SuperCom - Q2 2024

Transcript

Operator (participant)

Ladies and gentlemen, good morning, and welcome to SuperCom's second quarter 2024 financial results and corporate update conference call. At this time, all participants are in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press Star then one on your telephone keypad. To withdraw your question, please press Star then two. Participants of this call are advised that the audio of this conference call is being broadcast live over the internet and is also being recorded for playback purposes. Joining me from SuperCom's leadership team is Ordan Trabelsi, SuperCom's President and Chief Executive Officer.

I'd like to remind you that during this call, SuperCom management may be making forward-looking statements, including statements that address SuperCom's expectations for future performance or operational results. Forward-looking statements involve risks, uncertainties, and other factors that may cause SuperCom's actual results to differ materially from those statements. For more information about these risks, uncertainties, and factors, please refer to the risk factors described in SuperCom's most recently filed periodic reports on Form 20-F and Form 6-K, and SuperCom's press release that accompanies this call, particularly the cautionary statements in it. Today's conference call includes EBITDA, a non-GAAP financial measure that SuperCom believes can be useful in evaluating its performance. You should not consider this additional information in isolation or as a substitute for results prepared in accordance with GAAP.

For a reconciliation of this non-GAAP financial measure to net loss, a comparable GAAP financial measure, please see the reconciliation table located in SuperCom's earnings press release that accompanies this call. Reconciliations for other non-GAAP financial measures and comparable GAAP financial measures are available there as well. The content of this call contains time-sensitive information that is accurate only as of today, August fifteenth, two thousand and twenty-four. Except as required by law, SuperCom disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. It is now my pleasure to turn the call over to SuperCom's President and CEO, Ordan Trabelsi.

Ordan Trabelsi (President and CEO)

Thank you, operator, and good morning, everyone, and thank you for joining us today. Earlier this morning, we issued a press release of our financial results for the second quarter of 2024. You can find a copy in the investor relations section of our website at www.supercom.com. Today, I'll start my comments with a brief update on our recent business highlights, strategy, and Q2 results, followed by a Q&A session. The second quarter was an outstanding quarter for SuperCom, marking our second consecutive period of remarkable net income growth with a 183% increase quarter-over-quarter this time. We achieved a record-breaking high year, high in quarterly net income of $2.2 million, reflecting a $3.3 million year-over-year improvement. This is the second quarter in a row where we're breaking our record.

Additionally, our cash flows from operating activity decreased by $5.3 million to +$2 million this quarter, year-over-year, reflecting the strength of our operational performance. We are thrilled with this outstanding performance and look forward to maintaining this momentum in the coming quarters. During this quarter, we executed an advance of various projects in our portfolio and utilized operating leverage and prior investments in our proprietary technology to achieve a significant EBITDA increase of 83% year-over-year to $1.6 million this quarter. We're particularly proud to have successfully integrated the PureOne solution into multiple new markets during this period, reflecting our continued commitment to innovation and our ability to meet the evolving needs of our clients. This, along with other strategic initiatives, has positioned us to deliver sustained growth and profitability.

For those new to SuperCom, our mission is to revolutionize the public safety sector worldwide with our proprietary electronic monitoring technology, data intelligence, and suite of complementary services. With over 36 years of experience since our founding in 1988, we've been a trusted partner to dozens of national governments worldwide, providing cutting-edge electronic and digital security solutions. Our strategic blueprint is straightforward yet powerful. Lead with innovative technology. Our proprietary technology, monitoring technology, which scores highly in competitive government tenders and supports various programs such as house arrest, GPS monitoring, rehabilitation services, domestic violence prevention, and more. Moreover, we've recently broadened our portfolio to include advanced AI-driven analytics, which are an integration in our electronic monitoring solutions. This addition enhances our ability to provide predictive insights and improved outcomes for our clients. We're developing superior solutions.

Since 2018, we've secured over 50 new multi-year government projects for these solutions. We're expanding our global presence. Our strong, growing reputation as a premium provider of electronic monitoring solutions and services enhances our market position with each new customer win, and we deliver outstanding service. Our strategic focus on the IoT tracking business is where the opportunity is the greatest. With the electronic monitoring market projected to reach $2.3 billion by 2028, the U.S. and Europe constitute around 95% of these markets. We continue to amplify our technological leadership with significant R&D investments, leading to the launch of advanced solutions like PureProtect and PureOne. These offerings are already making headway in various markets, including the U.S., and are pivotal in SuperCom's expansion.

