TEL AVIV, Israel, Sept. 3, 2020 /PRNewswire/ --
SuperCom (NASDAQ: SPCB), a global provider
of secure solutions for the e-government, public safety,
healthcare, and finance sectors, reports 6 months ended
June 30th, 2020
financial results. SuperCom management will host a conference
call, upon filing of the full 2020 semi-annual financial report
including balance sheet and cash flows statements.
First Half 2020 Financial Highlights
- GAAP Operating Expenses decreased to $3.45 million.
- GAAP Gross Margin Increased to 62%.
- GAPP Operating Income increased to $0.8
million.
- Non-GAAP Operating Income increased to $2.0 million.
- Non-GAAP Net Profit of $0.9
million or $0.06 per
share.
- EBITDA improved to $2.5
million
- EBITDA Margin increased to 36%
- Revenue decreased to $6.8 million
- IOT products sub-segment annualized revenue increased by over
119% over last year, affected by Covid-19 related growing demand
for PureSecurity and PureHealth solutions
- IOT services sub-segment annualized revenue decreased by 43%
over last year, due to large impact coming from Covid-19 related
imposed government restrictions in California and other geographies.
- e-Gov segment annualized revenue decreased by 43% over last
year due to Covid-19 effects and completion of large project in
2019
- Cyber segment revenue decreased due to Covid-19 affect in
the Israel, US, Europe and Asia.
First Half 2020 and Recent Operational
Highlights
- IOT products sub-segment experienced a sharp growth in demand
in reaction to global Covid-19 implications, requiring release of
more offenders from prison to house arrest as well as new
technology solutions to assist with quarantine compliance and
combating of the spread of Covid-19. Production capacity and
production line has been improved.
- IOT services sub-segment impacted by imposed government
restrictions in California and
other geographies, limiting our ability to interact with our
clients to provide full services as well as adding new clients to
our monitoring programs given court systems shutdown.
- e-Gov division impacted by Covid-19 government imposed
lockdowns and travel restrictions, although continued development
and enhancement for projects in Europe and Africa, and maintained relationships with
existing customers with existing SuperCom systems in place.
- Cyber segment impacted by Covid-19 government imposed
restrictions hindering proper sales and R&D processes and
ability of customers to deploy more licenses and new features.
Select Announcements:
- In March 2020, SuperCom through
its subsidiary, Leaders in Community Alternatives (LCA), has won a
new project with a California Central Valley county to provide
employment and anger management services, valued at up to
$3.8 million.
- In March 2020, SuperCom announced
PureHealth – its new solution for quarantine and isolation
monitoring to assist governments in combating infectious diseases
such as the coronavirus.
- In March 2020, SuperCom announced
it shipped equipment designated for a Pilot of its Coronavirus
(COVID-19) citizen quarantine compliance technology.
- In April 2020, announced today
that a new government agency in Canada has adopted SuperCom's PureSecurity
Offender Tracking Suite.
- In April 2020, SuperCom announced
that its e-Gov division has secured a new approximately
$1 million order from a national
government customer.
- In April 2020, SuperCom announced
it has released a second shipment of its Coronavirus (COVID-19)
citizen quarantine and containment tracking technology, to
Central America.
- In May 2020, SuperCom announced
its e-GOV division has secured a 2nd new order of approximately
$1 million from a national government
customer.
- In June 2020, SuperCom announced
it was awarded a new 5-year contract with the national government
of Latvia to deploy its enhanced
PureSecurity Electronic Monitoring (EM) Suite, including both RF
House Arrest and GPS tracking.
- In June 2020, SuperCom announced
it has shipped equipment for two new pilots in the Middle East of its COVID-19 citizen quarantine
and containment tracking technology solution
- In July 2020, SuperCom announced
it has shipped equipment for three new pilots of its people
tracking solutions in the Caribbean, Central
America and South
America.
- In July 2020, SuperCom announces
the closing of a private placement financing raising gross proceeds
of $3.2 million.
Management Commentary
"It was a challenging half year, with the unexpected effects of
the Covid-19 on our operations and our customer's operations, with
government imposed restrictions and lockdowns limiting our ability
to get new clients from courts, serve our existing clients, travel
as part of ongoing operations, proper shipping and handling of
goods, progress project deployment effectively, run sales
processes, and implement R&D plans. Although thanks to our
agile teams and operating structures, we managed to adapt quickly
and efficiently. We decreased our operating expenses to new lows,
while continuing to support all required operational and customer
needs," commented Arie Trabelsi, President and CEO of
SuperCom. "The financial result highlighted an improvement in some
of our financial performance compared to last year. We
achieved improvements in profitability margins with 36% EBITDA
margins and GAAP gross margins of 62%, and as we continued to
optimize our cost structure, operating expenses reached a low
of $3.45 million for the first half of 2020."
