Exhibit 99.1

 

 

 

DecisionPoint Systems Announces Fourth Quarter and Full Year 2021 Results

 

Strategic growth plan continues to yield gains in revenue, margin, and mix

 

Delray Beach, Florida – March 31, 2022 – DecisionPoint Systems, Inc. (OTCQB: DPSI), today announced fourth quarter and full year 2021 financial results.

 

Full Year 2021

 

·Revenue was $65.9MM, an increase of $2.6MM (3.9%) from 2020.

 

·Services revenues, the Company’s strategic focus, were $15.5MM, an increase of $2.8MM (17.9%) from 2020.

 

·Gross profit, $15.3MM, increased by $0.4MM (2.8%) from 2020.

 

·2021 EBITDA was $3.0MM ($2.8MM on an adjusted EBITDA basis).

 

·Debt was paid down by $1.2MM from December 31, 2020.

 

Fourth Quarter 2021

 

·Q4 Revenue was $16.5MM, pressured by industry-wide supply chain issues, which the Company anticipates continuing into 1H 2022.

 

·Solid booking activity continued however resulting in a backlog expansion to $31.2MM. The Company is working closely with its equipment manufacturer partners to manage through these supply constraints.

 

·Q4 adjusted EBITDA was $0.3MM for the fourth quarter 2021, compared with $1.3MM for the fourth quarter of 2020.

 

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“We continue to execute the strategic growth plan we put in place several years ago,” commented CEO Steve Smith. “That plan is focused on the growth of what we call “mobility-first services,” and on the expansion of our served geographic coverage. We’re achieving those goals through both the organic build-out of our business and by select acquisitions.

 

Smith continued, “While the sale of enterprise hardware such as mobile computers, bar code and RFID scanners, and printers remains a solid core of our business, the provision of associated services, including especially managed operational services, with its recurring revenue streams, is the focus of our strategic intent. The nearly 18% growth in these services in 2021 marks our progress. We plan for services to contribute still larger proportions of our growth going forward, yielding margin expansion, increased forward revenue visibility, and the foundation for robust enterprise value growth.”

 

The Company also continues to execute on its strategy to make select strategic acquisitions that add technical competencies, operational capacity, and geographic coverage. The full integration of one such acquisition from late 2020, ExtenData, a Rocky Mountains-focused regional leader in solutions and services design and delivery, was completed in 2021. In January 2022, we also acquired Advanced Mobile Group to expand DecisionPoint’s mobility-first enterprise solutions and service offerings and grow its capabilities in the mid-Atlantic region. Advanced Mobile Group is a regional leader providing services, hardware, software, integration, and wireless networking solutions, with deep experience in warehousing and distribution, manufacturing, mobile workforce automation, retailing, and healthcare segments, and 600 customers.

 

CEO Smith concluded, “2021 was another very solid year for DecisionPoint. We grew in all key measures relative to 2020, a tough compare with its outsized singular top line event, and did so overcoming industry headwinds caused by global supply chain constraints. I’m confident that our plans and proven execution capacity will yield still greater successes for our customers and growth for DecisionPoint in 2022 and beyond.”

 

Balance Sheet and Liquidity

 

Our cash and accounts receivable were $14.9 million on December 31, 2021, compared to $18.4 million on December 31, 2020. Cash flow from operations in 2021 was $2.4 million, as compared to $4.2 million in 2020. Overall debt is lower by $1.2 million than at the beginning of the year. As of December 31, 2021, we had no borrowings under the line of credit.

 

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Conference Call Information

 

A conference call to discuss these financial results is scheduled for Friday, April 1, 2022, at 4:30 p.m. ET (1:30 p.m. PT). Investors, analysts, and all parties interested in listening to the call are invited to dial (877) 407-3982 (domestic) or (201) 493-6780 (international) at 4:30 p.m. ET (1:30 p.m. PT). The conference call will also be available to interested parties through a live webcast at https://viavid.webcasts.com/starthere.jsp?ei=1540399&tp_key=229612448d. Please log in at least 15 minutes prior to the start of the call to register and download any necessary software.

 

A telephone replay of the call will be available until April 1, 2022, by dialing (844) 512-2921 (domestic) or (412) 317-6671 (international) and entering the conference identification number: 13728547. Please note participants must enter the conference identification number in order to access the replay.

