SuperCom Reports 141% YoY Revenue Growth and 5-Year-Record Revenue for the Second Quarter 2023

Q2 2023: 5-Year-Record Revenue of $7.7 million, Non-GAAP EPS of $0.07, & EBITDA of $0.9 million; Trailing-Twelve-Month-Period: Revenue of $25.5 million & EBITDA of $2.5 million

TEL AVIV, Israel, July 31, 2023 /PRNewswire/ -- SuperCom (NASDAQ: SPCB), a global provider of secured solutions for the e-Government, IoT, and Cybersecurity sectors, today reported financial and operating results for the three and six months ended June 30, 2023. 

Second Quarter Ended June 30, 2023, Financial Highlights (Compared to the Second Quarter of 2022)

• Revenue increased by 141% to $7.7 million from $3.2 million, marking a fourth consecutive quarter of high year-over-year ("YoY") revenue growth.
• Gross profit increased by 77% to $2.3 million from $1.3 million.
• Positive EBITDA* improved to $0.9 million compared to -($0.7) million.
• Net Income improved by 63% to a $1.1 million loss compared to a $2.8 million loss.
• Non-GAAP Net Income* improved to a $0.3 million profit compared to a $1.9 million loss.
• Non-GAAP EPS* improved to $0.07 compared to -($0.50).
• Working Capital at end of quarter was $21.2 million.

Trailing-Twelve-Month Period Ended June 30, 2023, Financial Highlights (Compared to the prior twelve month period)

• Revenue increased by 106% to $25.5 million from $12.4 million.
• EBITDA* increased to $2.5 million from -($0.25) million.
• Net Income increased to –($4.9) million from -($13.0) million.

First Half Ended June 30, 2023, Financial Highlights (Compared to the First Half of 2022)

• Revenue increased by 126% to $14.1 million from $6.3 million.  
• Gross profit increased by 47% to $3.9 million from $2.6 million.
• Net Income improved by 50% to a $2.6 million loss compared to a $5.2 million loss
• Non-GAAP Net Income* improved to $0.1 million profit compared to ($3.4) million loss.
• EBITDA* improved to $1.3 million profit compared to a ($1.0) million loss.
• Non-GAAP EPS* improved to positive $0.02 compared to negative Non-GAAP EPS of ($0.70).

Recent Business Highlights:

• SuperCom is well on track with the implementation of the recently awarded $33 Million national electronic monitoring ("EM") project in Romania. SuperCom's PureSecurity EM Suite was deployed for domestic violence monitoring, GPS Tracking of offenders, and a home detention monitoring program. As the project continues to progress, the company expects to see an upward trend in gross margins on subsequent orders for this project.
• SuperCom's wholly owned subsidiary, LCA, won a $4.25 million contract to provide adult reentry services in a Northern California, USA county. The project began in Q1 2023, expanding LCA's existing day reporting and electronic monitoring services to include jail-based and community-based sites. The project is actively servicing clients and generating recurring revenues.
• SuperCom launched a $3.6M national EM project in Finland with the national government in Q1 2023. By May 2023, the PureSecurity EM Suite was fully deployed in Finland, covering all EM offender programs – house arrest, GPS, and inmate monitoring. 
• SuperCom launched a new project in Iceland, upgrading the company's deployed system to support secured issuance of National ID cards and passports.
• SuperCom announced the integration of advanced AI technologies into its PureSecurity platform, enhancing data analysis, automation, and predictive monitoring capabilities. These innovations aim to optimize decision-making, improve operational efficiency, and redefine industry standards in electronic monitoring for the criminal justice sector.
• SuperCom reached a significant milestone by completing the development and multiple successful deployments of PureProtect, a life-saving domestic violence monitoring solution. This innovative solution addresses domestic violence issues and further enhances the company's portfolio of products and services.
• SuperCom successfully launched PureOne, its best-of-breed all-in-one GPS tracking ankle-bracelet monitoring solution. This product not only expands the Company's addressable market but also may facilitate its rapid expansion into the US market.
• The company is strategically prioritizing the expansion of PureOne into new markets and geographies. It has already received high praise during its introduction into various regions of the USA, where PureOne has been successfully deployed and is actively utilized to monitor live offenders. Moreover, sales activities for PureOne have commenced in promising new markets outside Europe and North America.

Management Commentary:

"We are excited to announce breakthrough performance for Q2 2023, where we outperformed expectations on multiple fronts. Our efforts have catapulted us to new heights, realizing a substantial 141% YoY revenue growth, as well as record breaking quarterly revenue of $7.7 million and non-GAAP EPS of $0.07. Furthermore, this quarter closes an exceptional trailing-twelve-month period boasting $25.5 million in revenue and $2.5 million in EBITDA, underscoring our focus on sustained growth and profitability," commented Ordan Trabelsi, President and CEO of SuperCom.

"Our achievements are a testament to the unwavering dedication of our global multidisciplinary team in pursuing and executing groundbreaking public safety projects. Notably, the first national electronic monitoring project in Romania, valued at $33 million, and other lucrative recent new projects in Sweden, Finland, Croatia and California have contributed significantly to our success. When combined with a high recurring revenue base, a rapidly-growing track record of excellence, and our state-of-the-art proprietary technology suite, these accomplishments reinforce the positive trends driving our business," continued Ordan.

"SuperCom's proprietary technology has been a game-changer in competitive tenders worldwide, enabling us to displace incumbent vendors and make a significant impact on public safety around the globe. Our steadfast commitment to technology superiority is evident in our recent incorporation of AI capabilities into our products, along with the continuous launch of innovations such as the recent PureProtect and PureOne solutions. These efforts propel our business growth and solidify our path towards industry leadership. Our astute investments in research & development and sales & marketing have paved the way for global opportunities, enabling us to deliver exceptional value to our clients as we charge ahead resolutely towards our long-term strategic objectives," Ordan concluded.

Conference Call

SuperCom will hold a conference call today (July 31, 2023) at 8:30  a.m. Eastern time (3:30 p.m. Israel time) to discuss the company's financial and operating results for its quarter ended June 30, 2023, followed by a question and answer session.

Conference Call Dial-In Information:

Date:                                Monday, July 31, 2023
Time:                                8:30 a.m. Eastern time (5:30 a.m. Pacific time)
U.S. toll-free:                    888-506-0062
Israel toll-free:                  1-809-423-853
International:                    973-528-0011
Link:                                 https://www.webcaster4.com/Webcast/Page/2259/48786

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 https://www.supercom.com/

SuperCom Investor Relations:
[email protected]

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, 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.

*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.

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SOURCE SuperCom