Q3 2023: Revenue $6.8
million; Gross Margin 59.4%; EBITDA $2.7 million; Non-GAAP EPS $0.24
TEL
AVIV, Israel, Nov. 14,
2023 /PRNewswire/ -- SuperCom (NASDAQ:
SPCB), a global provider of secured solutions for the
e-Government, IoT, and Cybersecurity sectors, today reported
financial and operating results for the three and nine months ended
September 30, 2023.
Third Quarter Ended September
30, 2023, Financial Highlights
(Compared to the Third Quarter of 2022)
- Revenue increased to $6.8 million
from $6.3 million, marking a fifth
consecutive quarter of year-over-year ("YoY") revenue growth.
- Gross Profit increased by 89% to $4.0
million from $2.1
million.
- Gross Profit margin increased by 75% to 59.4% from 34%.
- Operating Income improved 200% to $0.8
million compared to Operating Loss of ($0.8) million.
- Operating Margin improved 191% to 12.3% from negative margin of
(13.6%).
- EBITDA increased by 550% to $2.7
million from $0.4
million.
- Net Income improved 107% to $0.15
million compared to Net Loss of ($2.2) million.
- EPS improved to $0.02 compared to
Negative EPS of ($0.52).
- Non-GAAP Net Profit improved 256% to $1.6 million compared to Net Loss ($1.0) million.
- Non-GAAP EPS improved to $0.24
compared to ($0.02).
- Working Capital at end of quarter was $24.3 million.
First Nine Months Ended September
30, 2023, Financial Highlights
(Compared to First Nine months of 2022)
- Revenue increased by 67% to $21
million from $12.5
million.
- Gross profit increased by 66% to $7.9
million from $4.7
million.
- Operating Income improved 78% to ($0.9)
million compared to Operating Loss of ($4.0) million.
- Net Income improved by 66% to ($2.4)
million from ($7.3)
million.
- Non-GAAP Operating Income improved to $3.2 million compared to Operating Loss of
($1.1) million.
- EBITDA improved to $3.9 million
compared to ($0.6) million.
- Non-GAAP EPS improved to $0.30
compared to ($0.01).
Recent Business Highlights:
- SuperCom received a substantial third order of $3.4 million from Romania's Ministry of Interior, set for
delivery in the fourth quarter of 2023. This progression not only
solidifies the robust partnership but also showcases the trusted
deployment of SuperCom's PureSecurity EM Suite for domestic
violence monitoring, GPS tracking of offenders, and home detention
programs.
- SuperCom's won a $3 million
contract to deliver Alcohol Monitoring technologies in California, through its wholly owned
subsidiary, LCA. This contract, which is already in effect and
expected to extend till 2026, reaffirms SuperCom's dominance in the
electronic monitoring market and its commitment to public safety
through advanced technology solutions, generating steady recurring
revenue.
- SuperCom has expanded its footprint in Finland by securing a national program for the
Electronic Monitoring of Domestic Violence offenders. This program
leverages SuperCom's cutting-edge PureSecurity Suite to empower
Finnish authorities in enhancing citizen safety. The suite's
deployment is anticipated to start generating recurring revenue in
the 4th quarter of 2023, marking another significant achievement in
SuperCom's global impact.
- SuperCom launched a $3.6M
national EM project in Finland
with the national government in Q1 2023. By May 2023, the PureSecurity EM Suite was fully
deployed in Finland, covering all
EM offender programs – house arrest, GPS, and inmate
monitoring.
- SuperCom's won a $4.25 million
contract to provide adult reentry services in a Northern California, through its wholly owned
subsidiary, LCA. The project began in Q1 2023, expanding LCA's
existing day reporting and electronic monitoring services to
include jail-based and community-based sites. The project is
actively servicing clients and generating recurring revenues.
- SuperCom launched a new project in Iceland, upgrading the company's deployed
system to support secured issuance of National ID cards and
passports.