 

About DecisionPoint Systems

 

DecisionPoint Systems Inc. delivers mobility-first managed service and integration solutions to healthcare, supply chain, and retail customers, enabling them to make better and faster decisions in the moments that matter—the decision points. Our mission is to help businesses consistently deliver on those moments—accelerating growth, improving worker productivity, and lowering risks and costs.

 

For more information about DecisionPoint Systems, Inc., visit www.decisionpt.com.

 

Forward-Looking Statements

 

This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995 that are based on management’s beliefs and assumptions and on information currently available to management. These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance, or achievements to be materially different from the information expressed or implied by forward-looking statements. Forward-looking statements in this press release may include statements about our plans to obtain funding for our current and proposed operations and potential acquisition and expansion efforts; the ultimate impact of the COVID-19 pandemic, or any other health epidemic, on our business, our clientele or the global economy as a whole; debt obligations of the Company; our general history of operating losses; our ability to compete with companies producing products and services; the scope of protection we are able to establish and maintain for intellectual property rights covering our products and technology; the accuracy of our estimates regarding expenses, future revenue, capital requirements and needs for additional financing; our ability to develop and maintain our corporate infrastructure, including our internal controls; our ability to develop innovative new products; and our financial performance. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this press release, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. We qualify all of our forward-looking statements by these cautionary statements. Forward-looking statements speak only as of the date they are made, and we do not undertake to update these statements other than as required by law. You are advised, however, to review any further disclosures we make on related subjects in our periodic filings with the Securities and Exchange Commission.

 

Investor Relations Contact:

ir@decisionpt.com

 

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DecisionPoint Systems, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except per share data)

(unaudited)

 

   December 31,
2021		   December 31,
2020		 
ASSETS        
Current assets:        
Cash  $      2,587   $        2,005 
Accounts receivable, net   12,302    16,438 
Inventory, net   2,111    884 
Deferred costs   1,998    1,744 
Prepaid expenses and other current assets   336    67 
Total current assets   19,334    21,138 
Operating lease assets   329    583 
Property and equipment, net   834    751 
Deferred costs, net of current portion   1,492    2,097 
Deferred tax assets   1,999    1,973 
Intangible assets, net   3,564    4,663 
Goodwill   8,128    8,128 
Other assets   50    22 
Total assets  $35,730   $39,355 
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities:          
Accounts payable  $10,273   $12,852 
Accrued expenses and other current liabilities   3,220    2,807 
Deferred revenue   4,599    4,617 
Line of credit   —    1,206 
Due to related parties   —    34 
Current portion of long-term debt   3    — 
Current portion of operating lease liabilities   257    261 
Total current liabilities   18,352    21,777 
Deferred revenue, net of current portion   2,510    3,140 
Long-term debt   146    1,361 
Noncurrent portion of operating lease liabilities   83    340 
Other liabilities   381    873 
Total liabilities    21,472    27,491 
Stockholders’ equity:          
Preferred stock   —    — 
Common stock   7    7 
Additional paid-in capital   39,216    38,236 
Accumulated deficit   (24,965)   (26,379)
Total stockholders’ equity   14,258    11,864 
Total liabilities and stockholders’ equity  $35,730   $39,355 

 

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DecisionPoint Systems, Inc.

Condensed Consolidated Statements of Income and Comprehensive Income

(in thousands, except per share data)

(unaudited)

 

   Fourth Quarter Ended
December 31,		   Year Ended
December 31,		 
   2021   2020   2021   2020 
Net sales:                
Product  $12,634   $14,733   $50,480   $50,673 
Service   3,849    3,568    15,463    12,687 
Net sales   16,483    18,301    65,943    63,360 
Cost of sales:                    
Product   9,995    11,550    39,943    40,129 
Service   2,706    2,264    10,696    8,413 
Cost of sales   12,701    13,814    50,639    48,542 
Gross profit   3,782    4,487    15,304    14,818 
Operating expenses:                    
Sales and marketing expense   1,743    1,586    7,354    5,587 
General and administrative expenses   2,960    1,971    7,552    5,203 
Total operating expenses   4,703    3,557    14,906    10,790 
Operating (loss) income   (921)   930    398    4,028 
Interest expense   (12)   (87)   (79)   (319)
Gain on extinguishment of debt   —    —    1,211    — 
Other income   —    1    —    213 
Income (loss) before income taxes   (933)   844    1,530    3,922 
Income tax (expense) benefit   232    (244)   (116)   (1,061)
Net income (loss) and comprehensive income (loss)  $(701)  $600   $1,414   $2,861 
Earnings (loss) per share (1):                    
Basic  $(0.10)  $0.09   $0.20   $0.42 
Diluted  $(0.10)  $0.08   $0.19   $0.37 
Weighted average common shares outstanding (1)                    
Basic   7,003    6,788    6,947    6,788 
Diluted   7,003    7,811    7,593    7,811 

