Revenue of $3.2 million
reflecting year-over-year and sequential quarterly growth
TEL
AVIV, Israel, Aug. 9, 2022
/PRNewswire/ -- SuperCom (NASDAQ: SPCB), a global
provider of secured solutions for the e-Government, IoT, and
Cybersecurity sectors, today reported results for the second
quarter of 2022 ended June 30,
2022.
Second Quarter Ended June 30, 2022, Financial
Highlights (Compared to the Second Quarter of 2021)
- Revenue increased to $3.2 million
from $3.1 million in the second
quarter of last year, and from $3.0
million in the first quarter of 2022. Additional progress
was achieved on replacing the revenue decline from the legacy
business with new revenues from the IoT business.
- Gross margin of 40% compared to 58%, reflecting the high
transitional costs associated with deploying new IoT projects ahead
of the start of the associated recurring revenue streams, and the
temporarily higher costs of material and shipping due to
disruptions in the global supply chain.
- Research and Development expenses increased to $0.93 million compared to $0.59 million, reflecting increased investment in
R&D to enhance existing solutions and to develop new products
in the IoT and Cyber Security sectors.
- Sales and Marketing expenses of $0.76
million compared to $0.38
million, reflecting investment in proactive sales strategy
to expand SuperCom's footprint in the European and North American
markets.
- General and Administrative expenses of $1.3 million compared to $1.0 million, reflecting growth in the Company's
overall operations.
- EBITDA of -$0.72 million compared
to $0.68 million, reflecting an
increase in COGS and operating expenses to support the launch of
new projects and the Company's global growth plan.
- Non-GAAP EPS of -$0.05.
- Cash and cash equivalents and restricted cash was $3.9 million on June 30,
2022, compared to $4.6 million
at the end of 2021.
Recent Business Highlights:
- Won a new EM contract in Kentucky with a leading private probation
services provider, which facilitates SuperCom's strategic expansion
into the Southeast US. The first order of over 50 units has already
been placed and is expected to start generating recurring revenues
soon.
- Signed a second and a third new GPS monitoring contract in
Idaho with two County Juvenile
Departments, which will use SuperCom's PureTrack GPS smartphone
products to monitor their caseload for location compliance.
- Won a contract with a new customer in Southern California to deploy SuperCom's
PureSecurity Electronic Monitoring Suite. The new customer is a
long-standing provider of products and services to the Criminal
Justice market with operations primarily in Southern California.
- Secured a new GPS monitoring contract in Texas to monitor juvenile probation
clients.
- Awarded a contract with the Swedish National Board of
Institutional Care for a full-scale high-security Juvenile
electronic monitoring project to deploy SuperCom's PureSecurity
Electronic Monitoring (EM) Suite. This project marks SuperCom's
third national electronic monitoring project in Sweden and its fifth national project in the
Nordic countries.
- Won and launched Croatia's
first full-scale electronic monitoring project in the country,
which will deploy SuperCom's PureSecurity Electronic Monitoring
Suite. The project was formally awarded earlier this year through a
formal bid process conducted by Croatia's Ministry of Justice and
Administration.
- Won and launched new projects in California, US valued at up to over
$5 million over five years to provide
programming and rehabilitation services to various
organizations.
- Secured a new governmental electronic monitoring contract in
Wyoming. The contracting agency is
an Adult and Juvenile Probation Agency with plans to use SuperCom's
PureTrack GPS smartphone products to monitor their caseload for
location compliance.
- Continued to strengthen the Company's global sales division,
now headed by a new VP of sales and sales managers with industry
expertise, to execute an active outreach sales strategy.
- Maintained increased investment in the Company's R&D
division, with experienced engineers, product managers and quality
assurance personnel, with expertise to serve the Company's growing
government customer base.
Management Commentary:
"We continued to progress on multiple fronts in the second
quarter. Revenue reached $3.2
million, reflecting year-over-year growth and 5.5% quarterly
sequential growth as well. Revenue growth was driven by new project
launches in Europe and
North America, as well as new
orders with existing customers. Moreover, the IoT division grew
faster than the decline in the legacy business again this quarter.
Our focus on the IoT tracking business continues to drive our
expansion on top of a strong customer base generating roughly 83%
recurring revenue in recent years," commented Ordan Trabelsi, President and CEO of
SuperCom.
"Over the past few months, we were awarded new contracts in
Idaho, California, Texas, and Kentucky in the US, as well as in Croatia and Sweden in Europe. With each new contract win, we
continue to expand our reach and brand awareness leading to more
wins in both adjacent and distant locations," Mr. Trabelsi
continued.
