Reports Q3 Revenue of $6.3
million and Gross Profit of $2.1
million, approximately double compared to the third quarter
of last year, and swing to Positive EBITDA of $0.4 million
TEL
AVIV, Israel, Oct. 26,
2022 /PRNewswire/
-- SuperCom (NASDAQ: SPCB), a global provider of
secured solutions for the e-Government, IoT, and Cybersecurity
sectors, today reported results for the third quarter of 2022,
ended September 30, 2022.
Third Quarter Financial Highlights Ended September 30,
2022 (Compared to the Third Quarter of 2021)
- Revenue increased 102% to $6.3
million from $3.1
million in the third quarter of last year and
increased 97% from $3.2 million in
the second quarter of 2022.
- Gross Profit increased 96% to $2.1
million compared to $ 1.1
million last year.
- Research and Development expenses increased 52% to
$0.96 million compared to
$0.63 million, reflecting
increased investment to enhance existing solutions and to
accelerate development of new products in the IoT and Cyber
Security sectors.
- Sales and Marketing expenses were $0.65 million compared to $0.46 million, reflecting investment in
a proactive sales strategy to expand SuperCom's footprint in the
European and North American markets.
- Non-GAAP Operating Income increased by $415,000 to positive $230,000 from an Operating Loss of
($185,000) last year.
- Positive EBITDA of $0.41
million compared to negative EBITDA of ($0.05) million last year, reflecting the
benefits of deployment of new IoT projects and operating
leverage.
- Non-GAAP EPS was ($0.02)
compared to ($0.03).
- Cash and cash equivalents and restricted cash were $3.1 million on September
30, 2022, compared to $4.6
million at the end of 2021.
Recent Business Highlights:
- Won and launched a $33 million
national EM project in Romania,
the largest new European EM project awarded in the industry this
year. With a focus on domestic violence, the project is expected to
help protect up to 15,000 families per month over a six year period
and includes the deployment of SuperCom's PureSecurity Electronic
Monitoring (EM) Suite for Domestic Violence monitoring, GPS
Tracking of offenders, and a home detention monitoring
program.
- Won a new $1.7 million contract
with an existing customer of the e-Government division.
- Signed second and third new GPS monitoring contracts 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 include deployment of 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.
- 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.
Management Commentary:
"In recent years, we have worked tirelessly to build Supercom's
reputation in the IoT offender tracking space while gradually
climbing the value chain of the projects we've won and executed. We
are proud to have won the largest European Electronic Monitoring
project launched this year, valued at over $33 million. We believe that we have developed
the best technology in the market and the necessary infrastructure
to support EM projects of almost any complexity and magnitude, as
we've repeatedly demonstrated over the past years. We also believe
that the stellar reputation that we've built will serve us well as
we strive for further growth and continue to participate in tenders
for additional projects around the world," commented Ordan Trabelsi, President and CEO of
SuperCom.
"We're gratified to start to realize the significant return we
had expected from our years of investment in the IoT division, as
reflected in our third quarter financial results. Revenue reached
$6.3 million, a year-over-year
increase of 102%, and a quarterly sequential increase of 98%. New
project launches and orders from existing customers in Europe and North
America also supported revenue growth. This quarter
the IoT division grew 150% year over year, which was significantly
more than the decline in the legacy business, leading to strong
total revenue growth."
"In the third quarter, we also returned to positive EBITDA,
which reached $0.4 million compared
to negative EBITDA of $0.7 million in
the previous sequential quarter. The positive swing of $1.1 million reflects the benefits of operating
leverage and scalability associated with deploying new IoT projects
on top of a stable and robust operating structure."
"We expect our significant investments in R&D and sales and
marketing to continue to yield nice returns as we work hard to
maintain our leading edge in technology and expedite market
expansion with our new proactive sales approach. Taken together
with our high win rates in competitive RFPs and a steady recurring
revenue base of over 80%, we are excited and feel confident about
SuperCom's growth in the years ahead," concluded Mr. Trabelsi.
Conference Call
The Company will hold a conference
call on October 26, 2022, at
10:00 a.m. Eastern time (7 a.m. Pacific time) to discuss the second
quarter results, followed by a question and answer session.
Conference Call Dial-In Information:
Date:
Wednesday, October 26, 2022
Time: 10:00 a.m. Eastern Time /
7:00 a.m. Pacific Time / 17:00 p.m. Israel Time
U.S. toll-free: 877-545-0320
Israel toll-free:
1-809-423-853
International: 973-528-0002
Access Code: 577031
Link: https://www.webcaster4.com/Webcast/Page/2259/46925
Please call the conference telephone number 5-10 minutes prior
to the start time. An operator will register your name and
organization.
