Q4 Non-GAAP Net Profit of $2.2 million; Q4 Non-GAAP EPS of $0.53; Q4 EBITDA of $0.77
Million – Positive for 2nd Consecutive Quarter; Annual
Revenue Increased 44% to $17.7
million
TEL
AVIV, Israel, April 20,
2023 /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 and fourth quarter, ended
December 31, 2022.
Financial Highlights for Fourth Quarter 2022 Ended December
31, 2022 (Compared to the Fourth Quarter of
2021)
- Revenue increased 69% to $5.1
million from $3.0
million.
- Operating Loss improved significantly to $2.0 million loss compared to $4.6 million Operating Loss
- Net Loss in 2022 improved to $0.1
million loss compared to $5.4
million Net Loss
- Non-GAAP Net Profit significantly increased to $2.2 million from a ($0.2)
million Net Loss
- Non-GAAP EPS of $0.53 compared
to Negative EPS of ($0.1)
- EBITDA of $0.77
million
Financial Highlights for Twelve-Months Ended December 31, 2022 (Compared to the Prior Year
Period)
- Annual Revenue increased by 44% to $17.7
million from $12.3 million,
marking a second consecutive year of revenue growth
- Revenue from European countries increased by 230% to
$9.6 million from $2.9 million
- IoT Segment Revenue increased by 75% to 15.6 million from
$8.9 million
- Operating Loss in 2022 improved to $6.0
million compared to $6.7
million
- Net Loss in 2022 improved to a $7.5
million loss compared to a $10.1
million Net Loss
- Net cash used by operating activities was $4.7 million in 2022 compared to $9.4 million, mainly due to positive cash flow
from multi-year government projects
- Working Capital at end of 2022 increased slightly to
$21.1 million from $20.5 million
- Cash and cash equivalents and restricted cash at end of 2022
reached $4.5 million from
$4.6 million
- Non-GAAP EPS improved to $(0.61)
compared to $(0.71)
Business Highlights:
- The Company was awarded and launched a $33 Million national EM project in Romania. The project's first phase and
delivery of the initial order, valued at over $8 million, was completed successfully.
Subsequently, a follow-on order valued at approximately
$7.1 million was received and
expected to be delivered within 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.
- In November 2022, SuperCom's
subsidiary, LCA, won a $4.25 million
contract to provide adult reentry services in a Northern California
county. The project launched in the first quarter of 2023. LCA has
been providing adult day reporting services and electronic
monitoring in this county for many years. The new project expands
LCA's reentry services to encompass jail-based sites in addition to
several community-based sites. The project focuses on reentry
services such as case management, substance abuse education, job
preparedness, and criminogenic risk reduction.
- In March 2023, the Company
launched a $3.6 Million national EM
Project with the national government of Finland to deploy its PureSecurity EM Suite
The nationwide project is planned to cover all EM offender programs
in Finland for four years and
simultaneously include at least 1,000 enrollees, with potential for
expansions.
- Successfully finalized the development and deployment of a new
proprietary product, PureProtect – a life-saving domestic violence
monitoring solution. This groundbreaking product has undergone
rigorous testing and has already been successfully implemented in
multiple projects, significantly expanding the Company's
addressable market.
- Successfully launched a new proprietary product, PureOne, an
all-in-one GPS tracking ankle-bracelet monitoring solution that
integrates comprehensive monitoring capabilities into a single
device. With its lightweight design, high precision, and
future-proof features, PureOne offers a more efficient and
effective electronic monitoring solution, facilitating the rapid
expansion of SuperCom into the US market.
- In the fourth quarter of 2022, Safend, SuperCom's data
protection and cybersecurity subsidiary, received two orders
totaling approximately $870,000.
- In September 2022, the Company
secured a new $1.7 million contract
with an existing customer of its e-Government division.
- In May 2022, the Company launched
a national EM project with the Ministry of Justice and
Administration of Croatia to
deploy its PureSecurity EM Suite.
- In May 2022, the Company secured
a new contract for Sweden's
Juvenile national EM project.
- In January 2022, the Company
launched a new $1 Million project in
Central Coast California.
Management Commentary:
"2022 was a great year for SuperCom. We extended
our business across Europe by
winning significant new contracts, typically awarded through a
competitive RFP process. We won the largest industry award of the
year, valued at $33 million in
Romania, and other new projects in
Finland, Sweden, and Croatia. In 2022, our revenue from
Europe reached $9.6 million, representing 230% YoY growth. We've
also been working hard to increase our business presence in the
U.S., where we have continued to make progress towards our goals by
launching our new proprietary PureOne product and by securing
multiple project wins in California, Idaho, Texas,
and Wyoming," commented
Ordan Trabelsi, President and CEO of
SuperCom.
