Senstar Technologies Reports Second Quarter 2021 Financial Results

YEHUD, Israel, Aug. 12, 2021 /PRNewswire/ -- Senstar Technologies Ltd. (legal name: Magal Security Systems Ltd.) (NASDAQ: MAGS) today announced its financial results for the three and six months ended June 30, 2021. Management will hold an investors' conference call later today (at 10 a.m. Eastern Time) to discuss the results.

SECOND QUARTER 2021 BUSINESS HIGHLIGHTS:

• Awarded a multi-million dollar contract for Perimeter Security at a major Asian airport; Bookings increased sequentially across all regions.
• Completed the sale of the Integrated Solutions division to Aeronautics Ltd. for $35 million, subject to post-closing working capital and other customary adjustments.
• Pristine balance sheet with cash of $50.5 million, or $2.18 per share, and zero debt as of June 30.
• Court approval for a distribution of up to $40 million received.

Mr. Dror Sharon, Chief Executive Officer of Senstar Technologies, said, "In the second quarter, Senstar delivered 30% annual revenue growth, along with a 270 basis point improvement in gross margin, which resulted in income from continuing operations increasing by 35% to $0.7 million, and EBITDA from continuing operations increasing by 95% to $2.5 million. The strength of our performance this quarter validates our growth strategy. We are now singularly focused on developing Senstar's highly scalable business model, having completed the divestiture of the Integrated Solution division on June 30, 2021. In the second quarter we grew revenue in each of our four key verticals, Energy, Corrections, Logistics, and Critical Infrastructure. We are reaping the benefits of our R&D investment and will launch new products and software in the second half of 2021. Our sales processes are working more effectively, and we have seen our pipeline grow in all regions, with increased bookings year over year. Our sound balance sheet gives us the latitude to acquire innovative technology and essential expertise that will support our brand leadership. We anticipate continued revenue growth and maintaining high profitability for the remainder of 2021."

SECOND QUARTER 2021 RESULTS*

• Revenue up 30.9% to $10.1 million.
• Gross margin improved by 270 basis points to 69.8%.
• Operating income more than doubled to $2.2 million.
• Income from continuing operations rose 35% to $0.7 million.
• EBITDA from continuing operations up nearly 95% to $2.5 million.

* The second quarter results from continuing operations exclude the results of the Magal Integrated Solutions Division, whose sale to Aeronautics Ltd. was completed on June 30, 2021. In addition, the revenue from continuing operations excludes sales from Senstar to the Magal Integrated Solutions division, which is considered a related party for this period. Integrated Solutions division results are reported hereunder as part of the income from discontinued operations.              

Revenue for the second quarter of 2021 was $10.1 million, an increase of 30.9% compared with $7.7 million in the second quarter of 2020. The increase in second quarter revenue was primarily due to increased demand in all verticals,  mainly with respect to critical infrastructures.

Second quarter gross margin was 69.8% of revenue versus 67.1% last year. The increase in gross margin was primarily due to increased sales and a shift in sales mix towards higher margin products.

Operating expenses were $4.8 million, an increase of 16.1% compared to the prior year's second quarter operating expenses of $4.2 million. The increase in operating expenses is attributable to continued investment in research and development and increased activity related to sales and marketing events.

Operating income for the second quarter was $2.2 million compared to $1.0 million in the year-ago period.

Financial expense was ($222,000) compared to ($522,000) in the second 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 $0.7 million in the second quarter of 2021 compared to $0.5 million in the year ago quarter.

Net income attributable to shareholders in the quarter was $11.8 million or $0.51 per share versus $153,000 or $0.01 per share in the second quarter of last year. The reported net income includes $11.1 million in income from discontinued operations (Integrated Solutions division) versus a net loss of ($412,000) in the same period last year.

EBITDA from continuing operations for the second quarter was $2.5 million versus $1.3 million in the second quarter of 2020.

Cash and cash equivalents and restricted cash and deposits related to continuing operations as of June 30, 2021, was $50.5 million, or $2.18 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, AUGUST 12, 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 13721723:

• US: 1-877-407-9716
• Israel: 1-809-406-247
• UK: 0-800-756-3429
• International: 1-201-493-6779

The conference call will also be webcast live at:  http://public.viavid.com/index.php?id=145837.

A replay link of the call will be available at senstartechnologies.com on August 12, 2021, after 1 p.m. Eastern time through August 26, 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: 13721723

About Senstar Technologies

Senstar Technologies (historically known as Magal Security Systems) is a leading international provider of comprehensive physical, video, and access control security products and solutions, as well as site management. Over the past 45 years, Senstar Technologies has delivered its products as well as tailor-made security solutions and turnkey projects to hundreds of satisfied customers in over 80 countries under some of the most challenging conditions. On June 30, 2021, Senstar Technologies completed the sale of its project division for approximately $35 million. Senstar Technologies is now focused entirely on security products, both software and hardware, and product-based solutions, with a highly visible and scalable business model through its Senstar brand.

Senstar is a global leader in innovative perimeter intrusion detection systems (PIDS) and intelligent video management (VMS) with advanced video analytics and access control, offering a comprehensive suite of innovative, intelligent, integrated security technologies. Senstar offers a comprehensive suite of proven, integrated technologies that reduce complexity, improve performance and unify support. Senstar, which products are found in thousands of sites including critical infrastructure, logistics, corrections and energy, has been protecting high risk assets for more than 40 years. For more information, visit the Company's website at www.senstar.com.

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.

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SOURCE Senstar Technologies (legal name: Magal Security Systems Ltd.)