Revenue Increased to $12.3
million; Gross Profit Increased to 50.6%; Cash
& Restricted Cash increased to $4.6
million
TEL AVIV, Israel, March 31, 2022 /PRNewswire/
-- SuperCom (NASDAQ: SPCB), a global
provider of secured solutions for the e-Government, IoT, and
Cybersecurity sectors, today reported results for the twelve
months ended December 31,
2021.
Twelve-Months Ended December 31,
2021, Financial Highlights (Compared to the Prior Year
Period)
- Revenue increased by 4% to $12.3
million in 2021, from $11.8
million last year, representing the first year of revenue
increase since 2017 as significant progress is achieved on the
transition from the legacy business to the IOT tracking
business.
- Gross margin increased to 50.6% in 2021 from 47.4% last
year.
- Cash and cash equivalents and restricted cash increased to
$4.6 million from $4.0 million last year.
- Operating loss in 2021 reached $6.7
million compared with a $3.7
million loss in 2020, driven mainly by $4.4 million of one-time expenses in 2021
pertaining to the legacy business.
- EBITDA decreased to $2.1 million
in 2021 compared to $2.8 million in
2020.
- Working Capital at the end of 2021 increased significantly to
$20.5 million from $5.3 million in 2020, due to investment in new
equipment manufacturing, settlements of old payables, and securing
of new longer-term financing with preferable terms.
- Non-GAAP EPS of $(0.07) compared
to $(0.09) in last year.
Fourth Quarter Ended December
31, 2021, Financial Highlights (Compared
to the average results of third and fourth quarter
20201):
- Revenue increased to $3.0 million
from $2.5 million
- Gross margin increased to 54.8% from 27.3%
- Operating loss reached $4.6
million compared to a $2.3
million loss, driven mainly by $3.7
million of one-time expenses in 2021 pertaining to the
legacy identification business.
- EBITDA increased to approx. $600
thousand from approx. $100
thousand
- Non-GAAP EPS of $(0.01)
Select announcements in past year and recent months:
- In March 2022, the Company was
awarded by the Ministry of Justice and Administration of
Croatia the first full-scale
electronic monitoring contract in the country.
- In March 2022, the Company raised
$4.65 million in a registered direct
offering with a single accredited institutional investor, providing
additional liquidity to execute the Company's business plan.
- In July 2021, launched a new
project in California, USA valued
at up to $4 million over up to 5
years to provide Juvenile programming and rehabilitation
services.
- Won and launched a new project with the probation department in
California, USA valued at up to
$1 million, providing rehabilitation
services.
- Won and launched a new project in California, USA valued at up to $240,000 per year, providing Juvenile Programming
and Rehabilitative Services for out of custody juvenile.
- Announced a few contract wins supporting expansion into three
US states, Texas, Idaho, and Wyoming, for the PureTrack GPS tracking
platform serving adults and juveniles.
- Through a competitive national RFP process, won a $3.6 million national electronic monitoring
project in Finland and scored
highly by offering SuperCom's proprietary PureSecurity Electronic
Monitoring Suite.
- Supercom's cyber security division, Safend, was selected by
government security agency and cyber security enterprises to grow
their cyber security protection programs. Orders from these
customers alone are expected to exceed $350,000 in the fourth quarter of 2021.
Recent Business Highlights:
- Experienced an increase in market activity in our IoT segment,
resulting in more RFPs and interest in our proprietary IoT segment
technology and service offerings in Europe and the USA.
- Focused on building world-class engineering teams by launching
a new HR program to attract top talent to build SuperCom's
next-generation tracking and monitoring products.
- Released new generations and capabilities to SuperCom's
smartphone-based monitoring products and solutions including
support for the new OS and mobile phone architectures.
- Strengthened the Company's global sales division, recruiting a
new VP of sales and sales managers with industry expertise and a
shift from passive bidding to an active outreach sales
strategy.
