Revenues Increase 56% from Prior-Year Period QADIMA, Israel, and
MCLEAN, Va., Aug. 30 /PRNewswire-FirstCall/ -- Vuance, Ltd.
(formerly SuperCom Ltd.) (Nasdaq: VUNC; Euronext: VUNC), a provider
of incident management, active RFID and credentialing solutions,
today announced its unaudited operating results for the second
quarter and first half of 2007. Recent Business Highlights --
Second quarter revenues and gross profits increased 56% to $2.8
million and $1.7 million, respectively, when compared with
prior-year period. -- Acquisition of SHC completed. -- Common Stock
listed on The NASDAQ Capital Market. -- Progress continues in
penetration of Active RFID and credentialing markets, in accordance
with the Company's strategic plan. Operating Results Revenues for
the quarter ended June 30, 2007 increased 56% to $2.8 million, when
compared with revenues of $1.8 million in the second quarter of
2006. Revenues for the six months ended June 30, 2007 increased 44%
to $5.5 million, compared with revenues of $3.8 million in the
first half of 2006. Gross profit increased 56% to $1,741,000 (61.3%
of revenue) in the most recent quarter, versus $1,117,000 (61.3% of
revenue) in the three months ended June 30, 2006. For the six
months ended June 30, 2007, gross profit increased 38% to
$3,139,000 (56.8% of revenue), compared with $2,280,000 (59.4% of
revenue) in the corresponding period of the previous year. The
Company reported a net loss of $1,330,000, or $0.33 per share, in
the three months ended June 30, 2007, compared with a net loss of
$993,000, or $0.25 per share, in the second quarter of 2006. A net
loss of $2,411,000, or $0.60 per share, was posted for the six
months ended June 30, 2007, versus a net loss of $1,718,000, or
$0.43 per share, in the first half of 2006. On a non-GAAP basis
(see reconciliation between GAAP and non-GAAP results at the end of
this press release), excluding non-cash stock-based compensation
expenses of $354,000, the Company's net loss totaled $976,000, or
$0.24 per share, in the second quarter of 2007, versus a non-GAAP
net loss of $867,000, or $0.22 per share, in the three months ended
June 30, 2006. Non-cash stock- based compensation of $126,000 was
recorded in the second quarter of 2006. Management Comments "We are
pleased to report that both revenue and gross profits increased 56%
in the most recent quarter, when compared with the prior-year
period, as the process of repositioning the Company for
participation in higher-growth and more stable markets moves
forward at a pace that is in line with management's expectations,"
stated Eyal Tuchman, Chief Executive Officer of Vuance Ltd. "Our
net loss was higher than the second quarter of the previous year,
reflecting substantially increased selling and marketing expenses
related to our Incident Response Management and active-RF business
initiatives in the United States as well as higher sales expenses
related to our traditional legacy business." "A number of other
initiatives were announced or undertaken during and shortly after
the second quarter that are consistent with our long-term goals,"
continued Tuchman. "We changed the Company's name from 'SuperCom
Ltd.' to 'Vuance Ltd.' in May, in order to more closely identify
with our technological capability of providing a uniquely
comprehensive view of every nuance of controlled sites or objects.
