cash and cash equivalents $23,933 $24,531

Restricted cash and deposits 27 10

Trade receivables, net 8,570 7,670

Unbilled accounts receivable 114 64

Other accounts receivable and prepaid expenses 1,067 899

Inventories 4,978 5,325

Total current assets 38,689 38,499

Long term investments and receivables:

Deferred tax assets 1,604 1,671

Operating lease right-of-use assets 1,410 1,703

Total long-term investments and receivables 3,014 3,374

PROPERTY AND EQUIPMENT, NET 2,075 2,080

INTANGIBLE ASSETS, NET 2,488 2,979

GOODWILL 11,465 11,507

ASSETS ATTRIBUTED TO DISCONTINUED OPERATIONS 2,028 49,618

Total assets $59,759 $108,057

SENSTAR TECHNOLOGIES LTD.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(All numbers expressed in thousands of US$)

September 30, December 31,

2021 2020

CURRENT LIABILITIES:

Trade payables $1,791 $1,511

Customer advances 362 355

Deferred revenues 2,730 2,709

Other accounts payable and accrued expenses 6,809 6,164

Short-term operating lease liabilities 343 460

Total current liabilities 12,035 11,199

LONG-TERM LIABILITIES:

Deferred revenues 1,746 1,624

Deferred tax liabilities 701 676

Accrued severance pay 641 644

Long-term operating lease liabilities 1,146 1,335

Other long-term liabilities 256 285

Total long-term liabilities 4,490 4,564

LIABILITIES ATTRIBUTED TO DISCONTINUED OPERATIONS 4,346 25,196

SHAREHOLDERS' EQUITY

Share Capital: Ordinary shares of NIS 1 par value -

Authorized: 39,748,000 shares at September 30, 2021 and December 31, 2020; Issued and outstanding: 23,258,320 shares at September 6,784 6,753 30, 2021 and 23,163,985 shares at December 31, 2020

Additional paid-in capital 30,355 69,965

Accumulated other comprehensive loss 1,570 34

Foreign currency translation adjustments (stand-alone 9,341 9,104financial statements)

Accumulated deficit (9,162) (18,759)

Total shareholders' equity 38,888 67,097

Non-controlling interest - 1

TOTAL SHAREHOLDERS' EQUITY 38,888 67,098

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $59,759 $108,057

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SOURCE Senstar Technologies Ltd.