DecisionPoint Systems Announces Second Quarter 2022 Results

·12 min read

Revenue increased 81.3% to a record $27.5 million
GAAP net income and diluted EPS of $0.7 million and $0.09;
Non-GAAP net income and non-GAAP diluted EPS increased 227.4% and 233.3%; Adjusted EBITDA increased 392.6% to $2.7 million
Raises full-year 2022 revenue guidance to $87.0 to $90.0 million (33-36% growth) and adjusted EBITDA guidance to $4.6 to $5.0 million

DELRAY BEACH, Fla., Aug. 11, 2022 /CNW/ -- DecisionPoint™ Systems, Inc. (NYSE American: DPSI), a mobility-first enterprise services and solutions company today announced second quarter 2022 financial results.

(PRNewsfoto/DecisionPoint Systems, Inc.)
(PRNewsfoto/DecisionPoint Systems, Inc.)

DecisionPoint Systems (NYSE American:DPSI) reports record quarterly revenue; Increases 2022 Guidance

"Our mobility-first strategy is working as we had our best revenue quarter ever due to broad-based strength across our verticals," said Steve Smith, chief executive officer. "Demand from our retail vertical customers was robust, and we successfully leveraged strong relationships with our OEM and distribution partners to partially ship two significant equipment orders while still building up inventory to fill our backlog in future quarters.

"We also made significant progress integrating the two strategic acquisitions made during the first quarter that strengthen our positions in the Transportation and Direct Store Delivery verticals. As a result, we realized cost synergies and are executing on many cross-selling opportunities. This quick realization of value also allows us to look at new potential acquisitions during the second half of the year."

Second Quarter Highlights (2022 versus 2021)

  • Revenue increased 81.3% to $27.5 million;

  • Gross Profit increased 81.0% to $6.3 million;

  • GAAP Net Income and diluted EPS increased to $0.7 million and $0.09, respectively;

  • Non-GAAP Net Income and non-GAAP diluted EPS increased 227.4% and 233.3% to $0.8 million and $0.10, respectively;

  • Adjusted EBITDA increased 392.6% to $2.7 million;

  • Backlog as of June 30, 2022 was $28.0 million.

Second Quarter Select Financial Metrics: 2022 versus 2021

 (in $M except for EPS)

2Q22

2Q21

Change

YTD 2022

YTD 2021

Change

Total Revenue

$ 27.5

$ 15.2

81.3 %

$     47.2

$     31.2

51.2 %

Hardware Revenue

$ 20.6

$ 10.3

240.3 %

$      34.9

$      20.7

68.4 %

Software and Services Revenue

$   4.8

$   3.6

149.1 %

$        9.0

$        7.7

15.6 %

Consumables Revenue

$   2.1

$   1.3

156.0 %

$        3.4

$        2.8

21.4 %

Gross Profit

$   6.3

$   3.5

80.98 %

$     11.0

$        7.3

50.0 %

Operating Income

$   2.0

$   0.1

1670.5 %

$        2.2

$        0.4

403.9 %

GAAP Net Income

$   0.7

$   0.2

324.1 %

$        1.6

$        1.5

4.7 %

GAAP Diluted Earnings Per Share

$   0.1

$   0.0

307.0 %

$        0.2

$        0.2

3.5 %

Non-GAAP Net Income

$   0.8

$   0.3

227.4 %

$        2.1

$        0.5

351.4 %

Non-GAAP Diluted EPS

$   0.1

$   0.0

233.3 %

$        0.3

$        0.1

300.0 %

Adjusted EBITDA

$   2.7

$   0.6

392.6 %

$        3.8

$        1.4

182.3 %

*numbers may not add due to rounding







Balance Sheet and Liquidity as of June 30, 2022
Cash and cash equivalents were $8.5 million, compared to $2.6 million on December 31, 2021. Long-term debt was $0.1 million, roughly flat to December 31, 2021.

Net cash from operating activities was $12.9 million compared to $2.5 million in the second quarter of 2021.

