SPCB SuperCom Ltd

Revenue of $7.5 million; Record Net Income of $2.2 million; Positive Operating Cash Flow of $2 million

TEL AVIV, Israel, Aug. 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)

• Revenue was $7.5 million compared to $7.7 million.
• Gross Profit surged by 65.2% to $3.7 million from $2.3 million.
• Gross Profit margin expanded by 20.4% percentage points to 49.6% from 29.2%.
• Net Income improved by $3.3 million to $2.2 million from Net Loss of ($1.1) million.
• Net Income margin surged to 29% from (13.6%).
• Cash Flows from Operating Activities increased by $5.3 million to positive $2 million from negative ($3.3 million).
• EPS improved by $0.27 to $0.06 from Negative EPS of ($0.21).
• Non-GAAP Net Income surged 874% to $3.3 million from $0.33 million.
• Non-GAAP EPS improved to $0.09 from $0.07.
• EBITDA increased by 83% to $1.6 million from $0.9 million.

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

• Revenue was $14.4 million compared to $14.1 million.  
• Gross profit increased by 95.7% to $7.5 million from $3.8 million.
• Gross Profit margin nearly doubled to 52.3% from 27.2%.
• Operating Income improved by $2.8 million to $1.1 million from Operating Loss of ($1.7) million.
• Net Income improved by $5.6 million to $3.0 million from Net Loss of ($2.6) million.
• Net Income margin improved to 20.6% from (18.3%).
• Non-GAAP Net Income surged $4.5 million to $4.6 million from $0.1 million
• Non-GAAP EPS improved to $0.17 from Non-GAAP EPS of $0.02.
• EBITDA improved by 182% to $3.6 million from $1.3 million.

Recent Business Highlights:

• The company has received new orders totaling over $11.0 million from European governments. These orders are expected to be delivered by the end of 2024, further solidifying SuperCom's leadership in the public safety sector across Europe.
• 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, secured a new North California contract to provide housing and evidence-based case management services to youth and individuals transitioning from housing. The contract is projected to generate nearly $500,000 annually, marking SuperCom's fourth North American contract win in 2024 and further expanding its role in rehabilitative services and secure solutions.
• SuperCom secured a $1.8 million contract with a long-term government customer, continuing a decade-long partnership. The contract underscores SuperCom's ability to maintain strong relationships and deliver consistent, high-quality solutions in the e-Government sector.
• SuperCom, through its wholly owned subsidiary, LCA, won a new project in California valued at up to $2.0 million to provide a comprehensive jail-based program focusing on re-entry services aimed at reducing recidivism. This project, won through a competitive bid process, marks an expansion into a new county and is expected to generate approximately $400,000 in annual recurring revenue over five years.
• 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.

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
The Company will hold a conference call today (August 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:                               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 

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. 

SuperCom Investor Relations:
ir@supercom.com

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SOURCE SuperCom