"Near term, we expect to layer in new revenue from our many new
contract wins. We only recently won a number of them and expect
that the associated revenue will only begin to contribute to our
financial results in the coming quarters. We also expect our
significant investments in R&D to continue to pay off as we
maintain our leading edge in technology and release new products,
while our new proactive sales approach expedites our market
expansion. The unique nature of our industry provides resilience
through market cycles and volatile economic conditions. We believe
that this, together with our high win rates in competitive RFPs and
steady recurring revenue base, provides strong tailwinds through
potential recessionary environments and continued growth in the
years ahead," concluded Mr. Trabelsi.
Conference Call
The Company will hold a conference call today, August 9, 2022, at 8:30
a.m. Eastern time (3:30 p.m.
Israel time) to discuss the
second quarter results, followed by a question and answer
session.
Conference Call Dial-In Information:
Date: Tuesday, August 9, 2022
Time: 8:30 a.m. Eastern Time /
5:30 a.m. Pacific Time / 3:30 p.m. Israel Time
U.S. toll-free: 877-545-0523
Israel toll-free:
1-809-423-853
International: 973-528-0016
Access Code: 583763
Please call the conference telephone number 5-10 minutes prior
to the start time. An operator will register your name and
organization.
About SuperCom
Since 1988, SuperCom has been a global provider of traditional
and digital identity solutions, providing advanced safety,
identification and security solutions to governments and
organizations, both private and public, throughout the world.
Through its proprietary e-government platforms and innovative
solutions for traditional and biometrics enrollment,
personalization, issuance and border control services, SuperCom has
inspired governments and national agencies to design and issue
secure Multi-ID documents and robust digital identity solutions to
its citizens and visitors. SuperCom offers a unique all-in-one
field-proven RFID & mobile technology and product suite,
accompanied by advanced complementary services for various
industries including healthcare and homecare, security and safety,
community public safety, law enforcement, electronic monitoring,
livestock monitoring, and building and access automation. For more
information, visit www.supercom.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Statements preceded or followed by or that otherwise
include the words "believes", "expects", "anticipates", "intends",
"projects", "estimates", "plans", and similar expressions or
future or conditional verbs such as "will", "should", "would",
"may" and "could" are generally forward-looking in nature
and not historical or current facts. These forward-looking
statements are subject to risks and uncertainties that could cause
our actual results to differ materially from the statements
made. Examples of these statements include, but are not
limited to, statements regarding business and economic trends, the
anticipated effects of the COVID-19 outbreak on travel and physical
locations, the levels of consumer, business and economic
confidence generally, the duration of the COVID-19 outbreak and
severity of such outbreak, the pace of recovery following the
COVID-19 outbreak, the effect on our supply chain, our ability to
implement cost containment and business recovery
strategies and resulting anticipated impact of such outbreak
on our business, financial condition and results of
operations, the adverse effects of the COVID-19 outbreak on
our business or the market price of our ordinary shares, and other
risks and uncertainties described in the forward looking
statements and in the section captioned "Risk Factors" in our
Annual Report on Form 20-F for the year ended December 31, 2021, filed with the U.S.
Securities and Exchange Commission (the "SEC") on April 4, 2022, our reports on Form 6-K filed from
time to time with the SEC and our other filings with the SEC.
Except as required by law, we not undertake any obligation to
update or revise these forward-looking statements, whether as a
result of new information, future events or otherwise, after the
date of this press release.
Results presented in this press release are based on
management's estimated unaudited analysis of financial results for
the presented periods. SuperCom's independent registered accounting
firm has not audited the financial data discussed in this press
release. During the course of SuperCom's quarter- and fiscal
year-end closing procedures and review process, SuperCom may
identify items that would require it to make adjustments, which may
be material, to the information presented in this press release. As
a result, the estimate financial results constitute forward-looking
information and are subject to risks and uncertainties, including
possible adjustments to such results.
Use of Non-GAAP Financial Information
In addition to disclosing financial results calculated in
accordance with United States
generally accepted accounting principles (GAAP), this release of
operating results also contains non-GAAP financial measures, which
SuperCom believes are the principal indicators of the operating and
financial performance of its business. Management believes the
non-GAAP financial measures provided are useful to investors'
understanding and assessment of the Company's on-going core
operations and prospects for the future, as the charges eliminated
are not part of the day-to-day business or reflective of the core
operational activities of the Company. Management uses these
non-GAAP financial measures as a basis for strategic decisions,
forecasting future results and evaluating the Company's current
performance. However, such measures should not be considered
in isolation or as substitutes for results prepared in accordance
with GAAP. Reconciliation of the non-GAAP measures to the most
comparable GAAP measures are provided in the schedules attached to
this release.
