SuperCom Reports $1.6 EPS, $3.1 Non-GAAP EPS, and Positive Free Cash Flows for the First Nine Months of 2024
SuperCom (NASDAQ: SPCB) reported strong financial results for Q3 and the first nine months of 2024. Revenue for the nine-month period increased to $21.3 million, with gross profit rising to $10.7 million and margin improving to 50.1%. The company achieved net income of $2.52 million, compared to a loss in the previous year. Q3 revenue was $6.91 million with positive free cash flows of $1.2 million.
The company secured multiple new contracts, including a significant 5-year contract with the Israel Prison Service and various electronic monitoring contracts across the US. Notable new orders totaling over $13.5 million were received from European governments, expected to be delivered by end of 2024.
SuperCom (NASDAQ: SPCB) ha riportato risultati finanziari solidi per il terzo trimestre e i primi nove mesi del 2024. I ricavi per il periodo di nove mesi sono aumentati a $21,3 milioni, con un utile lordo salito a $10,7 milioni e un margine migliorato al 50,1%. L'azienda ha registrato un utile netto di $2,52 milioni, rispetto a una perdita dell'anno precedente. I ricavi del terzo trimestre sono stati di $6,91 milioni, con flussi di cassa liberi positivi di $1,2 milioni.
L'azienda ha ottenuto diversi nuovi contratti, incluso un importante contratto quinquennale con il Servizio Penitenziario israeliano e vari contratti di monitoraggio elettronico negli Stati Uniti. Sono stati ricevuti ordini significativi per oltre $13,5 milioni da governi europei, previsti per la consegna entro la fine del 2024.
SuperCom (NASDAQ: SPCB) reportó resultados financieros sólidos para el tercer trimestre y los primeros nueve meses de 2024. Los ingresos para el periodo de nueve meses aumentaron a $21,3 millones, con una ganancia bruta que subió a $10,7 millones y un margen mejorado al 50,1%. La compañía logró un ingreso neto de $2,52 millones, en comparación con una pérdida en el año anterior. Los ingresos del tercer trimestre fueron de $6,91 millones, con flujos de caja libres positivos de $1,2 millones.
La compañía aseguró varios nuevos contratos, incluyendo un significativo contrato de 5 años con el Servicio Penitenciario de Israel y varios contratos de monitoreo electrónico en los EE. UU. Se recibieron nuevos pedidos notables por un total de más de $13,5 millones de gobiernos europeos, que se espera se entreguen a finales de 2024.
SuperCom (NASDAQ: SPCB)은 2024년 3분기 및 첫 9개월 동안 강력한 재무 결과를 보고했습니다. 9개월 동안의 수익은 $21.3백만으로 증가했으며, 총 이익은 $10.7백만으로 상승하고 마진이 50.1%로 개선되었습니다. 회사는 지난해 손실에 비해 $2.52백만의 순이익을 기록했습니다. 3분기 수익은 $6.91백만이었으며, 긍정적인 자유 현금 흐름은 $1.2백만이었습니다.
회사는 이스라엘 교도소 서비스와의 중요한 5년 계약 및 미국 전역의 다양한 전자 모니터링 계약을 포함하여 여러 개의 새로운 계약을 확보했습니다. 유럽 정부로부터 총 $13.5백만 이상에 달하는 주목할 만한 신규 주문이 접수되었으며, 2024년 말까지 배송될 예정이다.
SuperCom (NASDAQ: SPCB) a annoncé des résultats financiers solides pour le troisième trimestre et les neuf premiers mois de 2024. Les revenus pour la période de neuf mois ont augmenté à $21,3 millions, avec un bénéfice brut passant à $10,7 millions et une marge améliorée à 50,1%. L'entreprise a réalisé un bénéfice net de $2,52 millions, par rapport à une perte l'an dernier. Les revenus du troisième trimestre s'élevaient à $6,91 millions, avec des flux de trésorerie disponibles positifs de $1,2 million.
L'entreprise a obtenu plusieurs nouveaux contrats, y compris un contrat significatif de 5 ans avec le Service des prisons israélien et divers contrats de surveillance électronique aux États-Unis. Des commandes notables totalisant plus de $13,5 millions ont été reçues de gouvernements européens, qui devraient être livrées d'ici la fin de 2024.