"We grew our teams in the recent couple years to
strengthen our sales and R&D initiatives in preparation for
wider market expansion and larger projects. Consequently, our
strategic plan yielded positive results already in the third and
fourth quarters, as evidenced by the impressive YoY revenue growth
of 102% and 69%, respectively. Furthermore, we were proud to return
to positive EBITDA and achieve EBITDA of $0.4 million and $0.77
million in these two quarters, which resulted from targeted
spending and high YoY increases in revenue."
"SuperCom is highly regarded in the IoT tracking
space. Many of these projects are for juvenile and domestic
violence offenders, where SuperCom's proprietary technology,
scalable infrastructure, and rehabilitative features stand out.
Once we launch one successful project with a client, we can easily
add more project types, leveraging our infrastructure to provide
more value and deepen the customer relationship. Additionally, our
ability to customize our solutions to address our client's specific
needs while delivering outstanding results has also built
SuperCom's reputation."
"We have full confidence in our ability to
consistently secure a robust pipeline of new projects and wins in
the market. To put things into perspective, while the global
electronic monitoring market growth was approximately 10% in 2022,
SuperCom IoT revenues achieved a staggering 76% growth during the
same period. This growth is a testament to the fact that the market
prefers our solution over the alternatives. As we continue to gain
market share and expand our presence, displacing legacy industry
leaders time and time again, we improve our positioning towards
future success. We plan to maintain our technology leadership and
sales momentum and to grow and build on the growing reputation for
excellence that SuperCom has achieved globally," concluded Mr.
Trabelsi.
Conference Call
The Company will hold a conference call on
April 20, 2023, at 10:00 a.m. Eastern Time (5:00 p.m. Israel
time) to discuss the fourth quarter and year end 2022 results,
followed by a question and answer session.
Conference Call Dial-In Information:
Date:
Thursday,
April 20, 2023
Time:
10:00 a.m.
Eastern Time / 7:00 a.m. Pacific
Time
U.S. toll-free:
877-545-0523
Israel toll-free:
1-809-423-853
International:
973-528-0016
Access Code:
SuperCom
Link:
https://www.webcaster4.com/Webcast/Page/2259/48122
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
pace of recovery following the COVID-19 outbreak, the effect on our
supply chain, our ability to implement cost containment and
business recovery strategies, financial condition and results of
operations, , 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 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 Investor
Relations:
ir@supercom.com
Kirin Smith
PCG Advisory
ksmith@pcgadvisory.com
SUPERCOM LTD.
|
CONSOLIDATED BALANCE
SHEETS
|
(U.S. dollars in
thousands)
|
|
|
As of December
31,
|
|
|
2022
|
|
2021
|
|
|
Audited
|
|
Audited
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
Cash and
cash equivalents
|
|
4,042
|
|
3,537
|
Restricted bank
deposits
|
|
463
|
|
1,067
|
Trade receivable,
net
|
|
10,852
|
|
11,061
|
Patents
|
|
5,283
|
|
5,283
|
Other accounts
receivable and prepaid expenses
|
|
2,239
|
|
1,599
|
Inventories,
net
|
|
3,411
|
|
3,561
|
|
|
|
|
|
Total current
assets
|
|
26,290
|
|
26,108
|
|
|
|
|
|
LONG-TERM
ASSETS
|
|
|
|
|
Severance pay
funds
|
|
482
|
|
487
|
