TEL AVIV, Israel, April 30, 2021 /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, 2020.
Twelve-Months Ended December 31,
2020 Financial Highlights (Compared to the Prior Year
Period)
- Cash and cash equivalents and restricted cash increased to
$4.0 million from $1.2 million last year.
- Revenue decreased 29% to $11.8
million in 2020, from $16.5
million last year, mainly due to material impact from
Covid-19 related government restrictions and limitations.
- Gross margin increased to 47.4% in 2020 from 38.5% last
year.
- Operating expenses in 2020 decreased 36% to $9.3 million from $14.5
million last year.
- EBITDA improved to $2.8 million
in 2020 compared to an EBITDA loss of $(0.5)
million in 2019.
Recent Business Highlights:
- In response to the Covid-19 pandemic, the company underwent
significant cost optimizations allowing for improvement in margins
and profitability in parallel to Covid-19 related revenue
declines.
- 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 sent out to
various regions around the world. Global demand for this solution
along with more pilots continues in 2021.
- Company won a tender with the Israeli government for its
PureHealth Coronavirus (COVID-19) Quarantine Compliance Solution.
This was won post a successful pilot in Israel of the solution.
- In order to support increased demand for its IoT products, the
company has adjusted its manufacturing capacity to enable more
flexibility and allow to scale production capacity by more than
several multiples. Furthermore, the company made its global supply
chain more resilient by reducing dependencies on specific suppliers
and geographies.
- On February 2021, the company
appoints Ordan Trabelsi as new CEO.
Ordan has been with the company since May
2013 as the second US employee and grew the business in the
USA to over $10 million in annual revenues and profitability,
representing over 1000% of organic growth. He has also led
successful mergers and acquisitions and numerous financings for the
company, including public equity offerings, private equity
placements, and various credit facilities, which totaled over
$75 million in capital.
- Investment in financial team resources and improved financial
reporting processes to support return to timely filings and
quarterly financial reporting.
- Maintained strong relationships with existing customers across
all 3 business segments reflecting high customer retention and
demand for company solutions even during unexpected environments
such as the global Covid-19 pandemic.
Select Announcements:
- March 2021. Launched successful
PureCare quarantine enforcement pilot in Israel and won an award for a project
estimated to generate over $9M in
revenues.
- December 9, 2020. Won a new
electronic monitoring contract with Sheriff's office in Southeast
US for SuperCom's PureTrack solution
- December 7, 2020. Won a new
electronic monitoring contract in State
of California
- December 3, 2020. Won a new
juvenile electronic offender monitoring contract in State of Alabama
- December 1, 2020. Announced the
Launch of a $1.2 million 5 year
contract with the government of Latvia in Europe for national electronic monitoring
- November 30, 2020. Secured a new
electronic monitoring contract in State
of Wisconsin for our PureSecurity Electronic Monitoring
suite
- September 3, 2020. Converted a
pilot in the Caribbean into a new
contract with our PureSecurity Suite.
- March, 2020. Launched two new PureHealth solutions to battle
the spread of COVID-19 via quarantine enforcement and contact
tracing.
Management Commentary
"In 2020, we focused on being agile and adapting to the new
challenges presented to us by the COVID-19 pandemic," said
Ordan Trabelsi, CEO of SuperCom."As
government restrictions and limitations impacted our revenues and
ability to fully provide our services, we adapted our operations
and offerings to meet rapidly changing demands. We were pleased to
see an increase in margins and profitability in parallel to a
decline in revenues, representing the hard work of our operating
teams to optimize costs while continuing to deliver outstanding
services and solutions and win new contracts. During the past nine
months, we have seen strong interest in our Pure Security solution
which has resulted in several valuable contract wins. In the
second half of last year, we won contracts also in the Caribbean, Latvia, State of
Wisconsin, Alabama,
California as well as one in the
southeast United States. We expect the momentum to continue
as more government customers realize the unique value of our
solutions and offerings."