SuperCom (NASDAQ: SPCB) berichtete über starke finanzielle Ergebnisse für das dritte Quartal und die ersten neun Monate des Jahres 2024. Die Einnahmen für den Neunmonatszeitraum stiegen auf $21,3 Millionen, während der Bruttogewinn auf $10,7 Millionen anstieg und die Marge auf 50,1% verbessert wurde. Das Unternehmen erzielte einen Nettoertrag von $2,52 Millionen, verglichen mit einem Verlust im Vorjahr. Die Einnahmen im dritten Quartal beliefen sich auf $6,91 Millionen, mit positiven freien Cashflows von $1,2 Millionen.
Das Unternehmen sicherte sich mehrere neue Verträge, darunter einen bedeutenden 5-Jahres-Vertrag mit dem Israel Prison Service und verschiedene elektronische Überwachungsverträge in den USA. Es wurden bemerkenswerte neue Bestellungen im Gesamtwert von über $13,5 Millionen von europäischen Regierungen erhalten, die bis Ende 2024 geliefert werden sollen.
- Revenue increased to $21.3M from $20.9M in first nine months
- Gross profit margin improved to 50.1% from 37.7%
- Net income improved to $2.52M from -$2.48M loss
- Cash position increased to $6.23M
- Secured new orders worth $13.5M from European governments
- Won 5-year contract with Israel Prison Service
- Q3 gross profit decreased to $3.2M from $4.0M
- Q3 gross profit margin declined to 46% from 59%
- Q3 net loss of $0.44M compared to profit of $0.12M
- Q3 EBITDA decreased to $1.1M from $2.5M
Insights
SuperCom's Q3 2024 results present a mixed but overall positive picture. The company achieved significant improvements in the first nine months, with
Key strengths include substantial contract wins totaling over
However, Q3 showed some concerning metrics, including decreased gross profit margin from
The electronic monitoring market penetration strategy shows impressive execution with multiple new contract wins across diverse geographical locations. The expansion into New York, West Virginia and Maryland, coupled with international growth in Europe and Canada, demonstrates strong market acceptance of SuperCom's PureOne and PureSecurity solutions.
The Israeli Prison Service contract is particularly significant as it represents a nationwide implementation with potential for expansion beyond the initial 1,500 enrollees. The contract's 5-year term with possible extension to 9 years provides stable, predictable revenue streams. The company's ability to displace incumbent competitors in California suggests superior technology offering and competitive pricing strategy.
Q3 2024: Revenue
First Nine Months Ended September 30, 2024, Financial Highlights (Compared to First Nine months of 2023)
- Revenue increased to
from$21.3 million .$20.9 million - Gross profit increased to
from$10.7 million .$7.9 million - Gross Profit margin increased to
50.1% from37.7% . - Operating Income improved to
compared to Operating Loss of$1.13 million ( .$0.91) million - Net Income improved to
from Net Loss of$2.52 million ( .$2.48) million - Non-GAAP Operating Income improved to
compared to$3.91 million .0 million.$3 - Non-GAAP Net Income improved to
compared to$4.88 million .$1.68 million - EBITDA improved to
compared to$4.6 million .$3.7 million - Cash increased to
.$6.23 million - Non-GAAP EPS of
.$3.1
Third Quarter Ended September 30, 2024, Financial Highlights (Compared to the Third Quarter of 2023)
- Revenue increased to
from$6.91 million .$6.78 million - Gross Profit decreased to
from$3.2 million .$4.0 million - Gross Profit margin decreased to
46% from59% . - Operating Income decreased to
compared to$0.03 million .$0.81 million - EBITDA decreased to
from$1.1 million .$2.5 million - Net Loss decreased to
compared to Net Profit of$0.44 million .$0.12 million - Non-GAAP Net Profit decreased to
compared to$0.35 million .$1.4 million - Cash increased to
from$6.2 million .$1.2 million - Cash per Share of
at end of period.$3 - Generated Positive Free Cash Flows of
.$1.2 million - Working Capital increased to
.$26.1 million - Non-GAAP EPS of
.$0.17
Recent Business Highlights:
- The company has received new orders totaling over
from European governments. These orders are expected to be delivered by the end of 2024, further solidifying SuperCom's leadership in the public safety sector across$13.5 million Europe . - SuperCom, together with prime partner Electra, has been awarded a 5-year contract by the Israel Prison Service state agency (IPS) to deploy its PureSecurity Electronic Monitoring (EM) Suite. The nationwide program is expected to cover all EM offender programs in the country, with an estimated 1,500 enrollees and potential for expansion. SuperCom will deploy its cutting-edge EM solutions, including PureCom, PureTrack, PureTag, and PureBeacon. The 5-year contract is already in effect and includes the option for up to four one-year extensions for a total of a 9-year potential contract term.
