Q1 2024 SuperCom Ltd Earnings Call
Speaker Change: [music].
Yeah.
Operator: Ladies and gentlemen, good morning and welcome to Supercom's first quarter 2024 financial results and corporate update conference call. At this time, all participants are in a listen-only mode.
Speaker Change: Ladies and gentlemen, good morning, and welcome to Super Com's first quarter 2024 financial results and corporate update conference call.
Speaker Change: At this time all participants are in a listen only mode.
Operator: 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.
Speaker Change: Should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.
Speaker Change: After todays presentation, there will be an opportunity to ask questions.
Speaker Change: To ask a question you May press Star then one on your telephone keypad.
Speaker Change: To withdraw your question. Please press Star then two.
Operator: 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. Such forward-looking statements involve risks, uncertainties, and other factors that may cause Supercom's actual results to differ materially from those statements.
Speaker Change: 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.
Speaker Change: Joining me from Superchunk leadership team is or Dan Trabelsi Super Com's, President and Chief Executive Officer.
Operator: 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 GAP.
Supercomm management: I'd like to remind you that during this call Supercomm management may be making forward looking statements, including statements that address supercomm expectations for future performance or operational results forward.
Supercomm management: Forward looking statements involve risks uncertainties and other factors that may cause super com's actual results to differ materially from those statements.
Supercomm management: For more information about these risks uncertainties and factors. Please refer to the risk factors described in Supercuts. Most recently filed periodic reports on form 20-F and form 6K and.
Speaker Change: And Super Comms press release that accompanies this call, particularly the cautionary statements in it.
Speaker Change: Today's conference call includes EBITDA, a non-GAAP financial measures that Supercomm believes can be useful in evaluating its performance.
Speaker Change: You should not consider this additional information in isolation or as a substitute for results prepared in accordance with GAAP.
Speaker Change: For a reconciliation of this non-GAAP financial measure to net loss a comparable GAAP financial measure. Please see the reconciliation table located in Supercuts earnings press release that accompanies this call.
Speaker Change: Reconciliations for other non-GAAP financial measures and comparable GAAP financial measures are available there as well.
Operator: 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, May 15, 2024. 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 floor over to Supercom's President and CEO, Ordan Trabelsi.
The content of this call contains time sensitive information that is accurate only as of today may 15th 2024.
Speaker Change: Except as required by law Supercomm 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 floor over to supercuts, President and CEO or Dan Trabelsi.
Ordan Trabelsi: Thank you, operator. Good morning, everyone.
Ordan Trabelsi: Thank you operator, and good morning, good morning, everyone and thank you for joining us today.
Ordan Trabelsi: And thank you for joining us today. Earlier this morning, we issued a press release with our financial results for the first quarter of 2024. You can find a copy of it in the Investor Relations section of our website at supercom.com. Today, I'll start my comments with a brief update on our recent business highlights, strategy, and Q1 results, followed by a Q&A session. We had a great start to the year with a strong first quarter.
Ordan Trabelsi: Earlier. This morning, we issued a press release with our financial results for the first quarter of 2024.
Ordan Trabelsi: You can find a copy of it in the Investor Relations section.
Speaker Change: Oh, I'm, sorry that Supercomm dot com.
Speaker Change: Today I'll start my comments with a brief update on our recent business highlights strategy Q1 results followed by a Q&A session.
Speaker Change: So if we kind of had a great start to the year with a strong first quarter, which is an eight year record quarterly net income of $800000, representing 2.3 million dollar improvement.
Ordan Trabelsi: We achieved an eight-year record quarterly net income of $800,000, representing a $2.3 million improvement year over year. We're thrilled with this outstanding performance and look forward to maintaining this momentum in the coming quarters. During the quarter, we executed advances on various projects in our portfolio, such as a $33 million national EM project in Romania. We utilized operating leverage and prior investments in our proprietary technology to achieve a significant EBITDA increase of 400% year over year, to a level of $2 million even though this quarter. For those new to Supercom,
Speaker Change: Year over year.
We're thrilled with this outstanding performance and look forward to maintaining this momentum in the coming quarters.
Speaker Change: During the quarter, we executed an advance on various projects in our portfolio such as the $33 million Nashville, <unk> project in Romania.
Speaker Change: This operating leverage prior investments in our proprietary technology to achieve a significant EBITDA increase of 400% year over year.
Speaker Change: So a level of $2 million, even though this quarter.
Speaker Change: For those new to Super Com.
Ordan Trabelsi: 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 35 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, develop superior solutions, expand our global presence, and deliver outstanding service. This strategy is backed by the following.
Speaker Change: Our mission is to revolutionize the public safety sector worldwide.
Speaker Change: With our proprietary electronic monitoring technology data intelligence and suite of complementary services.
Over 35 years of experience since our founding in 1988, we'd been a trusted partner to dozens of national governments worldwide.
Speaker Change: Providing cutting edge electronic and digital security solutions.
Speaker Change: Our strategic blueprint straightforward.
Speaker Change: Powerful.
Speaker Change: Lead with innovative technology develop superior solutions expand our global presence and deliver outstanding service.
Speaker Change: <unk> is backed by the following.
Ordan Trabelsi: Our proprietary electronic 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. And since 2018, Supercom has secured over 50 new multi-year government projects, a strong growing reputation. As a premium provider of electronic monitoring solutions and services, we enhance our market position with each new customer win. Our strategic focus on the IOT tracking business in developed markets, where the opportunity is greatest with electronic marketing, a market projected to reach $2.3 billion by 2028. The electronic monitoring market, the US, and Europe, constitute about 95% of these markets.
Speaker Change: Our proprietary electronic monitoring technology, which is of course highly competitive government tenders and supports various programs such as house arrest GPS monitoring rehabilitation services domestic violence prevention and more.
Speaker Change: Since 2018, <unk> secured over 50, new multiyear government projects.
Speaker Change: Our strong growing reputation.
Speaker Change: As a premium provider of electronic monitoring solutions and services enhances our market position with each new customer win.
Speaker Change: Ed.
Speaker Change: Our strategic focus on the Iot tracking business in developed markets, where the opportunity is greatest with electronics marketing.
Speaker Change: The market projected to reach $2 $3 billion by 2028.
Speaker Change: The electronic monitoring market the U S and Europe constitute about a 95% of these markets.
Ordan Trabelsi: All together, these successes and opportunities have resulted in a growing project pipeline and substantial recurring revenue. Last year, we continued to amplify our technological leadership with significant R&D investments leading to the launch of advanced solutions like Pure Protect and Pure One. These offerings are already making headway in various markets, including the U.S., and are pivotal in Supercom's expansion. PureProtect is a lifesaving domestic violence monitoring solution. This solution provides improved protection to families suffering from domestic violence. This innovative solution addresses domestic violence issues and further enhances the company's portfolio of products and services. PureOne is an all-in-one GPS tracking ankle bracelet monitoring solution that integrates comprehensive monitoring capabilities into a single device.
Speaker Change: Altogether these successes and opportunities that resulted in a growing project pipeline are substantial recurring revenue last year, we continue to amplify our technological leadership with.
Speaker Change: Significant R&D investments needed to the launch of advanced solutions like pure protect of tier one these offerings are already making headway in various markets, including the U S and our pivotal supercalender protection.
Speaker Change: Pure protect is a lifesaving domestic violence monitoring solution. This solution provides improved protection to families suffering from domestic violence. This innovative solution addresses domestic violence issues and further enhances the company's portfolio of products and services.
Speaker Change: Pier one is it all one GPS tracking the ankle bracelet monitoring solution that integrates comprehensive monitoring capabilities into a single device like many of our products. It offers topnotch features placing it above competition and most metrics such as battery life weight comfort and more so these two products are pure protect computer one had been.
Ordan Trabelsi: Like many of our products, it offers top-notch features, placing it above competition in most metrics, such as battery life, weight, comfort, and more. So these two products, PureProtect and PureOne, have been significant innovations that have helped us redefine and disrupt competitors and segments in the industry. Our cloud-based software-enabled peer security product lines have been particularly effective monitoring domestic violence offenders and managing real-time information as well. The real-time advantage is a game changer to the industry because it empowers authorities with actionable insights and timely intervention to mitigate potential risks and enhance public safety.
Speaker Change: Significant innovations, which have helped us.
Speaker Change: Redefine and.
Speaker Change: Okay.
Speaker Change: <unk> competitors and segments in the industry.
Speaker Change: Card based software enabled to your security product line.
Speaker Change: Has been particularly effective monitoring domestic violence offenders at manager real time information as well.
The real time advantage is a game changer for the industry because it empowers authorities with actionable insights and timely intervention to mitigate potential risks and enhance public safety.
Ordan Trabelsi: These products have also been well received and have significantly expanded the company's addressable market. We've been very pleased with the reception and traction of our newest solutions and expect them to help facilitate the accelerated expansion of Supercom into the U.S. market and further European countries. We fortified our operational infrastructure to support our growth, and it revamped our sales strategy with a proactive outreach approach.
Speaker Change: These products have also been well received and have significantly expanded the company's addressable market. We've been very pleased with the reception and traction of our newest solutions and expect them to help facilitate the accelerated expansion of supercomm into the U S market and further European countries.
Ordan Trabelsi: Our sales team, with deep industry expertise, has been instrumental in achieving new wins and driving growth. In the past months, we announced many new project wins in the U.S. and Europe. Supercom has continued displacing incumbent vendors and achieved an over 65% win rate in Europe in competitive tenders over recent years. Despite macroeconomic uncertainties and the ongoing Israel-Gaza war, Supercom's solutions are becoming increasingly relevant. Factors like high recidivism rates and the escalating cost of incarceration make our solutions not only cost-effective but also essential for governments looking to enhance public safety and reduce costs.
Speaker Change: We 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.
Speaker Change: Over the past months, we announced many new project wins in the U S and Europe Super comments continue displacing incumbent vendors and achieved in over 65% win rate in Europe and competitive tenders over the recent years despite.