PureProtect is a life-saving domestic violence monitoring solution, providing preventative measures to families suffering from domestic violence or stalking, thereby increasing their safety. PureOne is an all-in-one GPS tracking ankle bracelet monitoring solution, integrating comprehensive monitoring capabilities into a single device. Like many of our products, it offers top-notch features, placing it above the competition in most metrics. Our cloud-based software-enabled PureSecurity product line has been particularly effective in monitoring offenders and managing real-time information. This real-time advantage is a game changer, empowering authorities with actionable insights and timely intervention to mitigate potential risks and ensure public safety. These products have significantly expanded the company's addressable market. We've been very pleased with their reception and traction, and expect them to help facilitate the accelerated expansion of SuperCom into the U.S. market and further into European countries.

We've fortified our operational infrastructure to support our growth and have revamped our sales strategy with a proactive outreach approach. Our sales team, with deep industry expertise, has been instrumental in achieving new wins and driving growth. Over the past months, we announced many new orders and projects in the U.S. and Europe. SuperCom has continuously displaced incumbent vendors and achieved an over 65%, 65% win rate in European competitive tenders. In the European market, SuperCom has secured several national tracking programs across Europe over the past two years, with bids and contracts at various stages of execution. Notably, the company's large-scale domestic violence offender tracking programs, like the one launched in Romania, have the potential to catalyze further uptake from existing European customers. As more European countries adopt these technologies, we anticipate a broader expansion of our solutions across the continent.

In the European market, SuperCom expanded its business into over 10 countries and secured significant new contracts, which are typically awarded through a competitive tender process. Besides winning new projects, we continue to execute and receive ongoing orders from our partners. Just about four weeks ago, we announced the receipt of new orders valued at over $2.9 million from European governments, totaling over $11 million in new orders from European clients. Last year, we secured a new national program with the Finnish government to deploy our domestic violence monitoring solution. The deployment of our PureSecurity Suite, consisting of PureProtect, PureTrack, PureTag, and PureMonitor, demonstrates the versatility and effectiveness of our solutions and underscores our leadership in the electronic monitoring space.

Our collaboration with Finland is a prime example of the confidence that clients have in SuperCom, as those who experience our services often choose to broaden their engagement with our diverse array of solutions. Notably, at the end of 2022, the company won the largest industry award of the year for a national electronic monitoring project in Romania, valued at $33 million, including up to 15,000 monitored offenders per month throughout the six years. The project has been progressing smoothly and demonstrates substantial advancements, further extending our engagement in the country's national EM project. This large-scale project reinforces the strength of our PureSecurity Suite and cements our position as a trusted partner for governments worldwide. We've also launched domestic violence solutions in other European regions and have recently launched them in the U.S.

While the European market continues to grow, it's important to note that the U.S. market offers an even larger opportunity, bringing approximately three to four times the size of the European market. With the introduction of our PureOne electronic monitoring product, now available in the U.S., and the expansion of our domestic violence tracking solution, we believe SuperCom is well positioned to unlock substantial growth potential in this untapped market. Although SuperCom already does business in multiple U.S. states, we are actively focused on further expanding our presence in the U.S. Our wholly owned subsidiary, LCA, located in California, is actively expanding the size and scope of existing programs, winning rebids with existing customers and winning new programs with new customers.

The company strategically prioritizes PureOne's expansion to new markets and geographies, but PureOne has already received high praise during its introduction to various regions of the USA, where it has been successfully deployed and actively utilized to monitor violent offenders. Moreover, sales activities for PureOne have commenced in promising new markets outside Europe and North America. Despite our long-standing presence in parts of California, the U.S. market remains largely untapped for us. Since we began investing in outbound sales efforts in 2022, we have secured wins in California, Idaho, Texas, Kentucky, Wyoming, to name a few. The launch of PureOne in 2023, coupled with the positive feedback from initial deployments, positions us to accelerate market capture across the U.S., unlocking significant growth opportunities.

