SuperCom Announces Availability of its Annual Report on Form 20-F

May 18, 2016, 14:30 ET from SuperCom

HERZLIYA, Israel and NEW YORK, May 18, 2016 /PRNewswire/ --

SuperCom (NASDAQ: SPCB), a leading provider of secure solutions for the e-Government, Public Safety, HealthCare, and Finance sectors, announced today that it has filed its Annual Report on Form 20-F with the U.S. Securities and Exchange Commission. This report contains, among other information, audited financial results for the twelve months ended December 31, 2015, which may be found in summary at the bottom of this release and supersede any previously released financial information provided by the Company.

In addition, this report provides disclosure on the conclusion of the Company's negotiations with On Track Innovations Ltd. ("OTI"), with respect to the earn-out liability and other claims, and it entering into a settlement agreement with OTI. As part of this agreement, the remaining earn-out related to SuperCom's acquisition of OTI's SmartID division which closed on December 23, 2013 was reduced from the remaining maximum contractual amount of $10.7 million to a maximum of $3.55 million, out of which an amount of up to $2.05 million was paid at the beginning of May 2016, and the remaining amount of $1.5 million will be subject to the original earn-out mechanism.

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 arising from the annual audit by management and the Company's independent auditors. 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)
   

                                                      Year ended December 31,
                                                        2015            2014
                                                      Audited          Audited
    CURRENT ASSETS
    Cash and cash equivalents                         22,246           4,789
    Restricted bank deposits                           3,274           5,195
    Trade receivable, net                             15,122          11,628
    Deferred tax short term                            2,639           3,958
    Other accounts receivable and prepaid expenses     1,199           1,190
    Inventories, net                                   3,602           1,614

    Total current assets                              48,082          28,374

    LONG-TERM ASSETS
    Severance pay funds                                  216             325
    Deferred tax long term                             1,433             301
    Property & equipment, net                            888             616
    Customer Contracts                                 4,052           4,587
    Software and other IP                              4,595           4,949
    Other Intangible assets                            1,988              -
    Goodwill                                           4,688           3,722

    Total Assets                                      65,942          42,874

   
    CURRENT LIABILITIES
    Trade payables                                     3,705           2,892
    Employees and payroll accruals                     1,488             944
    Related parties                                       77             341
    Accrued expenses and other liabilities             2,917           2,755
    Advances from customers                               -            2,864
    Short-term liability for future earn-out           2,051           2,870

    Total current liabilities                         10,238          12,666

    LONG-TERM LIABILITIES
    Long-term liability for future earn-out              931           1,477
    Accrued severance pay                                341             425

    Total long-term liabilities                        1,272           1,902

    SHAREHOLDERS' EQUITY:
    Ordinary shares                                     1,053            937
    Additional paid-in capital                         83,201         58,210
    Accumulated deficit                               (29,822)       (30,841)

    Total shareholders' equity                         54,432         28,306

                                                       65,942         42,874

 

                             SUPERCOM LTD.
                    CONSOLIDATED STATEMENTS OF OPERATIONS   

             (U.S. dollars in thousands, except per share data)
   
                                                        Year ended December 31,
                                                          2015           2014
                                                        Audited        Audited

    Revenues                                            28,340         29,703
    Cost of revenues                                    10,446          7,301
    Gross profit                                        17,894         22,402

    Operating expenses:
    Research and development                             3,669          3,359
    Selling and marketing                                6,611          7,036
    General and administrative                           3,947          2,773
    Other expenses                                       2,174[1]       1,225
    Total operating expenses                            16,401         14,393

    Operating income                                     1,493          8,009

    Financial expenses, net                               (277)          (133)

    Income before income tax                             1,216          7,876
    Income tax expense                                    (197)        (1,675)

    Net income                                           1,019          6,201

    Net earnings per share:
    Basic                                                 0.07         $ 0.46
    Diluted                                               0.07         $ 0.45

    Weighted average number of
    ordinary shares used                                    
    in computing basic earnings per share           15,047,496     13,560,490
    Weighted average number of
    ordinary shares used in
    computing diluted earnings per                   
    share                                           15,202,303     13,662,151

  1. Other expenses increased to $2.174m, primarily resulting from a conversion of total outstanding receivables from a certain customer, which amount to approximately $1.6m, to doubtful debt. The Company is in ongoing contact with the customer and will continue to make efforts to collect this full amount.  

 


                                            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   December 31
                                                            2015           2014

    GAAP gross profit                                     17,894         22,402
    Amortization of Software and IP                          354            354
    Stock-based compensation expenses                        309             -

    Non-GAAP gross profit                                 18,557         22,756

    GAAP operating income                                  1,493          8,009
    Expenses related to doubtful debts                     1,576          1,225
    Amortization of Software and IP                          354            354
    Stock-based compensation expenses                      1,528             -
    Amortization of Customer Contracts                       917          1,158
    Expense related transaction DD                           598             -
    Non-GAAP operating income                              6,446         10,746

    GAAP net income                                        1,019          6,201
    Expenses related to doubtful debts                     1,576          1,225
    Amortization of Software and IP                          354            354
    Stock-based compensation expenses                      1,528             -
    Amortization of Customer Contracts                       917          1,158
    Income tax expense                                       197          1,675
    Expense related transaction DD                           598             -
    Non-GAAP net income                                    6,189         10,613

    Non-GAAP Basic EPS                                      0.41           0.81

     GAAP net income for the period                         1,019          6,201
    Income tax expense                                       197          1,675
    Financial expenses, net                                  277            133
    Expenses related to doubtful debts                     1,576          1,225
    Depreciation and amortization                          3,201          1,788
    Expense related transaction DD                           598             -
    EBITDA *                                               6,868         11,022

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

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

SOURCE SuperCom