Speaker Change: Macroeconomic uncertainties and the ongoing Israel Gaza War Supercomm solution are being increasingly relevant factors like high recidivism rates and the escalating cost of incarceration make our solutions not only cost effective but also essential for governments looking to enhance public safety and reduce costs the company's <unk> technology.
Ordan Trabelsi: The company's peer security technology solution is designed to address this trend, offering an effective way for institutions to enforce home confinement, ease prison overcrowding, and lower costs significantly. For example, the total daily cost for monitoring an offender on home confinement or GPS monitoring is approximately $10 to $35, compared to the much higher cost of $100 to $140 at a correctional facility.
Speaker Change: Solutions have been designed to address this trend offering an effective way for institutions to enforce home confinement ease prison overcrowding and lower cost significantly for example.
Speaker Change: Total daily calls for monitoring the federal home confinement or GPS monitoring is approximately 10% to $35 compared to the much higher cost of 100 to $140 at a correctional facility most.
Ordan Trabelsi: Most importantly, home confinement has been shown to reduce recidivism, highlighting its effectiveness in helping offenders improve their lives and communities. On top of these growth drivers, we have witnessed a surge in the adoption of victim protection solutions worldwide, which aligns perfectly with our strategic plan and the launch of our new product, PureProtect. In the European market, Supercom expanded its business in over 10 countries and secured significant new contracts, which are typically awarded through a competitive tender process.
Speaker Change: Most importantly home confinement has been shown to reduce recidivism pilot.
Speaker Change: Highlighting its effectiveness in helping offenders improve their lives and communities.
Speaker Change: On top of these growth drivers, we have witnessed the surge and the adoption of victim protection solutions worldwide, which aligns perfectly with our strategic plan and the launch of our new products pure protect.
Speaker Change: Okay.
Speaker Change: In the European market Supercomm expanded its business in over 10 countries and secured significant new contracts, which are typically awarded to a competitive tender process. Besides winning new projects, we continue to execute and receive ongoing orders from our partners just about three weeks ago, We announced received new orders valued at over $5 billion for European governments Same-store optimized it.
Ordan Trabelsi: Besides winning new projects, we continue to execute and receive ongoing orders from our partners. Just about three weeks ago, we announced we received new orders valued at over $5 million from European governments. Thanks to our optimized and efficient production processes, over 50% of these orders have already been delivered. Last year, we secured a new national program with the Finnish government to deploy our domestic violence monitoring solution. The deployment of our peer security suite, consisting of PeerProtect, PeerTrack, PeerTag, and PeerMonitor, demonstrates the versatility and effectiveness of our solutions and underscores our leadership in the electronic monitoring space.
Speaker Change: Fishing production processes over 50% of these orders have already been delivered.
Speaker Change: Last year, we secured a new national program with the Finnish government to deploy our domestic violence monitoring solution that appointment of our pure security suite consistent and pure protect good track for your Todd If you monitor demonstrates the versatility and effectiveness of our solutions and underscores our leadership electronic monitoring space. Our collaboration in Finland is a Prime example of a <unk>.
Ordan Trabelsi: 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 the National Electronic Monitoring Project in Romania, valued at $33 million, including up to 15,000 monitor vendors per month for up to six years. During 2023, we announced orders valued at over $10 million from Romania's Ministry of Interior, further extending our engagement in the country's national EM project.
Speaker Change: <unk> have an supercomm.
Speaker Change: As those who experience our services often choose to broaden their engagement with our diverse array of solutions.
Speaker Change: Notably.
Speaker Change: At the end of 2022, the company won the largest industry award of the year for National electronic monitoring projects, Armenia valued at $33 million, including up to 15000 monitored offenders per month for up to six years. During 2023, we announced the orders valued at over $10 billion for Romania's Ministry of interior further extended our engagement.
Speaker Change: In the country's national projects. This large scale project reinforces the strength of our pure security suite and cements our position as a trusted partner for governments worldwide.
Ordan Trabelsi: This large-scale project reinforces the strength of our pure security suite and cements our position as a trusted partner for governments worldwide. We have also launched our domestic violence solutions in other European regions and recently launched them in the U.S.
Speaker Change: We also launched our domestic violence solutions in other European regions, and recently launched them in the U S. Although supercomm already does business in multiple U S. States. We're actively focused on further expanding our presence in the U S.
Ordan Trabelsi: 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 rebates with existing customers and winning new programs with new customers. The company strategically prioritizes Pure1's expansion into new markets and geography. It has received high praise during its introduction into various regions of the U.S., where it has been successfully deployed and is actively utilized to monitor live offenders. Moreover, sales activities for Pier 1 have commenced in promising new markets outside Europe and North America.
Speaker Change: Our wholly owned subsidiary of LCA located in California is actively expanding the size and scope of existing programs.
Speaker Change: Willing to rebids with existing customers and winning new programs with new customers the company strategically prioritizes tier ones expansion.
Speaker Change: Into new markets and geographies.
Speaker Change: Received high praise.
Speaker Change: This introduction into various which is the U S or pure what has been successfully deployed and is actively utilized.
Speaker Change: To monitor live offenders, Moreover, sales activities or pier, one have commenced and promising new markets outside Europe and North America.
Ordan Trabelsi: Our new strategic sales team and new wins have been the first step in executing the company's U.S. market expansion strategy and have already driven increased activity within Assistant Customers and multiple new demos, resulting in a significant increase in the company's pipeline. Launching our Pure One solution in late 2023 was a significant milestone in our U.S. expansion. Unknown Attendee, Ordan Trabelsi, Supercom, The first through LCA, we want a new project in California valued up to $2 million to provide a comprehensive program focusing on ranching services for all adult inmates. The award is a result of winning the formal competitive bid process.
Speaker Change: New strategic sales team and new wins have been the first step.
Speaker Change: Due to the company's U S market expansion strategy and have already driven increased activity within.
Speaker Change: Existing customers in multiple new demos, resulting in a significant increase of the company's pipeline.
Speaker Change: Launching our pier one solution in late 2023 was a significant milestone in our U S expansion strategy at June 24, we have already announced with new project wins in North America to provide the solution.
Speaker Change: First through LCA, if you want a new project, California valued up to $2 billion to provide comprehensive program focusing on reentry services for all adult inmates the water as a result of winning the formal competitive bid process. Moreover else ASP your new electronic monitoring contract in California, with an established California services provider in the judicial sector. This contract this.
Ordan Trabelsi: Moreover, LCA secured a new electronic monitoring contract in California with an established California services provider in the judicial sector. This contract is particularly notable for Supercom's successful displacement of a long-term incumbent vendor. Finally, Supercom won a new project in Canada with a renowned Canadian industry partner in the tracking solution sector. This project expands existing collaboration with this long-standing partner, transitioning from providing RFA tracking technology to embracing new GPS technology. As I mentioned earlier, introducing our Pure One solution was a game changer in securing these contracts.
Speaker Change: Notable feature becomes successful displacement of a long term incumbent vendor.
Speaker Change: Finally sort of a kind of a lot of new projects in Canada with ever known Canadian industry partner and the tracking solutions sector. This project expands existing collaboration with its long standing partner transitioning from providing rfps tracking technology to embracing new GPS technologies.
Speaker Change: As I mentioned earlier, introducing a pier one solution was a game changer in securing these contracts and underscores our competitive edge and commitment to delivering innovative and superior technology solutions by securing these contracts with further reinforce our position as a market leader review, our recent wins as indicators of a growing influence expansion potential in North America and worldwide.
Ordan Trabelsi: It underscores our competitive edge and commitment to delivering innovative and superior technology solutions. By securing these contracts, we further reinforce our position as a market leader. We review our recent wins as indicators of our growing influence and expansion potential in North America and worldwide. As we mentioned in previous calls, we believe there is also an opportunity to enhance our U.S. growth through strategic acquisitions of local electronic monitoring service providers with a strong reputation and customer base in their local markets.
Speaker Change: As we mentioned in previous calls we believe is also an opportunity to enhance our U S growth through strategic acquisitions of local electronic monitoring service providers with a strong reputation and customer base in their local markets.
Ordan Trabelsi: We constantly monitor the market for potential acquisitions that could generate significant value by immediately expanding the market for potential acquisitions and really expanding market presence and providing vertical integration synergies. Our acquisition of LCA in 2016 for $3 million is a great example.
Johnson: Johnson the monitor the market for potential acquisitions that could generate significant value by immediately expanding market for potential acquisitions.
Johnson: Immediate expanding market presence and providing vertical integration synergies are acquisitions of LCA in 2016 for $3 million is a great example, successful because I should have provided to be a great strategic value to the company.
Ordan Trabelsi: The successful acquisition has provided great strategic value to the company, through which we won over $35 million in new project wins, and it generated in California alone. I'll now turn to the financials. During our previous conference call, I mentioned that we anticipated contributing to our financial results in the subsequent quarters as our ongoing projects matured. I'm delighted to share.
Johnson: Through which we won over $35 million of New project wins and is generated in California alone.
Johnson: Okay.
Speaker Change: I'll now turn to the financials.
Ordan Trabelsi: We've substantially improved our financial and operating results. We've seen a gross profit margin increase by 123%. 55 percent from 25 percent.
Speaker Change: During our previous conference call I mentioned that we anticipated contributing to our financial results in the subsequent quarters as our ongoing projects matured I'm delighted to share we substantially improved our financial and operating results. We've seen them grow smart our gross profit margin increased by 122% to.
Speaker Change: 55% from 25%.
Ordan Trabelsi: Moreover, we've sustained positive EBITDA in each of the last four years, from 20 to 2023, and seen remarkable operating improvements, as evidenced by a record net income of $800,000 this quarter, along with $400,000 EBITDA growth year over year to $2 million. This is driven by the significant growth in the company's revenue in the past few years, targeted spending, and operating leverage. This quarter's profitability metrics demonstrate how we can seize the high margin potential of our project portfolio through successful execution and progression at different stages of these projects.
Speaker Change: Moreover, we sustained positive EBITDA in each of the last four years 'twenty to 'twenty to 'twenty three.
