TEL AVIV, Israel, Aug. 10, 2021 /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, 2021.

Second Quarter 2021 Financial Highlights (Compared to the First Quarter of 2021):

Revenue increased to $3,093 million from $3,032 million.
Gross margin increased to 57.6% from 55.3%.
EBITDA increased to $684,000 from $652,000.
EBITDA margin increased to 22.1% from 21.5%.
Cash and cash equivalents increased to $10.9 million from $9 million.

Recent Business Highlights:

Won new project in California valued at up to $4 million providing support to offenders reentering the community from periods of incarceration with objective of driving a reduction in recidivism, which represents continued growth in demand for the various offerings in our IoT Tracking segment.
Won $3.6 million national electronic monitoring project in Finland, through a competitive national RFP process, and scoring high by offering our proprietary PureSecurity Electronic Monitoring Suite.
Experienced an increase in market activity in our IOT segment, resulting in more RFPs and interest in our proprietary IOT segment technology and service offerings in Europe and the USA.
Opened a new office in Kentucky, with new sales, sales support and tech support resources tailored to our unique offerings for the USA market. Since the beginning of the second quarter, received requests to demo and evaluate our proprietary technology from over 15 new USA potential customers.
Launched new HR programs to attract top talent and are actively recruiting and building world class engineering teams to build our next generation tracking and monitoring products
Released new generations and capabilities to our smartphone based monitoring products and solutions including support for new OS and mobile phone architectures.
Experienced continued high customer retention and strong relationships with existing customers across all 3 business segments.
Closed $5 million financing, which will also help support the Company's growth strategy.

Management Commentary:

"In the second quarter, we achieved sequential quarterly improvements in revenue and margins in parallel to winning new projects and increasing our investment in long-term growth. We continued to see momentum in our IoT Tracking segment as correctional institutions are increasingly looking at alternative solutions to address challenges associated with overpopulated prisons. Our remote monitoring solutions, which enable offenders to serve sentences in home confinement, are not only successful in addressing the overpopulated prisons issue, but also enable these institutions to experience substantial cost savings while also reducing recidivism among offenders," said Ordan Trabelsi, President and CEO of SuperCom.

"Given the recent surge in COVID cases driven also by the spread of the delta variant, many countries are considering another round of lockdowns and associated quarantine measures to help fight the spread of coronavirus. Accordingly, we are still seeing interest in our PureCare solution as governments look for an effective solution to help them implement appropriate quarantine compliance measures," continued Ordan.

"At the end of the quarter, we closed $5 million in additional financing that consists of a two-year unsecured promissory note. Our financings help provide the upfront capital required to support new project deployments, while continuing to invest in growth, taking advantage of the opportunities we see in the market. We continue to execute on our business plan to offer exceptional value to our existing customers and to potential new ones as we expand our global footprint," concluded Ordan.

Conference Call

The company will hold a conference call today (August 10, 2021) at 8:30 a.m. Eastern time (3:30 p.m. Israel time) to discuss these results, followed by a question and answer period.

Conference Call Dial-In Information:

Date: Tuesday, August 10, 2021

Time: 8:30 a.m. Eastern time (5:30 a.m. Pacific time)

U.S. toll-free: 877-545-0320 (Passcode: 514587)

Israel toll-free: 1-809-423-853 (Passcode: 514587)

International: 973-528-0016

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization.

SuperCom Investor Relations:

ir@supercom.com

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.

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, 2020, filed with the U.S. Securities and Exchange Commission (the "SEC") on April 30, 2021, 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)

	June 30,	December 31,
	2021	2020
	Unaudited	Audited

CURRENT ASSETS
Cash and cash equivalents	9,419	3,137
Restricted bank deposits	1,462	815
Trade receivable, net	13,574	12,427
Patents	5,283	5,283
Other accounts receivable and prepaid expenses	874	876
Inventories, net	3,567	2,404

Total current assets	34,179	24,942

LONG-TERM ASSETS
Severance pay funds	404	531
Deferred tax long term	204	204
Customer Contracts	1,094	1,250
Software and other IP	2,472	2,677
Other Asset, net	2,290	2,343
Goodwill	7,026	7,026
Property & equipment, net	1,628	1,371
Total long-term assets:	15,118	15,402

Total Assets	49,297	40,344

CURRENT LIABILITIES
Short-term loans and other	1,909	7,204
Trade payables	1,872	2,860
Employees and payroll accruals	2,558	2,627
Related parties	359	1,749
Accrued expenses and other liabilities	2,642	4,393
Deferred revenues ST	329	766
Short-term liability for future earn-out	-	-

Total current liabilities	9,669	19,599

LONG-TERM LIABILITIES

Long-term bank loan	28,536	14,952
Accrued severance pay	520	656
Related Parties	-	-
Deferred tax liability	170	170
Deferred revenues	49	49

Total long-term liabilities	29,275	15,827

SHAREHOLDERS' EQUITY:
Ordinary shares	1,862	1,397
Additional paid-in capital	96,089	88,853
Accumulated deficit	(87,598)	(85,331)