- SuperCom has significantly upgraded its technological suite,
integrating advanced AI into the PureSecurity platform and rolling
out PureProtect for domestic violence monitoring, alongside the
comprehensive PureOne GPS tracking solution. These developments
significantly bolster SuperCom's product offering, sharpening its
competitive edge and strategically positioning the company for
robust business growth and expansion, particularly in the lucrative
US market.
- SuperCom is expanding its deployment of PureOne into new
regions, with successful initial deployments and positive feedback
in the USA, and has initiated
sales in emerging markets beyond Europe and North
America.
- SuperCom successfully closed a $2.75
million public offering, to support the company's continued
innovation and growth initiatives.
Management Commentary:
"We are excited to announce exceptional operational performance
for Q3 2023, which is reflected in our financial results. A 5-year
record net profit, remarkable 550% growth in EBITDA and 74% growth
in gross profit margins are clear indicators of the successful
execution of our growth strategy. The significant increase in the
company's profit margins is driven by the forward momentum we've
maintained across our projects, where margins typically enhance as
projects mature. This trend is an indicator of further potential
margin expansion when project timelines align," commented
Ordan Trabelsi, President and CEO of
SuperCom.
"Our steadfast commitment to advancing public safety through
technology resonates with governments and agencies worldwide, as
evidenced by the continued expansion in Finland and our growing partnership with
Romania's Ministry of Interior.
These relationships, underpinned by our cutting-edge technology and
reliable services, translate into solid financial performance and
increased shareholder value," Ordan continued.
"As we look to the future, SuperCom is uniquely positioned to
capitalize on the increasing global demand for secured electronic
monitoring solutions. We are strategically investing in the
continuous improvement of our offerings and extending our reach
into new markets, which is already yielding promising results in
the US and other regions. Our focus remains on driving innovation,
enhancing operational efficiencies, and delivering exceptional
value to our customers and stakeholders. We are confident that our
strategic decisions will further propel us towards achieving our
long-term objectives and securing SuperCom's position as a leader
in the industry," Ordan concluded.
Conference Call
SuperCom will hold a conference call today (Tuesday, November 14, 2023) at 10:00 a.m. Eastern time (5:00 p.m. Israel
time) to discuss the company's financial and operating results for
its quarter ended September 30, 2023,
followed by a question and answer session.
Conference Call Dial-In Information:
Date:
Tuesday, November 14, 2023
Time:
10:00 a.m. Eastern time (7:00 a.m. Pacific Time)
U.S.
toll-free:
888-506-0062
Israel
toll-free:
1-809-423-853
International:
973-528-0011
Link:
https://www.webcaster4.com/Webcast/Page/2259/49460
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 https://www.supercom.com/
SuperCom Investor Relations: ir@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 levels of consumer, business and
economic confidence generally, the adverse effects of these risks
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, 2022, filed with the U.S. Securities
and Exchange Commission (the "SEC") on April
20, 2023, 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 the generally accepted accounting principles in
the United States ("GAAP"), this
release 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 SuperCom's
ongoing 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. The presentation of these non-GAAP
financial measures is not intended to be considered in isolation
from, or as a substitute for, or superior to, operating loss and or
net income (loss) or any other performance measures derived in
accordance with GAAP or as an alternative to net cash provided by
operating activities or any other measures of our cash flows or
liquidity.
Non-GAAP EPS is defined as earnings before amortization and
other non-cash or one-time expenses divided by weighted average
outstanding shares.
EBITDA is defined as earnings before interest, taxes,
depreciation, amortization, and other non-cash or one-time
expenses.