Deferred tax long
term
|
|
501
|
|
202
|
Property and
equipment, net
|
|
1,640
|
|
1,804
|
Other intangible
assts, net
|
|
5,617
|
|
5,610
|
Operating lease
right-of-use assets
|
|
484
|
|
882
|
Goodwill
|
|
7,026
|
|
7,026
|
|
|
|
|
|
Total long-term
assets
|
|
15,750
|
|
16,011
|
|
|
|
|
|
Total Assets
|
|
42,040
|
|
42,119
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
Short-term loans and
credit
|
|
900
|
|
207
|
Trade
payables
|
|
1,267
|
|
1,395
|
Employees and payroll
accruals
|
|
1,339
|
|
2,119
|
Related
parties
|
|
168
|
|
172
|
Accrued expenses and
other liabilities
|
|
469
|
|
1,559
|
Short-term Operating
lease liabilities
|
|
381
|
|
-
|
Deferred revenues
ST
|
|
715
|
|
151
|
|
|
|
|
|
Total current
liabilities
|
|
5,239
|
|
5,603
|
|
|
|
|
|
|
LONG-TERM
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term
loan
|
|
32,600
|
|
30,451
|
Deferred
revenues
|
|
269
|
|
49
|
Deferred tax liability
LT
|
|
170
|
|
170
|
Accrued severance
pay
|
|
523
|
|
529
|
Long-term Operating
lease liabilities
|
|
108
|
|
925
|
|
|
|
|
|
Total long-term
liabilities
|
|
33,670
|
|
32,124
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY:
|
|
|
|
|
Ordinary
shares
|
|
3,057
|
|
2,028
|
Additional paid-in
capital
|
|
103,000
|
|
97,833
|
Accumulated
deficit
|
|
(102,926)
|
|
(95,469)
|
|
|
|
|
|
Total shareholders'
equity
|
|
3,131
|
|
4,392
|
|
|
|
|
|
Total liabilities and
equity
|
42,040
|
|
42,119
|
SUPERCOM LTD.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(U.S. dollars in
thousands)
|
|
|
Year
ended
December
31,
|
|
|
|
2022
|
2021
|
|
|
Audited
|
Audited
|
|
|
|
|
|
REVENUES
|
|
|
17,649
|
12,267
|
COST OF
REVENUES
|
|
|
(11,261)
|
(6,063)
|
|
|
|
|
|
GROSS
PROFIT
|
|
|
6,388
|
6,204
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
Research
and development
|
|
|
3,412
|
2,763
|
Selling
and marketing
|
|
|
2,657
|
1,655
|
General
and administrative
|
|
|
5,186
|
4,149
|
Other
expense (income), net
|
|
|
1,138
|
4,374
|
|
|
|
|
|
Total operating
expenses
|
|
|
12,393
|
12,941
|
|
|
|
|
|
OPERATING
LOSS
|
|
|
(6,005)
|
(6,737)
|
FINANCIAL EXPENSES,
NET
|
|
|
(1,751)
|
(3,396)
|
|
|
|
|
|
LOSS BEFORE INCOME
TAX
|
|
|
(7,756)
|
(10,133)
|
INCOME TAX
EXPENSE
|
|
|
299
|
(5)
|
|
|
|
|
|
NET LOSS FOR THE
PERIOD
|
|
|
(7,457)
|
(10,138)
|
SUPERCOM LTD.
|
Reconciliation Table
of GAAP to Non-GAAP Figures and EBITDA to Net Income
|
(U.S. dollars in
thousands)
|
|
|
Year
ended
December
31,
|
|
|
2022
|
2021
|
|
|
Unaudited
|
Unaudited
|
|
|
|
|
|
GAAP gross
profit
|
|
|
6,388
|
6,204
|
Amortization of
intangible assets
|
|
|
354
|
353
|
One-time inventory
write-off
|
|
|
138
|
298
|
Stock-based
compensation expenses
|
|
|
17
|
7
|
Non-GAAP gross
profit
|
|
|
6,897
|
6,862
|
|
|
|
|
|
GAAP Operating
Loss
|
|
|
(6,005)
|
(6,737)
|
Amortization of
intangible assets
|
|
|
1,960
|
1,800
|
Stock-based
compensation expenses
|
|
|
138
|
31
|
One-time
inventory write-off
|
|
|
138
|
298
|
Foreign Currency
Loss
|
|
|
2,086
|
1,780
|
One-time
reorganization expenses
|
|
|
180
|
1,374
|
Allowance for
doubtful debt in legacy business
|
|
|
1,000
|
3,000
|
Non-GAAP operating
profit
|
|
|
(503)
|
1,546
|
GAAP net
Loss
|
|
|
(7,457)
|
(10,138)
|
Amortization of
intangible assets
|
|
|
1,960
|
1,800
|
Stock-based
compensation expenses
|
|
|
138
|
31
|
One-time
inventory write-off
|
|
|
138
|
298
|
Foreign Currency
Loss
|
|
|
2,086
|
1,780
|
Income tax
expense
|
|
|
(299)
|
5
|
One-time
reorganization expenses
|
|