- SuperCom secured multiple new electronic monitoring contracts with Sheriff agencies across
West Virginia . These contracts leverage SuperCom's innovative PureOne suite, enhanced with both cellular and WiFi communication capabilities, to provide robust monitoring solutions in rural areas with limited cellular coverage. These newly initiated contracts are already generating recurring revenue, further solidifying SuperCom's footprint in the U.S. market. - SuperCom secured a new contract with a leading
Baltimore -based service provider inMaryland . The contract, which was launched in June 2024, is estimated to generate an annual recurring revenue (ARR) of approximately$250,000. T hrough this new partnership, SuperCom has deployed its advanced GPS technology, along with its 24/7 monitoring center services. - SuperCom secured its first new contract in a county in
New York State . This win, achieved through a competitive selection process, further strengthens SuperCom's strategic expansion across the US and marks another milestone in its global business plan. - SuperCom, through its wholly owned subsidiary, LCA, secured a new
North California contract to provide housing and evidence-based case management services to youth and individuals transitioning from housing. The contract is projected to generate nearly annually, marking SuperCom's fourth North American contract win in 2024 and further expanding its role in rehabilitative services and secure solutions.$500,000 - SuperCom secured a
contract with a long-term government customer, continuing a decade-long partnership. The contract underscores SuperCom's ability to maintain strong relationships and deliver consistent, high-quality solutions in the e-Government sector.$1.8 million - SuperCom, through its wholly owned subsidiary, LCA, won a new project in
California valued at up to to provide a comprehensive jail-based program focusing on re-entry services aimed at reducing recidivism. This project, won through a competitive bid process, marks an expansion into a new county and is expected to generate approximately$2.0 million in annual recurring revenue over five years.$400,000 - SuperCom, through its wholly owned subsidiary, LCA, secured a new EM contract in
California with an establishedCalifornia services provider in the judicial sector. This contract is particularly notable for SuperCom's successful displacement of a long-time incumbent competitor, primarily due to SuperCom's new innovative PureOne solution. - SuperCom won a new project in
Canada with a renowned Canadian industry partner in the tracking solutions sector. This new project expands an existing collaboration with a long-standing partner, transitioning from providing RF-based tracking technology to embracing new GPS technologies. This expansion into new GPS technologies with the state-of-the-art PureOne devices underscores the company's commitment to innovation and its ability to adapt to the evolving needs of its clients.
Management Commentary:
"We are pleased to announce another quarter of significant achievements, showcasing the continued strength and resilience of our business," commented Ordan Trabelsi, President and CEO of SuperCom. "Our financial results for the third quarter and the first nine months of 2024 reflect the successful execution of our strategic initiatives, which have been driving revenue growth, improving profitability, and enhancing cash flow. Year-to-date, revenue increased to
"This quarter was particularly exciting as we solidified our leadership position with key contract wins, including the prestigious National Israeli Electronic Monitoring project. We also expanded into new regions, including
"Our commitment to financial discipline, operational efficiencies, and technology innovation has translated into tangible results: an improvement in net income to
"Looking ahead, we remain focused on executing our strategy by delivering cutting-edge solutions, deepening relationships with existing clients, and entering new markets. With a pipeline of opportunities, continued technology advances, and a track record of operational excellence, we are well-positioned to drive shareholder value," Ordan concluded.
