DecisionPoint Systems Reports Record First Quarter Revenue of $17.8 Million
Revenue Increases 39% Year-Over-Year and 12% Sequentially
FOOTHILL RANCH, CA -- (Marketwire) -- 05/15/12 -- DecisionPoint Systems, Inc. (OTCBB: DPSI), a leading enterprise mobility and RFID systems solutions provider, today reported its financial results for the first quarter ended March 31, 2012.
Highlights of Quarter Ended March 31, 2012
- Revenue increased to $17.8 million, representing a 39% increase from the quarter ended March 31, 2011 and a 12% increase from the quarter ended December 31, 2011.
- Gross margin increased to 21.1% from 18.2% for the first quarter of 2011.
- Adjusted EBITDA(1) for the first quarter of 2012 was $0.5 million compared to a negative $(0.9) million for the same quarter in 2011, a $1.4 million improvement.
- Cash flow from operating activities for the first quarter of 2012 was $3.0 million compared to $2.1 million for the same period in 2011.
- Operating loss was $(0.1) million compared to $(1.2) million for the same quarter of 2011.
- Net loss attributable to common shareholders was $(459,000), or $(0.06) per share after deducting preferred dividends of $222,000.
First Quarter 2012 Results
Revenue was $17.8 million, compared to $12.8 million for the same period a year ago and $15.9 million for the fourth quarter ended December 31, 2011. The year-over-year and sequential revenue increases were driven by increased sales of field mobility solutions and continued increases in demand from the retail sector.
Gross profit was $3.8 million, compared to $2.3 million for the same period of 2011 and $3.6 million for the fourth quarter of 2011. Gross profit margin was 21.1%, compared to 18.2% for the same period a year ago and 22.4% for the fourth quarter of 2011. The 290 basis point year-over-year increase in the gross margin was primarily due to reduced costs, improved utilization, and the ongoing revenue mix shift towards software and services. Gross margin declined 130 basis points from the fourth quarter of 2011 due to typical seasonal patterns.
Selling, general and administrative expenses were $3.8 million, compared to $3.5 million for the same period of 2011, and $3.3 million for the fourth quarter of 2011. The year-over-year and sequential increases were due to costs incurred in pursuing certain acquisition opportunities which totaled approximately $0.4 million during the first quarter of 2012.
Operating loss was $(0.1) million, compared to an operating loss of $(1.1) million for the same period a year ago and operating income of $0.2 million in the fourth quarter of 2011.
Net loss was approximately $(459,000), or $(0.06) per share, compared to a net loss of $(1.65) million, or $(0.38) per share, in the same period a year ago. Net loss was $153,000 the fourth quarter of 2011, or $(0.02) per share.
As of March 31, 2012, the Company had $5.1 million available under its revolving credit facility with Silicon Valley Bank and a cash balance of approximately $0.5 million. The Company's term loan, also with Silicon Valley Bank, was paid down to $1.75 million from $2.0 million at December 31, 2011.
"Strong execution and new product introductions led to record revenue and gross margin expansion in the first quarter of 2012," said Nicholas Toms, CEO of DecisionPoint. "Our field mobility solutions continue to gain traction with our wireless carrier partners and customers. The pipeline of opportunities in our retail and warehouse and distribution segments continues to expand. Our improving utilization and continuing focus on cost control combined with the ongoing shift in our revenue mix in favor of software and professional services resulted in gross margin gains that we believe are sustainable going forward."
"Retail solution sales have continued to bounce back as the industry is in the beginning stages of a technology upgrade that will enhance retailers' own competitiveness," continued Mr. Toms. "Our tablet-based assisted shopping solution suite for in-store applications is a revenue generation and productivity tool that continues to gain acceptance with existing and new retail customers. In field mobility applications our major wireless carrier partners are embracing our Grapevine Push-to-Talk solution for enterprise and small business applications. In addition we recently introduced a number of packaged solutions to be sold through our carrier partners which have been well received by the market. These encouraging demand trends reinforce our belief that revenue will grow over 25% in 2012."
Forward-Looking Statements
Under the Private Securities Litigation Reform Act of 1995: Except for historical information contained herein, the statements in this news release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause a company's actual results, performance and achievement in the future to differ materially from forecasted results, performance, and achievement. These risks and uncertainties are described in the Company's periodic filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof, or to reflect the occurrence of unanticipated events or changes in the Company's plans or expectation.
About DecisionPoint Systems, Inc.
DecisionPoint Systems, Inc. (OTCBB: DPSI) delivers improved productivity and operational advantages to its clients by helping them move their business decision points closer to their customers. We do this by making enterprise software applications accessible to the front-line worker anytime, anywhere. DecisionPoint utilizes the latest wireless, mobility, and RFID technologies. For more information on DecisionPoint Systems visit www.decisionpt.com/news.php.