Speaker Change: And seeing remarkable operating improvements as evidenced by our record net income of $800000. This quarter, along with $400000 EBITDA growth year over year to $2 million. This is driven by the significant growth in our company's revenue. The past few years targeted spending and operating leverage this quarter as profitability metrics demonstrate how we can seize the high margin potential of our.
Speaker Change: Portfolio through successful execution and progression of different stages of these projects.
Ordan Trabelsi: The following is a comparison between the financial results of the first quarter of 2024 and the first quarter of 2023. Gross profit increased by 139% to $3.8 million compared to $1.6 million, a direct outcome of the progress you've made across our projects for margins typically enhanced as projects mature. Typically, the initial project stages incur high expenses, while advanced stages yield higher gross margins, causing fluctuations in our gross profit, depending on project composition and deployment stages.
Speaker Change: The following is a comparison between the financial results of first quarter of 2024, and the first quarter of 2023.
Speaker Change: <unk> increased by 139% that you reported $8 million compared to $1 6 million was direct alcohol the progress you've made across our projects where margins typically enhance as projects mature.
Speaker Change: Typically the initial project stages incur high expenses, while at that stage is due to the higher gross margins, causing fluctuations in our gross profit depending on projects competition and deployment stages as the project pipeline matures, we expect an upward trend in gross margins based on the evolving project portfolio as we deploy additional bracelets in regions, where we run existing projects.
Ordan Trabelsi: As the project pipeline matures, we expect an upward trend in gross margins, based on the evolving project portfolio. As we deploy additional bracelets in regions where we run existing projects on our infrastructure, the contribution margins for each additional bracelet can be high, even as high as 70% or more. We decrease our R&D expenses by $90,000 while we continue to develop and launch new features and improve existing products, keeping us at the edge of innovation and technological leadership in our space. In addition, our sales and marketing expenses decrease by $50,000 while we increase our revenues year over year.
Richard: Our it infrastructure the contribution margins. Richard this is embraced that can be high even as high as 70% or more.
Richard: Our R&D expenses by $90000 or we continued to develop and launch new features and improve existing products keeping us at the edge of innovation and technology leadership in our space. In addition, our sales and marketing expenses decreased to $50000, while we increase our revenues year over year.
Ordan Trabelsi: Moreover, our general administrative expenses increased by $300,000 to accommodate our management team expansion, also in the US, which has already yielded results, such as evidence of the 3 new contracts we have won in the past month. The company's operating income improved by $1.8 million, from $700,000 compared to an operating loss of $1.8 million before. So we improved by $1.8 million to 700,000 compared to an operating loss of $1.1 million in the prior year, resulting in a significant increase in our gross profit.
Richard: Rover.
Richard: Our general and administrative expenses increased by $300000 to accommodate our management team expansion also in the U S, which has already yielded results such as evidenced by the three new contracts. We have won in the past months the company operating income improved by $1.8 million.
Speaker Change: From $700000 compared to an operating loss of $1 8 million before.
Speaker Change: So we can prove out $1 eight to 700000 compared to an operating loss of one plant $1 million in the prior year, resulting from significant increase in our gross profit.
Speaker Change: <unk> improved to positive.
Speaker Change: <unk> compared to net EPS of <unk> 32 cents in the prior year period.
Speaker Change: Company's EBITDA improved by 400% $2 million compared to $400000, reflecting benefits operating leverage associated with higher revenues deployed new Iot projects and continued progress on the faces in our ongoing projects. This achievement underscores our focus on sustained growth and profitability our net income.
Speaker Change: <unk> by $2 $3 billion from the net loss of $1 $5 billion last quarter to net profit of 800000 this quarter.
Ordan Trabelsi: EPS improved to positive, [inaudible] million last quarter to net profit of 800,000 this quarter, and our non-GAAP NEM profit improved by $1.6 million to $1.35 million profit compared to a $250,000 loss in the performer year period. Positive round at EPS, improve the positive. 7 cents compared to negative non-net EPS of 5 cents.
Speaker Change: And our non-GAAP net profit improved by $1 $6 billion to $1 35 million profit compared to.
Speaker Change: $250000 loss in the performer year period positive around that EPS improved to positive.
Speaker Change: Seven cents compared to negative nine net EPS of <unk>, our cash position stable, we have a credit facility in place and we focus on reducing our need for external cash as we continue to win and execute more new projects also last month, we completed a successful close of $2 $9 million public offering to support the company's continued innovation and growth initiatives.
Ordan Trabelsi: Our cash position is stable. We have a credit facility in place, and we focus on reducing our need for external cash as we continue to win and execute more new projects. Also, last month, we completed a successful close of $2.9 million in public offerings to support the company's continued innovation and growth initiatives, a testament to the investment community's trust in our vision and strategic trajectory. In addition, the company had a one-time expense of $280,000, mainly pertaining to the legacy business and allowance of debtful debt.
Speaker Change: A testament to the investment community Trust in our vision and strategic trajectory in.
Speaker Change: In addition, the company had one time expenses of $280000, mainly pertaining to the legacy business and allowance of doubtful debt will continue to invest.
Ordan Trabelsi: We continue to invest in our sales and marketing, as well as R&D, to drive revenue growth and expand our global and Executor business. In closing, I'd like to thank our global team for the hard, tireless work to achieve our company's record-setting performance this quarter. We have developed the right technology and products to help criminal justice system clients overcome challenges and make better use of the over $80 billion spent annually in the US on operating rehabilitation centers in prison. With research showing an approximate 75% recidivism rate in the U.S., there is significant room for improvement when effective programs and technology are deployed.
Speaker Change: And our sales and marketing as well as R&D to drive revenue growth and expand our global footprint.
Speaker Change: Execute our business plan.
Speaker Change: In closing.
Speaker Change: At the center of global team for the hard tireless work to achieve our company's record setting performance this quarter.
Speaker Change: We have developed.
Speaker Change: 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 U S. Our operating rehabilitation centres and prisons with research showing an approximate 75% for citizens in the U S. Theres significant room for improvement when effective programs and technology.
Speaker Change: Our deployed we're.
Ordan Trabelsi: We're excited about the growth we are experiencing and about the growing demand for our products. After several years of transitioning from a legacy business to the IoT tracking and fender business, we're happy to show the shift to nice growth in revenue and profit. We believe that we're well positioned for continued growth and continued expansion by capitalizing on the many new opportunities before us. These are being driven by multiple factors, including a strong presence and reputation in the US and European markets, and the growing adoption of Domestic Violence Prevention Solutions.
Speaker Change: We're excited about the growth we are experiencing that about the growing demand for our products. After several years through which we transition from our legacy business and the Iot tracking the offender business, we're happy to show the shift to nice growth in revenue and profit we believe that we're well positioned for continued growth.
Speaker Change: Continued expansion by capitalizing on the many new opportunities before us these are being driven multiple factors, including a strong presence reputation in the U S and European markets. The countercyclical nature of those chronic monitoring in this industry the growing public policy shifts monitoring instead of incarceration.
Speaker Change: And the growing adoption of domestic violence prevention solutions.
Ordan Trabelsi: We anticipate sustained growth by further expanding our market share in the U.S. and Europe. Our commitment to preserving our technological advancement as a robust growth foundation remains steadfast as we continue to invest in this area. I'll turn the call over to the operator for questions. Operator.
Speaker Change: Anticipate sustained growth by further expanding our market share in the U S and Europe are committed to preserving our technological advance it as Airbus growth Foundation remains steadfast as we continued to invest in this area with that also.
Speaker Change: I'll turn the call over to operator for questions.
Speaker Change: Operator.
Operator: 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 2. One moment, please for the first question. Your first question for today is from Matthew Galinko with Maxim Group.
Speaker Change: 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.
Speaker Change: If you are using a speakerphone. Please pick up your handset before entering your request and speaking on the call.
Speaker Change: If your question has been answered and you wish.
Speaker Change: To withdraw your question you may do so by pressing star to one moment. Please for the first question.
Your first question for today is from Matthew <unk> with Maxim Group.
Speaker Change: Yeah.
Matthew Evan Galinko: Can you maybe start, I know you touched on it in the prepared remarks, but gross margin was, you know, I think one of the stronger quarters in recent history. So can you touch a little bit more on why this quarter in particular was able to get to that mid 50% range, if my math is correct, and, you know, how sustainable is that, given where you are in your current, you know, I guess, growth cycle?
Matthew <unk>: Can you maybe start I know you touched on it in the prepared remarks, but the gross margin was.
Matthew <unk>:
Speaker Change: I think one of the stronger quarters in recent.
Speaker Change: Recent history, so can you touch a little bit more on.
Speaker Change: And why this quarter in particular was able to get to that mid 50% range.
Speaker Change: Finance correct and.
Speaker Change: How how sustainable is that where given where you are in your current growth cycle.
Speaker Change: Okay.
Ordan Trabelsi: Thanks. A great question.
Speaker Change: Thanks, Great question, whereas as you can see where there's a general trend of increasing our gross margins.
Speaker Change: We're reaching later stages in our current projects there are some fluctuations because some of our projects with the Romania project.
Speaker Change: A big part of our revenues and our you know as the mix changes between the quarters of the various parts of the project. They drive within the gross margin, which is affiliated with it generally speaking at the initial stages of the projects you have a lot of hardware installations in training.
Ordan Trabelsi: As you can see, there's a general trend of increasing our gross margins as we're reaching later stages in our current projects. There are some fluctuations because some of our projects, like the Romania project, make up a big part of our revenues. And as the mix changes between the quarters of the various parts of the project, they drive within the gross margin, which is affiliated with it. Generally speaking, at the initial stages of Ours from our teams and hardware purchases, which are lower margin in nature, and later stages of projects are just kind of manufacturing more bracelets and providing maintenance and support for our software.
Speaker Change: A lot of.
Speaker Change: Hours from them from our teams in hardware purchases, which are lower margin in nature. At later stages of the projects are just kind of manufacturing more bracelets and providing maintenance and support for our software. So the more we can be in the later start to the project the higher margins will be.