SuperCom Investor Relations:
ir@supercom.com
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 LTD.
|
CONSOLIDATED BALANCE
SHEETS
|
(U.S. dollars in
thousands)
|
|
|
|
|
|
|
|
|
As of
September
30, 2022
|
|
As of
December 31, 2021
|
|
|
Unaudited
|
|
Audited
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
Cash and
cash equivalents
|
|
2,114
|
|
3,537
|
Restricted bank
deposits
|
|
1,017
|
|
1,067
|
Trade receivable,
net
|
|
13,704
|
|
11,061
|
Patents
|
|
5,283
|
|
5,283
|
Other accounts
receivable and prepaid expenses
|
|
1,865
|
|
1,599
|
Inventories,
net
|
|
3,592
|
|
3,561
|
|
|
|
|
|
Total current
assets
|
|
27,575
|
|
26,108
|
|
|
|
|
|
LONG-TERM
ASSETS
|
|
|
|
|
Severance pay
funds
|
|
465
|
|
487
|
Deferred tax long
term
|
|
202
|
|
202
|
Customer
Contracts
|
|
699
|
|
936
|
Software and other
IP
|
|
2,211
|
|
2,495
|
Operating lease
right-of-use assets
|
|
584
|
|
882
|
Other Assets,
net
|
|
2,443
|
|
2,179
|
Goodwill
|
|
7,026
|
|
7,026
|
Property and
equipment, net
|
|
1,640
|
|
1,804
|
Total long-term
assets
|
|
15,270
|
|
16,011
|
|
|
|
|
|
Total Assets
|
|
42,845
|
|
42,119
|
|
CURRENT
LIABILITIES
|
|
|
|
|
Short-term loans and
other
|
|
-
|
|
207
|
Trade
payables
|
|
1,188
|
|
1,395
|
Employees and payroll
accruals
|
|
1,682
|
|
2,119
|
Related
parties
|
|
159
|
|
172
|
Accrued expenses and
other liabilities
|
|
1,374
|
|
1,559
|
Deferred revenues
ST
|
|
685
|
|
151
|
|
|
|
|
|
Total current
liabilities
|
|
5,088
|
|
5,603
|
|
|
|
|
|
LONG-TERM
LIABILITIES
|
|
|
|
|
|
|
|
|
|
Long-term
loan
|
|
33,332
|
|
30,451
|
Accrued severance
pay
|
|
505
|
|
529
|
Deferred tax
liability
|
|
170
|
|
170
|
Deferred
revenues
|
|
49
|
|
49
|
Operating lease
liabilities
|
|
600
|
|
925
|
|
|
|
|
|
Total long-term
liabilities
|
|
34,656
|
|
32,124
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY:
|
|
|
|
|
Ordinary
shares
|
|
3,057
|
|
2,028
|
Additional paid-in
capital
|
|
102,862
|
|
97,833
|
Accumulated
deficit
|
|
(102,818)
|
|
(95,469)
|
|
|
|
|
|
Total shareholders'
equity
|
|
3,101
|
|
4,392
|
|
|
|
|
|
Total liabilities and
equity
|
42,845
|
|
42,119
|
SUPERCOM LTD.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(U.S. dollars in
thousands)
|
|
|
|
|
|
Three months
ended
|
|
|
September
30, 2022
|
September
30, 2021
|
|
|
Unaudited
|
Unaudited
|
|
|
|
|
|
REVENUES
|
|
|
6,263
|
3,108
|
COST OF
REVENUES
|
|
|
(4,132)
|
(2,022)
|
|
|
|
|
|
GROSS
PROFIT
|
|
|
2,131
|
1,086
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
Research
and development
|
|
|
958
|
625
|
Selling
and marketing
|
|
|
652
|
457
|
General
and administrative
|
|
|
1,370
|
1,107
|
Other
expenses
|
|
|
-
|
689
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
|
2,980
|
2,878
|
|
|
|
|
|
OPERATING
LOSS
|
|
|
(849)
|
(1,792)
|
FINANCIAL EXPENSES,
NET
|
|
|
(1,253)
|
(647)
|
|
|
|
|
|
LOSS BEFORE INCOME
TAX
|
|
|
(2,102)
|
(2,439)
|
INCOME TAX
EXPENSE
|
|
|
-
|
-
|
|
|
|
|
|
NET LOSS FOR THE
PERIOD
|
|
|
(2,102)
|
(2,439)
|
|
|
|
|
|
|
|
|
SUPERCOM LTD.