- Revenue from the USA continued
to grow and reached 56% of the total revenue, consistent with
SuperCom's business plan to shift focus from emerging countries to
the USA and Europe.
- Revenue from the IoT division reached 73% of total revenue,
compared to 65% last year.
- Experienced continued high customer retention and strong
relationships with existing government customers globally.
- In February 2021, the Company
appointed Ordan Trabelsi as the new
CEO. Ordan has been with the Company since May 2013 as the second US employee and grew the
business in the US to millions in annual revenues and
profitability, representing over 1000% of organic growth. He has
also led successful mergers and acquisitions and numerous
financings in the past, which totaled over $100 million.
- In response to the Covid-19 pandemic, the Company launched a
new solution, PureHealth for quarantine compliance, to help fight
the spread of infectious diseases. Pilots have been launched and
evaluated in various regions around the world
.
- The Company has adjusted its manufacturing capacity to enable
more flexibility and to scale production capacity in response to
increased potential demand for its IoT products. The Company has
also made its global supply chain more resilient by reducing
dependencies on specific suppliers and geographies.
Management Commentary:
"We are proud of our achievements over the past year and since I
entered the new role as president and CEO last February. For the
first time in five years, we achieved growth in annual revenues. We
also generated over $2 million in
EBITDA, enhanced our operational infrastructure, strengthened our
workforce towards future growth, and maintained technology
leadership. We also raised the needed financial resources to
support the implementation of our business plan with new
longer-term financings with preferable terms. We settled old
disputes, cleaned up old payables and reorganized legacy parts of
our company for improved efficiency. We honed in our business plan
and aligned our customers, partners and employees with our mission
and goals. And in a global environment riddled with uncertainty of
a global pandemic and geopolitical crises, we are humbled to say we
feel confident about our future," commented Ordan Trabelsi, President and CEO of
SuperCom.
"The past year further demonstrates the continued execution of
our strategy to expand our footprint and positioning in our niche
market of IoT tracking solutions for the public safety market.
During 2021, we had a handful of new wins in the USA, expanding our reach to 3 new states, and
launched another sizable project in California valued at up to $4 million. In Europe, we won another national electronic
monitoring project in Finland,
valued at $3.6 million, and just last
week announced an award by the Ministry of Justice of Croatia for the first full-scale electronic
monitoring contract in the country, adding Croatia to a long line of European countries
selecting our proprietary technology. With the release of
some government restrictions related to COVID, we have seen an
increase in RFP activity. This can allow us to continue with
consistent new electronic monitoring project wins on top of the
over 40 new project wins we've had in this space in recent years.
Incremental revenues from these contracts offset declines from our
legacy business of electronic identification mainly in Africa. Per our long-term strategy, we've been
able to replace those legacy revenues with new customer revenues in
the USA and Europe and generate growth this past year,"
continued Ordan.
"The momentum we are seeing in our IoT Tracking segment is
driven on the one hand by correctional institutions looking for
alternative solutions for the challenges associated with
overpopulated prisons. And on the other hand, by our proprietary
technology offerings which score highly on competitive tenders and
help us displace incumbent vendors in countries around the world.
Our electronic monitoring solutions address the challenges related
to overcrowding, provide substantial cost savings, and reduce
recidivism among offenders promoting public safety in communities
worldwide," continued Ordan.
"We believe our investments in research and development, as well
as in sales and marketing are paying off as we are seeing continued
interest in our IoT products, which we expect will drive continued
growth in the long-term. While the sales cycles for these contract
wins can be long, the resulting business typically lasts for years,
providing steady recurring revenue streams. We are confident that
we will continue to see a healthy amount of new projects and wins
in the space as we continue gaining market share and expanding our
footprint," Ordan concluded.
Conference Call
The Company will hold a conference
call today (March 31, 2022) at
4:30 p.m. Eastern time (11:30 p.m. Israel time) to discuss these results,
followed by a question and answer session.
