SuperCom Reports Full Year 2020 Financial Results

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.

 

 

 

Cision View original content:http://www.prnewswire.com/news-releases/supercom-reports-full-year-2020-financial-results-301281179.html

SOURCE SuperCom Ltd

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