2022 Commentary
"Our strong first half of the year combined with a large backlog gives us the confidence to increase our revenue and adjusted EBITDA guidance for 2022. We now expect revenue to be $87 to $90 million, representing 33% to 36% growth versus 2021. We also expect approximately $20 million to come from services. Within this range, we expect Adjusted EBITDA to be between $4.6 and $5.0 million," concluded Smith.

Conference Call and Webcast Information
DecisionPoint's earnings release will be filed on Form 8-K and posted on the DecisionPoint investor relations website (https://www.decisionpt.com/investing-in-decisionpoint/) at approximately 4:10 p.m. Eastern Time on August 11, 2022. Management will host an earnings conference call and webcast at 4:30 p.m. Eastern Time. Management's presentation of the results, outlook and strategy will be followed by Q&A with investors.

Live Call Information:
Date: August 11, 2022
Time: 4:30 p.m. Eastern Time
Dial-in Toll Free: 1-888-882-4478
Dial-in Toll/International: 1-323-794-2590
Webcast: https://viavid.webcasts.com/starthere.jsp?ei=1563737&tp_key=933b447d44

Replay Information:
Toll Free: 1-844-512-2921
Toll/International: 1-412-317-6671
Replay Pin Number: 1185733
Replay Start: Thursday August 11, 2022, 7:30 PM ET
Replay Expiry: Thursday August 18, 2022, 11:59 PM ET

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 https://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:
Brian Siegel, IRC, MBA
Senior Managing Director, Hayden IR
(346) 396-8696
Brian@haydenir.com

 

DecisionPoint Systems, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except par value)
(Unaudited)




June 30,



December 31,

2022

2021

   ASSETS






   Current assets:






Cash


$

8,459



$

2,587

Accounts receivable, net



18,654




12,302

Inventory, net



871




2,111

Deferred costs



1,867




1,998

Prepaid expenses and other current assets



516




336

Total current assets



30,367




19,334

Operating lease assets



2,924




329

Property and equipment, net



1,670




834

Deferred costs, net of current portion



2,051




1,492

Deferred tax assets



1,410




1,999

Intangible assets, net



5,223




3,564

Goodwill



10,012




8,128

Other assets



41




50

Total assets


$

53,698



$

35,730

   LIABILITIES AND STOCKHOLDERS' EQUITY







Current liabilities:








Accounts payable


$

15,310



$

10,273

Accrued expenses and other current liabilities



3,736




3,220

Deferred revenue



13,086




4,599

Current portion of long-term debt



3




3

Current portion of operating lease liabilities



452




257

Total current liabilities



32,587




18,352

Deferred revenue, net of current portion



3,271




2,510

Long-term debt



144




146

Noncurrent portion of operating lease liabilities



2,747




83

Other liabilities



221




381

Total liabilities



38,970




21,472

Commitments and contingencies 








Stockholders' equity:








Preferred stock, $0.001 par value; 10,000 shares authorized; no shares issued or outstanding






Common stock, $0.001 par value; 50,000 shares authorized; 7,234 and 7,007 shares issued and outstanding, respectively



7




7

Additional paid-in capital



38,113




39,216

Accumulated deficit



(23,392)




(24,965)

Total stockholders' equity



14,728




14,258

Total liabilities and stockholders' equity


$

53,698



$

35,730

 

DecisionPoint Systems, Inc.
Condensed Consolidated Statements of Income and Comprehensive Income
(in thousands, except per share data)
(Unaudited) 




Three Months Ended



Six Months Ended

June 30,

June 30,



2022



2021



2022



2021

   Net sales:












Product


$

22,692


$

11,574



$

38,272



$

23,497

Service



4,814



3,595




8,955




7,744

Net sales



27,506



15,169




47,227




31,241

Cost of sales:















Product



17,869



9,208




30,290




18,657

Service



3,310



2,465




5,935




5,250

Cost of sales



21,179



11,673




36,225




23,907

Gross profit



6,327



3,496




11,002




7,334

Operating expenses:















Sales and marketing expense



2,384



1,910




4,560




3,799

General and administrative expenses



1,960



1,474




4,220




3,094

Total operating expenses



4,344



3,384




8,780




6,893

Operating income



1,983



112




2,222




441

Interest expense



(9)



