Slide 1: Roadshow Presentation December 2013
Issuer Free Writing Prospectus dated December 9, 2013 Filed pursuant to Rule 433 Relating to Preliminary Prospectus dated December 9, Registration 2013 Statement No. 333-189810 ROADSHOW PRESENTATION DECEMBER 2013 Property of Supercom © 2013 1
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT § 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) regarding Supercom Corporation (Supercom) and/or its subsidiaries collective the company, to the extent
Slide 3: Free Writing Prospectus Statement
FREE WRITING PROSPECTUS STATEMENT This presentation highlights basic information about us and the offering. Because it is a summary, it does not contain all of the information that you should consider before investing. We have filed a registration statement (including a preliminary prospectus) with
Slide 4: Offering Summary
OFFERING SUMMARY Issuer SuperCom Ltd. Exchange / Symbol NASDAQ / SPCB • 3,000,000 Ordinary Shares Offering Size • Approximately $14 million Over-Allotment Option 15% Listing NASDAQ Capital Market • Funding the purchase of OTI’s SmartID Division; • Working capital needs associated with eID contracts
Slide 5: What We Do
WHAT WE DO Profitable, Growing and Cash Generating Future Engines of Growth Electronic ID RFID (Radio Frequency Identification) National IDs, Driver Licenses, Passports & e-Govt Public Safety Animal Intelligent Technology & Knowhow End-to-end suite of e-ID & RFID products that eliminate the need to
Slide 6: Experienced Management Team
EXPERIENCED MANAGEMENT TEAM OTHER KEY TEAM MEMBERS Arie Trabelsi - CEO Igor Merling Brenda Gebhardt CTO President, PureRFid •28 years extensive experience in the Wireless, Internet and Communication Industries •Formerly CTO of •Experience in the •Led multiple highly synergistic acquisitions, OTI Sec
Slide 7: Investment Highlights
INVESTMENT HIGHLIGHTS § Successful turnaround with significant upside potential § Attractive profit margins: gross margin > 80%, operating margin > 25% § Positive, growing free cash flow § Minimal capex requirements, $50M NOL tax shield § Highly synergistic pending acquisition of OTI’s SmartID Divis
Slide 8: SmartID Acquisition - Overview
SMARTID ACQUISITION- OVERVIEW § Supercom signed a definitive agreement to purchase OTI’s SmartID division - Supercom’s biggest competitor. § Attractive Price Ratio - 3.5x /EBITDA § OTI Contribution to SuperCom’s EBITDA* = $4.8M § Fair value of acquisition cost = $17M § Favorable Purchase Price Alloc
Slide 9: Highly Strategic Synergies Expected from Acquisition
HIGHLY STRATEGIC SYNERGIES EXPECTED FROM ACQUISITION § Strong Revenue Growth § Addition of new government contracts and active local subsidiaries via eID projects in Asia, Africa & South America § Acquisition of a deep and broad pipeline of bids in over 20 countries § Powerful Complementary IP § Bro
Slide 10: 2012 Pro-Forma Combination
2012 PRO-FORMA COMBINATION COMBINED SmartID REVENUE Division 2012 combined REVENUE adjusted $26.3m $17.4m EBITDA 100% $2.4m2 2012 PRO-FORMA Item Estimated adjusted EBITDA Savings TOTAL SAVINGS OF COGS $1.0m $7.9m1 30% $5.6m G&A $3.0m In operational S&M $0.8m synergies R&D $0.8m REVENUE $8.9m 1. Adju
Slide 11: Electronic ID (ΣID) Division
ELECTRONIC ID (ƩID) DIVISION Future Adding more contracts Upside “We have a leading position and aim to grow our business in emerging countries with a strong pipeline and significant growth opportunities.” Property of Supercom © 2013 11
Slide 12: ΣID Solutions
ƩID SOLUTIONS Turnkey, end-to-end and comprehensive solutions for creation of smart IDs and passports for various government ID programs Population National eIDs Biometric Smart driving Biometric Voter Internal e-Government registries and passports and and vehicle border control registration Revenue
Slide 13: National IDs & Passports
NATIONAL IDS & PASSPORTS BIOMETRIC PASSPORTS AVAILABILITY BY COUNTRY Biometric passports available to the general public Announced future availability of biometric passports No biometric passport announced COUNTRIES WITH NATIONAL ID & BIOMETRIC/eID PROGRAMS* 2010 & 2015 *Source: Acuity Market Intell
Slide 14: Attractive End Markets
ATTRACTIVE END MARKETS SuperCom offers a full end-to-end solution geared towards emerging markets GLOBAL MARKET SIZE FOR BIOMETRIC Increased globalization IDs* US$ BILLIONS *Source: Frost & Sullivan, 2012 and regulation drive a need for better ID systems for a growing global middle-class Property of
Slide 15: Growth from RFID Division
GROWTH FROM RFID DIVISION Growth Engines PUBLIC SAFETY HEALTHCARE & HOMECARE ANIMAL INTELLIGENCE Residential Monitoring Anti-Wandering Property of Supercom © 2013 15