Ordan Trabelsi: So, the more we can be in the later stages of the project, the higher margins will be. So, as the new new projects come along, small projects will make a bunch of impact, but the larger ones will, and they will also drive margins through these stages, which were initially a little lower, and later they're higher.
Speaker Change: So as the new new projects come upon.
Speaker Change: All of our projects will make as much of an impact with the larger ones will or they will also drive margins through these stages, where initially they are little lower and later they're higher.
Ordan Trabelsi: Got it. Thank you.
Speaker Change: Got it.
Speaker Change: And it sounds like your.
Speaker Change: Your peer focus in on the North American market today, maybe because you Panthers products now available, but can you talk a little bit about it.
Speaker Change: Kind of North America versus Europe for you.
Speaker Change: 2024, I guess is there just more.
Matthew Evan Galinko: And it sounds like you're focused on the North American market today, maybe because you have those products now available. But can you talk a little bit about, you know, kind of North America versus Europe for, you know, 2024, I guess, is there just more. More to be had in the U.S. market today.
More to be had in the U S market today.
Ordan Trabelsi: The U.S. market's roughly three or four times, based on market research, three to four times the size of the European market. We've been doing very well in Europe. We had over 65% win rate in recent years.
Speaker Change: Yes, Mark that's a roughly three to four times based on market research three to four times the size of the European market, we've been doing very well in Europe that over 65% win rate over recent years and its national projects to bid on one by one and even without a large sales team were able to come to to win consistently.
Ordan Trabelsi: And it's national projects we have to bid on one by one. And even without a large sales team, we're able to win consistently because of our high-scoring technology. The U.S. market's a little more fragmented, so it requires a little more boots on the ground. And we're actually scaling up and growing our team accordingly to address that. We developed the Pure One product, which is a one-piece solution that meets a lot of the requirements and behaviors that are more customizable to the U.S. market.
Speaker Change: Because of our high scoring technology.
Speaker Change: The U S market is little more fragmented requires little more boots on the ground and we're actually scaling up and growing our team accordingly to have to address that we developed the pure the pure one product, which is a <unk> solution, which meets you know a lot of their requirements and and.
Speaker Change: Behaviors that are more comfortable to the U S market will be developed in a way that has the most let's say optimize features in terms of battery life, and lightweight and remote charging and the others that helps us.
Ordan Trabelsi: But we developed it in a way that has the most, let's say, optimized features in terms of battery life and lightweight and remote charging and others, and that helps, you know, come in with a splash when we compete against incumbent vendors, but the U.S. market, we think for us, is a nice and interesting opportunity because we haven't taken advantage of it yet and all the potential there. We're just in the early stages.
Speaker Change: Come in with its flash will be compete against incumbent vendors.
Speaker Change: But the U S market, we think for us its a nice and interesting opportunity because we haven't we.
Ordan Trabelsi: Our pipeline is growing. We're in the middle of active live demos right now, and we hope to continue growing that more and more. And at some point, that could be the size of Europe and even larger.
Speaker Change: We haven't taken advantage of it yet and all the potential there. We're just in the early stages. Our pipeline is growing we're doing we're in the middle of active live demos right now and we hope to continue growing that more and more.
Speaker Change: And at some point that could be the size of Europe and even larger.
Ordan Trabelsi: Thanks. And one last question for me before I jump back in the queue.
Speaker Change: Thanks, and one last question for me before I jump back in the queue.
Matthew Evan Galinko: You seem to have, you know, I think you mentioned a greater than 65% win rate in Europe. And, you know, you're starting to gain some traction in the US, North America, with the new product. What is the competitive response to, you know, your successes to date with the strategy? Are there any companies that are, you know, seeing an impetus to try to catch you on the product side? Or do you think that, you know, you're still kind of a uniquely focused player in the market? You could stay and continue to have an edge.
Speaker Change: You seem to have you know I think you mentioned the greater than 65% win rate in Europe, and you're starting to gain some traction in the U S. North America with the new products.
Speaker Change: What is the competitive response to.
To your your successes to date, but the strategy is there.
Speaker Change: Are there any companies that are.
Speaker Change: You're going after those two.
Speaker Change: To try to catch you on the product side or do you think that you know you're still kind of a uniquely focused.
Speaker Change: A player in the market that you could stay and continue to have an edge.
Matthew Evan Galinko: you say response on the product side. So a lot of out of our competitors, the market is roughly 10 international players, and it's a very highly-barriered market. So Google or Apple is not going to be coming in any day. Without an acquisition, you have to show that you've been doing this for 510 years to even compete. So we know the players; a lot of them haven't updated their technology so much over the last few years; they use their relationships to try to hold on to existing contracts.
Speaker Change: You say response on the product side, a lot of the all of our competitors in the market is roughly 10 international players and its a very highly barrier markets.
Speaker Change: Google or apple or not going to be coming at any day.
Speaker Change: Without an acquisition you have to show that you've been doing this for 510 years television compete. So there are other players a lot of them have an updated their technology. So much over the last recent years they use our relationships try to hold on existing contracts the market average growth rate is.
Matthew Evan Galinko: The market average growth rate is Unknown Attendee, Ordan Trabelsi, Supercom Some of them try to try to respond to improving technology, but we haven't seen any threats there from anyone that's competing with the level of progress and advancement that we're showing. We're not just showing technology that is more advanced and has more features; we're also expanding our technological capabilities and adding new features at a very high rate. So we continue with every project we do, and we're doing a whole lot of projects.
Speaker Change: Anywhere between let's say, 7% and 13% every year and we've been growing at a.
Speaker Change: The CAGR of 70%, so we're growing significantly faster than the average marker and average companies on the market.
Speaker Change: Some of them try to try to respond to improving technology, but we haven't seen any threats.
Speaker Change: There with anyone.
Speaker Change: <unk> is competing with the level of progress and advancement that we're showing we're not just sharing technology, which is a.
Speaker Change: More advanced and has more features were also.
Speaker Change: <unk>, our technology capabilities and adding new features at a very high rates. So it continues every probably every project, we do and we're doing a whole lot of projects.
Matthew Evan Galinko: We add more features and more capabilities that we developed for X customer; we bring them to customer Y, and we bring them to customer Z. And then, as you saw in Finland, for example, we started with one type of program, then we added domestic violence.
Speaker Change: We add more features more capabilities that were developed for X customer, we bring that to customers <unk> customers that and then you saw like in Finland. For example, we started with one type of program that would be out of domestic violence, and we sell extending in Sweden. We started with one of them you had other programs and do we expect to do the same and what's great about this technology that a lot of the software on the cloud and are you can you can apply.
Ordan Trabelsi: Unknown Attendee, Ordan Trabelsi, Supercom
Speaker Change: The new <unk>, we have as well because of the lease breaks or at least is that once you have a new capability, we can share to two customers existing and new alike.
Ordan Trabelsi: Got it. That makes sense. Thanks. I'll turn back into queue. Thank you.
Speaker Change: Got it that makes sense, thanks, I'll jump back in the queue.
Speaker Change: Thank you.
Operator: Once again, if there are any questions, please press star one. Your next question for today is from Dan Schatz, a private investor.
Speaker Change: Once again, if there are any questions. Please press star one.
Speaker Change: Your next question for today is from Dan sheds, a private investor.
Speaker Change: Okay.
Dan Schatz: Hi everyone. First of all, it was great to see a positive net income, and the gross margin expansion was fantastic. My question really is concerning the repeated Uh, capital raises over the last couple of years that have deluded existing shareholders. I'm a longtime shareholder, and have been a big fan of the company. But I'm hopeful that we can turn the corner now with some net profitability, and I know we recently raised some money at a price that was higher than the stock was trading at. But I guess my question is, are you planning on any additional capital raises? And I'm hoping that we can leave that to a minimum if you want. Thank you.
Speaker Change: Hi, everyone.
Dan sheds: First of all it was great to see a positive net income in some.
Speaker Change: Gross margin.
Dan sheds: Expansion was fantastic My question really is concerning.
Dan sheds: The repeated.
Dan sheds: Capital raises over the last couple of years that hits.
Speaker Change: <unk> existing shareholders I'm, a longtime shareholder of benefits the company, but.
Speaker Change: I'm hopeful that we've turned the corner now with some net profitability.
Speaker Change: I know, we recently raised some money yet at a price that was higher than the stock was trading at.
Speaker Change: I guess my question is are you planning on any additional capital raises and I'm, hoping that we can leave that to a minimum if you are.
Ordan Trabelsi: Thank you for your continued support and super calm and great questions. When I came, I was a CEO, and you remember, I was a CEO in the US for the years before, and in 2021, I moved to Israel for the global CEO role, and we changed our strategy, and a lot of that was focused on growth because we had declines in revenues for five years or so, and we shifted to growth.
Speaker Change: Thank you for your continued support and Supercomm and great questions.
Speaker Change: So I came out of it.
Speaker Change: C O and you remember I was the CEO in the U S for the year before and into 2021 I moved a disrupt the global CRO and we changed some of our strategy in order that was focused on growth because we had declines revenues for five years or so and we shifted to growth so from 2021.
Ordan Trabelsi: So from 2021, revenues went from $11.7 to $12.5 to $17 plus, and now last year we closed at over $25 million. And in order to achieve that growth in a short period of time, we had to also expand our focus on growth, and that cost money, and it brought us into need of cash. But what's nice to see is while we focus on growth and we do need cash, our cash usage has declined over the years. So from three years ago, it was roughly $9 million in operating cash, and then $4.5, and last year it was just somewhere in the mid-2, between $2 and $3 million.
Speaker Change: <unk> gone from 11, 7% to 12, 5% to 17, plus and now last year, we closed over $25 million and in order to achieve that growth.
Speaker Change: In a short period of time, we had to also expand our focus on growth and that that cost money and it brought us into.
Speaker Change: He needs of cash, but what's nice to see is while.
Speaker Change: We focus on growth or we did have in these cash our cash usage to decline over the years. So from three years ago was roughly 9 million operating cash than four and a half and last year was just somewhere in the mid to between two and $3 million and <unk>.
