Revenue increased 37% to $27 million
DecisionPoint™ Systems, Inc. (NYSE American: DPSI), a
mobility-first enterprise services and solutions company, today
announced first quarter 2023 financial results ended March 31,
2023.
Steve Smith, chief executive officer of DecisionPoint commented:
“Our momentum from 2022 carried into the first quarter of 2023 as
we continued to execute on our proven growth model. We saw strong
contributions from select projects in retail, along with a boost to
our run-rate business realized from the upside synergies associated
with our M&A and cross-selling activities.
“In addition to this strength in retail, we saw our
mobility-first enterprise services and solutions strategy yield
increases in our services and consumables businesses, which grew
18% and 27%, respectively. We also used this across-the-board
strength in our business to reinvest internally in initiatives with
higher margin potential, including our Vision portal and additional
sales and business development resources. While this restrained our
profitability growth near-term, we believe these investments will
drive strong outcomes from a medium to longer-term
perspective.”
First Quarter Highlights
(2023 versus 2022)
- Revenue increased 37.1% to $27.0 million;
- Gross Profit increased 29.4% to $6.1 million;
- GAAP Operating Income increased 399% to $1.2 million;
- GAAP Net Income and diluted EPS increased slightly to $0.9
million and $0.11, respectively;
- Non-GAAP Net Income and non-GAAP diluted EPS increased slightly
to $1.3 million and $0.16, respectively;
- Adjusted EBITDA increased 97.9% to $2.2 million;
First Quarter Select Financial
Metrics: 2023 versus 2022
(in $M except for EPS)
1Q23
1Q22
Change
Total Revenue
$
27.0
$
19.7
37.1
%
Hardware Revenue
$
20.5
$
14.3
43.6
%
Software and Services Revenue
$
4.9
$
4.1
17.7
%
Consumables Revenue
$
1.6
$
1.3
27.0
%
Gross Profit
$
6.1
$
4.7
29.4
%
Gross Margin
22.4
%
23.7
%
Operating Income
$
1.2
$
0.2
399.2
%
GAAP Net Income
$
0.9
$
0.9
1.4
%
GAAP Diluted Earnings Per Share
$
0.11
$
0.11
1.1
%
Non-GAAP Net Income
$
1.3
$
1.3
2.1
%
Non-GAAP Diluted EPS
$
0.16
$
0.16
2.9
%
Adjusted EBITDA
$
2.2
$
1.1
97.9
%
*numbers may not add due to rounding
Balance Sheet and Liquidity as of March
31, 2022
Cash and cash equivalents were $18.0 million, compared to $7.6
million on December 31, 2022. Short-term and long-term debt were
$1.0 million and $11.1 million, respectively. The increase in cash
and debt related to the Company drawing down on its credit
facilities in order close the acquisition of Macro Integration
Services (MIS) on April 1, 2023.
2023 Commentary and Second Quarter
Guidance (ending 6/30/23)
2Q23 Guidance
2Q22 Actual
Revenue
$29.0 - $31.0 Million
$27.5 Million
Adjusted EBITDA
$1.5 - $1.8 million
$2.7 Million
“Looking to the second quarter, we closed the MIS acquisition,
which aligned with our strategic objectives of adding a higher mix
of services, adding new solutions, filling geographic gaps and
bringing new retail and hospitality customer relationships on the
first day of the quarter. We expect the acquisition, combined with
the continued fulfillment of the large retail customer orders, to
drive higher revenue and gross margin sequentially and year over
year. As a result, from the second quarter through the remainder of
the year, we now expect MIS to incrementally add at least $12
million in revenue and over $1.2 million in adjusted EBITDA at an
above-company average gross margin, as roughly 70% of MIS’ revenue
comes from services,” concluded Smith.
Conference Call and Webcast
Information
Management will host an earnings conference call and webcast at
11:00 a.m. Eastern Time. Q&A with investors will follow
management's presentation of the results, outlook and strategy.
