TEL AVIV, Israel, Nov. 11, 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 September 30, 2021 ("Q3 2021").

Third Quarter 2021 Financial Highlights (Compared to the average results of third and fourth quarter 2020¹):

Revenue increased to $3,108 million from $2,487 million
Gross margin increased to 34.9% from 27.3%.
Cash and cash equivalents at end of Q3 2021 was $6.3 million
Working Capital at end Q3 2021 was $23.9 million

Recent Business Highlights:

On July 2021, launched a new project in California, USA valued at up to $4 million over up to 5 years to provide Juvenile programming and rehabilitation services.
Won new project with probation department in California, USA valued at up to $1 million, providing rehabilitation services with an emphasis on employment services for women supporting those reentering the community from periods of incarceration. Project is expected to launch before the end of 2021.
Won and launched new project in California, USA valued at up to $240,000 per year, providing Juvenile Programing and Rehabilitative Services for out of custody juvenile programming.
Won $3.6 million national electronic monitoring project in Finland, through a competitive national RFP process, and scoring highly by offering SuperCom's proprietary PureSecurity Electronic Monitoring Suite.
Experienced an increase in market activity in SuperCom's IOT segment, resulting in new proposal submissions, RFPs and interest in SuperCom's 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 SuperCom's unique offerings for the USA market.
Launched new HR programs to attract top talent and are actively recruiting and building world class engineering teams to build SuperCom's next generation tracking and monitoring products.
Released new generations and capabilities to SuperCom's smartphone-based monitoring products and solutions including support for new OS and mobile phone architectures
Revenue in the USA continued to grow and revenues in Africa continued to decline, consistent with SuperCom's business plan to shift focus from Africa to the USA and Europe.

Management Commentary:

"We are encouraged by our accomplishments in the third quarter which further demonstrate the continued execution of our strategy to expand our footprint and positioning in our niche market of IOT tracking solutions for the public safety market. During the quarter, we had two new wins in California, USA for our offerings and launched another sizable project in California as well valued at up to $4 million. In Europe we won another national electronic monitoring project in Finland, valued at $3.6 million and have seen an increase in RFP activity with release of some government restrictions related to COVID. This can allow us to continue with consistent new electronic monitoring project wins on top of the over 30 new project wins we've had in this space in recent years. Incremental revenues from these contracts offset declines from our legacy business of electronic identification mainly in Africa. We've been able to replace those legacy revenues with new customer revenues in the USA and Europe, per our long-term strategy, and in-addition generate growth this quarter," commented Ordan Trabelsi, President and CEO of SuperCom.

"The momentum we are seeing in our IoT Tracking segment is driven on one hand by correctional institutions looking for alternative solutions for the challenges associated with overpopulated prisons. And on the other hand, by our proprietary technology offerings which score highly on competitive tenders and help us displace incumbent vendors in countries around the world. Our electronic monitoring solutions address the challenges related to overcrowding, provide substantial cost savings, and reduce recidivism among offenders promoting public safety in communities around the world," continued Ordan.

"We believe our investments in research and development, as well as in sales and marketing, are paying off as we are seeing continued interest in our IoT products, which we expect will drive continued growth in the long-term. While the sales cycles for these contract wins can be long, the resulting business typically lasts for years, providing steady streams of recurring revenue. We are confident that we will continue to see a healthy amount of new projects and wins in the space as we continue gaining market share and expanding our footprint," Ordan concluded.

Conference Call

The company will hold a conference call today (November 11, 2021) at 8:30 a.m. Eastern time (3:30 p.m. Israel time) to discuss these results, followed by a question and answer session.

Conference Call Dial-In Information:

Date:                           Thursday, November 11, 2021

Time:                           8:30 a.m. Eastern time (5:30 a.m. Pacific time) (3:30pm Israel time)

U.S. toll-free:              888-506-0062 (Passcode: 846371)

Israel toll-free:           1-809-423-853 (Passcode: 846371)

International:             973-528-0011

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

¹ SuperCom was not required to and did not report its Q3 2020 financial results and accordingly, comparable Q3 2020 financial results are not available without unreasonable effort and expense. In order to provide a reasonable comparison, an average of the Company's financial quarterly results for its third and fourth quarters of 2020 is presented.

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.

Results presented in this press release are based on management's estimated unaudited analysis of financial results for the presented periods. SuperCom's independent registered accounting firm has not audited the financial data discussed in this press release. During the course of SuperCom's quarter- and fiscal year-end closing procedures and review process, SuperCom may identify items that would require it to make adjustments, which may be material, to the information presented in this press release. As a result, the estimate financial results constitute forward-looking information and are subject to risks and uncertainties, including possible adjustments to such results.