Our new strategic sales team and new wins have been the first steps in executing the company's U.S. market expansion strategy and have already driven increased activity with existing customers and multiple new demos, resulting in a significant increase in the company's pipeline. Launching our PureOne solution in U.S. markets in late 2022 was a significant milestone in our U.S. expansion strategy. Entering 2024, we've already announced three new projects in North America to provide the solution. Through LCA, we won a new project in California valued up to $2 million to provide a comprehensive jail-based program focusing on reentry services for adult inmates. The award was a result of winning a formal competitive process. Moreover, LCA secured a new contract in California with an established California services provider in the judicial sector. This contract is particularly notable for SuperCom's successful displacement of long-time incumbent competitor.

Finally, SuperCom won a new project in Canada with a known Canadian industry partner in the tracking solution sector. This project expands the existing collaboration with this long-standing partner, transitioning from providing RF-based technology to embracing new GPS technologies. As I mentioned earlier, introducing our PureOne solution is a game changer in securing these contracts. It underscores our competitive edge and commitment to delivering innovative and superior technology solutions. By securing these contracts and others, we leverage our technologies and our services and our track record of experience to win in our competitive tenders. And with securing these contracts, we further reinforce our position as a market leader. We view our recent wins as indicators of our growing influence and expansion potential in North America and worldwide. In conclusion on strategy, despite macroeconomic uncertainties and ongoing global challenges, including those in Israel, SuperCom solutions are being increasingly relevant.

We continue to see growth driven by high recidivism rates, the escalating costs of incarceration, and the surge in the adoption of victim protection solutions worldwide. The company's PureSecurity technology solutions have been designed to address these trends, offering new effective ways for institutions to enforce home confinement, ease prison overcrowding, and lower costs significantly. For example, monitoring an offender on home confinement or GPS costs about $10-$35 a day, which is 90% less than the $100-$140 daily cost at a correctional facility. Moreover, home confinement helps reduce repeat offenses, highlighting its effectiveness in helping offenders improve their lives and communities. As we've mentioned in previous calls, we believe there is also an opportunity to enhance our U.S. growth through strategic acquisitions of local electronic monitoring services providers with a strong reputation and customer base in those local markets.

We constantly monitor the market for potential acquisitions that could generate significant value by immediately expanding market presence and providing vertical integration synergies. Our acquisition of LCA in 2016 for $3 million is a great example. The successful acquisition has proven to be of great strategic value throughout the over $35 million of new project wins that's generated since then in California alone. I'll now turn to the financials. During our previous conference call, I mentioned that we anticipated contributing to our financials results in the subsequent quarters as our ongoing projects mature. I'm delighted to share that we've substantially improved our financial and operating results. Our gross margin improved by 20.4 percentage points to 49.6% year-over-year.

Moreover, our operating income improved by $1 million, reaching $0.4 million, a significant year-over-year turnaround from an operating loss of $1.7 million, driven by the substantial rise in our gross profit. Our non-GAAP net income surged by 874% year-over-year to $3.3 million, reflecting the benefits of operating leverage associated with higher revenues and continued progress in our IoT projects. This quarter's results highlights our ability to seize the high margin potential of our project portfolio through successful execution and progression in different stages of these projects, showcasing our focus on sustained growth and profitability.

Our momentum is also evidenced by our improved cash flows from operating activities, which increased by $5.3 million year over year to $2 million in operating cash this quarter from -$3.3 million in Q2 of last year. The following is a comparison between the financial results of the second quarter of 2024 and the second quarter of 2023. Gross profit increased by 65.2% to $3.7 million, compared to $2.3 million, reflecting the progress we've maintained across our projects, where margins typically enhance as projects mature. Typically, initial project stages incur higher expenses, while advanced stages yield higher gross margins, causing fluctuations in our gross profit depending on project and revenue composition and deployment stages.

As the project pipeline matures, we expect an upward trend in gross margin based on our evolving project portfolio. As we deploy additional braces in regions where we run existing projects on our existing infrastructure, the contribution margins for each additional braces can be as high as 70% or more. We observed a slight increase in operating expenses this quarter, which balanced the increase in gross profit. These expenses are primarily aimed at supporting the future growth of our pipeline, maintaining our technological edge and ensuring high levels of client satisfaction. We increased R&D expenses by $150,000 as we continue to develop and launch new features and improve existing products to meet the needs of new existing clients, ensuring that we remain at the forefront of innovation and technology leadership in our space.