Live Call Information:
Date: May 15, 2023 Time: 11:00 a.m. Eastern Time
Toll-Free: 1-877-407-3982 Toll/International:
1-201-493-6780 Call me™: Click Call me Link for instant
telephone access to the event (Call me™ link will be made active 15
minutes prior to scheduled start time). Webcast:
https://viavid.webcasts.com/starthere.jsp?ei=1614929&tp_key=6c8b18f619
Replay Information:
Toll-Free: 1-844-512-2921 Toll/International:
1-412-317-6671 Replay Pin Number: 13738732 Replay
Start: Monday, May 15, 2023, 12:00 p.m. ET Replay
Expiry: Monday, May 22, 2023 at 11:59 p.m. 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
In this press release, all statements that are not purely about
historical facts, including, but not limited to, those in which we
use the words "believe," "anticipate," "expect," "plan," "intend,"
"estimate, "target" and similar expressions, are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. While these forward-looking statements
represent our current judgment of what may happen in the future,
actual results may differ materially from the results expressed or
implied by these statements due to numerous important factors,
including, but not limited to, those described in our most recent
report on SEC Form 10-K (under the headings "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations"), which may be revised or supplemented in
subsequent reports on SEC Forms 10-Q and 8-K. We are under no
obligation, and expressly disclaim any obligation, to update the
forward-looking statements in this press release, whether as a
result of new information, future events or otherwise.
DecisionPoint Systems,
Inc.
Condensed Consolidated Balance
Sheets
(in thousands, except par
value)
(Unaudited)
March 31, 2023
December 31,
2022
ASSETS
Current assets:
Cash
$
17,975
$
7,642
Accounts receivable, net
26,430
17,085
Inventory, net
5,923
4,417
Deferred costs
2,718
2,729
Prepaid expenses and other current
assets
471
399
Total current assets
53,517
32,272
Operating lease assets
2,576
2,681
Property and equipment, net
1,838
1,817
Deferred costs, net of current portion
3,092
2,868
Deferred tax assets
838
848
Intangible assets, net
4,122
4,531
Goodwill
10,499
10,499
Other assets
45
41
Total assets
$
76,527
$
55,557
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
23,262
$
19,755
Accrued expenses and other current
liabilities
3,612
5,357
Deferred revenue
12,159
6,021
Current portion of long-term debt
1,003
3
Current portion of operating lease
liabilities
525
529
Total current liabilities
40,561
31,665
Deferred revenue, net of current
portion
4,587
4,331
Long-term debt
11,142
143
Noncurrent portion of operating lease
liabilities
2,581
2,706
Other liabilities
6
130
Total liabilities
58,877
38,975
Commitments and contingencies (Notes 6, 7
and 10)
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; 7,417 and 7,416 shares issued and outstanding,
respectively
7
7
Additional paid-in capital
38,631
38,429
Accumulated deficit
(20,988
)
(21,854
)
Total stockholders’ equity
17,650
16,582
Total liabilities and stockholders’
equity
$
76,527
$
55,557
DecisionPoint Systems,
Inc.
Condensed Consolidated
Statements of Income and Comprehensive Income
(in thousands, except per share
data)
(Unaudited)
Three Months Ended March
31,
2023
2022
Net sales:
Product
$
22,166
$
15,580
Service
4,873
4,141
Net sales
27,039
19,721
Cost of sales:
Product
17,885
12,422
Service
3,104
2,625
Cost of sales
20,989
15,047
Gross profit
6,050
4,674
Operating expenses:
Sales and marketing expense
2,368
2,175
General and administrative expenses
2,494
2,261
Total operating expenses
4,862
4,436
Operating income
1,188
238
Interest expense
(13
)
(25
)
Other expense
-
4
Income before income taxes
1,175
217
Income tax (expense) benefit
(309
)
637
Net income and comprehensive income
attributable to common stockholders
$
866
$
854
Earnings per share attributable to
stockholders:
Basic
$
0.12
$
0.12
Diluted
$
0.11
$
0.11
Weighted average common shares
outstanding
Basic
7,417
7,104
Diluted
7,789
7,664
DecisionPoint Systems,
Inc.