Conference Call
Dial-In Information:
|
Date:
|
Thursday, March 31,
2022
|
Time:
|
4:30 p.m. Eastern time
(1:30 p.m. Pacific time) (11:30 pm Israel time)
|
U.S.
toll-free:
|
888-506-0062
|
Israel
toll-free:
|
1-809-423-853
|
International:
|
973-528-0011
|
Access
Code:
|
615281
|
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
1 SuperCom was not required to and did not
report its Q4 2020 financial results and accordingly, comparable Q4
2020 financial results are not available without unreasonable
effort and expense. In order to provide a reasonable comparison, an
average of the Company's financial quarterly results for its third
and fourth quarters of 2020 is presented.
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, 2020, filed with the U.S.
Securities and Exchange Commission (the "SEC") on April 30, 2021, 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.
[Tables to follow]
SUPERCOM
LTD. CONSOLIDATED BALANCE SHEETS (U.S. dollars in
thousands)
|
|
|
|
As of December
31,
|
|
|
2021
|
|
2020
|
|
|
Unaudited
|
|
Audited
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
Cash and
cash equivalents
|
|
3,537
|
|
3,137
|
Restricted bank
deposits
|
|
1,067
|
|
815
|
Trade receivable,
net
|
|
11,061
|
|
12,427
|
Patents
|
|
5,283
|
|
5,283
|
Other accounts
receivable and prepaid expenses
|
|
1,599
|
|
876
|
Inventories,
net
|
|
3,561
|
|
2,404
|
|
|
|
|
|
Total current
assets
|
|
26,108
|
|
24,942
|
|
|
|
|
|
LONG-TERM
ASSETS
|
|
|
|
|
Severance pay
funds
|
|
487
|
|
531
|
Deferred tax long
term
|
|
202
|
|
204
|
Customer
Contracts
|
|
936
|
|
1,250
|
Software and other
IP
|
|
2,495
|
|
2,677
|
Operating lease
right-of-use assets
|
|
882
|
|
-
|
Other Assets,
net
|
|
2,179
|
|
2,343
|
Goodwill
|
|
7,026
|
|
7,026
|
Property and equipment,
net
|
|
1,804
|
|
1,371
|
|
|
|
|
|
Total long-term
assets
|
|
16,011
|
|
15,402
|
|
|
|
|
|
Total Assets
|
|
42,119
|
|
40,344
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
Short-term loans and
other
|
|
207
|
|
7,204
|
Trade
payables
|
|
1,395
|
|
2,860
|
Employees and payroll
accruals
|
|
2,119
|
|
2,627
|
Related
parties
|
|
172
|
|
1,749
|
Accrued expenses and
other liabilities
|
|
1,559
|
|
4,393
|
Deferred revenues
ST
|
|
151
|
|
766
|
|
|
|
|
|
Total current
liabilities
|
|
5,603
|
|
19,598
|
|
|
|
|
|
LONG-TERM
LIABILITIES
|
|
|
|
|
|
|
|
|
|
Long-term
loan
|
|
30,451
|
|
14,952
|
Accrued severance
pay
|
|
529
|
|
656
|
Deferred tax
liability
|
|
170
|
|
170
|
Deferred
revenues
|
|
49
|
|
49
|
Operating lease
liabilities
|
|
925
|
|
-
|
|
|
|
|
|
Total long-term
liabilities
|
|
32,124
|
|
15,827
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY:
|
|
|
|
|
Ordinary
shares
|
|
2,028
|
|
1,397
|
Additional paid-in
capital
|
|
97,833
|
|
88,853
|
Accumulated
deficit
|
|
(95,469)
|
|
(85,331)
|
|
|
|
|
|
Total shareholders'
equity
|
|
4,392
|
|
4,919
|
|
|
|
|
|
Total liabilities and
equity
|
42,119
|
|
40,344
|
SUPERCOM
LTD. CONSOLIDATED STATEMENTS OF OPERATIONS (U.S.