Conference Call
SuperCom will hold a conference call today (Thursday, November 14, 2024) at 10:00 a.m. Eastern time (7:00 a.m. Pacific time; 5:00 p.m.
Conference Call Dial-In Information:
Date: Thursday, November 14, 2024
Time: 10 a.m. Eastern time (7 a.m. Pacific time)
International: 973-528-0011
Access Code: SuperCom
Link: https://www.webcaster4.com/Webcast/Page/2259/51654
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, 2023, filed with the
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
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.
[Tables to follow]
SUPERCOM LTD. | |||||
CONSOLIDATED BALANCE SHEETS | |||||
( | |||||
As of | As of | ||||
September 30, | December 31, | ||||
Unaudited | Unaudited | ||||
CURRENT ASSETS | |||||
Cash and cash equivalents | 6,229 | 5,206 | |||
Restricted bank deposits | 347 | 371 | |||
Trade receivable, net | 14,887 | 13,357 | |||
Patents | 5,283 | 5,283 | |||
Other accounts receivable and prepaid expenses | 2,257 | 1,742 | |||
Inventories, net | 2,725 | 2,503 | |||
Total current assets | 31,728 | 28,462 | |||
LONG-TERM ASSETS | |||||
Deferred tax long term | 919 | 501 | |||
Other intangible assets, net | 5,099 | 5,576 | |||
Operating lease right-of-use assets | 923 | 487 | |||
Goodwill | 7,026 | 7,026 | |||
Property and equipment, net | 3,071 | 2,701 | |||
Total long-term assets | 17,038 | 16,291 | |||
Total Assets | 48,766 | 44,753 | |||
CURRENT LIABILITIES | |||||
Short-term loans and credit | 765 | 792 | |||
Trade payables | 1,990 | 1,883 | |||
Employees and payroll accruals | 1,131 | 1,015 | |||
Related parties | - | 100 | |||
Accrued expenses and other liabilities | 333 | 485 | |||
Operating lease liabilities | 877 | 401 | |||
Deferred revenues ST | 576 | 726 | |||
Total current liabilities | 5,672 | 5,403 | |||
LONG-TERM LIABILITIES | |||||
Long-term loan | 29,530 | 33,952 | |||
Deferred tax liability | 170 | 170 | |||
Deferred revenues | 49 | 305 | |||
Long-term operating lease liabilities | - | 108 | |||
Total long-term liabilities | 29,749 | 34,535 | |||
SHAREHOLDERS' EQUITY: | |||||
Ordinary shares | 21,970 | 9,094 | |||
Additional paid-in capital | 95,803 | 102,670 | |||
Accumulated deficit | (104,428) | (106,948) | |||
Total shareholders' equity | 13,345 | 4,816 | |||
Total liabilities and equity | 48,766 | 44,754 | |||
SUPERCOM LTD. | |||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
( | |||||||
Three months ended | |||||||
September 30, | September 30, | ||||||
Unaudited Unaudited | |||||||
REVENUES | 6,911 | 6,778 | |||||
COST OF REVENUES | (3,758) | (2,751) | |||||
GROSS PROFIT | 3,153 | 4,027 | |||||
OPERATING EXPENSES: | |||||||
Research and development | 933 | 774 | |||||
Selling and marketing | 625 | 531 | |||||
General and administrative | 1,474 | 1,093 | |||||
Other expenses | 90 | 793 | |||||
Total operating expenses | 3,122 | 3,191 | |||||
OPERATING PROFIT | 31 | 836 | |||||
FINANCIAL EXPENSES, NET | (474) | (690) | |||||
PROFIT (LOSS) BEFORE INCOME TAX | (443) | 146 | |||||
INCOME TAX EXPENSE | - | - | |||||
NET PROFIT (LOSS) FOR THE PERIOD | (443) | 146 | |||||
SUPERCOM LTD. | ||||
Reconciliation Table of GAAP to Non-GAAP Figures and EBITDA to Net Income | ||||
( | ||||
Three months ended | ||||