Ordan Trabelsi: And as projects reach later stages, like the Romania project, then they become more cash flow positive, and then we could use that to stabilize our cash needs. And we did this capital raise just now to give us more support and to have a cushion for fluctuations. But currently, we're actually doing pretty good from an operating cash perspective. Sometimes, we're even breakeven or cash flow positive. And sometimes we're a little bit cash flow negative, and we need to manufacture things ahead of time. For example, for some projects that are leased, we need to manufacture a lot of bracelets ahead of time.
As projects reach later stages like Romania project, then they become more cash flow positive or we could use that to stabilize our cash needs and we did this capital raise just now to give us more support and to have a cushion for fluctuation, but currently or do you actually doing pretty good from an operating cost perspective.
Speaker Change: Sometimes a where we're even breakeven cash flow positive and sometimes we're a little bit Castro negative when we need to manufacture things ahead of time for some projects that are at least we need to manufacture a lot of bracelets ahead of time and that brings a sense of temporary cash negativity on that project and then afterwards, but these things balance out and with the large amount of projects that we're doing.
Ordan Trabelsi: And that brings us into temporary cash flow negativity on that project and then afterwards. But these things balance out, and with the large number of projects that we're doing, they start to kind of stabilize one another. And we hope that over the years, our cash needs will decline. That being said, when there are big projects out there that require, you know, a massive expansion and units, we think it's okay to take on those projects because they grow the company significantly.
Speaker Change: They started to to kind of stabilize one another and we hope that over the years, our cash needs will decline.
Speaker Change: That being said when there are big projects out there that require massive.
Speaker Change: Spansion and units.
Speaker Change: We think it's okay to take on those projects that they grow the company significantly those will require some cash upfront. Sometimes then we would accordingly.
Ordan Trabelsi: These will require some cash up front sometimes, so we would accordingly look for capital raises. However, we try to keep them to a minimum. And as you can see, our uses have been decreasing over time. And now, in the state we're at after these three years of growth, we're happy to see that our cash operations have declined, and we're able to depend more on operating cash production rather than external cash. So we're cognizant of that.
Speaker Change: Look for capital raises we try to keep to a minimum and as you can see our users have been decreasing over time.
Speaker Change: And now as they were at after these three years of growth.
Speaker Change: Happy to see that our cash used for operations, a decline and we're able to depend more of our operating cash production rather than external cash. So we're cognizant of that we're trying to reduce the capital raises to a minimum but also are aware that there's many opportunities out there and if there's opportunities that could provide a great return to our investors.
Ordan Trabelsi: We're trying to reduce capital raises to a minimum, but we are also aware that there are many opportunities out there. And if there are opportunities that could provide a great return to our investors, we will try to capitalize on that.
Speaker Change: We will try to capitalize on them.
Dan Schatz: Thank you. I appreciate that commentary and the feedback. I just caution you to keep in mind the existing shareholders when that capital raise happens, because we've suffered a significant amount of dilution over the last couple of years. Yeah, I think we are. Okay, good. Yeah, we're very excited.
Speaker Change: Thank you I appreciate that.
Speaker Change: The commentary and the feedback.
Speaker Change: We caution you to keep in mind, the existing shareholders when that <unk>.
Speaker Change: Capital raise happens because we suffered a significant amount of dilution over the last couple of years.
Transcription Note: Transcribed by https://otter.ai
Speaker Change: Okay.
Speaker Change: We are.
Speaker Change: Okay. Good yeah, we were very aware and.
Speaker Change: And hopefully over time the valuation.
Speaker Change: We'll justify all the all activities that we've been doing to grow the company over the years.
Yeah.
Operator: Your next question for today is from Mike Walters, a private investor.
Speaker Change: Your next question for today is from Mike Walters, a private investor.
Mike Walters: Morning, Mr. Trabelsi. Um, thanks for taking your time to provide us with another. Mooning.
Speaker Change: Good morning, Mr. Trabelsi.
Mike Walters: Thanks for taking the time to provide us with another.
Mike Walters: Great quarterly. Thank you for taking your time to provide us with another one. I appreciate, always appreciate your quarterly earnings and conference calls. Congratulations to you guys on another quarter of growth, record growth. As a long-term investor for four years now, I've been pleased by your methodical progress over time. I appreciate the questions that were also asked. It's been up and down, you know, with the growth thing, and I appreciate your answer also. It answered one of my questions, which was that whenever you have to dip into the capital, you're using it on possible projects that could... It will be positive for us as shareholders in the future.
Speaker Change: Good morning, Greg quarterly Thank you for taking your time to provide us with another one I appreciate I always appreciate your quarterly earnings and conference calls.
Mike Walters:
Speaker Change: Congratulations to you guys.
Speaker Change: On another quarter of growth record growth.
Speaker Change: It was a long term investor.
Speaker Change: For years now.
I've been pleased by your methodical progress over time.
Speaker Change: Ben.
Speaker Change: I appreciate the questions also that we're all says it's been.
Speaker Change: Up and down you know.
With the growth thing and I appreciate your answer also.
Speaker Change: Answered one of my questions was that whenever you're whenever youre at you have to dip into the capital you're using it.
Speaker Change: Possibly projects that could be a.
Speaker Change: Positive to us as shareholders in the future.
Speaker Change: Correct.
Ordan Trabelsi: Unknown Attendee, Ordan Trabelsi, Supercomputer Graphics, Unknown Attendee, Ordan Trabelsi, Yes, of course. And we're also, myself and other management, we also own shares, and we're very inclined and interested in increasing the value of the shares. Also, our main focus is that sometimes, short term, we need to raise capital to manifest our long-term goals. Our current stock price, we believe, does not represent the intrinsic value of the company at all.
Speaker Change: Can you repeat the last sentence you broke up for a second.
Speaker Change: Whenever you whenever you your use of capital is directed towards possible shareholder value growing in the future.
Yes of course, we're also.
Speaker Change: The other management we are.
Speaker Change: We also own shares were very and client interested in two to increase the value of the shares also are our main focus.
Speaker Change: It sometimes.
Speaker Change: Short term, we need to raise capital to manufacture to manifest our long term goals. Our current stock price. We believe does not represent the intrinsic value of the company at all we're trading at fractions of multiples that are that we're seeing in the industry and we're growing at 10 times faster than the average industry as I said earlier, so we think over time.
Ordan Trabelsi: We're trading at fractions of the multiples that we're seeing in the industry, and we're growing at 10 times faster than the average industry, as I said earlier. So we think over time, the market value will align with intrinsic value, and then investors will be able to appreciate the valuations for the company.
Speaker Change: The market value of line with intrinsic value and then investors will be able to appreciate.
Speaker Change: The valuations for the company.
Mike Walters: I appreciate that answer. Um, it seems to me that you guys have a good, a good and growing pulse on your fundamentals. Would you say, fundamentally speaking, would you say that's
Speaker Change: I appreciate the answer it seems.
Speaker Change: To me.
Speaker Change: You guys have a good a good and growing pulse on your fundamentals would you say fundamentally speaking would you say, that's that's probably correct.
Speaker Change: Yeah.
Speaker Change: We are a growing part.
Mike Walters: Paul, Paul. Yeah, yeah, good. A great poll side.
Speaker Change: Sorry.
Speaker Change: Yeah, Yeah, good great poll side in your fundamentals and that they are growing in the right direction.
Ordan Trabelsi: Your fundamentals and that they are growing in the right direction. Yes, we are, as you can see from some of the improvements in profitability, we try to focus on fundamentals and also the underlying technology and the health of our projects. We're able to rebid on these projects, and win the rebids, as we said, because we have a great relationship with our customers and maintain a great reputation to help us to win more projects in other places around the world.
Speaker Change: Yes. So we're as you can see from some of the improvement of the profitability really tried to focus on fundamentals and also the the underlying technology and the health of our projects were able to re went rebid these projects.
Speaker Change #100: When the Rebids as he said because we have a great relationship with our customers and maintaining a great reputation that helps us to win more projects in other places around the world.
Mike Walters: It kind of leads into my next question. On June 29th of last year, you guys issued a press release that you incorporated advanced AI capabilities to enhance your monitoring solutions and integrated Cutting-Edge AM Models to Empower Your EM Offerings by Unlocking New Real-Time Data Insights and enhanced decision making processes. So I was wondering about that because you guys are obviously bidding on, or you are, announcing contracts over the course of the last couple of years pretty frequently.
Speaker Change #100: With that kind of it kind of leads into my.
Speaker Change #101: My My next question is.
Speaker Change #102: On June 29th last year, you guys issued a press release that you incorporated advanced AI AI capabilities to enhance your monitoring solutions.
Speaker Change #101: Yes.
Speaker Change #101: Yes.
Speaker Change #101: Integrated cutting edge AI models to empower your you have offerings by unlocking new real time real time data insights.
Speaker Change #101: And enhance decision making processes. So I was wondering about that because you guys are obviously bidding on or you are.
Speaker Change #101: Announcing contracts over the course of.
Speaker Change #101: Last couple of years.
Mike Walters: So my question is, is the AI Unknown Attendee, Ordan Trabelsi, Supercomputer Science, Supercomputer Science, Supercomputer. And I was wondering if the AI, the advances in AI, are paying off possibly by maybe making each onboarding more efficient than the last.
Speaker Change #101: Pretty frequently so my question is does the AI.
Speaker Change #101: The advancement in your AI capabilities.
It gets stronger every.
Speaker Change #103: Every contract like is it does it does it make it more efficient your next onboarding because I notice that you guys like part.
Speaker Change #103: Part of your business model is to onboard your customers, which I like I like that a lot that you onboard your customers before actually coming to terms on our contracts.
Speaker Change #104: And I was wondering if the AI.
Speaker Change #105: The advance the investments of the AI is paying off possibly by maybe making each onboarding more efficient than the last.