SuperCom Investor Relations:
ir@supercom.com
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-Tables Follow-
SUPERCOM
LTD.
|
CONSOLIDATED BALANCE
SHEETS
|
(U.S. dollars in
thousands)
|
|
|
|
|
|
As of
June 30, 2022
|
|
As of
December 31, 2021
|
|
|
Unaudited
|
|
Audited
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
Cash and
cash equivalents
|
|
2,912
|
|
3,537
|
Restricted bank
deposits
|
|
1,009
|
|
1,067
|
Trade receivable,
net
|
|
12,498
|
|
11,061
|
Patents
|
|
5,283
|
|
5,283
|
Other accounts
receivable and prepaid expenses
|
|
1,795
|
|
1,599
|
Inventories,
net
|
|
3,641
|
|
3,561
|
|
|
|
|
|
Total current
assets
|
|
27,138
|
|
26,108
|
|
|
|
|
|
LONG-TERM
ASSETS
|
|
|
|
|
Severance pay
funds
|
|
458
|
|
487
|
Deferred tax long
term
|
|
208
|
|
202
|
Customer
Contracts
|
|
857
|
|
936
|
Software and other
IP
|
|
2,220
|
|
2,495
|
Operating lease
right-of-use assets
|
|
683
|
|
882
|
Other Assets,
net
|
|
2,352
|
|
2,179
|
Goodwill
|
|
7,026
|
|
7,026
|
Property and
equipment, net
|
|
1,742
|
|
1,804
|
|
|
|
|
|
Total long-term
assets
|
|
15,546
|
|
16,011
|
|
|
|
|
|
Total Assets
|
|
42,684
|
|
42,119
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
Short-term loans and
other
|
|
-
|
|
207
|
Trade
payables
|
|
1,355
|
|
1,395
|
Employees and payroll
accruals
|
|
1,802
|
|
2,119
|
Related
parties
|
|
161
|
|
172
|
Accrued expenses and
other liabilities
|
|
1,353
|
|
1,559
|
Deferred revenues
ST
|
|
525
|
|
151
|
|
|
|
|
|
Total current
liabilities
|
|
5,196
|
|
5,603
|
|
|
|
|
|
LONG-TERM
LIABILITIES
|
|
|
|
|
|
|
|
|
|
Long-term
loan
|
|
32,337
|
|
30,451
|
Accrued severance
pay
|
|
498
|
|
529
|
Deferred tax
liability
|
|
170
|
|
170
|
Deferred
revenues
|
|
49
|
|
49
|
Operating lease
liabilities
|
|
709
|
|
925
|
|
|
|
|
|
Total long-term
liabilities
|
|
33,763
|
|
32,124
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY:
|
|
|
|
|
Ordinary
shares
|
|
2,645
|
|
2,028
|
Additional paid-in
capital
|
|
101,708
|
|
97,833
|
Accumulated
deficit
|
|
(100,628)
|
|
(95,469)
|
|
|
|
|
|
Total shareholders'
equity
|
|
3,725
|
|
4,392
|
|
|
|
|
|
Total liabilities and
equity
|
42,684
|
|
42,119
|
|
SUPERCOM
LTD.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(U.S. dollars in
thousands)
|
|
|
|
|
Three months
ended
|
|
|
|
June 30,
2022
|
June 30,
2021
|
|
|
|
Unaudited
|
Unaudited
|
|
|
|
|
|
REVENUES
|
|
|
3,218
|
3,093
|
COST OF
REVENUES
|
|
|
(1,936)
|
(1,313)
|
|
|
|
|
|
GROSS
PROFIT
|
|
|
1,282
|
1,780
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
Research
and development
|
|
|
933
|
589
|
Selling
and marketing
|
|
|
762
|
377
|
General
and administrative
|
|
|
1,346
|
976
|
|
|
|
|
|
Total operating
expenses
|
|
|
3,041
|
1,942
|
|
|
|
|
|
OPERATING
LOSS
|
|
|
(1,759)
|
(162)
|
FINANCIAL EXPENSES,
NET
|
|
|
(1,055)
|
(797)
|
|
|
|
|
|
LOSS BEFORE INCOME
TAX
|
|
|
(2,814)
|
(959)
|
INCOME TAX
EXPENSE
|
|
|
-
|
(5)
|
|
|
|
|
|
NET LOSS FOR THE
PERIOD
|
|
|
(2,814)
|
(964)
|
|
|
|
|
|
|
|
|
SUPERCOM
LTD.