We also recently completed the listing of our common stock on The
NASDAQ Capital Market, and we expect this move to benefit our
shareholders as it should improve the trading liquidity of Vuance
shares and will allow more institutional investors to invest in our
Company." "Shortly after the end of our second quarter, we
announced an agreement to acquire Security Holding Corp., a
U.S.-based manufacturer and distributor of RFID, security
management and forward-thinking access control systems and
equipment that we believe can leverage Vuance's technological
commitment to the credentialing and tracking of mission-critical
people, objects and assets. The acquisition was completed on August
28, 2007. SHC has thousands of commercial, governmental and
institutional security management, access control and RFID
installations in the U.S., and its acquisition will have an
immediate and meaningful impact upon our sales efforts in North
America. We expect SHC to contribute between $5 million and $6
million to our consolidated revenues during the upcoming twelve
months." "Overall, management is pleased with Vuance's progress in
recent months, and I am confident that additional IRMS and PureRF
contracts will be forthcoming in the second half of the year. We
remain alert for both organic growth and acquisition opportunities
that can contribute to our growth and momentum within target
markets. With the completion of the SHC acquisition, and based upon
information currently available to the Company, we expect an
accelerated growth in revenues during the second half of 2007 and
in 2008." Investor Conference Call Vuance will host an investor
conference call to discuss its second quarter 2007 operating
results today, Thursday, August 30, 2007 at 10:00 AM EDT (17:00
Israel Time). During the call, Mr. Eyal Tuchman, CEO, and Mr. Lior
Maza, CFO, will discuss the Company's second quarter results. To
participate in the conference call, please call one of the
following numbers five minutes before 10:00 AM EDT (17:00 Israel
Time): In Israel: 03-9180691 In the US (toll free): 1-888-407-2553
In the UK (toll free): 0-8000-32-3367 A replay of the
teleconference will be available for a one-week period from 14:00
Eastern Time (21:00 Israel Time) on August 30, 2007 until midnight
(EDT) on Sep 6, 2007. To access the replay, please call one of the
following numbers: In Israel: 03- 9255953 In the US (toll free):
1-888-782-4291 In the UK (toll free): 0-800-028-6837 Use of
Non-GAAP Financial Information In addition to reporting financial
results in accordance with generally accepted accounting
principles, or GAAP, Vuance uses non-GAAP measures of operational
profit, net income and earnings per share, which are adjustments
from results based on GAAP to exclude non-cash equity-based
compensation charges in accordance with SFAS 123(R). Vuance
management believes the non- GAAP financial information provided in
this release provides meaningful supplemental information regarding
its operating results and enhances the understanding of the
Company's on-going economic performance. The presentation of this
non-GAAP financial information is not intended to be considered in
isolation or as a substitute for results prepared in accordance
with GAAP. Management uses both GAAP and non-GAAP information in
evaluating and operating the business and, as such, has deemed it
important to provide all this information to investors. About
Vuance Ltd. Vuance Ltd. provides innovative incident management,
Active RFID, access control and credentialing solutions to the
public safety, commercial institutional and government sectors. The
Company's Incident Response Management System (IRMS) is the
industry's most comprehensive mobile credentialing and access
control system, as required by Homeland Security and other
initiatives. Its Active RFID is a complete, cost-effective solution
for the continuous tracking of assets and individuals. For more
information, visit the Company's website at http://www.vuance.com/.
Vuance Ltd. is headquartered in Qadima, Israel and its U.S.
subsidiary, SuperCom, Inc., is based in McLean, Virginia. Vuance
common stock is listed on the NASDAQ Capital Market under the
symbol "VUNC" and on the Euronext Exchange under the symbol "VUNC".
Safe Harbor This press release contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These statements are subject to known and unknown risks,
uncertainties and other factors that may cause actual results,
performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by
such forward-looking statements. Statements preceded or followed by
or that otherwise include the words "believes", "expects",
"anticipates", "intends", "projects", "estimates", "plans", and
similar expressions or future or conditional verbs such as "will",
"should", "would", "may" and "could" are generally forward-looking
in nature and not historical facts. Forward-looking statements in
this release also include statements about business and economic
trends. Investors should also consider the areas of risk described
under the heading "Forward Looking Statements" and those factors
captioned as "Risk Factors" in the Company's periodic reports under
the Securities Exchange Act of 1934, as amended, or in connection
with any forward-looking statements that may be made by the
Company. The Company also disclaims any duty to comment upon or
correct information that may be contained in reports published by
the investment community Contact: In Israel: Alex Somech Tel:
+972-77-3456-302 Fax: +972-50-8961-570 Mobile: +972-54-4297-754
E-mail: In North America: RJ Falkner & Company, Inc., Investor
Relations Counsel Tel: 800-377-9893 E-mail: CONDENSED CONSOLIDATED
BALANCE SHEETS U.S. dollars in thousands June 30, December 31, 2007
2006 Unaudited Audited ASSETS CURRENT ASSETS: Cash and cash
equivalents $1,222 $2,444 Restricted cash deposit 1,634 859
Marketable securities: Municipal bond 1,425 - Other company 14,268
11,077 Trade receivables, net of doubtful accounts 2,237 2,625
Other accounts receivable and prepaid expenses 492 717 Inventories
245 270 Total current assets 21,523 17,992 INVESTMENTS AND
LONG-TERM RECEIVABLES: Investment in restricted marketable
securities of other company - 4,431 Long term trade receivables -
79 Severance pay fund 277 239 Total investments and long-term
receivables 277 4,749 PROPERTY AND EQUIPMENT, NET 213 160
INTANGIBLE ASSETS AND DEFERRED CHARGES 549 197 TOTAL ASSETS $22,562
$ 23,098 CONDENSED CONSOLIDATED BALANCE SHEETS U.S. dollars in
thousands June 30, December 31, 2007 2006 Unaudited Audited
LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES:
Short-term bank credit and current maturities of long-term loan
$2,528 $668 Trade payables 906 823 Employees and payroll accruals
244 533 Accrued expenses and other liabilities 2,963 3,428 Total
current liabilities 6,641 5,452 LONG-TERM LIABILITIES: Convertible
bonds 2,377 2,255 Long-term loan, net of current maturities 209 67
Accrued severance pay 357 323 Total long-term liabilities 2,943
2,645 COMMITMENTS AND CONTINGENT LIABILITIES Shareholders' equity
12,978 15,001 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $22,562
$23,098 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS U.S.
