DecisionPoint Systems Reports Results For Second Quarter, Six Months Ended June 30, 2015

IRVINE, Calif., Aug. 28, 2015 /PRNewswire/ -- DecisionPoint™ Systems, Inc. (OTCQB: DPSI and DPSIP), a leading provider and integrator of Enterprise Mobility and Wireless Application solutions, today reported financial results for the second quarter and six months ended June 30, 2015.  During the quarter the Company completed the sale of its CMAC subsidiary, and is treating the CMAC results as a discontinued operation.  CMAC results have been eliminated from both the current periods being reported, and from the previous-year periods shown for comparison purposes, except as otherwise specified. 

Sales for the second quarter of 2015 were $9.4 million, down 27.9% from sales of $13.0 million in the second quarter of 2014.  The net loss, including a noncash write-down totaling $3.0 million of goodwill and intangible assets related to the Company's Apex operations in Canada, was $3.3 million from continuing operations, or $3.9 million attributable to common shareholders including both continuing and discontinued operations.  This compares to a net loss of $132,000 for the second quarter of 2014 from continuing operations, or $354,000 attributable to common shareholders including both continuing and discontinued operations.  This represents a $0.30 loss per share from continuing operations in the second quarter of 2015, compared to a $0.04 loss per share from continuing operations in the second quarter of 2014. 

Sales for the six months ended June 30, 2015 – again adjusted to eliminate discontinued operations at CMAC – were $19.2 million, down 27.2% from the sales of $26.4 million in the first half of 2014.  The net loss for the six months ended June 30, 2015 was $4.0 million from continuing operations, or $4.8 million attributable to common shareholders including both continuing and discontinued operations.  This loss includes the $3.0 million write-off of goodwill and intangible assets relating to the Apex operations.  That compares to a net loss in the first half of 2014 of $359,000 from continuing operations, or $795,000 attributable to common shareholders including both continuing and discontinued operations.  This represents a $0.38 loss per share in the first half of 2015 compared to a $0.08 loss per share in the first half of 2014.  Gross profit margin for the first half decreased to 20.3% from last year's 21.6%.  Adjusted EBITDA (a non-GAAP measurement that management uses to measure progress) was $183,000 for the first half of this year compared to $638,000 for the same period in 2014, a decrease of $455,000.¹

CEO Greg Henry commented, "The first half of 2015 has been a difficult time for DecisionPoint, beginning with the sudden departure of several employees from our sales force; those individuals showed up immediately in the employment of a direct competitor.  We have been working hard to replace the sales that those former employees took with them.  As we have said before, we have filed lawsuits for breaches of confidentiality, and breach of fiduciary duty.  In addition, we decided to divest our Georgia-based CMAC subsidiary after the recent loss of a significant customer of the business unit. Thereafter, the opportunity arose to sell the business to its former owner, our former Senior Vice President, as we continue to focus solely on providing our customers with world class mobile computing services and software.  We took a loss of $89,000 on that transaction, but it was largely responsible for the continued drop in our SG&A expense.  That said, hardware is still our largest revenue category, and hardware sales were down by 30% for the second quarter.  Professional services revenue, which brings higher margins, was down less at 23.2%. 

"We are keeping our eyes on the horizon, knowing that the second half has always tended to be our stronger part of each year.  Clearly with the divestiture of CMAC and the decline to date in sales that resulted from the actions of some previous sales employees, we can't expect to beat last year, which we had hoped to do.  Last year was our first year of profitability in quite a while, and we hoped to perform a repeat.  However, we are committed to strengthening our position as a mobile computing services and software provider and are continuing to invest in the people and services that are required to support our customers and the mobile computing market at large." 

CFO Michael Roe said, "Cash provided by operations in the first half of 2015 was $2.3 million, as compared to $1.1 million in the first half of 2014.  Overall bank debt including revolving credit facilities as of June 30, 2015 was $4.5 million, significantly lower than the December 31, 2014 balance of $8.2 million.  SG&A from continuing operations was $4.4 million for the first half of 2015, down by 24%, from $5.8 million in the first half of 2014, in part due to our continued emphasis on streamlining our operations and controlling expenses.  Our aggressive cost cutting has helped us in the difficult time represented by the first half of 2015.

"Interest expense was also lower, due to lower borrowings.  Our cash was $297,000 at June 30, 2015, compared to $1.6 million at December 31, 2014.  We expect to pay preferred dividends in kind, with the next such PIK payment before the end of August. We continue to aggressively press our legal actions against Tolt Solutions Inc, a direct competitor and the current employer of the sales group that left DecisionPoint."

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 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 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 achievements in the future to differ materially from forecasted results, performance, and achievements.  Known 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 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.

Contacts:

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

DresnerAllenCaron 
Rudy Barrio (investors)
[email protected]
(212) 691-8087

-FINANCIAL TABLES FOLLOW-

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 adjusted EBITDA provides investors with a better understanding of how the Company's current results relate to the Company's historical performance.  Management also believes that adjusted EBITDA reflects the essential operating activities of the Company. The non-GAAP financial measures provided are not meant to be considered in isolation or as a substitute for GAAP financials. A reconciliation of non-GAAP financial measures to GAAP measures appears below:

All amounts included in the table below are derived from continuing operations and do not include activity from discontinued operations.

SOURCE DecisionPoint Systems, Inc.

Related Links

http://www.decisionpt.com