"Furthermore, we were able to adapt and offer new solutions to
meet the changing needs of our customers, faced with the challenges
of Covid-19 as well, and offered our PureHealth quarantine
compliance solution, which has also seen demand and received
confirmation as an effective tool to help manage the spread of
COVID-19 through enforcing home quarantine of people traveling to
different regions. In March of this year, following a
successful pilot, we won a tender with the Israeli Ministry of
Health to provide the government with our turn-key solution for
quarantine enforcement of all non-vaccinated travelers entering the
country," continued Ordan.
"In 2021, together with our enhanced cash position, new product
offerings and gradual release of covid-19 limitations, we are
seeing increased activity in our target markets and are poised to
continue offering innovative solutions and grow our customer
footprint in the coming years," concluded Ordan.
Conference Call
The company will hold a conference call today (April 30, 2020) at 8:30
a.m. Eastern time (3:30 p.m.
Israel time) to discuss these
results and financial outlook.
SuperCom management will host the call, followed by a questions
and answers period.
Date: Friday, April 30,
2021
Time: 8:30 a.m. Eastern time
(5:30 a.m. Pacific time)
U.S. toll-free: 877-407-8133
Israel toll-free:
180-940-6247
International: 201-689-8040
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.
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 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,
2019, filed with the U.S. Securities and Exchange Commission
(the "SEC") on November 27, 2020, 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
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.
|
SUPERCOM
LTD.
|
CONSOLIDATED
BALANCE SHEETS
|
(U.S. dollars in
thousands)
|
|
|
|
December
31,
|
|
December
31,
|
|
|
2020
|
|
2019
|
|
|
Audited
|
|
Audited
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
Cash and
cash equivalents
|
|
3,137
|
|
110
|
Restricted bank
deposits
|
|
815
|
|
1,100
|
Trade receivable,
net
|
|
12,427
|
|
13,047
|
Patents
|
|
5,283
|
|
5,283
|
Other accounts
receivable and prepaid expenses
|
|
876
|
|
961
|
Inventories,
net
|
|
2,404
|
|
2,646
|
|
|
|
|
|
Total current
assets
|
|
24,942
|
|
23,147
|
|
|
|
|
|
LONG-TERM
ASSETS
|
|
|
|
|
Severance pay
funds
|
|
531
|
|
362
|
Deferred tax long
term
|
|
204
|
|
510
|
Customer
Contracts
|
|
1,250
|
|
1,824
|
Software and other
IP
|
|
2,677
|
|
3,474
|
Other Asset,
net
|
|
2,343
|
|
2,767
|
Goodwill
|
|
7,026
|
|
7,026
|
Property &
equipment, net
|
|
1,371
|
|
894
|
Total long-term
assets:
|
|
15,402
|
|
16,857
|
|
|
|
|
|
Total
Assets
|
|
40,344
|
|
40,004
|
CURRENT
LIABILITIES
|
|
|
|
|
Short-term loans and other
|
|
7,204
|
|
445
|
Trade
payables
|
|
2,860
|
|
3,541
|
Employees and payroll
accruals
|
|
2,627
|
|
3,229
|
Related
parties
|
|
1,749
|
|
305
|
Accrued expenses and
other liabilities
|
|
4,393
|
|
4,667
|
Deferred revenues
ST
|
|
766
|
|
1,332
|
Short-term liability
for future earn-out
|
|
-
|
|
794
|
|
|
|
|
|