 

(1)All share and per share information has been retroactively adjusted to reflect reverse stock split.

 

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DecisionPoint Systems, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

   Years Ended
December 31,		 
   2021   2020 
Cash flows from operating activities        
Net income  $1,414   $2,861 
Adjustments to reconcile net income to net cash provided by operating activities:          
Depreciation and amortization   1,387    891 
Amortization of deferred financing costs and note discount   24    157 
Share-based compensation expense   1,003    87 
Acquisition earn-out adjustment   (187)   — 
Gain on extinguishment of debt   (1,211)   — 
Deferred income taxes, net   (26)   686 
Provision for doubtful accounts   —    25 
Changes in operating assets and liabilities:          
Accounts receivable   4,136    (5,853)
Inventory, net   (1,227)   2,945 
Deferred costs   351    (382)
Prepaid expenses and other current assets   (294)   254 
Other assets, net   (28)   (8)
Accounts payable   (2,579)   585 
Accrued expenses and other current liabilities   277    294 
Due to related parties   (34)   (90)
Operating lease liabilities   (7)   6 
Deferred revenue   (648)   1,738 
Net cash provided by operating activities   2,352    4,196 
Cash flows from investing activities          
Purchases of property and equipment   (371)   (93)
Cash paid for acquisitions, net of cash acquired   (170)   (3,409)
Net cash used in investing activities   (541)   (3,502)
Cash flows from financing activities          
Repayment of term debt   —    (646)
Line of credit, net   (1,206)   (1,971)
Proceeds from issuance of term debt   —    1,361 
Debt issuance costs   —    (53)
Taxes paid in lieu of shares issued for share-based compensation   (25)   — 
Proceeds from exercise of stock options   2    — 
Net cash used in financing activities   (1,229)   (1,309)
Change in cash   582    (615)
Cash, beginning of year   2,005    2,620 
Cash, end of year  $2,587   $2,005 

 

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Non-GAAP Financial Measure:

 

This press release includes information relating to Adjusted EBITDA which the Securities and Exchange Commission has defined as a “non-GAAP financial measure.” Adjusted EBITDA is defined as net income (loss) before interest expense, income tax expense (benefit), depreciation and amortization, other income (expense), gain (loss) on extinguishment of debt and share based compensation expense. We believe Adjusted EBITDA may provide investors with useful information of how our current primary operating results relate to our historical performance. The non-GAAP financial measure provided is not meant to be considered as a substitute for GAAP financials. We caution investors that amounts presented in accordance with our definitions of Adjusted EBITDA may not be comparable to similar measures disclosed by other companies, because not all companies calculate Adjusted EBITDA in the same manner.

 

The following is a reconciliation of net income to Adjusted EBITDA (unaudited and in thousands):

 

   Fourth Quarter Ended
December 31,		   Year Ended
December 31,		 
   2021   2020   2021   2020 
Reconciliation of Net Income (Loss) to Adjusted EBITDA                
Net income (loss)  $(701)  $600   $1,414   $2,861 
Interest expense   12    87    79    319 
Income tax expense (benefit)   (232)   244    116    1,061 
Depreciation and amortization   356    324    1,387    888 
EBITDA  $(565)  $1,255   $2,996   $5,129 
Share based compensation   894    14    1,003    87 
Gain on extinguishment of debt   -    -    (1,211)   - 
Other income   -    (1)   -    (213)
Adjusted EBITDA  $329   $1,268   $2,788   $5,003 

 

 

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