|
Reconciliation Table
of GAAP to Non-GAAP Figures and EBITDA to Net Income
|
(U.S. dollars in
thousands)
|
|
|
|
|
Three months
ended
|
|
|
|
June 30,
2022
|
June 30,
2021
|
|
|
|
Unaudited
|
Unaudited
|
|
|
|
|
|
GAAP gross
profit
|
|
|
1,282
|
1,780
|
Amortization of
intangible assets
|
|
|
89
|
88
|
Non-GAAP gross
profit
|
|
|
1,371
|
1,868
|
|
|
|
|
|
GAAP Operating
Loss
|
|
|
(1,759)
|
(162)
|
Amortization of
intangible assets
|
|
|
472
|
378
|
Foreign Currency
Loss
|
|
|
395
|
342
|
Non-GAAP operating
profit
|
|
|
(892)
|
558
|
GAAP net
Loss
|
|
|
(2,814)
|
(964)
|
Amortization of
intangible assets
|
|
|
472
|
378
|
Income tax
expense (benefit)
|
|
|
-
|
5
|
Foreign Currency
Loss
|
|
|
395
|
342
|
Non-GAAP net
Loss
|
|
|
(1,947)
|
(239)
|
Non-GAAP
E.P.S
|
|
|
(0.05)
|
(0.01)
|
|
|
|
|
|
Net loss for the
period
|
|
|
(2,814)
|
(964)
|
Financial expenses (income), net
|
|
|
1,055
|
797
|
Depreciation and Amortization
|
|
|
643
|
504
|
Income tax expenses (benefit)
|
|
|
-
|
5
|
Foreign Currency Loss
|
|
|
395
|
342
|
EBITDA *
|
|
|
(721)
|
684
|
* EBITDA
is a non-GAAP financial measure generally defined as earnings
before interest, taxes, depreciation and amortization
and other non-cash or one-time expenses.
|
SUPERCOM
LTD.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(U.S. dollars in
thousands)
|
|
|
|
|
|
|
|
Six months
ended
|
|
|
|
June 30,
2022
|
June 30,
2021
|
|
|
|
Unaudited
|
Unaudited
|
|
|
|
|
|
REVENUES
|
|
|
6,264
|
6,125
|
COST OF
REVENUES
|
|
|
(3,648)
|
(2,669)
|
|
|
|
|
|
GROSS
PROFIT
|
|
|
2,616
|
3,456
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
Research
and development
|
|
|
1,792
|
1,246
|
Selling
and marketing
|
|
|
1,463
|
747
|
General
and administrative
|
|
|
2,488
|
1,806
|
|
|
|
|
|
Total operating
expenses
|
|
|
5,743
|
3,799
|
|
|
|
|
|
OPERATING
LOSS
|
|
|
(3,127)
|
(343)
|
FINANCIAL EXPENSES,
NET
|
|
|
(2,032)
|
(1,919)
|
|
|
|
|
|
LOSS BEFORE INCOME
TAX
|
|
|
(5,159)
|
(2,262)
|
INCOME TAX
EXPENSE
|
|
|
-
|
(5)
|
|
|
|
|
|
NET LOSS FOR THE
PERIOD
|
|
|
(5,159)
|
(2,267)
|
|
|
|
|
|
|
|
|
|
|
SUPERCOM
LTD.
|
Reconciliation Table
of GAAP to Non-GAAP Figures and EBITDA to Net Income
|
(U.S. dollars in
thousands)
|
|
|
|
Six months
ended
|
|
|
|
June 30,
2022
|
June 30,
2021
|
|
|
Unaudited
|
Unaudited
|
|
|
|
|
|
GAAP gross
profit
|
|
|
2,616
|
3,456
|
Amortization of
intangible assets
|
|
|
177
|
177
|
Non-GAAP gross
profit
|
|
|
2,793
|
3,633
|
|
|
|
|
|
GAAP Operating
Loss
|
|
|
(3,127)
|
(343)
|
Amortization of
intangible assets
|
|
|
927
|
755
|
One-time
inventory write-off
|
|
|
-
|
34
|
Foreign Currency
Loss
|
|
|
884
|
657
|
Non-GAAP operating
profit
|
|
|
(1,316)
|
1,103
|
GAAP net
Loss
|
|
|
(5,159)
|
(2,267)
|
Amortization of
intangible assets
|
|
|
927
|
755
|
One-time
inventory write-off
|
|
|
-
|
34
|
Foreign Currency
Loss
|
|
|
884
|
657
|
Income tax
expenses (benefit)
|
|
|
-
|
5
|
Non-GAAP net
Loss
|
|
|
(3,348)
|
(817)
|
Non-GAAP
E.P.S
|
|
|
(0.09)
|
(0.03)
|
|
|
|
|
|
Net loss for the
period
|
|
|
(5,159)
|
(2,267)
|
Income tax expense (benefit)
|
|
|
-
|
5
|
Financial expenses (income), net
|
|
|
2,032
|
1,919
|
Depreciation and Amortization
|
|
|
1,263
|
988
|
One-time inventory write-off
|
|
|
-
|
34
|
Foreign Currency Loss
|
|
|
884
|
657
|
EBITDA *
|
|
|
(980)
|
1,336
|
* EBITDA
is a non-GAAP financial measure generally defined as earnings
before interest,
taxes, depreciation and amortization and other non-cash or one-time
expenses.
|
View original
content:https://www.prnewswire.com/news-releases/supercom-reports-second-quarter-2022-financial-results-301602470.html
SOURCE SuperCom Ltd.