SuperCom Reports Record Profit and 400% YoY EBITDA Growth for the First Quarter 2024
Revenue of $6.9 million; Net Income of $0.8 million; EBITDA of $2 million
TEL AVIV, Israel, May 15, 2024 /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, 2024.
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First Quarter Ended March 31, 2024, Financial Highlights (Compared to the First Quarter of 2023)
-- Revenue increased by 8% to $6.9 million from $6.4 million.
-- Gross Profit increased by 139% to $3.8 million from $1.6 million.
-- Gross Profit margin increased by 123% to 55% from 25%.
-- Operating Income improved by $1.8 million to $0.7 million compared to an
Operating Loss of ($1.1) million.
-- Operating Margin improved by 27.2 percentage points to 10.5% from
negative margin of (16.7%).
-- Net Income improved by $2.3 million to $0.8 million compared to Net Loss
of ($1.5) million.
-- EPS improved by $0.36 to positive $0.04 compared to Negative EPS of
($0.32).
-- Non-GAAP Net Income improved by $1.6 million to $1.35 million compared
to Net Loss of ($0.25) million.
-- Non-GAAP EPS improved by $0.12 to positive $0.07 compared to Negative
($0.05)
-- EBITDA increased by 400% to $2 million from $0.4 million.
-- Working Capital at the end of the quarter of $23.6 million.
Recent Business Highlights:
-- The Company has received over $5.0 million in new orders from European
governments.
-- The company raised $2.9 million in gross proceeds in a registered direct
offering in Q2 2024, providing additional capital to execute the
Company's business plan.
-- SuperCom, through its wholly-owned subsidiary, LCA, won new project in
California valued at up to $2.0 million to provide a comprehensive
program focusing on re-entry services for adult inmates, designed to
support individuals transitioning back into the community. The award is
a result of winning a formal competitive bid process.
-- SuperCom launched a $4.25 million contract to provide adult re-entry
services in Northern California through its wholly-owned subsidiary,
LCA. The project expanding LCA's existing day reporting and electronic
monitoring services to include jail-based and community-based sites.
-- LCA secured a new EM contract in California with an established
California 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.
-- SuperCom launched a $3.6M national EM project in Finland with the
national government in 2023. The PureSecurity EM Suite is fully deployed
in Finland, covering all EM offender programs - house arrest, GPS, and
inmate monitoring. SuperCom has also expanded its footprint in Finland
by securing and launching a national program for the Electronic
Monitoring of Domestic Violence offenders. This program leverages
SuperCom's cutting-edge PureSecurity Suite to empower Finnish
authorities to enhance citizen safety.
Management Commentary:
"We are pleased to report a strong start to 2024, marked by significant financial and operational achievements. This quarter, we've continued to see revenue growth YoY and a dramatic improvement in our profitability metrics leading to an 8-year-record profit," commented Ordan Trabelsi, President and CEO of SuperCom.
"The substantial growth in our gross profit reflects the inherent quality and high-margin potential of our key projects and our successful progression through different stages of these projects. Typically, the initial stages of these projects involve higher expenses, which subsequently give way to higher gross margins as the projects advance, as demonstrated by this quarter's results. Additionally, our EBITDA year-over-year has seen a remarkable 400% increase. This improvement is a testament to our rigorous management practices and dedication to effectively leveraging our core business infrastructure," Ordan continued.
"Net income has also shown a significant turnaround, with a $2.3 million improvement from a net loss of $1.5 million last quarter to a net profit of $0.8 million this quarter, underscoring our successful strategy and execution. Our ability to continue a positive expansion trajectory is further evidenced by the over $5 million in new orders from European governments and three new projects in the USA and Canada in the past few months. This influx of new business reflects our competitive edge and ability to displace incumbents with our superior technology and service offerings. As we continue to expand our presence in both established and new markets, these projects are expected to contribute to growth and support our reputation as a leader in the industry," Ordan added.
"Moving forward into 2024, we remain committed to leveraging our innovative technology solutions and strategic market initiatives to drive expansion, deliver value to our shareholders, and enhance the safety and efficiency of the communities we serve," Ordan concluded.
