Revenue of $3.2 million reflecting year-over-year and sequential quarterly growth
SuperCom (NASDAQ: SPCB), a global provider of secured solutions for the e-Government, IoT, and Cybersecurity sectors, today reported results for the second quarter of 2022 ended June 30, 2022.
Second Quarter Ended June 30, 2022, Financial Highlights (Compared to the Second Quarter of 2021)
- Revenue increased to $3.2 million from $3.1 million in the second quarter of last year, and from $3.0 million in the first quarter of 2022. Additional progress was achieved on replacing the revenue decline from the legacy business with new revenues from the IoT business.
- Gross margin of 40% compared to 58%, reflecting the high transitional costs associated with deploying new IoT projects ahead of the start of the associated recurring revenue streams, and the temporarily higher costs of material and shipping due to disruptions in the global supply chain.
- Research and Development expenses increased to $0.93 million compared to $0.59 million, reflecting increased investment in R&D to enhance existing solutions and to develop new products in the IoT and Cyber Security sectors.
- Sales and Marketing expenses of $0.76 million compared to $0.38 million, reflecting investment in proactive sales strategy to expand SuperCom’s footprint in the European and North American markets.
- General and Administrative expenses of $1.3 million compared to $1.0 million, reflecting growth in the Company’s overall operations.
- EBITDA of -$0.72 million compared to $0.68 million, reflecting an increase in COGS and operating expenses to support the launch of new projects and the Company’s global growth plan.
- Non-GAAP EPS of -$0.05.
- Cash and cash equivalents and restricted cash was $3.9 million on June 30, 2022, compared to $4.6 million at the end of 2021.
Recent Business Highlights:
- Won a new EM contract in Kentucky with a leading private probation services provider, which facilitates SuperCom’s strategic expansion into the Southeast US. The first order of over 50 units has already been placed and is expected to start generating recurring revenues soon.
- Signed a second and a third new GPS monitoring contract in Idaho with two County Juvenile Departments, which will use SuperCom’s PureTrack GPS smartphone products to monitor their caseload for location compliance.
- Won a contract with a new customer in Southern California to deploy SuperCom’s PureSecurity Electronic Monitoring Suite. The new customer is a long-standing provider of products and services to the Criminal Justice market with operations primarily in Southern California.
- Secured a new GPS monitoring contract in Texas to monitor juvenile probation clients.
- Awarded a contract with the Swedish National Board of Institutional Care for a full-scale high-security Juvenile electronic monitoring project to deploy SuperCom’s PureSecurity Electronic Monitoring (EM) Suite. This project marks SuperCom’s third national electronic monitoring project in Sweden and its fifth national project in the Nordic countries.
- Won and launched Croatia’s first full-scale electronic monitoring project in the country, which will deploy SuperCom’s PureSecurity Electronic Monitoring Suite. The project was formally awarded earlier this year through a formal bid process conducted by Croatia’s Ministry of Justice and Administration.
- Won and launched new projects in California, US valued at up to over $5 million over five years to provide programming and rehabilitation services to various organizations.
- Secured a new governmental electronic monitoring contract in Wyoming. The contracting agency is an Adult and Juvenile Probation Agency with plans to use SuperCom’s PureTrack GPS smartphone products to monitor their caseload for location compliance.
- Continued to strengthen the Company’s global sales division, now headed by a new VP of sales and sales managers with industry expertise, to execute an active outreach sales strategy.
- Maintained increased investment in the Company’s R&D division, with experienced engineers, product managers and quality assurance personnel, with expertise to serve the Company’s growing government customer base.
Management Commentary:
“We continued to progress on multiple fronts in the second quarter. Revenue reached $3.2 million, reflecting year-over-year growth and 5.5% quarterly sequential growth as well. Revenue growth was driven by new project launches in Europe and North America, as well as new orders with existing customers. Moreover, the IoT division grew faster than the decline in the legacy business again this quarter. Our focus on the IoT tracking business continues to drive our expansion on top of a strong customer base generating roughly 83% recurring revenue in recent years,” commented Ordan Trabelsi, President and CEO of SuperCom.
“Over the past few months, we were awarded new contracts in Idaho, California, Texas, and Kentucky in the US, as well as in Croatia and Sweden in Europe. With each new contract win, we continue to expand our reach and brand awareness leading to more wins in both adjacent and distant locations,” Mr. Trabelsi continued.
“Near term, we expect to layer in new revenue from our many new contract wins. We only recently won a number of them and expect that the associated revenue will only begin to contribute to our financial results in the coming quarters. We also expect our significant investments in R&D to continue to pay off as we maintain our leading edge in technology and release new products, while our new proactive sales approach expedites our market expansion. The unique nature of our industry provides resilience through market cycles and volatile economic conditions. We believe that this, together with our high win rates in competitive RFPs and steady recurring revenue base, provides strong tailwinds through potential recessionary environments and continued growth in the years ahead,” concluded Mr. Trabelsi.
Conference Call
The Company will hold a conference call today, August 9, 2022, at 8:30 a.m. Eastern time (3:30 p.m. Israel time) to discuss the second quarter results, followed by a question and answer session.
Conference Call Dial-In Information:
Date: Tuesday, August 9, 2022
Time: 8:30 a.m. Eastern Time / 5:30 a.m. Pacific Time / 3:30 p.m. Israel Time
U.S. toll-free: 877-545-0523
Israel toll-free: 1-809-423-853
International: 973-528-0016
Access Code: 583763
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization.
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