SuperCom Reports 109% YoY Revenue Growth for the First Quarter 2023

 Revenue of $6.4 million; EBITDA of $0.4 Million - Positive for 3rd Consecutive Quarter 

TEL AVIV, Israel, May 15, 2023 /PRNewswire/ --  SuperCom (NASDAQ: SPCB), a global provider of secured solutions for the e-Government, IoT, and Cybersecurity sectors, today reported results for the three months ended March 31, 2023.  

First Quarter Ended March 31, 2023, Financial Highlights (Compared to the First Quarter of 2022)

• Revenue increased by 109% to $6.4 million from $3.05 million, marking a third consecutive quarter of YoY revenue growth.
• Net Income in 2022 improved 35% to $1.5 million loss compared to $2.3 million Loss.
• Non-GAAP Net Income improved 79% to $0.3 million loss compared to $1.4 million Loss.
• Positive EBITDA improved to $0.4 million compared to -$0.3 million.
• Non-GAAP EPS improved to -$0.05 compared to -$0.36.
• Working Capital at end of quarter of $22.6 million.

Recent Business Highlights:

• The Company was awarded and launched a $33 Million national EM project in Romania. The first phase, valued at over $8M, was completed successfully, and a follow-on order worth $7.1M is expected to be delivered in the first half of 2023. This project includes deploying SuperCom's PureSecurity EM Suite for domestic violence monitoring, GPS Tracking of offenders, and a home detention monitoring program.
• SuperCom's subsidiary, LCA, won a $4.25 million contract to provide adult reentry services in a Northern California county. 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 Company launched a $3.6M national EM project in Finland with the national government in Q1 2023. PureSecurity EM Suite will be deployed, covering all EM offender programs in Finland for four years with at least 1,000 enrollees initially and potential for expansion.
• SuperCom has achieved two new significant R&D milestones: the development and deployment of the PureProtect, a life-saving domestic violence monitoring solution, and the launching of the PureOne, an all-in-one GPS tracking ankle-bracelet monitoring solution, expanding the Company's addressable market, and facilitating its rapid expansion into the US.
• Raised $2.4 million in gross proceeds in a registered direct offering in Q1 2023, providing additional capital to execute the Company's business plan.

Management Commentary

"We are excited to report a strong start to the year, with exceptional results in the first quarter of 2023. Our dedicated efforts and successful execution of various projects in our portfolio have propelled us forward, resulting in remarkable 109% YoY quarterly revenue growth. Notably, our excellent execution of the $33 million national electronic monitoring project in Romania has played a significant role in this achievement," commented Ordan Trabelsi, President and CEO of SuperCom.

"Furthermore, we are proud to share that we have achieved positive EBITDA for the third consecutive quarter, a testament to our strategic utilization of operating leverage and previous investments in proprietary technology. This meaningful milestone showcases our commitment to sustainable growth and profitability," Ordan continued.

"Another noteworthy aspect is the continued success of our proprietary technology in competitive tenders, allowing us to displace incumbent vendors in numerous countries worldwide. Our electronic monitoring solutions have proven effective in addressing the challenges of prison overcrowding, while simultaneously delivering substantial cost savings and contributing to the reduction of recidivism. By promoting public safety within communities, we are making a tangible impact," Ordan added.

"Our investments in research and development, as well as sales and marketing, have yielded positive outcomes. The growing interest in our unique electronic monitoring products and solutions has facilitated our expansion into new countries and states across Europe and the USA. We remain committed to delivering exceptional value to our clients and shareholders alike, and we are confident that our ongoing efforts will help us achieve our long-term strategic objectives," Ordan concluded.

Conference Call
The Company will hold a conference call today (May 15, 2023) at 10:00 a.m. Eastern time (5:00 p.m. Israel time) to discuss these results, followed by a question and answer session.

