2014

DecisionPoint Systems Reports Financial Results for the First Quarter 2013

IRVINE, Calif., May 16, 2013 /PRNewswire/ -- DecisionPoint™ Systems, Inc. (OTCBB: DPSI), a leading provider and integrator of Enterprise Mobility and Wireless Applications and RFID solutions, today reported financial results for the first quarter ended March 31, 2013.

Highlights of the First Quarter 2013

  • Launched new sales, marketing initiative and dedicated team to accelerate move into enterprise mobile software, software subscriptions and professional services.
  • Selected by Mission Linen to create a comprehensive, paperless mobile customer interface program for all operations including delivering, invoicing, ordering, real-time communications and customer support.
  • Created partnership with Worldlink Integration Group to provide broader range of services and technologies to support retail and enterprise clients.
  • Appointed as an Apple Authorized Reseller.
  • Added Apple iOS® mobile operating support for the Company's proprietary APEXWare™ Field Service software product.
  • ContentCentral™ released on Android and certified on six different Android tablets.

First Quarter 2013 Results
Revenue was $13.8 million, compared to $17.8 million for the same period a year ago and $17.4 million for the fourth quarter ended December 31, 2012. The decrease from both the same period in the prior year and the prior quarter was attributable to a reduction in hardware sales. This reduction was primarily as a result of delays in delivery of hardware due to upgrades in Apple's iOS operating system and the delivery of custom software applications combined with fewer customers implementing new technologies or updating systems during the period. Partially offsetting the decline in hardware sales was an increase in professional services and proprietary software revenues.

Gross profit was $2.8 million, compared to $3.8 million for the same period of 2012 and $3.7 million for the fourth quarter of 2012. Gross profit margin was 20.5%, compared to 21.1% for the same period a year ago and 21.2% for the fourth quarter of 2012. The decrease in gross profit percentage from both the same period in 2012 and the prior quarter is directly due to amortization of intangible software assets, classified as part of cost of goods sold, offset by the lower volume of hardware sales which carry a lower gross margin. In the fourth quarter of 2012, the amortization of intangible software assets was a component of Selling, general and administrative expense.

Selling, general and administrative expenses were $5.0 million, compared to $3.8 million for the same period of 2012, and $5.0 million for the fourth quarter of 2012. The year-over-year increase was attributable to SG&A costs of the acquired APEX and Illume businesses, an increase of $0.4 million in sales headcount related expenses and professional service fees, mainly accounting, tax and capital raising costs of $0.3 million.

As a result, the operating loss was $2.2 million, compared to an operating loss of $0.1 million for the same period a year ago and operating loss of $1.3 million in the fourth quarter of 2012.

Net loss attributable to common shareholders was approximately $2.3 million or $(0.27) per share, compared to a net loss of $0.5 million, or $(0.06) per share, in the same period a year ago. Net loss was $1.6 million during the fourth quarter of 2012, or $(0.19) per share.

"We continue to be in a period of transition, shifting from a hardware value-added reseller to a provider and integrator of enterprise systems and software services in the rapidly growing mobile data market for retail, warehousing and logistics industries," said Nicholas Toms, CEO of DecisionPoint. "That process, along with the ongoing integration of our major acquisitions in 2012, flattened our top-line revenues in the short term, but bodes well for our long-term success. In our Mission Linen account, for instance, after we successfully delivered the initial software order in the first quarter, we were awarded a further software contract which the customer required to be completed before rollout of the enterprise wide system. Thus we now expect approximately $2 million in revenues in the late second and third quarters of this year. Additionally, a change in Apple's iOS operating system pushed out $2.2 million of customer revenues until later in 2013.

"Given the fact that our sales and services pipeline remains very strong, we remain very excited about our new strategic initiatives and the acceptance in the marketplace of our field mobility solutions," Toms continued. "Our retail, warehouse and distribution segments continue to expand, giving us confidence that double-digit revenue growth will return as 2013 progresses. We expect second quarter revenues in the range of $16.5 million to $18 million."

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.  They 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

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.

Contacts:

DecisionPoint Systems, Inc.
Nicholas R. Toms
Chief Executive Officer
(973) 489-1425

Allen & Caron, Inc. 
Rudy Barrio (investors)
r.barrio@allencaron.com

(212) 691-8087
Len Hall (media)
len@allencaron.com
(949) 474-4300

- Financial Tables Follow –

 

 





DECISIONPOINT SYSTEMS, INC.

