SPCB SuperCom Ltd

 

SuperCom Reports Record Profit with 183% QoQ Net Income Growth and

EPS of $0.06 for Q2 2024

 Revenue of $7.5 million; Record Net Income of $2.2 million; Positive Operating Cash Flow

of $2 million

Tel Aviv, Israel, August 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 June 30, 2024.

Second Quarter Ended June 30, 2024, Financial Highlights (Compared to the Second Quarter of 2023)

 

First Half Ended June 30, 2024, Financial Highlights (Compared to the First Half of 2023)

 

Recent Business Highlights:

 

 

 

 

 

 

 

 

Management Commentary:

 

"We are proud to announce another strong quarter, marked by significant achievements across key financial and operational metrics. This quarter, we delivered substantial improvements in gross profit, operating income, and net income – culminating once again in record-breaking profitability. Our ability to reach gross profit margins of nearly 50% as we advance through various stages of our projects is a testament to the efficiency of our operations and the high-margin nature of our offerings," commented Ordan Trabelsi, President and CEO of SuperCom.

 

"Our strategic focus on cost optimization and capital management, combined with our innovative approach to technology deployment, has driven a significant turnaround in our bottom line. The 183% quarter-over-quarter growth in net income to $2.2 million, along with positive operating cash flows of $2 million this quarter, underscores our commitment to driving sustainable profitability. We also strengthened our balance sheet with significant increases in cash. This quarter's results highlight the success of our efforts to leverage our operational infrastructure while continuously delivering value to our customers," Ordan continued.

 

"The recent business wins, including over $11 million in new orders from European governments and several significant new contracts in North America, highlight our leadership in the public safety sector and our ability to penetrate new markets with our cutting-edge solutions. Particularly noteworthy is our successful displacement of long-time incumbents in the judicial sector, showcasing the superiority of our PureOne technology. As we continue to expand our global footprint, these wins are expected to contribute meaningfully to our top line in the coming quarters," Ordan added.

 

"As we move further into 2024, our focus remains on leveraging our innovative solutions and robust market presence to drive further expansion and deliver value to our shareholders. We are excited about the opportunities ahead and believe in our ability to maintain our momentum," Ordan concluded.

Conference Call

Conference Call Dial-In Information:

Date:	Thursday, August 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/2259/51056

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.

[Tables to follow]

		As of June 30,				As of December 31,
		2024				2023
		Unaudited				Audited
CURRENT ASSETS
Cash and cash equivalents			5,727				5,206
Restricted bank deposits			368				371
Trade receivable, net			16,524				13,357
Patents			5,283				5,283
Other accounts receivable and prepaid expenses			1,780				1,742
Inventories, net			2,782				2,503
Total current assets			32,464				28,462
LONG-TERM ASSETS
Deferred tax long term			919				501
Property and equipment, net			2,889				2,701
Other intangible assets, net			5,251				5,576
Operating lease right-of-use assets			1,025				487
Goodwill			7,026				7,026
Total long-term assets			17,110				16,291
Total Assets			49,574				44,753
CURRENT LIABILITIES
Trade payables and other credit			2,345				1,883
Employees and payroll accruals			1,121				1,015
Related parties			-				100
Accrued expenses and other liabilities			517				485
Short-term operating lease liabilities			975				401
Short-term credit			715				792
Deferred revenues ST			695				726
Total current liabilities			6,368				5,403
LONG-TERM LIABILITIES
Long-term loan			29,181				33,952
Deferred revenues			49				305
Deferred tax liability LT			170				170
Long-term operating lease liabilities			-				108
Total long-term liabilities			29,400				34,535
SHAREHOLDERS' EQUITY:
Ordinary shares			21,970				9,094
Additional paid-in capital			95,822				102,670
Accumulated deficit			(103,986				(106,948	)
Total shareholders' equity			13,806				4,816
Total liabilities and equity			49,574				44,754

		Three months ended
		June 30, 2024				June 30, 2023
		Unaudited				Unaudited
REVENUES			7,545				7,748
COST OF REVENUES			(3,802	)			(5,482	)
GROSS PROFIT			3,743				2,266
OPERATING EXPENSES:
Research and development			999				849
Selling and marketing			686				556
General and administrative			1,359				1,290
Other expense, net			315				229
Total operating expenses			3,359				2,924
OPERATING PROFIT (LOSS)			384				(658	)
FINANCIAL INCOME, NET			1,804				(397	)
INCOME BEFORE INCOME TAX			2,188				(1,055	)
INCOME TAX EXPENSE			-				-
NET PROFIT (LOSS) FOR THE PERIOD			2,188				(1,055	)
Net Profit (loss) Per Share			0.06				(0.21	)

		Three months ended
		June 30, 2024				June 30, 2023
		Unaudited				Unaudited
GAAP gross profit			3,743				2,266
Amortization of intangible assets			89				89
Non-GAAP gross profit			3,832				2,355
GAAP Operating profit (loss)			384				(658	)
Amortization of intangible assets			552				452
Foreign Currency Loss			153				378
Non-cash or one-time expenses			359				559
Non-GAAP operating profit			1,448				731
GAAP net profit (loss)			2,189				(1,055	)
Amortization of intangible assets			552				452
Foreign Currency Loss			153				378
Non-cash or one-time expenses			359				559
Non-GAAP net profit			3,253				334
Non-GAAP E.P.S.			0.09				0.07
Net profit (loss) for the period			2,189				(1,055	)
Financial expenses (income), net			(1,805	)			397
Depreciation and Amortization			730				609
Foreign Currency Loss			153				378
Non-cash or one-time expenses			359				559
EBITDA *			1,626				888

* EBITDA is a non-GAAP financial measure generally defined as earnings before interest,tax, depreciation and amortization and other non-cash or one-time expenses.

		Six months ended
		June 30, 2024				June 30, 2023
		Unaudited				Unaudited
REVENUES			14,397				14,124
COST OF REVENUES			(6,867	)			(10,276	)
GROSS PROFIT			7,530				3,848
OPERATING EXPENSES:
Research and development			1,900				1,662
Selling and marketing			1,210				1,128
General and administrative			2,748				2,374
Other expense (income), net			570				405
Total operating expenses			6,428				5,569
OPERATING PROFIT (LOSS)			1,102				(1,721	)
FINANCIAL INCOME, NET			1,443				(869	)
PROFIT (LOSS) BEFORE INCOME TAX			2,545				(2,590	)
INCOME TAX BENEFIT			418				-
NET PROFIT (LOSS) FOR THE PERIOD			2,963				(2,590	)
Net Profit (loss) Per Share			0.11				(0.66	)

		Six months ended
		June 30, 2024				June 30, 2023
		Unaudited				Unaudited
GAAP gross profit			7,530				3,848
Amortization of intangible assets			177				177
Non-GAAP gross profit			7,707				4,025
GAAP Operating Loss			1,102				(1,721	)
Amortization of intangible assets			1,065				983
Foreign Currency Loss			353				898
Non-cash or one-time expenses			639				788
Non-GAAP operating profit			3,159				948
GAAP net Loss			2,963				(2,590	)
Amortization of intangible assets			1,065				983
Foreign Currency Loss			353				898
Income tax benefit			(418	)			-
Non-cash or one-time expenses			639				788
Non-GAAP net Loss			4,602				79
Non-GAAP E.P.S.			0.17				0.02
Net profit loss for the period			2,963				(2,590	)
Financial expenses (income), net			(1,443	)			869
Income tax benefit			(418	)			-
Depreciation and Amortization			1,497				1,307
Foreign Currency Loss			353				898
Non-cash or one-time expenses			639				788
EBITDA *			3,591				1,272