September 30, 2024 | September 30, 2023 | |||
Unaudited | Unaudited | |||
GAAP gross profit | 3,153 | 4,027 | ||
Amortization of intangible assets | 88 | 88 | ||
Non-GAAP gross profit | 3,241 | 4,115 | ||
GAAP Operating profit | 31 | 836 | ||
Amortization of intangible assets | 540 | 446 | ||
Foreign currency loss | 159 | 111 | ||
One-time expense | 90 | 899 | ||
Non-GAAP operating profit | 820 | 2,292 | ||
GAAP net profit (loss) | (443) | 146 | ||
Amortization of intangible assets | 540 | 446 | ||
One-time expense | 90 | 899 | ||
Foreign currency loss | 159 | 111 | ||
Non-GAAP net profit | 346 | 1,602 | ||
Non-GAAP EPS | 0.17 | 4.8 | ||
Net profit (loss) for the period | (443) | 146 | ||
Financial expenses, net | 474 | 690 | ||
Depreciation and Amortization | 797 | 822 | ||
One-time expense | 90 | 899 | ||
Foreign currency loss | 159 | 111 | ||
EBITDA * | 1,077 | 2,668 | ||
* EBITDA is a non-GAAP financial measure generally defined as earnings before interest, taxes, depreciation and amortization and |
SUPERCOM LTD. | ||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
( | ||||||||
Nine months ended | ||||||||
September 30, 2024 | September 30, 2023 | |||||||
Unaudited | Unaudited | |||||||
REVENUES | 21,308 | 20,902 | ||||||
COST OF REVENUES | (10,625) | (13,027) | ||||||
GROSS PROFIT | 10,683 | 7,875 | ||||||
OPERATING EXPENSES: | ||||||||
Research and development | 2,833 | 2,436 | ||||||
Selling and marketing | 1,835 | 1,659 | ||||||
General and administrative | 4,222 | 3,467 | ||||||
Other expenses, net | 660 | 1,198 | ||||||
Total operating expenses | 9,550 | 8,760 | ||||||
OPERATING PROFIT (LOSS) | 1,133 | (885) | ||||||
FINANCIAL EXPENSES, NET | (969) | (1,559) | ||||||
PROFIT (LOSS) BEFORE INCOME TAX | 2,112 | (2,444) | ||||||
INCOME TAX BENEFIT | 418 | - | ||||||
NET PROFIT(Loss) FOR THE PERIOD | 2,520 | (2,444) | ||||||
SUPERCOM LTD. | ||||||
Reconciliation Table of GAAP to Non-GAAP Figures and EBITDA to Net Income | ||||||
( | ||||||
Nine months ended | ||||||
September 30, 2024 | September 30, 2023 | |||||
Unaudited | Unaudited | |||||
GAAP gross profit | 10,683 | 7,875 | ||||
Amortization of intangible assets | 265 | 265 | ||||
Non-GAAP gross profit | 10,948 | 8,140 | ||||
GAAP Operating Profit (Loss) | 1,133 | (885) | ||||
Amortization of intangible assets | 1,604 | 1,429 | ||||
One-time expenses | 660 | 1,687 | ||||
Foreign currency loss | 512 | 1,009 | ||||
Non-GAAP operating profit | 3,909 | 3,240 | ||||
GAAP net Profit (Loss) | 2,520 | (2,444) | ||||
Amortization of intangible assets | 1,604 | 1,429 | ||||
One-time expenses | 660 | 1,687 | ||||
Foreign currency loss | 512 | 1,009 | ||||
Income Tax Benefit | (418) | - | ||||
Non-GAAP net profit | 4,878 | 1,681 | ||||
Non-GAAP EPS | 3.05 | 6.2 | ||||
Net Profit (Loss) for the period | 2,520 | (2,444) | ||||
Financial expenses (income), net | (969) | 1,559 | ||||
Income Tax Benefit | (418) | - | ||||
Depreciation and Amortization | 2,293 | 2,129 | ||||
One-time expenses | 512 | 1,687 | ||||
Foreign currency loss | 660 | 1,009 | ||||
EBITDA * | 4,598 | 3,940 | ||||
* EBITDA is a non-GAAP financial measure generally defined as earnings before interest, taxes, depreciation and |
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