In addition, our sales and marketing expenses increased by $130,000 to support project wins in new territories and fields such as domestic violence prevention. We plan to continue to invest in our sales and marketing as well as R&D to expand our global footprint and execute on our business plan. EPS improved by $0.27 to +$0.06 from a negative EPS of -$0.21 in the former year. The company's EBITDA improved by 83% to $1.6 million this quarter, compared to $0.9 million, reflecting the benefits of operating leverage associated with higher revenues, deploying new IoT projects, and continued progress in the phases of our ongoing projects. This achievement underscores our focus on sustained growth and profitability.

Our net income improved by $3.3 million to a new record profit of $2.2 million, from a net loss of $1.1 million last year. Our non-GAAP net profit improved by $3 million to a $3.3 million profit this quarter from $0.3 million last year. Positive non-GAAP EPS improves to positive $0.09 compared to non-GAAP EPS of $0.07 last year. Additionally, we've made considerable strides in reducing our long-term liabilities by $4.5 million year-over-year, which includes multiple exchanges with our creditors of debt to equity and negotiated premium prices of up to a 100% premium to market price.

Our operating cash flows improved by $5.3 million year-over-year, and our cash position grew by $4.1 million to $5.7 million quarter-over-quarter, supported by a successful close of a $2.9 million public offering, as well as $2 million in positive operating cash flows this quarter. This marks our highest reported cash position in the past three years. We remain focused on reducing our need for external funding as we continue to win and execute new projects. These improvements further strengthen our financial foundation to support our ongoing growth initiatives and strategic investments. In closing, I'd like to thank our global teams for the hard, tireless work to achieve our company's record-setting performance once again.

We've developed the right technology and products to help criminal justice systems clients overcome challenges and make better use of the over $80 billion spent annually in the USA on operating rehabilitation centers and prisons. With research showing an approximately 75% recidivism rate in the USA, there's significant room for improvement when effective programs and technology are deployed. We're excited about the growth we are experiencing and about the growing demand for our products. After several years to which we transitioned from our legacy business to the IoT tracking offenders business, we're happy to show the shift in nice growth in revenue and profit. We believe that we're well positioned for continued expansion by capitalizing on the many new opportunities that lay before us.

These are being driven by multiple factors, including our strong presence, reputation in the U.S. and European markets, the countercyclical nature of the electronic monitoring industry, the growing public's policy shift to monitoring instead of incarceration, and the growing adoption of domestic violence prevention solutions. We anticipate sustained growth by expanding our market share in the U.S. and Europe. Our commitment to preserving our technology advantages and robust growth foundations remain steadfast as we continue to invest, and the investment will support the expansion into more locations. With that, I'll turn the call over to the operator to open for questions. Operator?

Operator (participant)

Thank you. Ladies and gentlemen, if you wish to ask a question on today's call, you will need to press star, then the number one on your telephone. If you are using a speakerphone, please pick up your handset before entering your request and speaking on the call. If your question has been answered and you wish to withdraw your question, you may do so by pressing star two. One moment please, while we poll for questions. Your first question for today is from Matthew Galinko with Maxim Group.

Matthew Galinko (SVP and Senior Equity Research Analyst)

Hey, good morning. Thanks for taking my questions. So I guess congrats on the strong quarter. What...

Ordan Trabelsi (President and CEO)

Thank you.

Matthew Galinko (SVP and Senior Equity Research Analyst)

In terms of the, you know, I think you mentioned adding to sales and marketing, and I think we see that in this quarter's operating expenses. Do you expect to add more, like, quota-carrying, you know, sales reps for the U.S. market? Or what sorts of investments are you making or do you plan to make in the U.S.?

Ordan Trabelsi (President and CEO)

What was the first part of the question? For the quota, I didn't hear you. For the quota-carrying part, sales forces?

Matthew Galinko (SVP and Senior Equity Research Analyst)

Yeah, it really just focused on what the investments are that you'll plan to make. I think you mentioned that there's, like, a $150,000 increase sequentially of spend in sales and marketing. So I guess-

Ordan Trabelsi (President and CEO)

Yeah.

Matthew Galinko (SVP and Senior Equity Research Analyst)

between that and

Ordan Trabelsi (President and CEO)

Year-over-year.

Matthew Galinko (SVP and Senior Equity Research Analyst)

You know, year. Yeah. Yeah.

Ordan Trabelsi (President and CEO)

Year-over-year.