"While we did see some monthly revenue declines with the spread
of Covid-19 and government imposed restrictions, we believe we have
passed the bottom and have been pleased to see monthly increases in
active unit counts and revenues in recent months. The unexpected
environment has forced us to adapt and quickly. We have implemented
cost-optimizations that can persist and improve future
profitability, launched new products to meet the rapidly changing
and growing needs of our customers, enhanced our opportunity
pipeline with great new prospects and projects, and learned to work
better together to overcome even the most devastating of global
shifts. We believe we are weathering the storm and at the end will
come out stronger and improved," concluded Arie Trabelsi.
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.
SuperCom Corporate Contact:
Ordan Trabelsi, President,
Americas
Tel: +1-212-466-4606
ordan@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. Examples of these statements include, but are not
limited to, statements regarding business and economic trends, the
anticipated impact of the COVID-19 outbreak on travel and physical
locations and the anticipated impact of such outbreak on our
business and results of operations. These forward-looking
statements are subject to risks and uncertainties that could cause
actual results to differ materially from the statements made. These
risks and uncertainties include, but are not limited to, the
effects of the COVID-19 outbreak, including 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 the adverse effects of the COVID-19
outbreak on our business or the market price of our ordinary
shares, risks and uncertainties described under the heading
"Forward Looking Statements" in any repot and the risk factors
described in our Annual Report on Form 20-F for the year ended
December 31, 2018 and our subsequent
filings with the U.S. Securities and Exchange Commission and
reports on Form 6-K are uncertain. 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.
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
STATEMENTS OF OPERATIONS
|
|
(U.S. dollars in
thousands)
|
|
|
|
6 months
ended
June 30
2020
|
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
REVENUES
|
|
6,796
|
|
COST OF GOODS
SOLD
|
|
2,573
|
|
|
|
|
|
Gr
PROFIT
|
|
4,223
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
Research and
development
|
|
987
|
|
Selling and
marketing
|
|
973
|
|
General and
administrative
|
|
1,453
|
|
Other
expenses(Income)
|
|
45
|
|
|
|
|
|
Total operating
expenses
|
|
3,458
|
|
|
|
|
|
OPERATING
INCOME
|
|
765
|
|
FINANCIAL
(EXPENSES)
|
|
(1,141)
|
|
|
|
|
|
NET PROFIT (LOSS)
BEFORE
INCOME TAX
|
|
(376)
|
|
TAXES ON
INCOME
|
|
0
|
|
|
|
|
|
PROFIT (LOSS) FOR
THE
PERIOD
|
|
(376)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPERCOM
LTD.
|
|
Reconciliation
Table of GAAP to Non-GAAP Figures and EBITDA to Net
Income
|
|
(U.S. dollars in
thousands, except per share data)
|
|
|
Unaudited
|
|
|
|
|
|
|
GAAP Gross
Profit
|
4,223
|
|
|
Amortization
of Software and IP
|
177
|
|
|
Non-GAAP Gross
Profit
|
4,400
|
|
|
|
|
|
|
GAAP operating
Income
|
765
|
|
|
Amortization
of Software/IP, Customer Contracts and Brand
|
459
|
|
|
Foreign
Currency Loss
|
805
|
|
|
Non-GAAP Operating
Income
|
2,029
|
|
|
|
|
|
|
|
|
|
|
GAAP NET Profit
(Loss)
|
(376)
|
|
|
Amortization of
Software/IP, Customer Contracts and Brand
|
459
|
|
|
Foreign Currency
Loss
|
805
|
|
|
Income tax expense
(benefit)
|
-
|
|
|
Non-GAAP Net
Profit
|
888
|
|
|
|
|
|
|
Non-GAAP
EPS
|
0.06
|
|
|
|
|
|
|
GAAP NET Profit
(Loss) for the period
|
(376)
|
|
|
Income tax expenses
(benefit)
|
-
|
|
|
Financial expenses
(income), net
|
1,141
|
|
|
Depreciation and
Amortization
|
980
|
|
|
Foreign Currency
Loss
|
805
|
|
|
EBIDTA
*
|
2,550
|
|
|
|
|
|
|
* EBITDA is a non-GAAP
financial measure generally defined as earnings before interest,
taxes, depreciation and amortization
|
|
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SOURCE SuperCom Ltd