dollars in thousands)
|
|
|
|
Twelve months
ended
|
|
|
December
31,
|
|
|
|
2021
|
2020
|
|
|
Unaudited
|
Audited
|
|
|
|
|
|
REVENUES
|
|
|
12,267
|
11,770
|
COST OF
REVENUES
|
|
|
(6,063)
|
(6,189)
|
|
|
|
|
|
GROSS
PROFIT
|
|
|
6,204
|
5,581
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
Research
and development
|
|
|
2,763
|
2,386
|
Selling
and marketing
|
|
|
1,655
|
1,721
|
General
and administrative
|
|
|
4,149
|
4,074
|
Other
expense (income), net
|
|
|
4,374
|
1,149
|
|
|
|
|
|
Total operating
expenses
|
|
|
12,941
|
9,330
|
|
|
|
|
|
OPERATING
LOSS
|
|
|
(6,737)
|
(3,749)
|
FINANCIAL EXPENSES,
NET
|
|
|
(3,396)
|
(4,113)
|
|
|
|
|
|
LOSS BEFORE INCOME
TAX
|
|
|
(10,133)
|
(7,862)
|
INCOME TAX
EXPENSE
|
|
|
(5)
|
(5)
|
|
|
|
|
|
NET LOSS FOR THE
PERIOD
|
|
|
(10,138)
|
(7,867)
|
SUPERCOM
LTD. Reconciliation Table of GAAP to Non-GAAP Figures and
EBITDA to Net Income (U.S. dollars in thousands)
|
|
|
|
Twelve months
ended
|
|
|
December
31,
|
|
|
2021
|
2020
|
|
|
Unaudited
|
Unaudited
|
|
|
|
|
|
GAAP gross
profit
|
|
|
6,204
|
5,581
|
Amortization of
intangible assets
|
|
|
353
|
605
|
One-time inventory
write-off
|
|
|
298
|
150
|
Stock-based
compensation expenses
|
|
|
7
|
84
|
Non-GAAP gross
profit
|
|
|
6,862
|
6,420
|
|
|
|
|
|
GAAP Operating
Loss
|
|
|
(6,737)
|
(3,749)
|
Amortization of
intangible assets
|
|
|
1,800
|
2,930
|
Stock-based
compensation expenses
|
|
|
31
|
211
|
One-time
inventory write-off
|
|
|
298
|
150
|
Foreign Currency
Loss
|
|
|
1,780
|
897
|
One-time
reorganization expenses
|
|
|
1,374
|
-
|
Allowance for
doubtful debt in legacy business
|
|
|
3,000
|
2,001
|
Non-GAAP operating
profit
|
|
|
1,546
|
2,440
|
|
|
|
|
|
GAAP net
Loss
|
|
|
(10,138)
|
(7,867)
|
Amortization of
intangible assets
|
|
|
1,800
|
2,930
|
Stock-based
compensation expenses
|
|
|
31
|
211
|
One-time
inventory write-off
|
|
|
298
|
150
|
Foreign Currency
Loss
|
|
|
1,780
|
897
|
Income tax
expense
|
|
|
5
|
5
|
One-time
reorganization expenses
|
|
|
1,374
|
-
|
Allowance for
doubtful debt in legacy business
|
|
|
3,000
|
2,001
|
Non-GAAP net
Loss
|
|
|
(1,850)
|
(1,673)
|
Non-GAAP
EPS
|
|
|
(0.07)
|
(0.09)
|
|
|
|
|
|
Net loss for the
period
|
|
|
(10,138)
|
(7,867)
|
Income tax expense
|
|
|
5
|
5
|
Financial expenses (income), net
|
|
|
3,396
|
4,113
|
Depreciation and Amortization
|
|
|
2,316
|
3,265
|
One-time inventory write-off
|
|
|
298
|
150
|
Stock-based compensation expenses
|
|
|
31
|
211
|
Foreign Currency Loss
|
|
|
1,780
|
897
|
Allowance for doubtful debt in legacy business
|
|
|
3,000
|
2,001
|