Unaudited Condensed Consolidated Balance Sheets
March 31, December 31,
2012 2011
------------ ------------
ASSETS
Current assets
Cash $ 492,665 $ 365,814
Accounts receivable, net 10,502,251 13,916,787
Other receivable 1,493,512 1,476,285
Inventory, net 963,465 705,757
Deferred costs 3,402,251 3,468,583
Prepaid expenses and other current assets 326,081 408,413
------------ ------------
Total current assets 17,180,225 20,341,639
Property and equipment, net 99,016 98,934
Other assets, net 239,892 175,329
Deferred costs, net of current portion 1,878,869 1,800,320
Goodwill 5,538,466 5,538,466
Intangible assets, net 2,065,031 2,214,000
------------ ------------
Total assets $ 27,001,499 $ 30,168,688
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 10,299,573 $ 9,037,715
Accrued expenses and other current liabilities 1,829,616 2,414,288
Line of credit 1,600,000 4,024,141
Current portion of debt 1,000,000 1,000,000
Due to related parties 909,240 871,508
Unearned revenue 5,742,393 6,756,214
------------ ------------
Total current liabilities 21,380,822 24,103,866
Long term liabilities
Unearned revenue, net of current portion 2,578,449 2,509,190
Debt, net of current portion and discount 726,555 970,160
Deferred tax liabilities 22,000 18,000
Interest payable 60,000 60,000
------------ ------------
Total liabilities 24,767,826 27,661,216
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Commitments and contingencies
STOCKHOLDERS' EQUITY
Cumulative convertible preferred stock, $0.001
par value, 10,000,000 shares authorized,
1,816,289 shares issued and outstanding,
including cumulative and imputed preferred
dividends of $567,033 and $435,563, and with
a liquidation preference of $10,679,465 and
$10,652,275, respectively 6,451,099 6,319,629
Common stock, $0.001 par value, 100,000,000
shares authorized, 8,182,791 issued and
8,028,908 outstanding 8,183 8,183
Additional paid-in capital 14,534,596 14,513,918
Treasury stock, 153,883 shares of common stock (204,664) (204,664)
Accumulated deficit (17,689,567) (17,230,792)
Unearned ESOP shares (865,974) (898,802)
------------ ------------
Total stockholders' equity 2,233,673 2,507,472
------------ ------------
Total liabilities and stockholders' equity $ 27,001,499 $ 30,168,688
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Unaudited Condensed Consolidated Statements of Operations
Three Months Ended March 31,
----------------------------
2012 2011
------------- -------------
Net sales $ 17,810,008 $ 12,800,958
Cost of sales 14,057,351 10,477,349
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Gross profit 3,752,657 2,323,609
Selling, general and administrative expense 3,835,008 3,492,975
------------- -------------
Operating loss (82,351) (1,169,366)
------------- -------------
Other expense:
Interest expense 141,621 295,567
Other (income) expense, net (29,063) 150,114
------------- -------------
Total other expense 112,558 445,681
------------- -------------
Loss before income taxes (194,909) (1,615,047)
Provision for income taxes 41,813 7,628
------------- -------------
Net loss (236,722) (1,622,675)
Cumulative and imputed preferred stock
dividends (222,054) (27,100)
------------- -------------
Net loss attributable to common shareholders $ (458,776) $ (1,649,775)
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Net loss per share -
Basic and diluted $ (0.06) $ (0.38)
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Weighted-average shares outstanding -
Basic and diluted 7,392,441 4,333,848
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Non-GAAP Financial Measures
To supplement the Company's consolidated financial statements presented on a GAAP basis, the Company has provided non-GAAP financial information, namely earnings before interest, taxes, depreciation and amortization (EBITDA). The Company's management believes that this non-GAAP measure provides investors with a better understanding of how the results relate to the Company's historical performance. The additional adjusted information is not meant to be considered in isolation or as a substitute for GAAP financials. Management believes that these adjusted measures reflect the essential operating activities of the Company. A reconciliation of non-GAAP financial information appears below:
Three Months Ended March 31,
----------------------------
EBITDA Calculation - 2012 2011
------------- -------------
Net loss $ (236,722) $ (1,622,675)
Depreciation and amortization 159,641 140,417
Interest expense 141,621 295,567
Taxes 41,813 7,628
------------- -------------
EBITDA $ 106,353 $ (1,179,063)
============= =============
Adjusted EBITDA Calculation -
EBITDA $ 106,353 $ (1,179,063)
Adjustments:
Employee stock-based compensation 20,678 74,027
ESOP compensation expense 32,828 31,190
Deferred taxes, net 4,000 -
Other (29,063) 150,114
Acquisition/financing costs 360,000 -
------------- -------------
Adjusted EBITDA $ 494,796 $ (923,732)
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(1) See schedule attached and description of non-GAAP financial measures: Adjusted EBITDA
Company Contact: DecisionPoint Systems, Inc. Nicholas R. Toms Chief Executive Officer 973-489-1425 ntoms@decisionpt.com Investor Relations Contact: LHA Stephanie Prince/Jody Burfening 212-838-3777 sprince@lhai.com
Source: DecisionPoint Systems, Inc.
Released May 15, 2012