Super .(SPCB) - 2021 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenues for Q3 2021 were 25% higher than the Q3 2020 average, driven by new projects and a recovery from COVID impacts on existing projects [21] - Gross profit increased to 34.9% in Q3 2021 compared to 27.3% in the Q3 2020 average [22] - Operating loss for Q3 2021 was $1.9 million, an improvement from a loss of$ 2.2 million in Q3 2020 average [23] - Net income for the quarter was a loss of $2.5 million, compared to a loss of$ 3.7 million in the Q3 2020 average [23] - Total cash and cash equivalents as of September 30, 2021, were $6.3 million, down from the previous quarter due to operating losses and working capital increases [24] Business Line Data and Key Metrics Changes - The company has shifted focus from legacy identification business to recurring revenues in developed countries, particularly in IoT tracking [10] - New projects in California include a$ 1 million project for rehabilitative services and a $4 million juvenile programming project, both expected to generate recurring revenue [8][9] - In Europe, the company has won multiple projects, including a$ 3.6 million national electronic monitoring project in Finland and a $7 million project in Sweden, reflecting a strong competitive position [11] Market Data and Key Metrics Changes - The company has seen an uplift in RFP activity in Europe and the U.S., with a win rate of over 65% in competitive RFPs [11] - The electronic monitoring market in the U.S. is fragmented, with numerous local service providers, presenting acquisition opportunities for the company [39] Company Strategy and Development Direction - The company aims to enhance growth through strategic acquisitions in the electronic monitoring market, focusing on local service providers [16] - Investments in research and development continue to ensure competitive technology offerings, with a focus on IoT solutions [12][13] - The company is expanding its sales and marketing teams in the U.S. and Europe to drive growth in IoT solutions [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the market, citing demographic trends that favor electronic monitoring solutions due to budget constraints in correctional institutions [17] - The COVID-19 pandemic has created new revenue streams in the IoT segment, particularly with solutions for managing travel and minimizing disease spread [20] - The company is focused on capitalizing on recent successes and expanding its global footprint [14] Other Important Information - The company has not reported Q3 2020 financial results, and comparisons are made to an average of Q3 and Q4 2020 results [21] - A one-time charge of$ 689,000 was incurred in Q3 2021 related to a settlement from an old dispute [23] Q&A Session Summary Question: Share count for September - The average share count for September is 26,234,102 [28] Question: Covenants associated with long-term bank loan - The company has not converted any debt with Fortress; it remains on the balance sheet [30] Question: New deals announced - Four new deals have been announced since the end of the June quarter, including projects in California and Finland [32][35] Question: U.S. market characterization - The U.S. market is fragmented with many local service providers, presenting acquisition opportunities [37] Question: Progress on finding a CFO - The company is actively searching for a CFO to finalize investments in the financial department [45] Question: Auditors settled on - The company continues to work with the same Israeli firm, Halperin, for audits [48]