Conference Call Dial-In Information:
Date:                                 Monday, May 15, 2023
Time:                                10:00 a.m. Eastern time (7:00 a.m. Pacific time) (5:00 p.m. Israel time)
U.S. toll-free:                    877-545-0532
Israel toll-free:                  1-809-423-853
International:                    973-528-0016
Access Code:                   SuperCom
Link:                                  https://www.webcaster4.com/Webcast/Page/2259/48432

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 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, 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 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 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. 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 Investor Relations:
ir@supercom.com

Kirin Smith
PCG Advisory
ksmith@pcgadvisory.com

 

 

SUPERCOM LTD.
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
		As of March 31,			As of December 31,
		2023				2022
		Unaudited				Audited
CURRENT ASSETS
Cash and cash equivalents		3,524				4,042
Restricted bank deposits		367				463
Trade receivable, net		11,854				10,852
Patents		5,283				5,283
Other accounts receivable and prepaid expenses		1,897				2,239
Inventories, net		3,525				3,411
Total current assets		26,450				26,290
LONG-TERM ASSETS
Severance pay funds		474				482
Deferred tax long term		207				501
Property and equipment, net		1,592				1,640
Other intangible assets, net		5,375				5,617
Operating lease right-of-use assets		346				484
Goodwill		7,026				7,026
Total long-term assets		15,020				15,750
Total Assets		41,470				42,040
CURRENT LIABILITIES
Trade payables and other credit		1,109				2,167
Employees and payroll accruals		1,332				1,339
Related parties		152				168
Accrued expenses and other liabilities		402				469
Short-term Operating lease liabilities		389				381
Deferred revenues ST		516				715
Total current liabilities		3,900				5,239
LONG-TERM LIABILITIES
Long-term loan		32,588				32,600
Deferred revenues		-				269
Deferred tax liability LT		170				170
Accrued severance pay		514				523
Long-term Operating lease liabilities		-				108
Total long-term liabilities		33,272				33,670
SHAREHOLDERS' EQUITY:
Ordinary shares		4,759				3,057
Additional paid-in capital		104,000				103,000
Accumulated deficit		(104,461)				(102,926)
Total shareholders' equity		4,298				3,131
Total liabilities and equity		41,470				42,040

 

SUPERCOM LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands)
		Three months ended
			March 31, 2023	March 31, 2022
		Unaudited		Unaudited
REVENUES			6,376	3,046
COST OF REVENUES			(4,794)	(1,712)
GROSS PROFIT			1,582	1,334
OPERATING EXPENSES:
Research and development			813	859
Selling and marketing			572	701
General and administrative			1,084	1,142
Other expense (income), net			176	-
Total operating expenses			2,645	2,702
OPERATING LOSS			(1,063)	(1,368)
FINANCIAL EXPENSES, NET			(472)	(977)
LOSS BEFORE INCOME TAX			(1,535)	(2,345)
INCOME TAX EXPENSE			-	-
NET LOSS FOR THE PERIOD			(1,535)	(2,345)

 

 

SUPERCOM LTD.
Reconciliation Table of GAAP to Non-GAAP Figures and EBITDA to Net Income
(U.S. dollars in thousands)
		Three months ended
		March 31, 2023		March 31, 2022
		Unaudited		Unaudited
GAAP gross profit		1,582		1,334
Amortization of intangible assets		88		88
Non-GAAP gross profit		1,670		1,422
GAAP Operating Loss		(1,063)		(1,368)
Amortization of intangible assets		530		455
Foreign Currency Loss		520		489
One-time reorganization expenses		229		-
Non-GAAP operating profit		216		(425)
GAAP net Loss		(1,535)		(2,345)
Amortization of intangible assets		530		455
Foreign Currency Loss		520		489
One-time reorganization expenses		229		-
Non-GAAP net Loss		(256)		(1,401)
Non-GAAP E.P.S		(0.05)		(0.36)
Net loss for the period		(1,535)		(2,345)
Financial expenses (income), net		472		977
Depreciation and Amortization		697		620
Foreign Currency Loss		520		489
One-time reorganization expenses		229		-
EBITDA *		383		(259)
* EBITDA is a non-GAAP financial measure generally defined as earnings before interest, depreciation and amortization and other non-cash or one-time expenses .

 

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