HERZLIYA, Israel, May 15, 2017 /PRNewswire/
-- SuperCom (NASDAQ: SPCB), a global provider of secure solutions for the e-Government, Public Safety, HealthCare,
and Finance sectors, announced today its results for the full year 2016 ended December 31,
2016.
Full-Year 2016 Financial Highlights As Compared to full-year 2015
- Revenue of $20.3 million compared to $28.3 million
- EBITDA loss totaled ($8.25 million) compared to EBITDA of $6.9
million
- Non-GAAP Net Loss of ($9.55 million) compared to Non-GAAP Net Income of $6.2 million
- GAAP Net Loss of $11.251 million compared to GAAP Net Income of $1.02
million
- R&D operating expenses of $6.72 million compared to $3.67
million
- Total Assets of $56.65 million compared to $65.94 million as of
December 31, 2015
Second Half 2016 Financial Highlights As Compared to Second Half 2015
- Revenue of $9.45 million compared to $12.9 million
- EBITDA loss totaled ($7.02 million) compared to EBITDA of $1.36
million
- Non-GAAP Net Loss of ($7.71 million) compared to Non-GAAP Net Income of $0.9 million
- GAAP Net Loss of ($9.89 million) compared to GAAP Net Income of $2.13
million
- R&D operating expenses of $4.02 million compared to $2.16
million
Based on the current information available to the Company, management expects that revenue for first quarter 2017 will surpass
$8 million, an over 35% increase compared to the first quarter 2016.
Arie Trabelsi, SuperCom's President and CEO commented, "2016 was a difficult year, but one in
which we made substantial progress positioning the Company for longer- term sustained growth. Unfortunately, our
consolidated revenue and margins for the year were impacted by macro-economic challenges faced by our customers in developing
countries, and the challenges associated with our integration of several newly acquired distressed businesses."
Mr. Trabelsi continued, "While our financial results were disappointing, with the four acquisitions consummated in 2016 at
attractive valuations, we expanded our addressable markets, enhanced the quality and diversity of our revenue base, and broadened
our technology offering. SuperCom has strategically transformed from being primarily a secured electronic ID company for
government identity programs at the beginning of 2016 to becoming a leading provider of e-government and security solutions
across multiple high growth markets including national identity, electronic offender monitoring and cyber security. We are
also now also able to support these markets with state of the art WiFi and secure payment technologies. "
Mr. Trabelsi continued, "An important evolution in 2016 is the shift to higher quality revenue with a healthier mix to support
long term growth. Based on current visibility, we expect the percentage of our steady-state revenues from developed markets
to grow from less than 5% in 2015 to close to 50% in 2017. Additionally, we expect the percentage of steady-state revenues
contributed from our M2M, Cybersecurity, Secured Connectivity and Payments businesses to rise from less than 10% of total sales
in 2015 to close to 50% in 2017. Our customer base which historically derived mainly from government customers, today includes
top enterprises from various industries including banking, telecom, finance and retail around the world. As a result, we are
becoming less sensitive to volatility in emerging markets and geopolitical environments and building a stronger foundation on
which to substantially grow our business."
Mr. Trabelsi concluded, "Finally, during the course of the year we enhanced our technology and IP. At the beginning of
2016 we had under 7 patents and today we have 119] granted patents, most of which are in the USA. Our expanded IP across
high growth markets provides technology competitive advantages and new opportunities to drive sustained growth. Although
the ongoing integration efforts and process of converting billings into recognizable revenue have not yet delivered the
anticipated financial benefits, we expect growth in revenues and we will continue to focus on capitalizing on operational
efficiencies to drive enhanced margins and shareholder value. We are optimistic that our results will be more reflective of
these efforts as we progress through 2017."
Full Year 2016 and YTD 2017
General:
- Diversified the customer base previously consisting primarily of 20 national governments to now include over 30,000
customers including governments and banks, telecom providers, retail chains and other enterprises in over 100 countries.
- Completed four strategic acquisitions which expanded and enhanced our product offerings and target markets: Leaders of
Community Alternatives (LCA), Safend, the PowaPOS business, and Alvarion.
e-Gov:
- December 2016: Launched $9M Secure Web Land Geographical Information System
project in Colombia, with deployment expected to be completed and transitioned to steady-state
in July 2018.
- Previously delayed deployments picked up pace; completed large-scale e-ID deployment in Africa and have started to generate steady-state recurring revenues; another large scale deployment is on
track to completion and beginning of steady-state this year.
- March 2017: Awarded $3 million contract to provide various core
elements of our flexible electronic-ID solutions.
M2M:
- PureSecurity offender monitoring suite has won competitive bids for EM projects and contracts in 7 new countries globally
since summer 2015.