|
Reconciliation Table
of GAAP to Non-GAAP Figures and EBITDA to Net Income
|
(U.S. dollars in
thousands)
|
|
|
|
|
|
|
Three months
ended
|
|
|
September
30, 2022
|
September
30, 2021
|
|
|
Unaudited
|
Unaudited
|
|
|
|
|
|
GAAP gross
profit
|
|
|
2,131
|
1,086
|
Amortization of
intangible assets
|
|
|
88
|
88
|
Non-GAAP gross
profit
|
|
|
2,219
|
1,174
|
|
|
|
|
|
GAAP Operating
Loss
|
|
|
(849)
|
(1,792)
|
Amortization of
intangible assets
|
|
|
484
|
380
|
Foreign Currency
Loss
|
|
|
595
|
538
|
One-time expense
related to settlement
|
|
|
-
|
689
|
Non-GAAP operating
profit
|
|
|
230
|
(185)
|
GAAP net
Loss
|
|
|
(2,102)
|
(2,439)
|
Amortization of
intangible assets
|
|
|
484
|
380
|
One-time expense
related to settlement
|
|
|
-
|
689
|
Foreign Currency
Loss
|
|
|
595
|
538
|
Non-GAAP net
Loss
|
|
|
(1,023)
|
(832)
|
Non-GAAP
EPS
|
|
|
(0.02)
|
(0.03)
|
|
|
|
|
|
Net loss for the
period
|
|
|
(2,102)
|
(2,439)
|
Financial expenses (income), net
|
|
|
1,253
|
647
|
Depreciation and Amortization
|
|
|
665
|
512
|
One-time
expense related to settlement
|
|
|
-
|
689
|
Foreign Currency Loss
|
|
|
595
|
538
|
EBITDA *
|
|
|
411
|
(53)
|
* 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)
|
|
|
|
|
|
|
Nine months
ended
|
|
|
September
30, 2022
|
September
30, 2021
|
|
|
Unaudited
|
Unaudited
|
|
|
|
|
|
REVENUES
|
|
|
12,527
|
9,233
|
COST OF
REVENUES
|
|
|
(7,780)
|
(4,691)
|
|
|
|
|
|
GROSS
PROFIT
|
|
|
4,747
|
4,542
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
Research
and development
|
|
|
2,750
|
1,871
|
Selling
and marketing
|
|
|
2,115
|
1,204
|
General
and administrative
|
|
|
3,858
|
2,913
|
Other
expenses, net
|
|
|
-
|
689
|
|
|
|
|
|
Total operating
expenses
|
|
|
8,723
|
6,677
|
|
|
|
|
|
OPERATING
LOSS
|
|
|
(3,976)
|
(2,135)
|
FINANCIAL EXPENSES,
NET
|
|
|
(3,285)
|
(2,566)
|
|
|
|
|
|
LOSS BEFORE INCOME
TAX
|
|
|
(7,261)
|
(4,701)
|
INCOME TAX
EXPENSE
|
|
|
-
|
(5)
|
|
|
|
|
|
NET LOSS FOR THE
PERIOD
|
|
|
(7,261)
|
(4,706)
|
|
|
|
|
|
|
|
|
SUPERCOM LTD.
|
Reconciliation Table
of GAAP to Non-GAAP Figures and EBITDA to Net Income
|
(U.S. dollars in
thousands)
|
|
|
|
|
|
|
Nine months
ended
|
|
September
30, 2022
|
September
30, 2021
|
|
Unaudited
|
Unaudited
|
|
|
|
GAAP gross
profit
|
4,747
|
4,542
|
Amortization of
intangible assets
|
265
|
264
|
Non-GAAP gross
profit
|
5,012
|
4,806
|
|
|
|
GAAP Operating
Loss
|
(3,976)
|
(2,135)
|
Amortization of
intangible assets
|
1,411
|
1,135
|
One-time
expenses
|
-
|
723
|
Foreign Currency
Loss
|
1,479
|
1,195
|
Non-GAAP operating
profit
|
(1,086)
|
918
|
|
GAAP net
Loss
|
(7,261)
|
(4,706)
|
Amortization of
intangible assets
|
1,411
|
1,135
|
One-time
expenses
|
-
|
723
|
Foreign Currency
Loss
|
1,479
|
1,195
|
|
|
|
Non-GAAP net
Loss
|
(4,371)
|
(1,648)
|
Non-GAAP
EPS
|
(0.01)
|
(0.01)
|
|
|
|
Net loss for the
period
|
(7,261)
|
(4,706)
|
Income tax expense (benefit)
|
-
|
5
|
Financial expenses (income), net
|
3,285
|
2,566
|
Depreciation and Amortization
|
1,928
|
1,501
|
One-time expense
|
-
|
723
|
Foreign Currency Loss
|
1,479
|
1,195
|
EBITDA *
|
(569)
|
1,284
|
* 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.
|
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