(21)




(35)




(50)

Gain on extinguishment of debt



-






-




1,211

Other income (expense)



(21)






(16)




Income before income taxes



1,953



91




2,171




1,602

Income tax benefit (expense)



(1,232)



79




(598)




(99)

Net income and comprehensive income attributable to common stockholders


$

721


$

170



$

1,573



$

1,503

Earnings per share attributable to stockholders (1):














Basic


$

0.10


$

0.02



$

0.22



$

0.22

Diluted


$

0.09


$

0.02



$

0.20



$

0.20

  Weighted average common shares outstanding














Basic



7,222



6,942




7,209




6,913

Diluted



7,691



7,392




7,720




7,647

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

 

DecisionPoint Systems, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)




Six Months Ended

June 30,



2022



2021

Cash flows from operating activities





Net income

$

1,573



$

1,503

Adjustments to reconcile net income to net cash provided by operating activities:








     Loss on fixed asset disposal


22




-


Depreciation and amortization


1,128




715


     Gain on extinguishment of debt


-




(1,211)


     Amortization of deferred financing costs


-




25


     Share-based compensation expense


275




74


Deferred income taxes, net


589




(18)


     Changes in operating assets and liabilities:








Accounts receivable


(4,950)




5,203


Inventory, net


1,369




(252)


Deferred costs


(305)




150


Prepaid expenses and other current assets


(171)




(301)


Accounts payable


4,479




(4,730)


Accrued expenses and other current liabilities


(501)




(221)


Due to related parties


-




25


Operating lease liabilities


264




(3)


Deferred revenue


9,100




1,532


    Net cash provided by operating activities


12,872




2,491

Cash flows from investing activities







Cash paid for acquisitions, net of cash acquired


(4,525)




(170)

Purchases of property and equipment


(1,095)




(155)

            Net cash used in investing activities


(5,620)




(325)

Cash flows from financing activities







Line of credit, net


-




(1,206)

Payment under term loan


(2)




-

Cash paid for cashless exercise of stock options


(1,403)




-

Proceeds from exercise of stock options


25




2

            Net cash used in financing activities


(1,380)




(1,204)

Change in cash


5,872




962

Cash, beginning of period


2,587




2,005

Cash, end of period

$

8,459



$

2,967

Supplemental disclosures of cash flow information








Cash paid for interest

$

31



$

30


Cash paid for taxes


109




362









Non-cash investing and financing activities








Right of use assets obtained in exchange for new operating lease liabilities

$

3,211



$


   Cashless exercise of stock options

$

3,508



$

Non-GAAP Financial Measures 
To supplement our condensed consolidated financial statements presented on a GAAP basis, we have provided non-GAAP financial information, namely non-GAAP Net Income, non-GAAP diluted EPS and Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization adjusted for transaction-related and non-recurring items). We believe that these non-GAAP measures provide investors with a better understanding of how the results relate to our historical performance as well as when comparing our results to other publicly-traded companies. 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:

DecisionPoint Systems, Inc.
Supplemental Financial Information
Reconciliation of Select GAAP Financial Measures to Non-GAAP Financial Measures
(in thousands, except per share data)
(unaudited)




Three Months Ended


Six Months Ended



June 30


June 30



2022


2021


2022


2021

Net income, as reported


$        721


$         170


$      1,573


$        1,503

Share-based compensation


50


40


275


74

Business acquisition costs


25


42


202


106

NYSE American uplisting costs


29


-


29


14

Gain on extinguishment of debt


-


-


-


(1,211)

Non-GAAP net income


$        825


$         252


$      2,079


$           486

Depreciation and amortization


663


360


1,118


720

Income taxes


1,232


(79)


598


99

Interest expense


9


21


35


50

Adjusted EBITDA


$     2,729


$         554


$     3,830


$        1,355










Diluted EPS, as reported


$       0.09


$        0.02


$       0.20


$          0.20

Adjusted Diluted EPS


$       0.10


$        0.03


$       0.27


$          0.07










Weighted average diluted common shares outstanding

7,691


7,392


7,720


7,647

 

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