dollars in thousands (except share data) Six months ended Three
months ended June 30, June 30, 2007 2006 2007 2006 Unaudited
Revenues $5,523 $3,835 $2,838 $1,822 Cost of revenues 2,384 1,555
1,097 705 Gross profit 3,139 2,280 1,741 1,117 Operating expenses:
Research and development 388 642 200 348 Selling and marketing
3,457 2,099 1,938 1,071 General and administrative 1,384 1,166 810
575 Total operating expenses 5,229 3,907 2,948 1,994 Operating loss
(2,090) (1,627) (1,207) (877) Financial expenses, net (321) (31)
(123) (53) Other expenses, net - (60) - (63) Net loss $(2,411)
$(1,718) $(1,330) $(993) Basic and diluted net loss per share (1)
$(0.60) $(0.43) $(0.33) $(0.25) Weighted average number of Ordinary
shares used in computing basic and diluted net loss per share (1)
4,006,935 3,958,711 4,012,687 3,963,719 (1) A 1 for 5.88235 reverse
split of our common stock became effective for trading purposes on
May 14, 2007. All earnings per share and weighted- average share
amounts are presented on a post-split basis. RECONCILIATION BETWEEN
GAAP TO NON-GAAP STATEMENTS OF OPERATIONS U.S. dollars in thousands
(except share data) Six months ended Six months ended June 30, 2007
June 30, 2006 GAAP Adjustment Non-GAAP GAAP Adjustment Non-GAAP
Unaudited Unaudited Revenues $5,523 - $5,523 $3,835 - $3,835 Cost
of revenues 2,384 - 2,384 1,555 - 1,555 Gross profit 3,139 - 3,139
2,280 - 2,280 Operating expenses: Research and development 388
(65)(a) 323 642 (29)(a) 613 Selling and marketing 3,457 (118)(a)
3,339 2,099 (27)(a) 2,072 General and administrative 1,384 (387)(a)
997 1,166 (102)(a) 1,064 Total operating expenses 5,229 (570)(a)
4,659 3,907 (158)(a) 3,749 Operating loss (2,090) 570 (1,520)
(1,627) 158 (1,469) Financial income (expenses), net (321) - (321)
(31) - (31) Other income (expenses), net - - - (60) - (60) Net
Income (loss) $(2,411) $570 $(1,841) $(1,718) $158 $(1,560) Basic
and diluted net loss per share (b) $(0.60) $0.14 $(0.46) $(0.43)
$0.04 $(0.39) Weighted average number of Ordinary shares used in
computing basic and diluted net loss per share (b) 4,006,935
4,006,935 4,006,935 3,958,711 3,958,711 3,958,711 (a) The effect of
stock-based compensation. The Company adopted the provisions of
Statement of Financial Accounting Standards No. 123(R),
"Share-Based Payment" on January 1, 2006 using the modified-
prospective transition method. (b) A 1 for 5.88235 reverse split of
our common stock became effective for trading purposes on May 14,
2007. All earnings per share and weighted- average share amounts
are presented on a post-split basis. RECONCILIATION BETWEEN GAAP TO
NON-GAAP STATEMENTS OF OPERATIONS U.S. dollars in thousands (except
share data) Three months ended Three months ended June 30, 2007
June 30, 2006 GAAP Adjustment Non-GAAP GAAP Adjustment Non-GAAP
Unaudited Unaudited Revenues $2,838 - $2,838 $1,822 - $1,822 Cost
of revenues 1,097 - 1,097 705 - 705 Gross profit 1,741 - 1,741
1,117 - 1,117 Operating expenses: Research and development 200
(29)(a) 171 348 (28)(a) 320 Selling and marketing 1,938 (10)(a)
1,928 1,071 (21)(a) 1,050 General and administrative 810 (315)(a)
495 575 (77)(a) 498 Total operating expenses 2,948 (354)(a) 2,594
1,994 (126)(a) 1,868 Operating loss (1,207) 354 (853) (877) 126
(751) Financial income (expenses), net (123) - (123) (53) - (53)
Other income (expenses), net - - - (63) - (63) Net Income (loss)
$(1,330) $354 $(976) $(993) $126 $(867) Basic and diluted net loss
per share (b) $(0.33) $0.09 $(0.24) $(0.25) $0.03 $(0.22) Weighted
average number of Ordinary shares used in computing basic and
diluted net loss per share (b) 4,012,687 4,012,687 4,012,687
3,963,719 3,963,719 3,963,719 (a) The effect of stock-based
compensation. The Company adopted the provisions of Statement of
Financial Accounting Standards No. 123(R), "Share-Based Payment" on
January 1, 2006 using the modified- prospective transition method.
