SuperCom Reports Record Profit and 400% YoY EBITDA Growth for the First Quarter 2024

Revenue of $6.9 million; Net Income of $0.8 million; EBITDA of $2 million

TEL AVIV, Israel, May 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 March 31, 2024. 

First Quarter Ended March 31, 2024, Financial Highlights (Compared to the First Quarter of 2023)

• Revenue increased by 8% to $6.9 million from $6.4 million.
• Gross Profit increased by 139% to $3.8 million from $1.6 million.
• Gross Profit margin increased by 123% to 55% from 25%.
• Operating Income improved by $1.8 million to $0.7 million compared to an Operating Loss of ($1.1) million.
• Operating Margin improved by 27.2 percentage points to 10.5% from negative margin of (16.7%).
• Net Income improved by $2.3 million to $0.8 million compared to Net Loss of ($1.5) million.
• EPS improved by $0.36 to positive $0.04 compared to Negative EPS of ($0.32).
• Non-GAAP Net Income improved by $1.6 million to $1.35 million compared to Net Loss of ($0.25) million.
• Non-GAAP EPS improved by $0.12 to positive $0.07 compared to Negative ($0.05)
• EBITDA increased by 400% to $2 million from $0.4 million.
• Working Capital at the end of the quarter of $23.6 million.

Recent Business Highlights:

• The Company has received over $5.0 million in new orders from European governments.
• 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, won new project in California valued at up to $2.0 million to provide a comprehensive program focusing on re-entry services for adult inmates, designed to support individuals transitioning back into the community. The award is a result of winning a formal competitive bid process.
• SuperCom launched a $4.25 million contract to provide adult re-entry services in Northern California through its wholly-owned subsidiary, LCA. The project expanding LCA's existing day reporting and electronic monitoring services to include jail-based and community-based sites.
• 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.
• SuperCom launched a $3.6M national EM project in Finland with the national government in 2023. The PureSecurity EM Suite is fully deployed in Finland, covering all EM offender programs – house arrest, GPS, and inmate monitoring. SuperCom has also expanded its footprint in Finland by securing and launching a national program for the Electronic Monitoring of Domestic Violence offenders. This program leverages SuperCom's cutting-edge PureSecurity Suite to empower Finnish authorities to enhance citizen safety.

Management Commentary:

"We are pleased to report a strong start to 2024, marked by significant financial and operational achievements. This quarter, we've continued to see revenue growth YoY and a dramatic improvement in our profitability metrics leading to an 8-year-record profit," commented Ordan Trabelsi, President and CEO of SuperCom.

"The substantial growth in our gross profit reflects the inherent quality and high-margin potential of our key projects and our successful progression through different stages of these projects. Typically, the initial stages of these projects involve higher expenses, which subsequently give way to higher gross margins as the projects advance, as demonstrated by this quarter's results. Additionally, our EBITDA year-over-year has seen a remarkable 400% increase. This improvement is a testament to our rigorous management practices and dedication to effectively leveraging our core business infrastructure," Ordan continued.

"Net income has also shown a significant turnaround, with a $2.3 million improvement from a net loss of $1.5 million last quarter to a net profit of $0.8 million this quarter, underscoring our successful strategy and execution. Our ability to continue a positive expansion trajectory is further evidenced by the over $5 million in new orders from European governments and three new projects in the USA and Canada in the past few months. This influx of new business reflects our competitive edge and ability to displace incumbents with our superior technology and service offerings. As we continue to expand our presence in both established and new markets, these projects are expected to contribute to growth and support our reputation as a leader in the industry," Ordan added.

"Moving forward into 2024, we remain committed to leveraging our innovative technology solutions and strategic market initiatives to drive expansion, deliver value to our shareholders, and enhance the safety and efficiency of the communities we serve," Ordan concluded.

Conference Call

The Company will hold a conference call today (May 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: Wednesday, May 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/2259/50596

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.

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SuperCom Investor Relations:

[email protected]

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SOURCE SuperCom