Matthew Galinko (SVP and Senior Equity Research Analyst)

Uh-

Ordan Trabelsi (President and CEO)

Some of that... Yeah, some. Sorry, go ahead.

Matthew Galinko (SVP and Senior Equity Research Analyst)

Oh, no. I guess really the focus of the question is about what your plans are there for the second half of the year, and particularly if, you know, you're adding to the sales force or what the investments are.

Ordan Trabelsi (President and CEO)

So in general, we're seeing the traction in the U.S. In Europe, we've been winning a lot of projects just by bidding remotely. We haven't had much of a quota-carrying sales team in the European market. We bid on a national level. In the U.S., it's more fragmented, and while there is RFP-related wins that are possible through state tenders and others, a lot of it is going through the resellers or through the specific county agencies. For that, we also leverage quota-carrying salespeople. We started with expanding the team, and that is the actual photo came. So first thing and the support behind the person and the tech support call center and monitoring support and everything that is related to deploying these services to fragmented markets.

We continue to invest in that, and we expect as sales grow, to continue to bring on more personnel. We do it in a gradual fashion so that we can see that things are done effectively and people are utilizing their resources properly and growing their sales.

Matthew Galinko (SVP and Senior Equity Research Analyst)

Got it. Very good.

Ordan Trabelsi (President and CEO)

Yeah. We also added in Q3 more people to the sales team in the U.S., and there is sufficient for a little bit more addition by the end of the year, and that should support our growth for the coming years, and together with that, more salespeople, but step by step. Hello?

Operator (participant)

Your next question for today is from Ken Weiner with Alton Capital.

Ken Wiener (Analyst)

Yeah, hi, good morning. You know, I've been a stockholder in the company for a long time, and, I don't really understand, you know, a couple of things. First of all, when is the long-term debt due? I mean, you have about $29 million in long-term debt. What are the dates of that? What are the due dates on that?

Ordan Trabelsi (President and CEO)

Sorry, do you about which part of debt?

Ken Wiener (Analyst)

The long-term debt.

Ordan Trabelsi (President and CEO)

Hello. Yeah. So in our latest filings, we announced that the senior debt from Fortress is due at the end of 2025, and we've extended that maturity date several times. We expect to extend it more towards sort of later years. And the sub-debt is subordinate to Fortress, is required to be paid after that is paid.

Ken Wiener (Analyst)

What is the amount-

Ordan Trabelsi (President and CEO)

Additional stock. Sorry?

Ken Wiener (Analyst)

What is the amount of the debt with Fortress?

Ordan Trabelsi (President and CEO)

Fortress is roughly $18 million, and the rest is the sub-debt, and that is expected probably gonna be amended to $28 or $29. Based on our expectations and our negotiations with them, it's been amended a few times. It's debt that we've had for a long time, and we have a good relationship with them. They seem to believe in the prospects and the growth of the company to allow us to pay that in the future.

Ken Wiener (Analyst)

What interest rate do you pay on that?

Ordan Trabelsi (President and CEO)

It fluctuates. It fluctuates based on the EBITDA levels. But the normal is, you know, LIBOR plus certain percentage points.

Operator (participant)

Your next question is a follow-up question from Matthew Galinko.

Matthew Galinko (SVP and Senior Equity Research Analyst)

Hey, thanks for taking my follow-up. Maybe as a follow-up on the debt, it sounds like, I think you mentioned you were able to exchange a portion of the long-term debt into a good, you know, swap for equity. Is there potential to do more of that? Or can you just talk about, you know, your strategy for managing the debt balance?

Ordan Trabelsi (President and CEO)

Yeah. So our debt balance. We've had a good relationship with our lenders over the years, the Fortress debts from 2018, and like I said, we amended it several times. And also with the sub-debt, we were able to over the past year negotiate some exchanges at premium prices, some up to a 100% premium to market, which we think is beneficial for our shareholders, of course, with such kind of premium. They allow us to reduce our debt balance and without using our actual operating cash. So there is opportunity for more of that in the coming years, and together with that, we expect maturity to be pushed to the end of 2028.

Matthew Galinko (SVP and Senior Equity Research Analyst)

Gotcha. Okay. And I guess another question on the cash flow. I think it was $1.6 million or $2 million inflow from operations. Just curious if, you know, you expect to be able to generate operating cash flow for the full year 2024?

