DecisionPoint Systems Reports Results For The Year Ended December 31, 2015

"Going Concern" Language Dropped from Auditor's Report

IRVINE, Calif., Nov. 1, 2016 /PRNewswire/ -- DecisionPoint™ Systems, Inc. (Other OTC: DPSID), a leading provider and integrator of Enterprise Mobility and Wireless Applications solutions, today reported its financial results for the year ended December 31, 2015. The results include a key milestone: the removal of "going concern" language from the report of DecisionPoint's auditor, Haskell & White LLP. DecisionPoint believes that this was largely brought about by the Company's EBITDA-positive results during the course of 2016 and the vote by the Company's preferred and common stockholders in favor of the Company's recapitalization at the Company's Special Meeting of Stockholders held on September 30, 2016. Although the positive effects of the recapitalization are not reflected in the Company's financial statements as of and for the year ended December 31, 2015, they will be reflected in the Company's financial statements as of and for the third quarter ended September 30, 2016. The financial condition of the recapitalized company has been significantly strengthened.

Revenue from continuing operations in 2015 was $33.8 million, versus $50.6 million for 2014. Gross profit margin for 2015 was 20.8%, compared to 21.3% for 2014. For 2015, the Company reported a net loss attributable to common stockholders of $5.4 million, or $0.43 loss per share, which included a one-time loss of $3.5 million relating to discontinued operations in Canada and an expense of $1.8 million in dividends imputed to or paid on the Company's outstanding preferred stock series A through E. The preferred stock has since been converted to common stock as a result of the recently approved recapitalization and is no longer outstanding. As a result of the recapitalization, the Company now has 6,006,980 shares of common stock outstanding. The net loss from continuing operations for 2015 was $15,000, compared to net income from continuing operations of $391,000 for 2014.

CEO Steve Smith commented, "The recapitalization approved on September 30, 2016 was a watershed event for DecisionPoint. The burden of convertible debt and preferred dividends is now gone. Our ability to build, raise financing and add new markets is now unimpeded. DecisionPoint is a leader in mobility and networking for workforces in transportation, retail and warehousing, and we are eager to move forward at full strength. We hope to make 2017 a year of improved results following a period of extreme difficulty that we believe is now behind us."

CFO Michael Roe commented, "We plan to announce the results for each of the first three quarters of 2016 in the near term. As a result of the recapitalization, many of the issues that had clouded our balance sheet have been eliminated, including the conversion into common stock of all outstanding series of preferred stock and all convertible debt. As a result, the balance sheet for the third quarter ended September 30, 2016 will show a significant improvement in our financial condition, and we expect that our overall expenses going forward will be significantly lower."

The financial statements for 2015 are posted on the Company's website at www.decisionpt.com, as well as on third-party financial sites on the Internet under the temporary ticker symbol DPSID, which, in connection with the finalization of the recently approved recapitalization, will revert to the Company's old ticker symbol DPSI on or about November 2, 2016.

About DecisionPoint Systems, Inc.
DecisionPoint Systems, Inc. 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 all the latest wireless, mobility, and RFID technologies. For more information about DecisionPoint Systems, Inc., visit www.decisionpt.com.

Forward-Looking Statements
Except for historical information contained herein, the statements in this news release are forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties, which may cause a company's actual results, performance and achievements in the future to differ materially from forecasted results, performance, and achievements. The Company undertakes no obligation to publicly release the results of any revisions to its forward-looking statements to reflect events or circumstances after the date hereof, including without limitation unanticipated events or changes in the Company's plans or expectations.

DecisionPoint™ Systems, Inc.
Michael Roe
Chief Financial Officer
(949) 465-0065

DresnerAllenCaron
Joe Allen
212-691-8087
jallen@dresnerallencaron.com

DECISIONPOINT SYSTEMS, INC. Unaudited Condensed Consolidated Balance Sheets (In thousands, except share and per share data)


			December 31,
			2015	2014
ASSETS

Current assets
	Cash		$ 821	$ 1,616
	Accounts receivable, net		4,751	9,795
	Inventory, net		307	1,997
	Deferred costs		2,234	2,515
	Deferred tax assets		-	5
	Prepaid expenses and other current assets		28	57
	Assets of business unit held for sale		32	614
	Assets of discontinued operations		-	1,829