Total current
liabilities
|
|
19,599
|
|
14,313
|
|
|
|
|
|
LONG-TERM
LIABILITIES
|
|
|
|
|
|
|
|
|
|
Long-term bank loan
|
|
14,952
|
|
14,187
|
Accrued
severance pay
|
|
656
|
|
579
|
Related
Parties
|
|
-
|
|
2,383
|
Deferred tax
liability
|
|
170
|
|
-
|
Deferred
revenues
|
|
49
|
|
210
|
|
|
|
|
|
Total long-term
liabilities
|
|
15,827
|
|
17,359
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY:
|
|
|
|
|
Ordinary
shares
|
|
1,397
|
|
1,116
|
Additional paid-in
capital
|
|
88,853
|
|
84,680
|
Accumulated
deficit
|
|
(85,331)
|
|
(77,464)
|
|
|
|
|
|
Total shareholders'
equity
|
|
4,919
|
|
8,332
|
|
|
|
|
|
Total liabilities and
equity
|
40,344
|
|
40,004
|
|
SUPERCOM
LTD.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(U.S. dollars in
thousands)
|
|
|
|
Twelve months
ended
December
31,
|
|
2020
|
2019
|
|
Audited
|
Audited
|
|
|
|
|
REVENUES
|
11,770
|
16,475
|
COST OF
REVENUES
|
(6,189)
|
(10,127)
|
|
|
|
|
GROSS
PROFIT
|
5,581
|
6,348
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
Research
and
development
|
2,386
|
3,971
|
Selling
and marketing
|
1,721
|
3,526
|
General
and administrative
|
4,074
|
5,389
|
Other
expense (income), net
|
1,149
|
1,635
|
|
|
|
|
Total operating
expenses
|
9,330
|
14,521
|
|
|
|
|
OPERATING
LOSS
|
(3,749)
|
(8,173)
|
FINANCIAL
EXPENSES, NET
|
(4,113)
|
(3,289)
|
|
|
|
|
LOSS BEFORE INCOME
TAX
|
(7,862)
|
(11,462)
|
INCOME TAX
EXPENSE
|
(5)
|
(43)
|
|
|
|
|
NET LOSS FOR THE
PERIOD
|
(7,867)
|
(11,505)
|
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,
|
|
2020
|
2019
|
|
Unaudited
|
Unaudited
|
|
|
|
|
GAAP gross
profit
|
5,581
|
6,348
|
Amortization of
Software and IP
|
605
|
188
|
Stock-based
compensation expenses
|
84
|
-
|
Non-GAAP gross
profit
|
6,270
|
6,536
|
|
|
|
|
GAAP Operating
Loss
|
(3,749)
|
(8,173)
|
Amortization
of Software and IP, Customer Contracts and Brand
|
2,930
|
3,780
|
Stock-based
compensation expenses
|
211
|
144
|
One time
inventory write off
|
150
|
469
|
Foreign
Currency Loss
|
897
|
937
|
Allowance for
doubtful debt
|
2,001
|
1,920
|
|
|
|
|
Non-GAAP operating
profit(loss)
|
2,440
|
(923)
|
GAAP net
Loss
|
(7,867)
|
(11,505)
|
Amortization
of Software and IP, Customer Contracts and Brand
|
2,930
|
3,780
|
Stock-based
compensation expenses
|
211
|
144
|
One time
inventory write off
|
150
|
469
|
Foreign
Currency Loss
|
897
|
937
|
Income
tax expense(benefit)
|
5
|
43
|
Allowance for
doubtful debt
|
2,001
|
1,920
|
|
|
|
|
Non-GAAP net
Loss
|
(1,673)
|
(4,212)
|
|
|
|
|
NET LOSS FOR THE
PERIOD
|
(7,867)
|
(11,505)
|
Income tax expense (benefit)
|
5
|
43
|
Financial expenses (income), net
|
4,113
|
3,289
|
Depreciation and Amortization
|
3,265
|
4,176
|
One time inventory write off
|
150
|
469
|
Stock-based compensation expenses
|
211
|
144
|
Foreign Currency Loss
|
897
|
937
|
Allowance for doubtful debt
|
2,001
|
1,920
|
EBITDA
*
|
2,775
|
(527)
|
*
EBITDA is a non-GAAP financial measure generally
defined as earnings before interest, taxes, depreciation and
amortization.
|
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SOURCE SuperCom Ltd