“As we have previously reported, our first quarter results were impacted by delays associated with macro-economic conditions in certain emerging markets where we are deploying large long-term government systems, which were mostly resolved in the second quarter, as well as a significant increase in the consolidated operating expenses caused by our recent acquisitions, which we are in the process of optimizing as we have done historically,” commented Arie Trabelsi, SuperCom’s President and CEO. “Despite these factors, we are encouraged by both our near- and long-term opportunities and are making progress with customers and potential customers. In addition, we expect our broader product lines and expanded global customer base to provide us with a more robust sales opportunities pipeline in the future, which is less sensitive to macro-economic conditions in specific countries or regions.”
First Quarter and YTD Operational Highlights
M2M(IoT) division completed the acquisition of Leaders in Community Alternatives (LCA), adding more than 25 years of electronic monitoring experience and an established base of customers, within the U.S. Since the closing of the LCA acquisition, we have integrated SuperCom’s PureSecurity technology solutions into LCA’s existing customer base and have monitored over 200 offenders in California using SuperCom’s proprietary technology SuperCom acquired Safend, a Cyber and data security company, giving SuperCom a more established cybersecurity presence with thousands of valuable customers and leading product offerings in their space, and it has since the acquisition reached an annual run-rate of recurring bookings from existing customers of over $2 millionSubsequent to the end of the quarter, the Secured Payment Solution division acquired PowaPOS, a market-leading point-of-sale platform purpose-built to meet market demand for mobile and tablet-based payments, with potential deployments in more than 20 countries, and it has reached over $1 million in orders in the first month post-acquisition Subsequent to the end of the quarter, SuperCom acquired Alvarion, a provider of autonomous Wi-Fi networks with a proven record of reliability and performance in over 25,000 sites in more than 95 countries. Since last year, SuperCom grew its experience and relationships with a customer base consisting primarily of over 20 governments to currently over 30,000 customers including governments and banks, telecom providers, retail chains and other enterprises in over 100 countries.
Mr. Trabelsi added, “We continue to advance our stated growth strategy of providing a more integrated offering to customers through complementary and interconnected products and solutions. We believe there is significant opportunity to sell these expanded solutions to both government and enterprise customers using our existing sales channels. These new capabilities and offerings are complementary to, and interconnected with, our core business and should provide us with opportunities to increase our operating leverage.”
Mr. Trabelsi concluded, “Subsequent to the end of the first quarter, we have made significant progress to integrate our recent acquisitions and are beginning to leverage a number of synergies which we believe will pave the way for improved financial results in the quarters to come.”
Results Conference Call
The Company will host a conference call, today, Wednesday July 6, 2016, at 10:00 a.m. Eastern time to review the Company’s financial results and business outlook.
To participate, interested investors should call one of the following telephone numbers. It is recommended that participants dial in at least five minutes before the start of the call:
US:
1-866-932-0173
at 10 a.m. Eastern Time
Israel:
1-80-925-6145
at 5 p.m. Israel Time
International:
1-785-424-1630
A live and archived webcast of the call will be available on the SuperCom investor relations website at http://www.supercom.com.
About SuperCom
Since 1988, SuperCom has been a leading 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.
SuperCom’s website is http://www.supercom.com
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 16, 2016. 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)
March 31,
December 31,
2016
2015
Unaudited
Audited
CURRENT ASSETS
Cash and cash equivalents
11,222
22,246
Restricted bank deposits
4,249
3,274
Trade receivable, net
17,009
15,122
Deferred tax short term
1,391
2,639
Other accounts receivable and prepaid expenses
1,504
1,199
Inventories, net
3,190
3,602
Total current assets
38,565
48,082
LONG-TERM ASSETS
Severance pay funds
242
216
Deferred tax long term
4,194
1,433
Customer Contracts
6,507
4,052
Software and other IP
4,507
4,595
Goodwill
6,948
4,688
Other Intangible assets
2,436
1,988
Property & equipment, net
992
888
Total Assets
64,391
65,942
CURRENT LIABILITIES
Trade payables
3,131
3,705
Employees and payroll accruals
1,884
1,488
Related parties
33
77
Accrued expenses and other liabilities
2,848
2,917
Advances from customers
69
–
Short-term liability for future earn-out
2,445
2,051
Total current liabilities
10,410
10,238
LONG-TERM LIABILITIES
Long-term liability for future earn-out
719
931
Deferred tax liability long term
198
–
Accrued severance pay
435
341
Total long-term liabilities
1,352
1,272
SHAREHOLDERS’ EQUITY:
Ordinary shares
1,023
1,053
Additional paid-in capital
81,349
83,201
Accumulated deficit
(29,743)
(29,822)
Total shareholders’ equity
52,629
54,432
64,391
65,942
SUPERCOM LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except per share data)
Three months ended
March 31,
2016
2015
Unaudited
Unaudited
REVENUES
5,867
7,700
COST OF REVENUES
5,003
2,302
GROSS PROFIT
864
5,398
OPERATING EXPENSES:
Research and development
1,189
677
Selling and marketing
1,931
1,401
General and administrative
1,596
716
Other expenses
-2,606
–
Total operating expenses
2,110
2,794
OPERATING INCOME (LOSS)
-1,246
2,604
FINANCIAL EXPENSES (INCOME) , NET
56
-6
INCOME BEFORE INCOME TAX
1,302
2,610
INCOME TAX EXPENSES
1,381
548
NET INCOME FOR THE PERIOD
79
2,062
Basic
0.01
0.15
Diluted
0.01
0.15
Weighted average number of ordinary shares
15,130,490
13,742,586
used in computing basic income per share
Weighted average number of ordinary shares
15,219,619
13,875,938
used in computing diluted income per share
SUPERCOM LTD.
Reconciliation Table of GAAP to Non-GAAP figures and EBITDA to Net Income
(U.S. dollars in thousands)
Three months ended
March 31,
2016
2015
Unaudited
Unaudited
GAAP gross profit
864
5,398
Amortization of Software and IP
89
89
Stock-based compensation expenses
86
37
Non-GAAP gross profit
1,039
5,524
GAAP operating income (expense)
-1,246
2,604
Amortization of Software and IP
89
89
Amortization of Customer Contracts
191
230
Stock-based compensation expenses
489
175
Expense related transaction DD
108
–
Expense for doubtful debt
-800
–
Non-GAAP operating income (loss)
-1,169
3,098
GAAP net income
79
2,062
Amortization of Software and IP
89
89
Amortization of Customer Contracts
191
230
Stock-based compensation expenses
489
175
Expense related transaction DD
108
–
Expense for doubtful debt
-800
–
Non-GAAP net income
156
2,556
Non-GAAP EPS
0.01
0.15
NET INCOME FOR THE PERIOD
79
2,062
Income tax expenses (income), net
-1,381
548
Financial expenses (income), net
56
-6
Depreciation , amortization and stock-based compensation expenses
988
510
Expense related transaction DD
108
–
Expense for doubtful debt
-800
–
EBITDA *
-950
3,114
* EBITDA is a non-GAAP financial measure generally defined as earnings before interest, taxes, depreciation and amortization.
(U.S. dollars in thousands)
Investor Relations Contacts:
Brett Maas / Rob Fink
Hayden IR
+1-(646)-536.7331 / +1-(646)-415-8972
brett@haydenir.com / rob@haydenir.com
Company Contact:
Ordan Trabelsi, President Americas
Tel: +1-212-675-4606
ordan@supercom.com
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/supercom-reports-first-quarter-2016-financial-results-300294619.html
SOURCE SuperCom Ltd
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