One-time reorganization expenses
|
|
|
1,374
|
-
|
EBITDA *
|
|
|
2,062
|
2,775
|
* 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)
|
|
|
|
Three months
ended
|
|
|
December
31,
|
|
|
2021
|
Average of Q3
and Q4 2020
|
|
|
Unaudited
|
Unaudited
|
|
|
|
|
|
REVENUES
|
|
|
3,034
|
2,487
|
COST OF
REVENUES
|
|
|
(1,372)
|
(1,808)
|
|
|
|
|
|
GROSS
PROFIT
|
|
|
1,662
|
679
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
Research
and development
|
|
|
892
|
700
|
Selling
and marketing
|
|
|
451
|
374
|
General
and administrative
|
|
|
1,236
|
1,310
|
Other
expense, net
|
|
|
3,685
|
552
|
|
|
|
|
|
Total operating
expenses
|
|
|
6,264
|
2,936
|
|
|
|
|
|
OPERATING
LOSS
|
|
|
(4,602)
|
(2,257)
|
FINANCIAL EXPENSES,
NET
|
|
|
(830)
|
(1,486)
|
|
|
|
|
|
LOSS BEFORE INCOME
TAX
|
|
|
(5,432)
|
(3,743)
|
INCOME TAX
EXPENSE
|
|
|
-
|
(2)
|
|
|
|
|
|
NET LOSS FOR THE
PERIOD
|
|
|
(5,432)
|
(3,745)
|
SUPERCOM
LTD. Reconciliation Table of GAAP to Non-GAAP Figures and
EBITDA to net Income (U.S. dollars in thousands)
|
|
|
|
Three months
ended
|
|
|
December
31,
|
|
|
2021
|
|
|
Unaudited
|
|
|
|
|
GAAP gross
profit
|
|
|
1,662
|
Amortization of
intangible assets
|
|
|
89
|
One-time inventory
write-off
|
|
|
298
|
Stock-based
compensation expenses
|
|
|
7
|
Non-GAAP gross
profit
|
|
|
2,056
|
|
|
|
|
GAAP Operating
Loss
|
|
|
(4,602)
|
Amortization of
intangible assets
|
|
|
665
|
Stock-based
compensation expenses
|
|
|
31
|
One-time
inventory write-off
|
|
|
298
|
Foreign Currency
Loss
|
|
|
585
|
One-time
reorganization expenses
|
|
|
685
|
Allowance for
doubtful debt in legacy business
|
|
|
3,000
|
Non-GAAP operating
profit
|
|
|
662
|
|
|
|
|
GAAP net
Loss
|
|
|
(5,432)
|
Amortization of
intangible assets
|
|
|
665
|
Stock-based
compensation expenses
|
|
|
31
|
One-time
inventory write-off
|
|
|
298
|
Foreign Currency
Loss
|
|
|
585
|
Income tax
expense
|
|
|
-
|
One-time
reorganization expenses
|
|
|
685
|
Allowance for
doubtful debt
|
|
|
3,000
|
Non-GAAP net
Loss
|
|
|
(168)
|
Non-GAAP
EPS
|
|
|
(0.01)
|
|
|
|
|
Net loss for the
period
|
|
|
(5,432)
|
Income tax expense
|
|
|
-
|
Financial expenses (income), net
|
|
|
585
|
Depreciation and Amortization
|
|
|
815
|
One-time inventory write-off
|
|
|
298
|
Stock-based compensation expenses
|
|
|
31
|
Foreign Currency Loss
|
|
|
585
|
Allowance for doubtful debt in legacy business
|
|
|
3,000
|
One-time reorganization expenses
|
|
|
685
|
EBITDA
*
|
|
|
567
|
* 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-full-year-2021-financial-results-301515302.html
SOURCE SuperCom Ltd.