- Expanded PureSecurity presence in North America with deployments in Ohio, California, and Canada via
partnerships with leading, local-based electronic monitoring service providers.
- LCA was awarded electronic monitoring contracts in Marin county and two new counties in
California, further expanding its presence in North America;
integrated SuperCom's PureSecurity technology to monitor over 1,000 offenders in California.
- December 2016: LCA awarded a contract valued between $750 thousand to $2.5
million for community-based services in a new county in California.
- March 2017: Awarded an EM contract in Ontario, Canada valued
at up to $1.7 million in revenues.
- March 2017: Selected by the Czech Republic's Ministry of
Justice, for a $3.7 million national EM project.
Cyber Security:
- Safend restored its global distribution channels and relationships with its long term customer base including sophisticated
Fortune 500 enterprises; sold tens of thousands of new licenses to new customers; achieved quarterly sales bookings of
approximately $1.35 million in Q4 2016.
- Safend and Alvarion have collaborated to launch a new secure Wi-Fi platform for enterprises, creating a trusted platform
with multiple factor authentication to fight cyber-attacks and malicious entry into private networks.
- Rebranded PowaPOS product line to VeloPOS, a point-of-sale product which meets market demand for an all-in-one mobile and
traditional payment POS, enhanced by our product strategy to include proprietary cyber security capabilities and features.
Connectivity and Payments
- 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.
- Launched a Mobile e-Wallet Solution with VeriFone and Nofshonit for one of Israel's
largest loyalty clubs with over one million active clients
Financial Outlook
Based on the current information available to the Company, management expects that revenue for first quarter 2017 will surpass
$8 million, an over 35% increase compared to the first quarter 2016.
Based on the current information available to the Company, management re-affirms its belief that revenue for the full year
2017 will surpass $35 million, an approximately 75% increase compared to 2016.
Results Conference Call
The Company will host a conference call, today, Monday May 15, 2017, at 10 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- 877-407-9124
|
at 10 a.m. Eastern Time
|
Israel:
|
1- 809 406 247
|
at 5 p.m. Israel Time
|
International:
|
1- 201-689-8584
|
|
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.
[Tables follow]
SUPERCOM LTD.
|
CONSOLIDATED BALANCE SHEETS
|
(U.S. dollars in thousands)
|
|
|
|
December 31,
|
|
December 31,
|
|
|
2016
|
|
2015
|
|
|
Unaudited
|
|
Audited
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
Cash and cash equivalents
|
|
1,708
|
|
22,246
|
Restricted bank deposits
|
|
1,110
|
|
3,274
|
Trade receivable, net
|
|
11,174
|
|
15,122
|
Deferred tax short term
|
|
869
|
|
2,639
|
Other accounts receivable and prepaid expenses
|
|
3,730
|
|
1,199
|
Inventories, net
|
|
5,965
|
|
3,602
|
|
|
|
|
|
Total current assets
|
|
24,556
|
|
48,082
|
|
|
|
|
|
LONG-TERM ASSETS
|
|
|
|
|
Severance pay funds
|
|
282
|
|
216
|
Deferred tax long term
|
|
6,016
|
|
1,433
|
Customer Contracts
|
|
4,684
|
|
4,052
|
Software and other IP
|
|
5,987
|
|
4,595
|
Goodwill
|
|
7,026
|
|
4,688
|
Other Intangible assets
|
|
6,930
|
|
1,988
|
Property & equipment, net
|
|
1,165
|
|
888
|
|
|
|
|
|
Total Assets
|
|
56,646
|
|
65,942
|
CURRENT LIABILITIES
|
|
|
|
|
Trade payables
|
|
3,958
|
|
3,705
|
Employees and payroll accruals
|
|
2,948
|
|
1,983
|
Related parties
|
|
56
|
|
77
|
Accrued expenses and other liabilities
|
|
3,497
|
|
2,422
|
Deferred revenues
|
|
1,633
|
|
-
|
Short-term liability for future earn-out
|
|
679
|
|
2,051
|
|
|
|
|
|
Total current liabilities
|
|
12,771
|
|
10,238
|
|
|
|
|
|
LONG-TERM LIABILITIES
|
|
|
|
|
Deferred tax liability long term
|
|
652
|
|
-
|
Deferred revenues LT
|
|
423
|
|
-
|
Long-term liability for future earn-out
|
|
946
|
|
931
|
Accrued severance pay
|
|
453
|
|
341
|
|
|
|
|
|
Total long-term liabilities
|
|
2,474
|
|
1,272
|
|
|
|
|
|
SHAREHOLDERS' EQUITY:
|
|
|
|
|
Ordinary shares
|
|
1,024
|
|
1,053
|
Additional paid-in capital
|
|
81,515
|
|
83,201
|
Accumulated deficit
|
|
(41,138)
|
|
(29,822)
|
|
|
|
|
|
Total shareholders' equity
|
|
41,401
|
|
54,432
|
|
|
|
|
|
|
56,646
|
|
65,942
|
SUPERCOM LTD.