|
180
|
1,374
|
Allowance for
doubtful debt in legacy business
|
|
|
1,000
|
3,000
|
Non-GAAP net
Loss
|
|
|
(2,254)
|
(1,850)
|
Non-GAAP
E.P.S
|
|
|
(0.61)
|
(0.71)
|
|
|
|
|
|
Net loss for the
period
|
|
|
(7,457)
|
(10,138)
|
Income tax expense
|
|
|
(299)
|
5
|
Financial expenses (income), net
|
|
|
1,751
|
3,396
|
Depreciation and Amortization
|
|
|
2,660
|
2,316
|
One-time inventory write-off
|
|
|
138
|
298
|
Stock-based compensation expenses
|
|
|
138
|
31
|
Foreign Currency Loss
|
|
|
2,086
|
1,780
|
Allowance for doubtful debt in legacy business
|
|
|
1,000
|
3,000
|
One-time reorganization expenses
|
|
|
180
|
1,374
|
EBITDA *
|
|
|
197
|
2,062
|
* 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)
|
|
|
Three months
ended
|
|
|
|
December
31,
2022
|
December
31,
2021
|
|
|
Unaudited
|
Unaudited
|
|
|
|
|
|
REVENUES
|
|
|
5,122
|
3,034
|
COST OF
REVENUES
|
|
|
(3,481)
|
(1,372)
|
|
|
|
|
|
|
GROSS
PROFIT
|
|
|
1,641
|
1,662
|
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
Research
and development
|
|
|
662
|
892
|
Selling
and marketing
|
|
|
542
|
451
|
General
and administrative
|
|
|
1,328
|
1,236
|
Other
expense, net
|
|
|
1,138
|
3,685
|
|
|
|
|
|
Total operating
expenses
|
|
|
3,670
|
6,264
|
|
|
|
|
|
|
OPERATING
LOSS
|
|
|
(2,029)
|
(4,602)
|
FINANCIAL EXPENSES,
NET
|
|
|
1,627
|
(830)
|
|
|
|
|
|
|
LOSS BEFORE INCOME
TAX
|
|
|
(402)
|
(5,432)
|
INCOME TAX
EXPENSE
|
|
|
299
|
-
|
|
|
|
|
|
|
NET LOSS FOR THE
PERIOD
|
|
|
(103)
|
(5,432)
|
SUPERCOM LTD.
|
Reconciliation Table
of GAAP to Non-GAAP Figures and EBITDA to net Income
|
(U.S. dollars in
thousands)
|
|
|
Three months
ended
December
31,
|
|
|
2022
|
2021
|
|
|
Unaudited
|
Unaudited
|
GAAP gross
profit
|
|
1,641
|
1,662
|
Amortization of
intangible assets
|
|
89
|
89
|
One-time inventory
write-off
|
|
138
|
298
|
Stock-based
compensation expenses
|
|
17
|
7
|
Non-GAAP gross
profit
|
|
1,885
|
2,056
|
|
GAAP Operating
Loss
|
|
(2,029)
|
(4,602)
|
Amortization of
intangible assets
|
|
549
|
665
|
Stock-based
compensation expenses
|
|
138
|
31
|
One-time
inventory write-off
|
|
138
|
298
|
Foreign Currency
Loss
|
|
607
|
585
|
One-time
reorganization expenses
|
|
180
|
685
|
Allowance for
doubtful debt in legacy business
|
|
1,000
|
3,000
|
Non-GAAP operating
profit
|
|
583
|
662
|
GAAP net
Loss
|
|
|
(103)
|
(5,432)
|
Amortization of
intangible assets
|
|
|
549
|
665
|
Stock-based
compensation expenses
|
|
|
138
|
31
|
One-time
inventory write-off
|
|
|
138
|
298
|
Foreign Currency
Loss
|
|
|
607
|
585
|
Income tax
expense
|
|
|
(299)
|
-
|
One-time
reorganization expenses
|
|
|
180
|
685
|
Allowance for
doubtful debt
|
|
|
1,000
|
3,000
|
Non-GAAP net Profit
(Loss)
|
|
|
2,210
|
(168)
|
Non-GAAP
E.P.S
|
|
|
0.53
|
(0.10)
|
|
|
|
|
|
|
|
Net loss for the
period
|
|
|
(103)
|
(5,432)
|
Income tax expense
|
|
|
(299)
|
-
|
Financial expenses (income), net
|
|
|
(1,627)
|
585
|
Depreciation and Amortization
|
|
|
732
|
815
|
One-time inventory write-off
|
|
|
138
|
298
|
Stock-based compensation expenses
|
|
|
138
|
31
|
Foreign Currency Loss
|
|
|
607
|
585
|
Allowance for doubtful debt in legacy business
|
|
|
1,000
|
3,000
|
One-time reorganization expenses
|
|
|
180
|
685
|
EBITDA
*
|
|
|
766
|
567
|
* 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
.
|
View original
content:https://www.prnewswire.com/news-releases/supercom-reports-69-yoy-quarterly-revenue-growth-for-the-fourth-quarter-2022-301803080.html
SOURCE SuperCom