Unaudited Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)



March 31,


December 31,


2013


2012

ASSETS




Current assets 





Cash 

$       335


$     1,103


Accounts receivable, net

10,571


12,287


Due from related party

198


202


Inventory, net

1,458


811


Deferred costs

4,028


3,955


Deferred tax assets

48


48


Prepaid expenses and other current assets

650


302



Total current assets 

17,288


18,708





Property and equipment, net

163


179

Other assets, net

171


205

Deferred costs, net of current portion

1,981


2,124

Goodwill

8,518


8,571

Intangible assets, net

5,463


6,023



Total assets

$    33,584


$    35,810





LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities 





Accounts payable

$    10,023


$    11,080


Accrued expenses and other current liabilities

3,793


2,895


Lines of credit

3,107


3,430


Current portion of debt

1,863


1,800


Due to related parties

-


1


Accrued earn out consideration

1,164


1,186


Unearned revenue

7,664


7,409



Total current liabilities 

27,614


27,801






Long term liabilities





Unearned revenue, net of current portion

2,700


2,883


Debt, net of current portion and discount

3,294


2,922


Accrued earn out consideration, net of current portion

156


159


Deferred tax liabilities

1,055


1,078


Other long term liabilities

83


80



Total liabilities 

34,902


34,923





Commitments and contingencies

-


-





STOCKHOLDERS' EQUITY 





 Cumulative Convertible Preferred stock, $0.001 par value, 10,000,000






shares authorized, 1,105,155 and 1,105,155 shares issued and outstanding, including cumulative and imputed preferred dividends of $427 and $347, and with a liquidation preference of  $8,824 and $8,758 at March 31, 2013 and December 31, 2012, respectively

 

7,450


7,370


Common stock, $0.001 par value, 100,000,000 shares authorized,






9,300,439 issued and 9,146,556 outstanding as of March 31, 2013, and as of December 31, 2012

9


9


Additional paid-in capital

16,138


16,132


Treasury stock, 153,883 shares of common stock

(205)


(205)


Accumulated deficit

(23,997)


(21,674)


Unearned ESOP shares

(732)


(767)


Accumulated other comprehensive income

19


22



Total stockholders' equity 

(1,318)


887



      Total liabilities and stockholders' equity

$    33,584


$    35,810


















DECISIONPOINT SYSTEMS, INC.

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share data)











Three Months Ended March 31,


2013


2012









Net sales 

$

13,772


$

17,810





Cost of sales 

10,948


14,057





Gross profit 

2,824


3,753





Selling, general and administrative expense

5,033


3,835





Operating loss

(2,209)


(82)





Other expense:





Interest expense

226


142


Other income, net

(6)


(29)



Total other expense

220


113





Net loss before income taxes 

(2,429)


(195)





Provision (benefit) for income taxes

(327)


42





Net loss

(2,102)


(237)





Cumulative and imputed preferred stock dividends

(220)


(222)





Net loss attributable to common shareholders

$

(2,322)


$

(459)





Net loss per share -





Basic and diluted

$

(0.27)


$

(0.06)





Weighted average shares outstanding -





Basic and diluted

8,620,807


7,392,441









Comprehensive loss

$

(2,105)


$

-



DECISIONPOINT SYSTEMS, INC.

Unaudited Condensed Consolidated Statements of Cash Flows

(In thousands)












Three Months ended March 31,


2013


2012

Cash flows from operating activities:




Net loss

$    (2,102)


$      (237)

Adjustments to reconcile net loss to net cash





(used in) provided by operating activities:






Depreciation and amortization

502


160



Amortization of deferred financing costs and note discount

54


38



Employee stock-based compensation

5


21



Non cash interest income

-


(17)



ESOP compensation expense

35


33



Deferred taxes, net

-


4



Allowance for doubtful accounts

21


-



Loss on disposal of property and equipment

4


-



Changes in operating assets and liabilities:







Accounts receivable

1,686


3,414




Due from related party

-


-




Inventory, net

(647)


(258)




Deferred costs

70


(12)




Prepaid expenses and other current assets

(259)


82




Other assets, net

-


4




Accounts payable

(1,056)


1,254




Accrued expenses and other current liabilities

763


(585)




Due to related parties

-


38




Unearned revenue

87


(945)

Net cash (used in) provided by operating activities

(837)


2,994





Cash flows from investing activities





Purchases of property and equipment

(9)


(11)

Net cash used in investing activities

(9)


(11)





Cash flows from financing activities





Repayments from lines of credit, net

(320)


(2,424)


Proceeds from bank term loan

1,000


-


Repayment of debt

(483)


(250)


Paid financing costs

(118)


(100)


Dividends paid

-


(82)

Net cash provided by (used in) financing activities

79


(2,856)


Effect on cash of foreign currency translation

(1)


-

Net increase  (decrease) in cash

(768)


127

Cash at beginning of period

1,103


366

Cash at end of period

$       335


$       493





Supplemental disclosures of cash flow information:





Interest paid

$       293


$       180


Income taxes paid

16


43





Supplemental disclosure of non-cash financing activities:





Accrued and imputed dividends on preferred stock

$       220


$       222

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 -


2013


2012











Net loss

$

(2,102)

$

(237)

Depreciation and amortization


502


160

Interest expense


226


142

Taxes


(327)


42











  EBITDA

$

(1,701)

$

107











Adjusted EBITDA Calculation -





  EBITDA

$

(1,701)

$

107

Adjustments:





  Employee stock-based compensation


5


21

  ESOP compensation expense 


35


33

  Deferred taxes, net  




4

  Other   




(31)

  Financing/acquisition costs 


642


360











  Adjusted EBITDA

$

(1,019)

$

494

SOURCE DecisionPoint Systems, Inc.



RELATED LINKS
http://www.decisionpt.com

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