Ordan Trabelsi: So the, as you may be familiar with AI in general, the more data you have, the more helpful it is. For us, it's still... We started designing the implementation for a lot of these constructs and modules, and we have a lot of data, not just not just new, but over the years with onboarding tens of thousands of customers, different regions around the world that could be used to help the officer, at first, where they're tracking all these offenders, because one officer could be tracking 50 to 100 offenders at the same time.
Speaker Change #105: And so the.
Speaker Change #105: As you may be familiar with AI in general.
Speaker Change #105: Hmm.
Speaker Change #105: The more data you have the more helpful for.
Speaker Change #105: For us it's still.
Speaker Change #105: We we started designing the implementation for a lot of these contracts and modules and we have a lot of data and not just not just new but over the years with onboarding of tens of thousands of customers different regions around the world.
Speaker Change #105: That could be used to help the.
Speaker Change #106: First that the officer, where they're tracking all of these offenders, because one officer could be tracking 50 to 100 offenders at the same time.
Ordan Trabelsi: It's hard to keep track of everything, and when there are behaviors that create trends, it's easy for us to know that something's going to happen before the officer even sees it. And that's the kind of AI insight that we use learning to improve. These are still, a lot of them are still in various design and implementation stages, and there's a big opportunity there for more value creation for our customers as these start to roll out in a more efficient and comprehensive fashion.
Speaker Change #106: Hard to keep track of everything and when does the behaviors that create trends, it's easy for us to know that something.
Speaker Change #106: Something's going to happen before the officer, even sees it and those are the kind of as an example of the kind of insight that we use the learning and to improve.
Speaker Change #106: But these are still these are still a lot of them are still in various design and implementation stages, and we think that there's a big opportunity there for more for more value creation for our customers as they start to rollout in a more efficient and.
Speaker Change #106: Comprehensive fashion.
Ordan Trabelsi: Also, a lot of labor-intensive tasks. Monitor. We have to do a lot of clicks, a lot of shifts from one to one that will help with that, and that will improve efficiency for the program, which will save effectively more costs and also save more officer time.
Speaker Change #106: Also a lot of the labor intensive tasks.
Speaker Change #106: Monetary you have to do a lot of clinics that have shifts from one to one that will help with that and that will make the efficiency for the program to just say if in fact any more costs and also save more officer time.
Mike Walters: That's what I was thinking. Okay, that's that. Your employees, you guys employ over 100 people, and you said that in the one answer you said that you implemented a new or any addition to a new sales team.
That's what I was thinking okay.
Speaker Change #106: That's.
Speaker Change #106: What I was thinking.
Speaker Change #107: Your employees you guys employee over 100 people and as you said the one answer you said that you are.
Speaker Change #108: <unk> implemented a new no I didn't.
Speaker Change #109: In addition to new sales soon.
Mike Walters: Ordan Trabelsi
Speaker Change #110: What did you say what the employer sorry.
Ordan Trabelsi: Employees, I think you're over a hundred. Is that it? Yes, true.
Speaker Change #111: Employees I think you're over 100 and is that is that yes true yep wherever globally wherever 100, yes.
Speaker Change #112: 120, probably pretty proud of 120, awesome, you're probably pretty proud of them and the progress yeah, mostly proud is that we've had a we've had a great.
Ordan Trabelsi: Yeah, wherever I'm going, believe over a hundred 120. He's probably pretty proud of him. 120. Awesome. You're probably pretty proud of them. Yeah, I'm actually proud of it. We've had a great run in the last quarter as we are doing very well with growth and profitability and winning new projects, and there's a lot of work for us as a relatively small team; we have a lot of work and we do a lot of these things at the same time.
Speaker Change #113: We've had a great run in the last quarter or as Youre doing very well with the growth and profitability and winning new projects and there's a lot of work for were relatively small team, but a lot of work and we're doing a lot of these things.
Ordan Trabelsi: So yes, we're very happy with our team. I'm happy with the progress as well. Yeah, I was a little I was surprised by the 5.7 million. I actually thought that that might have been a challenge a little bit. As an estimate, because I know in the past you asked the estimate, I haven't, I felt like, reflected your actual progress, but this one, I felt like, challenged you a little bit. 5.7 million revenue, and I was happy to see that it was 6.9. So I'm really proud of you guys' continued growth, and I look forward to continuing to invest with you guys long term.
Speaker Change #113: Same time so.
Speaker Change #113: So, yes, we're very happy with our teams.
Speaker Change #113: I'm happy with the progress as well.
Speaker Change #114: Yeah, I was I was a little bit I was surprised by the $5 7 million and I actually thought that that was that might've been a challenge a little bit.
Speaker Change #115: As an estimate because I know in the past you asked the estimates are havent I felt like reflected as your actual progress, but this one I felt like challenge you a little bit with the $5 7 million revenue and I was happy to see that it was $6 nine.
Speaker Change #114: So.
Speaker Change #114: I'm really proud of.
Speaker Change #114: You guys continued growth.
Speaker Change #114: And I look forward to continuing the investments you guys long term.
Mike Walters: Thank you for your support and for your questions.
Speaker Change #116: Good. Thank you for your support and for your questions.
Mike Walters: And with that, I'll let you go. Thanks. Thanks. We're done.
Speaker Change #116: And with that I'll, let you go thanks, Thanks Jordan.
Speaker Change #116: Thank you.
Operator: Your next question is a follow-up question from Matthew Galinko.
Speaker Change #117: Your next question is a follow up question from Matthew <unk>.
Matthew Evan Galinko: Hey, hello again. First, I have the balance sheet question. I noticed your receivables were in the first quarter, you know, compared to the end of last year. Just wanted to see, you know, I. Is there a meaningful difference in payment terms between US and European EM clients, and I guess what moves the payment terms around?
Speaker Change #118: Hey, Hello again.
Speaker Change #119: Two quick follow ups for you.
Speaker Change #118: First.
Speaker Change #120: I get.
Speaker Change #121: You hit the balance sheet question I noticed your.
Speaker Change #121: Receivables.
Speaker Change #121: Or.
Speaker Change #121: In the first quarter compared to the end of 'twenty three.
Speaker Change #123: Just wanted to see you know I yeah.
Speaker Change #122: I guess.
Speaker Change #124: Is there a meaningful difference in payment terms between U S and European.
Speaker Change #124: M.
Speaker Change #124: And clients and I guess, what what moves to the payment term surround.
Ordan Trabelsi: Just sometimes it's just how it falls at the end of the quarter, because you can receive an order just like we received 5 million orders. You can receive orders, and you start to manufacture them and deliver them, you recognize revenues, but you haven't received the cash yet. On the other hand, you can receive the cash right before the end of the quarter, and then it brings down the AR nicely for the report. Transcribed by https://otter.ai
Speaker Change #125: Oh, just sometimes it's just how it falls at the end of the quarter because you can receive an order just like we received 5 million orders you can receive orders and you are starting to manufacture them.
Speaker Change #126: All over them recognize revenues you haven't received the cash yet.
Speaker Change #126: On the other hand, you can receive the cash right before the end of the quarter and then it brings down they are nicely for their for the report.
Speaker Change #126: And so to speak but I'm. We're not you know some of these are paid by delivery and some of these are a consistent monthly payments based on lease. So we have a whole mix of.
Speaker Change #126: Projects the more leased like project, which is what's happened in the U S.
Speaker Change #126: Monthly base, which is a little bit more consistent.
Speaker Change #126: The delivery.
Which is sometimes the national projects in Europe, which are more.
Speaker Change #126: By the units.
Speaker Change #126: And then manufacture them.
Speaker Change #126: Okay.
Matthew Evan Galinko: Got it. Thanks.
Speaker Change #127: Got it thanks, and then just given how strong or media. It's been for you over the last few quarters I guess.
Matthew Evan Galinko: And then just give you how strong Romania has been for you over the last few quarters. I guess I'm Curious how you look at the kind of business, excluding Romania, obviously, you have a lot of wins. But, you know, how do you balance the risk a little bit? Or like, how do you kind of fill in that? That buckets when, you know, if Romania slows down, you know, can you kind of fill in the gap with the rest of your pipelines?
Speaker Change #128: Curious how you look at the.
Speaker Change #128: Kind of business, excluding Romanian obviously, you have a lot of.
Speaker Change #128:
Speaker Change #128: A lot of wins, but you know how do you how do you balance the risk.
Speaker Change #128: Have risk a little bit or like how do you kind of fill in that.
Speaker Change #129: At that buckets, Glenn if Romania slowed down can you kind of filling the gap with the rest of your pipeline is the question.
Ordan Trabelsi: So first of all, Romania is still running well, and they're ordering more and more, and we'll see if the customer continues to maintain this positivity and this satisfaction, as you've seen with other customers in the world. There are always opportunities for growth programs and additional programs. Meanwhile, we're not just relying on Romania, of course; we're bidding on other projects, and in Europe and in the US, we have active demos. And a lot of those will come to add to Romania and also add to the base of other projects that we have there.
Speaker Change #130: So first of all it really is still running well, they're ordering more and more on the I will see if a customer continues to maintain.
Speaker Change #130: It's positivity and its satisfaction as you've seen with other customers in the world, there's always opportunities for growth programs and additional programs.
Speaker Change #130: Meanwhile, we're I just relying on Romania of course, we're bidding on other projects and in Europe and in the U S. So we have active.
Speaker Change #131: Demos and a lot of those will come to add ons in Romania, and also at all to the base of other projects that we have there.
Speaker Change #132: It's certainly a nice win and rather than just being a nice win which gives us a nice revenues profitability is also a good reference.
Ordan Trabelsi: Romania is certainly a nice win, and rather than just being a nice win, which gives us nice revenues and profitability, is also a good reference. You may remember in the past that there were some projects we've been bid on because we didn't have references of a certain size. Here you're looking at a 15,000 unit Transcripts provided by Transcription Outsourcing, LLC.
Speaker Change #133: Because as you may remember in the past that there's some projects we can bid on because we didn't have references a certain size you're looking at a 15000 units.
Speaker Change #134: Simultaneous 15000, and simultaneous units proud at project with domestic violence or many of these in the world and we have it and we've been implementing it successfully and when there.