(b) A 1 for 5.88235 reverse split of our common stock became
effective for trading purposes on May 14, 2007. All earnings per
share and weighted- average share amounts are presented on a
post-split basis. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands Six months ended Three months ended June
30, June 30, 2007 2006 2007 2006 Unaudited Cash flows from
operating activities: Net loss $(2,411) $(1,718) $(1,330) $(993)
Adjustments to reconcile net loss to net cash used in operating
activities: Depreciation and amortization 19 180 9 113 Accrued
severance pay, net (54) (14) (20) (32) Deferred stock compensation
570 155 354 188 Amortization of deferred charges 47 - 21 -
Amortization of discount on convertible bonds 122 - 61 - Decrease
(increase) in trade receivables 467 (1,149) 569 (547) Decrease
(increase) in other accounts receivable and prepaid expenses (44)
176 (98) 59 Decrease (increase)in inventories 25 173 47 44 Increase
(decrease) in trade payables 43 (150) (27) 39 Increase (decrease)
in employees and payroll accruals (314) 45 15 30 Increase
(decrease) in accrued expenses and other liabilities (146) 571
(208) 326 Capital gain from sale of marketable securities (75) -
(75) - Exchange differences on principle of long-term loan 13 3 (3)
3 Others - - - 1 Net cash used in operating activities (1,738)
(1,728) (685) (769) Cash flows from investing activities: Purchase
of property and equipment (72) (63) (35) (33) Capitalization of
software and intangible assets (282) - (114) - Amounts carried to
deferred charges (52) - - - Proceeds from short-term deposits, net
(775) 220 (924) 88 Investment in marketable Securities of municipal
bond, net (1,425) 400 200 1,050 Proceeds from sale of marketable
securities of other company 1,081 - 1,081 - Net cash provided by
(used in) investing activities (1,525) 557 208 1,105 Cash flows
from financing activities: Short-term bank credit, net (373) (331)
(180) (238) Proceeds from long-term loan 2,500 204 - 204 Principal
payment of long-term loan (138) (91) (70) (48) Proceeds from
exercise of options, net 52 - 52 - Expenses related to issuance of
shares in a private placement - (170) - (170) Net cash provided by
(used in) financing activities 2,041 (388) (198) (252) Increase
(decrease) in cash and cash equivalents (1,222) (1,559) (675) 84
Cash and cash equivalents at the beginning of the period 2,444
2,294 1,897 651 Cash and cash equivalents at the end of the period
$1,222 $735 $1,222 $735 Supplemental disclosure of cash flows
information: Cash paid during the period for: Interest $92 $39 $52
$20 Supplemental disclosure of non-cash activities: Trade payable
and Employees and payroll accruals related to capitalization of
software $65 - $45 - Accrued expenses related to issuance of shares
- $19 - $19 DATASOURCE: Vuance, Ltd. CONTACT: In Israel: Alex
Somech, +972-77-3456-302, fax +972-50-8961-570, mobile
+972-54-4297-754, ; or in North America: Investor Relations Counsel
of RJ Falkner & Company, Inc., 1-800-377-9893, , both for
Vuance, Ltd. Web site: http://www.vuance.com/
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