"Coupled with our strong organic growth and diversification of revenue, we have also been able to realize key operational synergies across our recently acquired businesses and divisions to dramatically improve gross and EBITDA margins. Compared to the third quarter of 2016, gross margins have increased by 60%, SG&A costs are down by 34%, and our core non-GAAP operating expenses, which exclude other income, have reached a low of approximately $3.8 million per quarter. For the first time since early 2016, we've achieved positive GAAP EPS, GAAP net income and EBITDA," Mr. Trabelsi continued.
"Moving forward, we remain confident in our ability to keep this positive momentum going through the remainder of this year and into 2018. As always, our focus will be on generating long-term sustainable growth through the successful implementation of our business plan with the goal of increasing value for SuperCom's shareholders," Mr. Trabelsi concluded.
Third Quarter 2017 and Recent Operational Highlights by Business Segment:
e-Gov:
IoT and Connectivity:
Cyber Security:
Financial Outlook
Based on the current information available to the company, SuperCom management reaffirmed its revenue guidance of at least $35 million for the full year ending December 31, 2017, representing an increase of 75% compared to 2016.
Conference Call
The company will hold a conference call today (October 30, 2017) at 10:00 a.m. Eastern time (7:00 a.m. Pacific time / 4:00 p.m.Israel time) to discuss these results and financial outlook.
SuperCom management will host the call, followed by a question and answer period.
U.S. toll-free: 1-800-967-7143
Israel toll-free: 180-925-8350
International: 1-913-312-0867
Conference ID: 1977984
Webcast: http://public.viavid.com/index.php?id=126919
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.
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 facts. Forward-looking statements in this release also include statements about business and economic trends. Investors should also consider the areas of risk described under the heading "Forward Looking Statements" and those factors captioned as "Risk Factors" in the Company's periodic reports under the Securities Exchange Act of 1934, as amended, or in connection with any forward-looking statements that may be made by the Company. These statements are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company's filings with the Securities and Exchange Commission (SEC), including the Company's Annual Report on Form 20-F filed with the SEC on May 24, 2017. The Company undertakes no 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) |
||||
September 30, |
December 31, |
|||
2017 |
2016 |
|||
Unaudited |
Audited |
|||
CURRENT ASSETS |
||||
Cash and cash equivalents |
831 |
1,708 |
||
Restricted bank deposits |
394 |
1,110 |
||
Trade receivable, net |
13,011 |
10,310 |
||
Deferred tax short term |
1,558 |
1,567 |
||
Other accounts receivable and prepaid expenses |
5,261 |
2,500 |
||
Inventories, net |
6,123 |
5,965 |
||
Total current assets |
27,178 |
23,160 |
||
LONG-TERM ASSETS |
||||
Severance pay funds |
344 |
282 |
||
Deferred tax long term |
3,141 |
2,656 |
||
Customer Contracts |
3,761 |
4,684 |
||
Software and other IP |
5,376 |
5,987 |
||
Goodwill |
7,026 |
7,026 |
||
Patents |
5,283 |
5,283 |
||
Other Intangible assets |
3,565 |
3,230 |
||
Property & equipment, net |
815 |
1,165 |
||
Total Assets |
56,489 |
53,473 |
||
CURRENT LIABILITIES |