Speaker Change #134: Other projects are large size come out.
Speaker Change #134: We could bid and show that we've been doing this a very nicely and so that puts us in a in a new area, where we weren't if you look three or four years ago.
Matthew Evan Galinko: I guess as a follow-up to that, does your success at something Romanian-scale in Europe help as a reference for, you know, doing state-level projects in the U.S. or North America?
Speaker Change #136: I guess the follow up to that.
Speaker Change #135: Your success.
Romania scale in Europe helped that the reference for doing state level project.
Speaker Change #135: In the U S or North America.
Ordan Trabelsi: Unknown Attendee, Ordan Trabelsi, Supercom Of course, you know, the closer you are, it's easier to win taxes in California; the closer you are in the same country, then there is more similarity there, but a $33 million project of 50,000 units. Transcription by https://otter.ai, Unknown Attendee, Ordan Trabelsi, Supercom, could have a very nice return, but the expected return is low because we don't know the probabilities there because these are large projects that we haven't yet worked on as much.
Yeah the.
Uh huh.
Speaker Change #135: Of course, the closer you are it's it's easier to two to one Texas after you've done, California. The closer you are.
Speaker Change #135: So that's just in the same country.
Speaker Change #135:
Speaker Change #137: And there is more similarity there, but a $33 million project at 50000 units.
Speaker Change #138: It's substantial anywhere in the world.
Speaker Change #138: It's our biggest one and we grew up a lot or we started projects in Lithuania or 100000, 200000 Duena Latvia.
Speaker Change #139: Up to Canada of $1.8 million, and we had Finland, and Denmark and some of these are $3 million to $4 million in Sweden with 7 million that was $33 million, so, but certainly it does help us and in the U S. The more we win we're still doing counties in the U S. We're also looking at states. We also considered maybe gone on the federal level in the U S. As well, it's all a matter of where do we have the high.
Speaker Change #138: Yes.
Speaker Change #138: Return on investment on our dollar spend for some of these projects.
Speaker Change #138: Could I have a very nice return, but the expected returns low because we don't know what the probabilities are because these are large projects that we haven't yet worked out as much whereas in Europe, we can bid on with more confidence as we know it moved up pretty pretty much how things are going to fall out and how the competitors are light and score in these projects.
Ordan Trabelsi: Whereas in Europe, we can bid on with more confidence as we know pretty much how things are going to fall out and how the competitors align and score in these projects. We've done many of them in the US; we're trying to develop that same capability and the same knowledge. And we're going to use that more effectively. So we're still in the early stages in the US. And that's what's exciting about this; there's a big opportunity there, and we're very well positioned for it.
Speaker Change #138: Many of them in the U S. We started adult I think ability to seek knowledge and we're going to have to use that more effectively. So we're still in the early stages in the U S.
Speaker Change #138: Excited about this there's a big opportunity there.
Speaker Change #138: And we're very well positioned positioned for it.
Speaker Change #138: Yeah.
Operator: Braden, I appreciate the caller. As a reminder, if there are any questions, please press star one.
Speaker Change #140: Great I appreciate the color.
Speaker Change #141: As a reminder, if there are any questions. Please press star one.
Operator: Once again, if there are any questions or comments, please press star one on your phone at this. My next question is from Eric Hamilton, a private investor. I know you're concentrating on the prison market, but what about the migrant market? Are there any opportunities for you to sell your products to countries that have migration problems?
Speaker Change #141: Once again, if there are any questions or comments. Please press star one on your phone at this time.
Speaker Change #142: Your next question is from Eric Hamilton, a private investor.
Speaker Change #141: Yes.
Eric Hamilton: I know youre concentrating on the.
Eric Hamilton: Dean crystalline market, but what about.
Eric Hamilton: The migraine market. So is there any.
Eric Hamilton: Opportunities for you to.
Speaker Change #144: Melissa to your product to.
Speaker Change #144: Countries that have migration problems.
Eric Hamilton: Can you repeat that? Migration problems across borders?
Yes.
Speaker Change #145: <unk> migration problems with over the borders.
Eric Hamilton: Unknown Attendee.
Speaker Change #145: Yes, yes.
Eric Hamilton: In the U.S., there's a...
Speaker Change #145: Yeah.
Speaker Change #146: Uh huh.
Speaker Change #147: Sorry go ahead.
Eric Hamilton: are the countries that have these issues and are interested in getting the bracelets or monitors from you to monitor the migrants coming into their country.
Speaker Change #148: Or the country that have these issues.
Speaker Change #149: Interested in getting the great clips are monitors from you to monitor the migrants coming into their countries.
Speaker Change #149: No.
Ordan Trabelsi: Good question. It's something that we're looking into and considering further. We know that in the U.S., there's the ICE program, and they use similar technology to track people coming over the border. They call them detainees. They come over the border from Mexico, and they're being tracked for a period of time until they decide their status and if they're approved to enter fully. They have big programs with... I think they sold over 100,000 units.
Speaker Change #150: We've seen good question, it's something that we're looking into and considering further we know that in the U S. Theres the ice program.
Speaker Change #151: And they use similar technology to track people coming over the border there they call them detainees they come with water from Mexico, and they are being tracked for a period of time until they decide the status and if there are if they are approved to enter fully.
Speaker Change #151: That big programs with I think over 100000 units. Other countries are very are considering and have considered not just now but.
Ordan Trabelsi: Other countries are considering and have considered, not just now but also in recent years, areas like that, and we've been looking into it, but we have not yet made that our biggest focus. Our biggest focus has been on programs in the country for offender monitoring. That's where the complexity is greatest. And since we have technological prowess, and we're able to score higher, we can go straight to the Unknown Attendee, Ordan Trabelsi, Supercomputer Scientist
Speaker Change #151: So over the recent years, various probes or anything like that and we've been looking into it but we have not yet made that our biggest focus will be the focus has been on the programs.
Speaker Change #151: In the country for the offender monitoring that's where the complexity is greatest and since we have technological progress and we're able to score higher we can go straight to the.
Speaker Change #151: That's the largest projects with the highest complexities, but these are other ones that are complimentary that could be added and it's something that over time, we would probably look into further even though we've already started looking.
Eric Hamilton: Well, the technology you have done for the prison systems, would the same technology be used for a migrant monitoring system?
Speaker Change #152: Well the technology you have did.
Speaker Change #152: We have done for the prison systems with the same technology can be used for a migrants.
Speaker Change #153: Monitoring system.
Speaker Change #153: Okay.
Ordan Trabelsi: The technology, I mean, the government would use technology in whichever way they like, but the technology is the same. It's different policies, you have different rules and different procedures, but the technological capabilities are the same. You have a bracelet, you monitor someone's location, there's anti-tampering, they can't take it off, they can't remove it.
Speaker Change #154: The technology I mean, the government would use technology in whichever way they they would like but the technology is same different policies you have different rules and different procedures.
Speaker Change #154: Does the technological capabilities of the same bracelet monitor someone's location, there is anti tampering and they can't take it off the kind of move it. There's all these processes are backend data intelligence aspect of what people are doing how they're doing.
Ordan Trabelsi: There are all these processes on the back end, the data intelligence aspect of what people are doing and how they're doing. And, you know, we provide so much flexibility and so much customization to our customers. We have so many customers that they each want something a little bit different. This is why Transcribed by https://otter.ai
Speaker Change #154: And.
Speaker Change #155: We provide so much flexibility in so much customization to our customers. We have so many customers that they each want something a little bit different.
Speaker Change #155: This is.
Let's call it a simple adjustment if someone were to change from this to that.
Speaker Change #156: Acknowledges there.
Eric Hamilton: Well, I know you have a limited staff and workforce, but I have to think that this is an area that you should be investing in and trying to get some of these substantial contracts if the technology is the same for a migrant as it would be for an inmate. It just makes sense that you would be taking some personnel and trying to get yourself involved in this migrant problem because it's huge, and I think it would be a good way of the government monitoring these people that come into the country.
Speaker Change #157: Well I know you have a limited our staff and workforce.
Speaker Change #157: I have to think that this is a area that are.
Speaker Change #157: You should be investing in and trying to get some of these are substantial contracts.
Speaker Change #157: Technology.
Speaker Change #157: Is the same for a migrant as it would be for a inmates.
Speaker Change #157: It just makes sense that.
Speaker Change #157: You would be taking some.
Speaker Change #157: Personnel and trying to get yourself involved in this migrant problem, because it's huge and I think it would be a good way of the government's monitoring these people that come into the countries.
Ordan Trabelsi: So first of all, you're right. Certainly, it's a good idea to look at complementary markets with similar technology. And that's what we've been doing consistently. That's how we entered the domestic violence tracking market, and also the inmate tracking market, over the years. And I appreciate the thought and the focus on this.
Speaker Change #158: So first of all Youre right.
Speaker Change #158: The.
Speaker Change #159: Is it a good idea to look at comprehension markets with similar technology and that's what we've been doing consistently that's how we entered domestic violence tracking and also the inmate tracking.
Ordan Trabelsi: The question for us when it comes to new projects and new types of programs is how ready the customers are to actually deploy these programs. A lot of times, especially in other countries outside the US and Europe, we see them trying to enter the normal electronic monitoring market, let's say in South America, and they seem very excited, and you spend a lot of time and effort, and then, at the end, you know, they're not ready for one reason or another to actually deploy something like this. So with migrants like other ones, we need to understand. How? Governments are the ones that have to push these laws and regulations.
Speaker Change #159: Over the years.
Speaker Change #160: And I appreciate the thoughts and the focusing on this.
Speaker Change #160: The question for Us when it comes to new projects and new types of programs is how ready the customers are to actually deploy these programs.
A lot of times.
Speaker Change #160: Especially in other countries outside the USA and Europe, we see them trying to enter the normal electronic monitoring market.
Speaker Change #160: Within South America, and they seem very excited and you spent a lot of time and effort and then at the end they are not ready for one reason or another its actually deploy something like this so with with migrant like the other ones we need to understand.