		Total current assets	8,173	18,428

Property and equipment, net			169	140
Other assets, net			22	90
Deferred costs, net of current portion			970	998
Goodwill			5,304	5,304
Assets of business unit held for sale			6	3,663
Assets of discontinued operations			-	1,634

		Total assets	$ 14,644	$ 30,257


LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities
	Accounts payable		$ 7,019	$ 9,658
	Accrued expenses and other current liabilities		1,690	1,941
	Lines of credit		3,154	5,753
	Current portion of debt		379	330
	Due to related parties		215	73
	Unearned revenue		3,102	5,321
	Liabilities related to business unit held for sale		1,880	1,300
	Liabilities related to discontinued operations		-	1,993

		Total current liabilities	$ 17,439	$ 26,370

DECISIONPOINT SYSTEMS, INC. Unaudited Condensed Consolidated Balance Sheets (In thousands, except share and per share data)


				December 31,
				2015	2014

Long-term liabilities
	Unearned revenue, net of current portion			1,355	1,550
	Debt, net of current portion and discount			-	55
	Deferred tax liabilities			29	25
	Warrant liability			78	519
	Other long-term liabilities			6	24
	Liabilities related to business unit held for sale			152	2,077
	Liabilities related to discontinued operations			-	551

		Total liabilities		19,059	31,170

Commitments and contingencies (Note 15)

STOCKHOLDERS' DEFICIT
	Cumulative Convertible Preferred stock, $0.001 par value,
		10,000,000 shares authorized, 2,236,571 and 1,547,845
		shares issued and outstanding, including cumulative and
		imputed preferred dividends of $2,403 and $2,295 and with a
		liquidation preference of $19,710 and $13,640 at
		December 31, 2015 and 2014, respectively		14,123	12,822
	Common stock, $0.001 par value, 100,000,000 shares
		authorized, 12,883,446 issued and 12,729,563 outstanding
		as of December 31, 2015 and 2014		13	13
	Additional paid-in capital			17,262	17,252
	Treasury stock, 153,883 shares of common stock			(205)	(205)
	Accumulated deficit			(35,646)	(30,292)
	Unearned ESOP shares			(331)	(484)
	Accumulated other comprehensive income (loss)			369	(19)

			Total stockholders' deficit	(4,415)	(913)

			Total liabilities and stockholders' deficit	$ 14,644	$ 30,257

DECISIONPOINT SYSTEMS, INC. Unaudited Condensed Consolidated Statements of Operations (In thousands, except share and per share data)


		Three Months Ended December 31,		Years ended December 31,
		2015	2014	2015	2014


Net sales		$ 7,314	$ 14,150	$ 33,838	$ 50,601

Cost of sales		5,555	11,176	26,801	39,801

Gross profit		1,759	2,974	7,037	10,800

Selling, general and administrative expense		1,400	2,456	7,158	10,196


Operating income (loss)		359	518	(121)	604

Other expense (income):
	Interest expense	88	117	387	487
	Fair market value adjustment of warrant liability	(4)	(31)	(440)	(284)
	Other income, net	1	(6)	(17)	(30)
	Total other expense	85	80	(70)	173

Income(loss) from continuing operations, before income taxes		274	438	(51)	431

Provision (benefit) for income taxes		(70)	(557)	(36)	40

Net income (loss) from continuing operations		344	995	(15)	391

Discontinued operations:
	Loss on sale of discontinue operations, net of tax	-	88	(89)	-
	(Loss) income from discontinued operations, net of tax	-	-	(94)	466
	Loss from business unit held for sale, net of tax	(10)	137	(3,267)	(333)
	Net (loss) income	334	1,220	(3,465)	524

Cumulative and imputed Series A and B preferred stock dividends		(27)	(27)	(108)	(108)
Accrued paid-in-kind dividends on Series D and Series E preferred stock		(1,781)	(312)	(1,781)	(1,233)
Net income(loss) attributable to common shareholders		$ (1,474)	$ 881	$ (5,354)	$ (817)

Net income (loss) per share -
	Basic and diluted	$ (0.12)	$ 0.07	$ (0.43)	$ (0.07)

Weighted-average shares outstanding -
	Basic and diluted	12,508,195	12,397,511	12,466,954	12,356,270