Condensed Consolidated
Statements of Cash Flows
(in thousands)
(Unaudited)
Three Months Ended
March 31,
2023
2022
Cash flows from operating
activities
Net income
$
866
$
854
Adjustments to reconcile net income to net
cash (used in) provided by operating activities:
Depreciation and amortization
564
452
Share-based compensation expense
196
225
Allowance for doubtful accounts
68
-
Provision for inventory obsolescence
45
-
Deferred income taxes, net
10
(639
)
Changes in operating assets and
liabilities:
Accounts receivable
(9,413
)
(2,102
)
Inventory
(1,551
)
1,190
Deferred costs
(212
)
(3
)
Prepaid expenses and other current
assets
(75
)
(243
)
Accounts payable
3,507
(1,407
)
Accrued expenses and other current
liabilities
(1,871
)
(901
)
Operating lease liabilities
(24
)
184
Deferred revenue
6,394
14,059
Net cash (used in) provided by operating
activities
(1,496
)
11,669
Cash flows from investing
activities
Cash paid for acquisitions, net of cash
acquired
-
(4,460
)
Purchases of property and equipment
(176
)
(447
)
Net cash used in investing activities
(176
)
(4,907
)
Cash flows from financing
activities
Line of credit, net
7,000
-
Payment under term loan
(1
)
-
Proceeds from term loan
5,000
-
Proceeds from exercise of stock
options
6
-
Net cash provided by financing
activities
12,005
-
Change in cash
10,333
6,762
Cash, beginning of period
7,642
2,587
Cash, end of period
$
17,975
$
9,349
Supplemental disclosures of cash flow
information
Cash paid for interest
$
7
$
25
Cash paid for income taxes
$
-
$
-
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
Trended Financial Information*
(in $M except for EPS)
1Q22
2Q22
3Q22
4Q22
1Q23
FY21
FY22
Total Revenue
$
19.7
$
27.5
$
25.7
$
24.5
$
27.0
$
65.9
$
97.4
Hardware Revenue
$
14.3
$
20.6
$
19.2
$
17.7
$
20.5
$
44.4
$
71.8
Software and Services Revenue
$
4.1
$
4.8
$
4.7
$
4.7
$
4.9
$
15.5
$
18.3
Consumables Revenue
$
1.3
$
2.1
$
1.8
$
2.1
$
1.6
$
6.1
$
7.3
Gross Profit
$
4.7
$
6.3
$
5.8
$
6.3
$
6.1
$
15.3
$
23.1
Gross Margin
23.7
%
23.0
%
22.4
%
25.9
%
22.4
%
23.2
%
23.7
%
Operating Income
$
0.2
$
2.0
$
1.5
$
0.7
$
1.2
$
0.4
$
4.4
GAAP Net Income
$
0.9
$
0.7
$
1.1
$
0.4
$
0.9
$
1.4
$
3.1
GAAP Diluted EPS
$
0.11
$
0.09
$
0.15
$
0.07
$
0.11
$
0.19
$
0.41
Non-GAAP Net Income
$
1.3
$
0.8
$
1.2
$
0.7
$
1.3
$
1.5
$
4.1
Non-GAAP Diluted EPS
$
0.16
$
0.11
$
0.16
$
0.11
$
0.16
$
0.20
$
0.54
nm = not measurable/meaningful
*numbers may not add due to rounding
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:
Supplemental Financial
Information
Reconciliation of Select GAAP
Financial Measures to Non-GAAP Financial Measures
(in thousands, except per share
data)
(unaudited)
Three Months Ended
March, 31
2023
2022
Net income, as reported
$
866
$
854
Share-based compensation
196
225
Business acquisition costs
221
177
NYSE American uplisting costs
-
-
Gain on extinguishment of debt
-
-
Non-GAAP net income
$
1,283
$
1,256
Depreciation and amortization
564
452
Income taxes
309
(637
)
Interest expense
13
25
Adjusted EBITDA
$
2,169
$
1,096
Diluted EPS, as reported
$
0.11
$
0.11
Adjusted Diluted EPS
$
0.16
$
0.16
Weighted average diluted common shares
outstanding
7,789
7,664
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230515005304/en/
Investor Relations Contact: Brian Siegel, IRC, MBA Senior
Managing Director, Hayden IR (346) 396-8696
Brian@haydenir.com
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