Speaker Change #160: How.
Speaker Change #160: How likely the programs are actually deployed before we invest significant amount of time and adjustments for that but we do interact with local partners in any country, where you work on these projects and they give US continued updates also for stuff like this so is that something that we're that we're crossing offer not emphasizing it and it's something that we continuously look at but we assess it versus the likelihood of other <unk>.
Speaker Change #160: Rejects like in Romania, They did a new project for China monitoring greater project for them. They were very serious about it and you see it also by how quickly the deployed it with us and all of the continued growth of the project and if we can find customers like that that are willing to do this on the migrant issue.
Speaker Change #160: And then they are able to adjust their laws and regulations accordingly.
Speaker Change #160: That would be great in Israel, there was issue of domestic violence and they've been tried to pass a law for over 10 years. It just last year.
They were able to pass it and then that became big focus now and now Theyre having.
Speaker Change #161: The RFP processes around it which are guided by the government. So we are in touch with all of the different players where needed but the governments are the ones that have to push these laws and regulations.
Speaker Change #161: Our new projects start.
Eric Hamilton: Okay, well, let's hope that you can develop more products so you can enhance the value of the company because the issue of just diluting the value of the shareholders by writing more shares or doing more outstanding shares is not a winning formula. You need to either bid higher on the projects to cover your overhead and to have money for R&D. You know, it's great to get projects, but if you are losing money on R&D, it's not a good idea. So, I think that's it, about contracts. That's That's no win for anybody.
Speaker Change #162: Okay, well lets hope that you can do.
Speaker Change #162: Develop more products. So you can enhance the <unk> the.
Speaker Change #162: The value of the company because the issue of just diluting the value of the shareholders by writing more shares or <unk>.
More outstanding shares is not a winning formula.
Speaker Change #163: You need to yes, either a bit higher on the projects to cover your overhead.
Speaker Change #163: And to have money for R&D.
Speaker Change #163: It's great to get projects, but if you are losing money on.
Speaker Change #163: Odd contracts.
Speaker Change #163: That's no win for antibody.
Ordan Trabelsi: Of course, we're certainly not losing money on projects and on contracts. We're making money on these contracts, and we're actually winning with our technology, not with a low price approach which some companies employ in some industries.
Speaker Change #164: Of course, and we're certainly not losing money on products on contracts.
We're making money on these contracts and we're actually winning with our technology not with a with a low price approach, which some companies appointing some in some industries. The thing is these these projects, sometimes large and they require capital.
Ordan Trabelsi: The thing is, these projects are sometimes large, and they require capital, and sometimes we need to raise capital accordingly. And the stock price, our stock price was much higher in the recent past, and valuations are not always reflective of the intrinsic value of the company. As the intrinsic value is more apparent, it also makes it much easier to raise capital with minimal dilution. We don't control the market, but the market has been sometimes challenging to deal with in terms of valuations over the past two or three years.
Speaker Change #164: We need to raise capital accordingly, and as the stock price.
Speaker Change #164: Stock price was much higher in the recent past.
Speaker Change #165: <unk> does not always reflective intrinsic value of the company is the Trinity values more apparent. It also makes it much easier to raise capital with minimal dilution.
Speaker Change #165: The we don't control the market, but the market has been sometimes challenging to deal with in terms of valuations over the past two or three years, but we continues to grow.
Ordan Trabelsi: We continued to grow and to perform projects and deploy new products. We're happy with the progress we've achieved, even though we're aware of the dilution and we're trying to keep that to a minimum as much as possible.
Speaker Change #165: A grow into different projects and deploying new products on it.
Speaker Change #165: Happy with the progress was achieved even though we are aware of the dilution and we're trying to keep that as a minimum as much as possible.
Eric Hamilton: Can you get your clients that are interested in giving you an order to upfront you with some of the initial capital costs to process their order? Can they do some upfront loading by giving you some money when they give you a PO?
Speaker Change #166: Can you.
Speaker Change #167: Get your clients that are interested in giving you an order to upfront you with some of the.
Speaker Change #167: Initial.
Speaker Change #167: Capital costs to process their order and they do some upfront loading of the.
Speaker Change #167: Giving you some money when they give you a P O.
Speaker Change #167: Yeah.
Ordan Trabelsi: That's a great question. The government is usually the one that decides the structure of the payments, but these are competitive processes. So there are five, six, seven players competing, and the government says, these are the payment terms that I want. And, you know, it's hard to come up with and say, no, with us, you're gonna pay up front, and with everyone else, they're gonna pay over time. So sometimes we have the ability to do that, especially when it's an existing customer that's been working with us for many years, because they already have our system and deploy it, they already know us; then we have more flexibility. But sometimes we don't have that flexibility, and we have to conform to the structure that the customer does.
Speaker Change #168: That's a great question.
Speaker Change #168: The government usually the ones that decide the structure of the payments remember these are competitive processes.
Speaker Change #168: So there's five six or seven players competing on and the government says these are the payment terms that I wanted.
Speaker Change #168: Hard to compensate that with US you didn't pay upfront with everyone else, they're going to pay over time. So it sometimes we have the ability to do that especially when it's an existing customer that's in working with us for many years, because they're already out of our system and deploy their he knows that we have more flexibility, but also sometimes we don't have that flexibility and we have to conform to the structure that the customer demands.
Speaker Change #169: I understand within three to five years.
Eric Hamilton: I understand that. We've been doing this for 35 years, yeah.
Eric Hamilton: I understand all your responses. I understand that completely. It's just a way of having relationships with a client that makes them understand, listen, we have the best technology, we have the best product, and you want to come on board with us. Well, we need you to help us and assure us that or help us to get you the product. So we aren't going into hawk mode to supply you with the product you need.
Speaker Change #168: Andrew.
Speaker Change #170: And all your responses I understand that completely.
Speaker Change #170: It's just a way of having relationships with a client that make them understand listen where we have the best technology. We have the best product and you want to come on board with Us well we.
Speaker Change #170: We need you to help us and assure us that or help us to get you the products. So we arent.
Speaker Change #170: Going into hock to supply you with the product unique.
Ordan Trabelsi: Yeah, and we have those conversations when they allow us to. Once the relationship has developed and evolved over the years, it's really it's an ongoing sensitivity and approach with these government customers that we've been working with for 35 years because even before the center monitoring, we've been doing passports and ID cards and driver's licenses. And it's always been that, you know; it's always escorted with payment terms.
Speaker Change #170: And we have those conversations when they allow us to once the relationship has developed and evolved over the years.
Speaker Change #170: Really it's a it's ongoing.
Sensitivity and AR.
Speaker Change #170: And the approach with these government customers that we've been we've been working with them for 35 years, because even before the offender monitoring we've been doing passports I'd cards and driver's licenses and it's always been that.
Speaker Change #170: Yeah, it's always.
Speaker Change #170: S correlated with the payment terms.
Ordan Trabelsi: It's a big part with these government contracts. At the beginning, you have less say. Over time, you have more say. You when your technology becomes more, more unique, and more prevalent as an industry leader. And that's what we're working on all the time. That's what you keep seeing. As we continue to invest in R&D, you have more abilities, and we, we expect and hope, over time, as we become larger, our expansion potential is there.
Speaker Change #170: Pardon me these government contracts at the beginning you have let's say over time, you have more say you.
Speaker Change #170: When you're technology becomes more.
Speaker Change #171: We're unique and we will prevail in.
Speaker Change #171: As the industry leader and that's what we're working on all the time, that's how you keep seeing them continue to invest in R&D you have more abilities and we we expect and hope over time as we become larger our expansion potential is there to manifest it will also be able to do.
Ordan Trabelsi: And once we manifest it, we'll also be able to improve our terms with payments from the customers. But our shift from South America and Africa to the US and Europe has already made a huge Unknown Attendee, Ordan Trabelsi, Supercom
Improve our terms with a with payments of the customers, but our shift from South America and Africa to the U S and Europe has already done a huge.
Speaker Change #171: Of.
Speaker Change #172: Benefit improvement for us in terms of collections in terms of payment structures. So that's already been a big help for us over the past five years to seven years and now even with these regions. There is always room for improvement.
Speaker Change #172: As we discussed.
Eric Hamilton: Well, thank you very much for putting up with me and answering my questions. And I certainly have great potential. There seems to be some disconnect between the value of the shares and your potential. And now you have shown that you can make a net profit, which is the critical thing. It can be consistent with net profit. It's got to improve the value of the share.
Speaker Change #173: Well, thank you very much for.
Speaker Change #174: Putting up with me and taking my questions.
Speaker Change #175: I sort of in line just any quick questions.
Speaker Change #174: Hi.
Speaker Change #176: Great potential there is some there seems to be some disconnect with the value of the shares and your potential and now you have shown that you can do a net profit which is the critical thing.
Speaker Change #176: Consistent with net profits.
Speaker Change #176: It's got to improve the value of the shares.
Speaker Change #176: Yes.
Operator: Over time, that's what we hope to happen. And thank you very much for your questions and for your support and Supercom. Thank you. Once again, if there are any remaining questions or comments, please press star one.
Speaker Change #176: Over time, that's the way.
Speaker Change #177: We hope to happen and thank you very much for your questions and for your support in Supercuts.
Speaker Change #178: Thank you.
Speaker Change #179: Once again, if there are any remaining questions or comments. Please press star one.
Ordan Trabelsi: At this time, I will pass the call back to Ordan for his closing remarks.
Speaker Change #180: At this time I will pass the call back to our Dan for closing remarks.
Operator: I want to thank all of you for participating in today's call and for your interest in Supercom. Please contact us directly if you have any additional questions. We look forward to sharing our progress with you on future conference calls, filings, and press releases. Thank you and have a great day.
Dan: I want to thank all of you for participating in today's call and for your interest in <unk>.
Speaker Change #182: Contact us directly if you have any additional questions. We look forward to sharing our progress with you on the next conference calls filings and press releases I. Thank you and have a great day.
Operator: This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.
Speaker Change #183: This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.