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(U.S. dollars in thousands, except per share data)
|
|
|
|
|
|
|
Six months ended
December 31,
|
|
|
|
2016
|
2015
|
|
|
Unaudited
|
Unaudited
|
|
|
|
|
|
REVENUES
|
|
|
9,445
|
12,896
|
COST OF REVENUES
|
|
|
(8,772)
|
(5,330)
|
|
|
|
|
|
GROSS PROFIT
|
|
|
673
|
7,566
|
|
|
|
|
|
OPERATING EXPENSES:
|
|
|
|
|
Research and development
|
|
|
4,024
|
2,159
|
Selling and marketing
|
|
|
5,459
|
3,742
|
General and administrative
|
|
|
3,840
|
1,887
|
Other expenses (income)
|
|
|
(2,864)
|
2,174
|
|
|
|
|
|
Total operating expenses
|
|
|
10,549
|
9,962
|
|
|
|
|
|
OPERATING LOSS(Profit)
|
|
|
9,786
|
2,396
|
FINANCIAL EXPENSES, NET
|
|
|
193
|
166
|
|
|
|
|
|
LOSS BEFORE INCOME TAX
|
|
|
9,979
|
2,562
|
INCOME TAX BENEFIT (EXPENSE)
|
|
|
94
|
433
|
|
|
|
|
|
NET INCOME (LOSS) FOR THE PERIOD
|
|
|
(9,885)
|
2,129
|
SUPERCOM LTD.
|
Reconciliation Table of GAAP to Non-GAAP figures and EBITDA to Net
Income
|
(U.S. dollars in thousands)
|
|
|
|
Six months ended
December 30,
|
|
|
|
2016
|
2015
|
|
|
Unaudited
|
Unaudited
|
|
|
|
|
|
GAAP gross profit
|
|
|
673
|
7,566
|
Amortization of Software and IP
|
|
|
325
|
177
|
Stock-based compensation expenses
|
|
|
99
|
216
|
|
|
|
|
|
Non-GAAP gross profit
|
|
|
1,097
|
7,959
|
|
|
|
|
|
GAAP operating expense
|
|
|
9,786
|
2,396
|
Amortization of Software and IP
|
|
|
387
|
177
|
Amortization of Brand (Alvarion)
|
|
|
41
|
-
|
Amortization of Customer Contracts
|
|
|
830
|
458
|
Stock-based compensation expenses
|
|
|
325
|
650
|
Expense related transaction DD
|
|
|
36
|
598
|
Expenses for doubtful debt
|
|
|
700
|
1,576
|
|
|
|
|
|
Non-GAAP operating income (loss)
|
|
|
(7,467)
|
1,063
|
|
|
|
|
|
GAAP net Loss
|
|
|
9,885
|
2,129
|
Amortization of Software and IP
|
|
|
379
|
177
|
Amortization of Customer Contracts
|
|
|
830
|
458
|
Stock-based compensation expenses
|
|
|
325
|
650
|
Expense related transaction DD
|
|
|
36
|
598
|
Expenses for doubtful debts
|
|
|
700
|
1,576
|
Income tax expense (benefit)
|
|
|
(94)
|
(433)
|
|
|
|
|
|
Non-GAAP net income(Loss)
|
|
|
(7,709)
|
897
|
|
|
|
|
|
NET INCOME FOR THE PERIOD
|
|
|
9,885
|
2,129
|
Income tax benefit (expense)
|
|
|
94
|
433
|
Financial expenses (income), net
|
|
|
193
|
166
|
Depreciation , amortization and stock-based compensation
expenses
|
|
|
2,027
|
1,580
|
Expense for doubtful debt
|
|
|
700
|
1,576
|
Expense related transaction DD
|
|
|
36
|
598
|
|
|
|
|
|
EBITDA *
|
|
|
(7,023)
|
1,358
|
|
|
|
|
|
* 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)
|
|
|
|
Twelve months ended
December 31,
|
|
|
|
2016
|
2015
|
|
|
Unaudited
|
Unaudited
|
|
|
|
|
|
REVENUES
|
|
|
20,382
|
28,340
|
COST OF REVENUES
|
|
|
17,461
|
10,446
|
|
|
|
|
|
GROSS PROFIT
|
|
|
2,867
|
17,894
|
|
|
|
|
|
OPERATING EXPENSES:
|
|
|
|
|
Research and development
|
|
|
6,718
|
3,669
|
Selling and marketing
|
|
|
9,970
|
6,611
|
General and administrative
|
|
|
7,277
|
3,947
|
Other expenses (income)
|
|
|
(8,499)
|
(2,174)
|
|
|
|
|
|
Total operating expenses
|
|
|