||||
Short-term bank credit |
282 |
- |
||
Trade payables |
5,567 |
3,958 |
||
Employees and payroll accruals |
4,014 |
2,948 |
||
Related parties |
402 |
56 |
||
Accrued expenses and other liabilities |
3,528 |
3,497 |
||
Deferred revenues Short term |
1,652 |
1,633 |
||
Deferred tax liability short term |
122 |
156 |
||
Short-term liability for future earn-out |
970 |
679 |
||
Total current liabilities |
16,537 |
12,927 |
||
LONG-TERM LIABILITIES |
||||
Long-term loan and others |
446 |
- |
||
Long-term liability for future earn-out |
946 |
946 |
||
Deferred revenues long term |
485 |
423 |
||
Deferred tax liability long term |
351 |
|||
Accrued severance pay |
565 |
453 |
||
Total long-term liabilities |
2,793 |
1,822 |
||
SHAREHOLDERS' EQUITY: |
||||
Ordinary shares |
1,024 |
1,024 |
||
Additional paid-in capital |
81,993 |
81,515 |
||
Accumulated deficit |
(45,858) |
(43,815) |
||
Total shareholders' equity |
37,159 |
38,724 |
||
56,489 |
53,473 |
SUPERCOM LTD. |
||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
||||
(U.S. dollars in thousands, except per share data) |
||||
Three months ended September 30, |
||||
2017 |
2016 |
|||
Unaudited |
Unaudited |
|||
REVENUES |
9,638 |
5,106 |
||
COST OF REVENUES |
4,512 |
3,404 |
||
GROSS PROFIT |
5,126 |
1,702 |
||
OPERATING EXPENSES: |
||||
Research and development |
1,695 |
1,417 |
||
Selling and marketing |
1,724 |
2,494 |
||
General and administrative |
1,202 |
1,934 |
||
Other expenses (income) |
87 |
(1,065) |
||
Total operating expenses |
4,534 |
4,780 |
||
OPERATING INCOME (LOSS) |
592 |
(3,078) |
||
FINANCIAL EXPENSES, NET |
31 |
76 |
||
INCOME (LOSS) BEFORE INCOME TAX |
561 |
(3,154) |
||
INCOME TAX EXPENSES (BENEFIT) |
(53) |
54 |
||
NET INCOME FOR THE PERIOD |
614 |
(3,208) |
||
Basic |
0.04 |
(0.21) |
||
Diluted |
0.04 |
(0.21) |
||
Weighted average number of ordinary shares used in computing basic income per share |
14,938,339 |
15,022,588 |
||
Weighted average number of ordinary shares used in computing diluted income per share |
15,017,308 |
15,106,088 |
SUPERCOM LTD. |
|||||
Reconciliation Table of GAAP to Non-GAAP figures and EBITDA to Net Income |
|||||
(U.S. dollars in thousands) |
|||||
Three months ended |
|||||
September 30, |
|||||
2017 |
2016 |
||||
Unaudited |
Unaudited |
||||
GAAP gross profit |
5,126 |
1,702 |
|||
Amortization of Software and IP |
154 |
130 |
|||
Stock-based compensation expenses |
36 |
54 |
|||
Non-GAAP gross profit |
5,316 |
1,886 |
|||
GAAP operating income (expense) |
592 |
-3,078 |
|||
Amortization of Software and IP |
492 |
164 |
|||
Amortization of Customer Contracts |
308 |
367 |
|||
253 |
110 |
||||
Stock-based compensation expenses |
|||||
Expense related transaction DD |
- |
- |
|||
Restructuring costs related to newly acquired operations |
- |
- |
|||
Non-GAAP operating income (loss) |
1,645 |
-2,437 |
|||
GAAP net income(Loss) |
614 |
-3,208 |
|||
Amortization of Software and IP |
492 |
164 |
|||
Amortization of Customer Contracts |
308 |
367 |
|||
Stock-based compensation expenses |
253 |
110 |
|||
Expense related transaction DD |
- |
- |
|||
Restructuring costs related to newly acquired operations |
- |
- |
|||
Income tax benefit |
-53 |
54 |
|||
Non-GAAP net income(Loss) |
1,614 |
-2,513 |
|||
Non-GAAP EPS |
0.11 |
-0.17 |
|||
NET INCOME FOR THE PERIOD |
614 |
-3,208 |
|||
Income tax expenses (income), net |
-53 |
54 |
|||
Financial expenses (income), net |
31 |
76 |