Slide 16: Long Range Active RFID & RTLS
LONG RANGE ACTIVE RFID & RTLS TECHNOLOGIES &provider “From a component SOLUTIONS to a higher margin solution provider.” Receiving Stations § Highly Energy Efficient with Extended Battery Life § Ultra Long Range § Lower Costs Property of Supercom © 2013 16
Slide 17: Customer Cost Savings
§ Prison overcrowding is a major global § problem Monitored throughout the world home detention provides a surveillance solution for juvenile, pre-trial and light offenders § Comparable: Attenti (bought by 3M for $230m in 2010) Customer Cost Savings COST PER INMATE PER YEAR $30-60k GLOBAL MARKET SIZ
Slide 18: Healthcare
HEALTHCARE Real Time Hospital Tracking §Provides a solution to monitor equipment §Track and identify patients § Competitor: AeroScout (bought by Black & Decker for $240m in 2012) Residential Monitoring §Home Care §Anti-Wandering Property of Supercom © 2013 18
Slide 19: Animal Intelligence
ANIMAL INTELLIGENCE § SmartCow TM System ü Collect, analyze and detect critical heat & health issues ü Rumination monitoring ü Health and reproduction Intelligence § PetTrack TM System ü Locate, monitor and track pets ü Low cost RFID-based radar system § HerdTrack TM System ü Locate, monitor and tra
Slide 20: Growth Strategy
GROWTH STRATEGY “Growth through both avenues: organic and M&A” § Organic growth to be achieved by: § Adding new Government EID contracts § Winning RFID projects in three verticals: Public Safety, Healthcare & Homecare or Animal Intelligence § Bidding on a number of projects in the EID & RFID pipelin
Slide 21: 2012 Pro Forma Financial Data
2012 PRO FORMA FINANCIAL DATA 2012 PRO FORMA INCOME STATEMENT HIGHLIGHTS US$ THOUSANDS Pro Forma Pro Forma SmartID SuperCom Combined Adjustments division of OTI Revenue 26,195 (136) 17,391 8,940 Gross Profit 18,052 944 9,787 7,321 Margin 69% 56% 82% Operating Income 5,737 4,567 (836) 2,006 Margin 22
Slide 22: SuperCom Financial Highlights
SUPERCOM FINANCIAL HIGHLIGHTS FINANCIAL SUMMARY 2010-2012 US$ THOUSANDS § Recurring revenue model whereby long term contracts providing ongoing income stream at high margin for many years § Turnaround actions taken in 2010 & net 2011 yielded strong financial income* results § in 2012 cash Strong and
Slide 23: SuperCom Key Financial Data
SUPERCOM KEY FINANCIAL DATASTATEMENT HIGHLIGHTS INCOME US$ THOUSANDS, EXLCUDING THE SMARTID DIVISION New management team from 2011 Most recent results reported 2009 2010 2011 2012 H1-13 Revenue 9,304 7,389 7,922 8,940 3,903 Gross Profit 5,939 5,332 4,616 7,321 3,362 Margin 64% 72% 58% 82% 86% Operat
Slide 24: Capitalization Table
CAPITALIZATION TABLE As of Pro Forma Post % Fully Security November 30, Offering Diluted 2013 Common Shares 9,332,548 9,332,548 71.5% Offering Shares (estimated) 3,000,000 23.0% Basic Shares Outstanding 9,332,548 12,332,548 94.5% Outstanding Warrants1 501,442 501,442 3.8% Outstanding Options2 219,73
Slide 25: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION 2012 PRO FORMA ADJUSTED EBITDA RECONCILIATION US$ IN MILLIONS SmartID Pro Forma Pro Forma SuperCom division of Adjustments Combined OTI Net income (loss) 4.8 (1.0) 4.5 8.3 Income tax (1.0) 0.1 (0.9) Financial expenses (1.8) 0.1 (1.7) Amortization 0.1 1.0 1.1 Other expe
Slide 26: Unaudited Pro Forma Condensed Combined Statement of Operations
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2012 (U.S. DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) Property of Supercom © 2013 26
Slide 27: Notes to the Unaudited Pro Forma Condensed Combined Statement of Operations
NOTES TO THE UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2012 The pro forma adjustments included in the unaudited pro forma consolidated statement of operations are as follows: (a) The pro forma adjustments made to the historical revenues reported f
Slide 28: Investment Highlights
INVESTMENT HIGHLIGHTS § Successful turnaround with significant upside potential § Attractive profit margins: gross margin > 80%, operating margin > 25% § Positive, growing free cash flow § Minimal capex requirements, $50M NOL tax shield § Highly synergistic upcoming acquisition of OTI’s SmartID Divi
Slide 29: Thank You!
THANK YOU! § Investor Presentation Property of Supercom © 2013 29
Slide 30: Supercom Filed the Registration Statement (including the Preliminary Prospectus)
On December 9, 2013, Supercom filed the Registration Statement (including the Preliminary Prospectus) with the Securities and Exchange Commission, or the SEC, for the offering to which this communication relates. This Registration Statement can be accessed through the following link: http://www.sec.
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