SUPERCOM
LTD.
|
CONSOLIDATED BALANCE
SHEETS
|
(U.S. dollars in
thousands)
|
|
|
|
|
|
As of
September
30, 2023
|
|
As of
December
31, 2022
|
|
|
Unaudited
|
|
Unaudited
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
Cash and
cash equivalents
|
|
1,151
|
|
4,042
|
Restricted bank
deposits
|
|
350
|
|
463
|
Trade receivable,
net
|
|
16,392
|
|
10,852
|
Patents
|
|
5,283
|
|
5,283
|
Other accounts
receivable and prepaid expenses
|
|
1,855
|
|
2,239
|
Inventories,
net
|
|
2,585
|
|
3,411
|
|
|
|
|
|
Total current
assets
|
|
27,616
|
|
26,290
|
|
|
|
|
|
LONG-TERM
ASSETS
|
|
|
|
|
Severance pay
funds
|
|
444
|
|
482
|
Deferred tax long
term
|
|
501
|
|
501
|
Other intangible
assets, net
|
|
5,433
|
|
5,617
|
Operating lease
right-of-use assets
|
|
173
|
|
484
|
Goodwill
|
|
7,026
|
|
7,026
|
Property and
equipment, net
|
|
2,479
|
|
1,640
|
|
|
|
|
|
Total long-term
assets
|
|
16,056
|
|
15,750
|
|
|
|
|
|
Total Assets
|
|
43,672
|
|
42,040
|
CURRENT
LIABILITIES
|
|
|
|
|
Short-term loans and
credit
|
|
675
|
|
900
|
Trade
payables
|
|
205
|
|
1,267
|
Employees and payroll
accruals
|
|
1,017
|
|
1,339
|
Related
parties
|
|
142
|
|
168
|
Accrued expenses and
other liabilities
|
|
643
|
|
469
|
Operating lease
liabilities
|
|
199
|
|
489
|
Deferred revenues
ST
|
|
444
|
|
715
|
|
|
|
|
|
Total current
liabilities
|
|
3,325
|
|
5,347
|
|
|
|
|
|
LONG-TERM
LIABILITIES
|
|
|
|
|
|
|
|
|
|
Long-term
loan
|
|
33,300
|
|
32,600
|
Accrued severance
pay
|
|
483
|
|
523
|
Deferred tax
liability
|
|
170
|
|
170
|
Deferred
revenues
|
|
299
|
|
269
|
|
|
|
|
|
Total long-term
liabilities
|
|
34,252
|
|
33,562
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY:
|
|
|
|
|
Ordinary
shares
|
|
5,362
|
|
3,057
|
Additional paid-in
capital
|
|
106,103
|
|
103,000
|
Accumulated
deficit
|
|
(105,370)
|
|
(102,926)
|
|
|
|
|
|
Total shareholders'
equity
|
|
6,095
|
|
3,131
|
|
|
|
|
|
Total liabilities and
equity
|
43,672
|
|
42,040
|
SUPERCOM
LTD.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(U.S. dollars in
thousands)
|
|
|
Three months
ended
|
|
|
September
30, 2023
|
September
30, 2022
|
|
|
Unaudited
|
Unaudited
|
|
|
|
|
|
REVENUES
|
|
|
6,778
|
6,263
|
COST OF
REVENUES
|
|
|
(2,751)
|
(4,132)
|
|
|
|
|
|
GROSS
PROFIT
|
|
|
4,027
|
2,131
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
Research
and development
|
|
|
774
|
958
|
Selling
and marketing
|
|
|
531
|
652
|
General
and administrative
|
|
|
1,093
|
1,370
|
Other expenses
|
|
|
793
|
-
|
|
|
|
|
|
Total operating
expenses
|
|
|
3,191
|
2,980
|
|
|
|
|
|
OPERATING
PROFIT
|
|
|
836
|
(849)
|
FINANCIAL EXPENSES,
NET
|
|
|
(690)
|
(1,253)
|
|
|
|
|
|
PROFIT BEFORE INCOME
TAX
|
|
|
146
|
(2,102)
|
INCOME TAX
EXPENSE
|
|
|
-
|
-
|
|
|
|
|
|
NET PROFIT FOR THE
PERIOD
|
|
|
146
|
(2,102)
|
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, 2023
|
September