Ordan Trabelsi (President and CEO)

If we expect what? Sorry. If we set the operating cash flow for the full year?

Matthew Galinko (SVP and Senior Equity Research Analyst)

Yeah, yeah, do you expect to be positive on operating cash flow this year?

Ordan Trabelsi (President and CEO)

So as you saw, we had a great quarter with $2 million of cash generated. There are some fluctuations because it depends on the deployments of the customer, so it's hard for us to know for certain, but so far, things are going good. We certainly have seen improvements in operating cash flow over the past three years. In 2021, I think it was -$9 million, and then went down to -$4 million and continued to go down in 2023, and now, you know, now we're seeing strong positive cash flow in Q2. But things sometimes fall differently between the quarters, and it's hard to tell how the whole year will fall, but as you can see, the trend is certainly very positive.

Matthew Galinko (SVP and Senior Equity Research Analyst)

... Got it. Great. And then as we think about the second half of the year, obviously, it was a very strong first half, and last year was a very strong second half. You mentioned the $11 million-$12 million or so that you have in orders already for the back half year. But I'm just curious, yeah, how investors should be thinking about, you know, the trajectory here in the back half of the year. Do you think you could kind of match the first half of revenue? Is there enough in the pipeline to sort of have a flat first half to second half comparison? Or just generally, how should we be thinking about second half revenue?

Ordan Trabelsi (President and CEO)

I love your questions. We're currently not giving guidance, and we haven't for the last few years because of the somewhat variable nature of the project deployments, which are not only in our control. So far things have been going well over the past years, and we've had nice growth. In 2021, it was $11.7 million-$12.5 million. In 2022 from $12.5 million in 2021 to 2022 to $16 million or $17 million-$26 million, and things have been falling nicely. There if, you know, things continue with our existing customers and new ones, of course, there's room for more growth, but at this point, we're still not giving guidance, particularly for which quarters and how things will fall.

Matthew Galinko (SVP and Senior Equity Research Analyst)

All right, thank you. And one final question from me is on the expansion of your U.S. sales operation. How long does it take for, you know, a new person to, you know, be productive and sell their kind of-

Ordan Trabelsi (President and CEO)

Yeah.

Matthew Galinko (SVP and Senior Equity Research Analyst)

to start capturing sales?

Ordan Trabelsi (President and CEO)

It's a great question. Typically, you know, if it's a new salesperson into the company, and they, they don't have the infrastructure, it could take them 6 months to 9 months to start, you know, to get going. But with that, for us, a lot of these salespeople are, are veterans, and they have a good experience in the industry. They already know, they understand the market and the players and the technologies, and so they actually get into things really quickly. And we see some of them, you know, within a few months already start to, to make a good impact. That being said, some of the projects, as, as you know, the, the law, the big RFPs, the government competitive processes, sometimes take 6 months to 18 months.

So for those large projects, regardless of person, persons there or not, it's gonna take a little bit of time. But in the U.S., it's nice because you have the large ones, but also the small fragmented ones, and you also have resellers. Sometimes someone just goes up to a reseller that they know and offer our technology. They'll take it in to try it, compare it to what they have, and if they like it, they'll buy it. So it, the PureOne, the PureOne is a great solution for the U.S. market, tailored and designed for the U.S. market. It boasts some of the best features around in terms of weight, battery usage, battery life, capabilities and communications abilities, antennas.

Right now we're seeing people like it a lot, and we hope and expect to be announcing more and more wins in the U.S. market based off of that solution. We'll start with small to medium-sized, and it's like Europe, that will grow from medium to large. Just like the radar that we saw in Europe, where we started with projects of $100,000 in revenues over five years. You know, some of the one of the recent projects that we won was $33 million in revenues in Romania.

Matthew Galinko (SVP and Senior Equity Research Analyst)

Great. Thank you.

Operator (participant)

Once again. If you would like to ask a question, please press star one on your telephone keypad. As a reminder, if you would like to ask a question, please press star one. As a reminder, if you would like to ask a question, please press star one. At this time, I will pass the call back to Ordan for closing remarks.

Ordan Trabelsi (President and CEO)

I want to thank you all for participating in today's call and for the interest in SuperCom. Please contact us directly if you have any additional questions. We look forward to sharing our progress with you on the next conference call, filings, and press releases. Thank you, and have a good day.

Operator (participant)

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.