Total shareholders' equity	10,353	4,919

Total liabilities and equity	42,297	40,004

SUPERCOM LTD. CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. dollars in thousands)

	Three months ended
	June 30, 2021	March 31, 2021


REVENUES	3,093	3,032
COST OF REVENUES	(1,313)	(1,356)

GROSS PROFIT	1,780	1,676

OPERATING EXPENSES:
Research and development	589	657
Selling and marketing	377	370
General and administrative	976	830
Other expense (income), net	-	-

Total operating expenses	1,942	1,857

OPERATING PROFIT (LOSS)	(162)	(182)
FINANCIAL EXPENSES, NET	(797)	(1,122)

LOSS BEFORE INCOME TAX	(959)	(1,303)
INCOME TAX EXPENSE	(5)	-

NET LOSS FOR THE PERIOD	(964)	(1,303)

Net loss Per Share:
Basic and Diluted	(0.04)	(0.05)
Shares used in calculation:
Basic and Diluted	25,882,526	24,843,049

SUPERCOM LTD. Reconciliation Table of GAAP to Non-GAAP Figures and EBITDA to Net Income (U.S. dollars in thousands)

	Three months ended
	June 30, 2021	March 31, 2021
	Unaudited	Unaudited

GAAP gross profit	1,780	1,676
Amortization of Software and IP	88	88
Stock-based compensation expenses	-	-
Non-GAAP gross profit	1,868	1,764

GAAP Operating Profit (Loss)	(162)	(182)
Amortization of Software and IP, Customer Contracts and Brand	378	377
Stock-based compensation expenses	-	-
One time inventory write off	-	34
Foreign Currency Loss	342	315
Allowance for doubtful debt	-	-

Non-GAAP operating profit(loss)	558	544

GAAP net Loss	(964)	(1,303)
Amortization of Software and IP, Customer Contracts and Brand	378	377
Stock-based compensation expenses	-	-
One time inventory write-off	-	34
Foreign Currency Loss	342	315
Income tax expense(benefit)	5	-
Allowance for doubtful debt	-	-

Non-GAAP net Profit (Loss)	(239)	(578)

NET LOSS FOR THE PERIOD	(964)	(1,303)
Income tax expense (benefit)	5	-
Financial expenses (income), net	797	1,122
Depreciation and Amortization	504	485
One time inventory write off	-	34
Stock-based compensation expenses	-	-
Foreign Currency Loss	342	315
Allowance for doubtful debt	-	-
EBITDA *	684	652

* EBITDA is a non-GAAP financial measure generally defined as earnings before interest, taxes, depreciation, and amortization.

SUPERCOM LTD. CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. dollars in thousands)

	Six months ended
	June 30, 2021	June 30, 2020
	Unaudited	Audited

REVENUES	6,125	6,796
COST OF REVENUES	(2,669)	(2,573)

GROSS PROFIT	3,456	4,223

OPERATING EXPENSES:
Research and development	1,246	987
Selling and marketing	747	973
General and administrative	1,806	1,453
Other expense (income), net	-	45

Total operating expenses	3,799	3,458

OPERATING PROFIT (LOSS)	(343)	765
FINANCIAL EXPENSES, NET	(1,919)	(1,141)

LOSS BEFORE INCOME TAX	(2,262)	(376)
INCOME TAX EXPENSE	(5)	-

NET LOSS FOR THE PERIOD	(2,267)	(376)

SUPERCOM LTD. Reconciliation Table of GAAP to Non-GAAP Figures and EBITDA to Net Income (U.S. dollars in thousands)

	Six months ended
	June 30, 2021	March 31, 2020
	Unaudited	Audited

GAAP gross profit	3,456	4,223
Amortization of Software and IP	177	177
Stock-based compensation expenses	-	-
Non-GAAP gross profit	3,633	4,400

GAAP Operating Profit (Loss)	(343)	765
Amortization of Software and IP, Customer Contracts and Brand	755	459
Stock-based compensation expenses	-	-
One time inventory write off	34	-
Foreign Currency Loss	657	805
Allowance for doubtful debt	-	-

Non-GAAP operating profit(loss)	1,103	2,029

GAAP net Loss	(2,267)	(376)
Amortization of Software and IP, Customer Contracts and Brand	755	459
Stock-based compensation expenses	-	-
One time inventory write off	34	-
Foreign Currency Loss	657	805
Income tax expense(benefit)	5	-
Allowance for doubtful debt	-	-

Non-GAAP net Profit (Loss)	(817)	888

NET LOSS FOR THE PERIOD	(2,267)	(376)
Income tax expense (benefit)	5	-
Financial expenses (income), net	1,919	1,141
Depreciation and Amortization	988	980
One time inventory write-off	34	-
Stock-based compensation expenses	-	-
Foreign Currency Loss	657	805
Allowance for doubtful debt	-	-
EBITDA *	1,336	2,550

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SOURCE SuperCom Ltd

SuperCom Reports Second Quarter 2021 Financial Results