30, 2022
|
|
|
Unaudited
|
Unaudited
|
|
|
|
|
|
GAAP gross
profit
|
|
|
4,027
|
2,131
|
Amortization of
intangible assets
|
|
|
88
|
88
|
Non-GAAP gross
profit
|
|
|
4,115
|
2,219
|
|
|
|
|
|
GAAP Operating
profit
|
|
|
836
|
(849)
|
Amortization of
intangible assets
|
|
|
446
|
484
|
Foreign Currency
Loss
|
|
|
111
|
595
|
One-time expense
related to settlement
|
|
|
899
|
-
|
Non-GAAP operating
profit
|
|
|
2,292
|
230
|
GAAP net
profit
|
|
|
146
|
(2,102)
|
Amortization of
intangible assets
|
|
|
446
|
484
|
One-time expense
related to settlement
|
|
|
899
|
-
|
Foreign Currency
Loss
|
|
|
111
|
595
|
Non-GAAP net
profit
|
|
|
1,602
|
(1,023)
|
Non-GAAP
EPS
|
|
|
0.24
|
(0.25)
|
|
|
|
|
|
Net profit for the
period
|
|
|
146
|
(2,102)
|
Financial expenses (income), net
|
|
|
690
|
1,253
|
Depreciation and Amortization
|
|
|
822
|
665
|
One-time
expense related to settlement
|
|
|
899
|
-
|
Foreign Currency Loss
|
|
|
111
|
595
|
EBITDA *
|
|
|
2,668
|
411
|
* 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, 2023
|
September
30, 2022
|
|
|
Unaudited
|
Unaudited
|
|
|
|
|
|
REVENUES
|
|
|
20,902
|
12,527
|
COST OF
REVENUES
|
|
|
(13,027)
|
(7,780)
|
|
|
|
|
|
GROSS
PROFIT
|
|
|
7,875
|
4,747
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
Research
and development
|
|
|
2,436
|
2,750
|
Selling
and marketing
|
|
|
1,659
|
2,115
|
General
and administrative
|
|
|
3,467
|
3,858
|
Other
expenses, net
|
|
|
1,198
|
-
|
|
|
|
|
|
Total operating
expenses
|
|
|
8,760
|
8,723
|
|
|
|
|
|
OPERATING
LOSS
|
|
|
(885)
|
(3,976)
|
FINANCIAL EXPENSES,
NET
|
|
|
(1,559)
|
(3,285)
|
|
|
|
|
|
LOSS BEFORE INCOME
TAX
|
|
|
(2,444)
|
(7,261)
|
INCOME TAX
EXPENSE
|
|
|
-
|
-
|
|
|
|
|
|
NET LOSS FOR THE
PERIOD
|
|
|
(2,444)
|
(7,261)
|
|
|
|
|
|
|
|
|
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, 2023
|
September
30, 2022
|
|
|
Unaudited
|
Unaudited
|
|
|
|
|
|
GAAP gross
profit
|
|
|
7,875
|
4,747
|
Amortization of
intangible assets
|
|
|
265
|
265
|
Non-GAAP gross
profit
|
|
|
8,140
|
5,012
|
|
|
|
|
|
GAAP Operating
Loss
|
|
|
(885)
|
(3,976)
|
Amortization of
intangible assets
|
|
|
1,429
|
1,411
|
One-time
expenses
|
|
|
1,687
|
|
Foreign Currency
Loss
|
|
|
1,009
|
1,479
|
Non-GAAP operating
profit
|
|
|
3,240
|
(1,086)
|
GAAP net
Loss
|
(2,444)
|
(7,261)
|
Amortization of
intangible assets
|
1,429
|
1,411
|
One-time
expenses
|
1,687
|
-
|
Foreign Currency
Loss
|
1,009
|
1,479
|
|
|
|
Non-GAAP net
profit
|
1,681
|
(4,371)
|
Non-GAAP
EPS
|
0.31
|
(1.22)
|
|
|
|
Net loss for the
period
|
(2,444)
|
(7,261)
|
Financial expenses (income), net
|
1,559
|
3,285
|
Depreciation and Amortization
|
2,129
|
1,928
|
One-time expenses
|
1,687
|
-
|
Foreign Currency Loss
|
1,009
|
1,479
|
EBITDA *
|
3,940
|
(569)
|
* 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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