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 to follow]

SUPERCOM LTD.
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)

	September 30,	December 31,
	2021	2020
	Unaudited	Audited

CURRENT ASSETS
Cash and cash equivalents	5,246	3,137
Restricted bank deposits	1,035	815
Trade receivable, net	14,387	12,427
Patents	5,283	5,283
Other accounts receivable and prepaid expenses	1,507	876
Inventories, net	3,966	2,404

Total current assets	31,424	24,942

LONG-TERM ASSETS
Severance pay funds	391	531
Deferred tax long term	204	204
Customer Contracts	1,015	1,250
Software and other IP	2,561	2,677
Other Asset, net	2,334	2,343
Goodwill	7,026	7,026
Property & equipment, net	1,668	1,371
Total long-term assets:	15,199	15,402

Total Assets	46,623	40,344

CURRENT LIABILITIES
Short-term loans and other	1,004	7,204
Trade payables	2,010	2,860
Employees and payroll accruals	2,256	2,627
Related parties	164	1,749
Accrued expenses and other liabilities	1,531	4,393
Deferred revenues ST	514	766
Short-term liability for future earn-out	-	-

Total current liabilities	7,479	19,598

LONG-TERM LIABILITIES

Long-term bank loan	29,510	14,952
Accrued severance pay	499	656
Related Parties	-	-
Deferred tax liability	170	170
Deferred revenues	49	49

Total long-term liabilities	30,228	15,827

SHAREHOLDERS' EQUITY:
Ordinary shares	1,928	1,397
Additional paid-in capital	97,025	88,853
Accumulated deficit	(90,037)	(85,331)

Total shareholders' equity	8,916	4,919

Total liabilities and equity	46,623	40,344

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

	Three months ended
	September 30, 2021	Average of Q3 and Q4 2020²


REVENUES	3,108	2,487
COST OF REVENUES	(2,022)	(1,808)

GROSS PROFIT	1,086	679

OPERATING EXPENSES:
Research and development	625	700
Selling and marketing	457	374
General and administrative	1,107	1,310
Other expense (income), net	689	552

Total operating expenses	2,878	2,936

OPERATING PROFIT (LOSS)	(1,792)	(2,257)
FINANCIAL EXPENSES, NET	(647)	(1,486)

LOSS BEFORE INCOME TAX	(2,439)	(3,743)
INCOME TAX EXPENSE	-	(2)

NET LOSS FOR THE PERIOD	(2,439)	(3,745)

² SuperCom was not required to and did not report its Q3 2020 financial results and accordingly, comparable Q3 2020 financial results are not available without unreasonable effort and expense. In order to provide a reasonable comparison, an average of the Company's financial quarterly results for its third and fourth quarters of 2020 is presented.

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, 2021
	Unaudited


GAAP gross profit	1,086
Amortization of Software and IP	88
Non-GAAP gross profit	1,174

GAAP Operating Profit (Loss)	(1,792)
Amortization of Software and IP, Customer Contracts and Brand	380
Foreign Currency Loss	538
One-time expense related to settlement of old dispute	689

Non-GAAP operating profit(loss)	(185)
GAAP net Loss	(2,439)
Amortization of Software and IP, Customer Contracts and Brand	380
Foreign Currency Loss	538
Income tax expense(benefit)	-
One-time expense related to settlement of old dispute	689

Non-GAAP net Profit (Loss)	(832)
Non- GAAP EPS Shares used in calculation: Basic and Diluted	$ (0.03) 26,234,102
NET LOSS FOR THE PERIOD	(2,439)
Income tax expense (benefit)	-
Financial expenses (income), net	647
Depreciation and Amortization	512
Foreign Currency Loss	538
One-time expense related to settlement of old dispute	689
EBITDA *	(53)

* *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)

		Nine months ended September 30, 2021
		Unaudited


REVENUES		9,233
COST OF REVENUES		(4,691)

GROSS PROFIT		4,542

OPERATING EXPENSES:
Research and development		1,871
Selling and marketing		1,204
General and administrative		2,913
Other expense (income), net		689

Total operating expenses		6,677

OPERATING PROFIT (LOSS)		(2,135)
FINANCIAL EXPENSES, NET		(2,566)

LOSS BEFORE INCOME TAX		(4,701)
INCOME TAX EXPENSE		(5)

NET LOSS FOR THE PERIOD		(4,706)

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, 2021
			Unaudited


GAAP gross profit			4,542
Amortization of Software and IP			264
Non-GAAP gross profit			4,806

GAAP Operating Profit (Loss)			(2,135)
Amortization of Software and IP, Customer Contracts and Brand			1,135
One time inventory write off			34
Foreign Currency Loss			1,195
One-time expense related to settlement of old dispute			689

Non-GAAP operating profit(loss)			918

GAAP net Loss			(4,706)
Amortization of Software and IP, Customer Contracts and Brand			1,135
One time inventory write off			34
Foreign Currency Loss			1,195
Income tax expense(benefit)			5
One-time expense related to settlement of old dispute			689

Non-GAAP net Profit (Loss)			(1,648)

NET LOSS FOR THE PERIOD			(4,706)
Income tax expense (benefit)			5
Financial expenses (income), net			2,566
Depreciation and Amortization			1,501
One time inventory write-off			34
Foreign Currency Loss			1,195
One-time expense related to settlement of old dispute			689
EBITDA *			1,284

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

SuperCom Investor Relations: ir@supercom.com

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SOURCE SuperCom Ltd

SuperCom Reports Third Quarter 2021 Financial Results