DECISIONPOINT SYSTEMS, INC. Unaudited Condensed Consolidated Statements of Cash Flows (In thousands)


					2015	2014
Cash flows from operating activities:
	Net (loss) income from continuing operations				$ (15)	$ 391
	Net loss from business unit held for sale				(3,268)	(333)
	Net (loss) income from discontinued operations				(183)	466
	Adjustments to reconcile net (loss) income to net cash
		provided by operating activities:
			Loss on sale of discontinued operations, net of tax		89	-
			Depreciation and amortization		37	38
			Amortization of intangibles		-	343
			Amortization of deferred financing costs and note discount		103	107
			Employee and Director stock-based compensation		141	119
			Change in fair value of warrants		(440)	(284)
			ESOP compensation expense		22	47
			Gain/loss on disposal		9	5
			Bad debt expense / (recoveries)		68	(53)
			Deferred taxes, net		(59)	22
			Changes in operating assets and liabilities:
				Intercompany	-	-
				Accounts receivable	4,975	(1,586)
				Inventory, net	1,689	(920)
				Deferred costs	309	1,107
				Prepaid expenses and other current assets	31	53
				Other assets, net	69	10
				Accounts payable	(2,637)	1,297
				Accrued expenses and other current liabilities	(600)	(211)
				Due to related parties	142	(84)
				Unearned revenue	(2,414)	(937)
				Operating activities from business unit held for sale	3,616	416
				Operating activities from discontinued operations	615	1,172

				Net cash provided by operating activities	$ 2,301	$ 1,185

DECISIONPOINT SYSTEMS, INC. Unaudited Condensed Consolidated Statements of Cash Flows (In thousands)


			Years ended December 31,
			2015	2014
Cash flows from investing activities
	Purchases of property and equipment		$ (76)	$ (60)
	Proceeds from the sale of CMAC		302	-
	Investing activities from business unit held for sale		-	(3)

		Net cash provided by (used in) investing activities	226	(63)

Cash flows from financing activities
	(Repayments) borrowings from lines of credit, net		(2,599)	1,870
	Repayment of debt		(11)	(333)
	Paid financing costs		(100)	(100)
	Dividends paid		(252)	(749)
	Financing activities from business unit held for sale		(382)	-
	Financing activities from discontinued operations		-	(842)

		Net cash used in financing activities	(3,344)	(154)

Effect on cash of foreign currency translation			22	7

Net (decrease) increase in cash			(795)	975

Cash at beginning of period			1,616	641

Cash at end of period			$ 821	$ 1,616

Supplemental disclosures of cash flow information:
	Interest paid		$ 524	$ 803
	Income taxes paid		73	109

Supplemental disclosure of non-cash financing activities:
	Accrued and imputed dividends on preferred stock		$ 108	$ 340
	Accrued PIK dividends on Series D and Series E preferred stock		588	-
	Liabilities forgiven by CMAC purchaser		348	-
	Conversion of earn-out liability to convertible note payable		-	291
	Payment of accrued dividends through issuance of PIK shares		1,193	289
	Disposals of property and equipment		37	33

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) and adjusted EBITDA. The Company's management believes that these non-GAAP measures provide investors with a better understanding of how the Company's results relate to the Company's historical performance, and reflect the essential operating activities of the Company. Non-GAAP information is not meant to be considered in isolation or as a substitute for GAAP information. A reconciliation of our GAAP financial measures to our non-GAAP financial measures appears below:

		Three months ended December 31,		Twelve months ended December 31,
		2015	2014	2015	2014
EBITDA Calculation:

Net income (loss) from continuing operations		$ 344	$ 995	$ (15)	$ 391
Depreciation and amortization		9	97	37	381
Interest expense		88	116	387	487
Income tax provision (benefit)		(70)	(557)	(36)	40
	EBITDA	$ 371	$ 651	$ 373	$ 1,299


Adjusted EBITDA Calculation:

EBITDA		371	651	373	1,299
Stock compensation		40	30	141	119
ESOP compensation		2	10	22	47
Deferred taxes		247	31	(59)	22
Fair market value adjustment of warrant liability		(3)	(30)	(440)	(284)
Non-recurring legal		-	-	116	142
	Adjusted EBITDA	$ 657	$ 692	$ 153	$ 1,345

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SOURCE DecisionPoint Systems, Inc.

Released November 1, 2016