Conference Call
The Company will hold a conference call today (May 15, 2024) 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: Wednesday, May 15, 2024
Time: 10 a.m. Eastern time (7 a.m. Pacific time)
U.S. toll-free: 888-506-0062
Israel toll-free: 1-809-423-853
International: 973-528-0011
Access Code: SuperCom
Link: https://www.webcaster4.com/Webcast/Page/2259/50596
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 security and safety, community public safety, law enforcement, electronic monitoring, and domestic violence prevention. 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 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 U.S. Securities and Exchange Commission (the "SEC") on April 22, 2024, 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.
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SuperCom Investor Relations:
ir@supercom.com
[Tables to follow]
SUPERCOM LTD.
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
---
As of
December 31,
As of
March 31,
2024 2023
Unaudited Audited
CURRENT ASSETS
Cash and cash equivalents 1,618 5,206
Restricted bank deposits 369 371
Trade receivable, net 17,300 13,357
Patents 5,283 5,283
Other accounts receivable and prepaid expenses 1,791 1,742
Inventories, net 2,382 2,503
Total current assets 28,743 28,462
LONG-TERM ASSETS
Deferred tax long term 919 501
Property and equipment, net 2,770 2,701
Other intangible assts, net 5,444 5,576
Operating lease right-of-use assets 378 487
Goodwill 7,026 7,026
Total long-term assets 16,537 16,291
Total Assets 45,280 44,753
CURRENT LIABILITIES
Trade payables and other credit 1,376 1,883
Employees and payroll accruals 1,100 1,015
Related parties 98 100
Accrued expenses and other liabilities 521 485
Short-term Operating lease liabilities 387 401
Short-term credit 812 792
Deferred revenues ST 839 726
Total current liabilities 5,133 5,403
LONG-TERM LIABILITIES
Long-term loan 34,338 33,952
Deferred revenues 49 305
Deferred tax liability LT 170 170
Long-term Operating lease liabilities 108
Total long-term liabilities 34,557 34,535
SHAREHOLDERS' EQUITY:
Ordinary shares 9,094 9,094
Additional paid-in capital 102,670 102,670
Accumulated deficit (106,174) (106,948)
Total shareholders' equity 5,590 4,816
Total liabilities and equity 45,280 44,754
SUPERCOM LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands)
---
Three months ended
March 31, March 31,
2024 2023
Unaudited Una
udited
REVENUES 6,852 6,376
COST OF REVENUES (3,065) (4,794)
GROSS PROFIT 3,787 1,582
OPERATING EXPENSES:
Research and development 901 813
Selling and marketing 524 572
General and administrative 1,389 1,084
Other expense (income), net 255 176
Total operating expenses 3,069 2,645
OPERATING PROFIT (LOSS) 718 (1,063)
FINANCIAL EXPENSES, NET (362) (472)
PROFIT (LOSS) BEFORE INCOME TAX 356 (1,535)
INCOME TAX EXPENSE (BENEFIT) (418)
NET INCOME (LOSS) FOR THE PERIOD 774 (1,535)
EPS 0.04 (0.32)
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, 2024 March 31, 2023
Unaudited Unaudited
GAAP gross profit 3,787 1,582
Amortization of intangible assets 88 88
Non-GAAP gross profit 3,875 1,670
GAAP Operating Profit (Loss) 718 (1,063)
Amortization of intangible assets 513 530
Foreign Currency Loss 200 520
Other one-time expenses 280 229
Non-GAAP operating profit 1,711 216
GAAP net Profit (Loss) 774 (1,535)
Amortization of
intangible assets 513 530
Income tax expenses
(benefit) (418)
Foreign Currency Loss 200 520
Other one-time expenses 280 229
Non-GAAP net Profit
(Loss) 1,349 (256)
Non-GAAP EPS 0.07 (0.05)
Net Profit (Loss) for
the period 774 (1,535)
Financial expenses
(income), net 362 472
Income tax expenses
(benefit) (418)
Depreciation and
Amortization 767 697
Foreign Currency Loss 200 520
Other one-time expenses 280 229
EBITDA
* 1,965 383
* 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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SOURCE SuperCom