(15,466)
|
(16,401)
|
|
|
|
|
|
OPERATING INCOME (LOSS)
|
|
|
(12,599)
|
1,493
|
FINANCIAL EXPENSES , NET
|
|
|
303
|
277
|
|
|
|
|
|
INCOME (LOSS) BEFORE INCOME TAX
|
|
|
(12,902)
|
1,216
|
INCOME TAX EXPENSES (BENEFIT)
|
|
|
(1,586)
|
197
|
|
|
|
|
|
NET INCOME FOR THE PERIOD
|
|
|
11,316
|
1,019
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
(0.75)
|
0.07
|
|
|
|
|
|
Diluted
|
|
|
(0.75)
|
0.07
|
|
|
|
|
|
Weighted average number of ordinary shares
used in computing basic income per share
|
|
|
15,048,812
|
15,047,496
|
|
|
|
|
|
Weighted average number of ordinary shares
used in computing diluted income per share
|
|
|
15,138,620
|
15,202,303
|
SUPERCOM LTD.
|
Reconciliation Table of GAAP to Non-GAAP figures and EBITDA to Net
Income
|
(U.S. dollars in thousands)
|
|
|
|
Twelve months ended
December 31,
|
|
|
|
2016
|
2015
|
|
|
Unaudited
|
audited
|
|
|
|
|
|
GAAP gross profit
|
|
|
2,867
|
17,894
|
Amortization of Software and IP
|
|
|
544
|
354
|
Stock-based compensation expenses
|
|
|
267
|
309
|
|
|
|
|
|
Non-GAAP gross profit
|
|
|
3,678
|
18,557
|
|
|
|
|
|
GAAP operating income (expense)
|
|
|
(12,599)
|
1,493
|
Amortization of Software and IP
|
|
|
632
|
354
|
Amortization of Brand (Alvarion)
|
|
|
49
|
-
|
Amortization of Customer Contracts
|
|
|
1,388
|
917
|
Stock-based compensation expenses
|
|
|
924
|
1,528
|
Expense related transaction DD
|
|
|
165
|
598
|
Expense for doubtful debt
|
|
|
(100)
|
1,576
|
Restructuring costs related to newly acquired operations
|
|
|
340
|
-
|
|
|
|
|
|
Non-GAAP operating income (loss)
|
|
|
(9,201)
|
6,466
|
|
|
|
|
|
GAAP net income(Loss)
|
|
|
(11,316)
|
1,019
|
Amortization of Software and IP
|
|
|
632
|
354
|
Amortization of Customer Contracts
|
|
|
1,388
|
917
|
Stock-based compensation expenses
|
|
|
924
|
1,528
|
Expense related transaction DD
|
|
|
165
|
598
|
Expense for doubtful debt
|
|
|
(100)
|
1,576
|
Income tax benefit
|
|
|
(1,586)
|
197
|
Restructuring costs related to newly acquired
operations
|
|
|
340
|
-
|
|
|
|
|
|
Non-GAAP net income(Loss)
|
|
|
(9,553)
|
6,189
|
|
|
|
|
|
Non-GAAP EPS
|
|
|
(0.63)
|
0.41
|
|
|
|
|
|
NET INCOME FOR THE PERIOD
|
|
|
(11,316)
|
1,019
|
Income tax expenses (income), net
|
|
|
(1,586)
|
197
|
Financial expenses (income), net
|
|
|
303
|
277
|
Depreciation , amortization and stock-based compensation
expenses
|
|
|
3,880
|
3,201
|
Expense related transaction DD
|
|
|
165
|
598
|
Expense for doubtful debt
|
|
|
(100)
|
1,576
|
Restructuring costs related to newly acquired
operations
|
|
|
340
|
|
|
|
|
|
|
EBITDA *
|
|
|
(8,314)
|
6,868
|
|
|
|
|
|
* EBITDA is a non-GAAP financial measure generally
defined as earnings before interest, taxes, depreciation and amortization.
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Company Contact:
Ordan Trabelsi, President Americas
Tel: 1 212 675 4606
ordan@supercom.com
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To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/supercom-reports-full-year-2016-financial-results-300457468.html
SOURCE SuperCom