|||
Depreciation, amortization and stock-based compensation expenses |
1,398 |
910 |
|||
Expense related transaction DD |
- |
- |
|||
Restructuring costs related to newly acquired operations |
- |
- |
|||
EBITDA * |
1990 |
-2,168 |
|||
* 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, except per share data) |
||||
Nine months ended September 30, |
||||
2017 |
2016 |
|||
Unaudited |
Unaudited |
|||
REVENUES |
25,467 |
15,989 |
||
COST OF REVENUES |
13,868 |
12,093 |
||
GROSS PROFIT |
11,599 |
3,896 |
||
OPERATING EXPENSES: |
||||
Research and development |
5,336 |
4,111 |
||
Selling and marketing |
5,995 |
7,005 |
||
General and administrative |
4,393 |
5,371 |
||
Other expenses (income) |
2,404 |
(6,700) |
||
Total operating expenses |
13,320 |
9,787 |
||
OPERATING INCOME (LOSS) |
(1,721) |
(5,891) |
||
FINANCIAL EXPENSES (INCOME), NET |
433 |
186 |
||
INCOME (LOSS) BEFORE INCOME TAX |
(2,154) |
(6,077) |
||
INCOME TAX EXPENSES (BENEFIT) |
(111) |
(1,438) |
||
NET INCOME (LOSS) FOR THE PERIOD |
(2,043) |
(4,639) |
||
Basic |
(0.14) |
(0.30) |
||
Diluted |
(0.14) |
(0.30) |
||
Weighted average number of ordinary shares used in computing basic income per share |
14,938,339 |
15,057,455 |
||
Weighted average number of ordinary shares used in computing diluted income per share |
15,016,582 |
15,143,910 |
SUPERCOM LTD. |
||||||
Reconciliation Table of GAAP to Non-GAAP figures and EBITDA to Net Income |
||||||
(U.S. dollars in thousands) |
||||||
Nine months ended |
||||||
September 30, |
||||||
2017 |
2016 |
|||||
Unaudited |
Unaudited |
|||||
GAAP gross profit |
11,599 |
3,896 |
||||
Amortization of Software and IP |
460 |
349 |
||||
Stock-based compensation expenses |
153 |
222 |
||||
Non-GAAP gross profit |
12,212 |
4,467 |
||||
GAAP operating income (expense) |
-1,721 |
-5,891 |
||||
Amortization of Software and IP |
1,325 |
417 |
||||
Amortization of Customer Contracts |
964 |
925 |
||||
Stock-based compensation expenses |
594 |
709 |
||||
Expense related transaction DD |
- |
129 |
||||
Expenses for doubtful debt |
- |
-800 |
||||
Restructuring costs related to newly acquired operations |
- |
340 |
||||
Non-GAAP operating income (loss) |
1,162 |
(4,171 |
||||
GAAP net income(Loss) |
-2,043 |
-4,639 |
||||
Amortization of Software and IP |
1,325 |
417 |
||||
Amortization of Customer Contracts |
964 |
925 |
||||
Stock-based compensation expenses |
594 |
709 |
||||
Expense related transaction DD |
- |
129 |
||||
Expenses for doubtful debts |
- |
-800 |
||||
- |
340 |
|||||
Restructuring costs related to newly acquired operations |
||||||
Income tax benefit |
-111 |
-1,438 |
||||
Non-GAAP net income(Loss) |
729 |
-4,357 |
||||
Non-GAAP EPS |
0.05 |
-0.29 |
||||
NET INCOME FOR THE PERIOD |
-2,043 |
-4,639 |
||||
Income tax expenses (income), net |
-111 |
-1,438 |
||||
Financial expenses (income), net |
433 |
186 |
||||
Depreciation, amortization and stock-based compensation |
3,673 |
2,763 |
||||
Expense for doubtful debt |
- |
-800 |
||||
Expense related transaction DD |
- |
129 |
||||
Restructuring costs related to newly acquired operations |
- |
340 |
||||
EBITDA * |
1,952 |
-3,459 |
||||
* EBITDA is a non-GAAP financial measure generally defined as earnings before interest, taxes, depreciation and amortization. |
SuperCom Corporate Contact:
Ordan Trabelsi, President, Americas
Tel: 1-212-675-4606
This email address is being protected from spambots. You need JavaScript enabled to view it.