DPSI - DecisionPoint Systems Announces Fourth Quarter and Full-Year 2022 Results

March, 29 2023 07:00 AM DecisionPoint Systems Inc.

Full-year revenue increased 48% to a record $97.4 million
Full-year GAAP net income of $3.1 million (+120%) and diluted EPS of $0.41 (+117%)
Full-year non-GAAP EPS of $0.54 (+165%) and adjusted EBITDA of $7.8 million (+152%)

DecisionPoint™ Systems, Inc. (NYSE American: DPSI), a mobility-first enterprise services and solutions company, today announced fourth quarter and full-year 2022 financial results ended December 31, 2022.

“We had a record year and created significant value for shareholders, demonstrating the potency of our strategy and our ability to execute on our playbook, even in challenging macro-economic backdrop,” said Steve Smith, chief executive officer. “We saw strength across our businesses, with significant upside driven by multiple new projects from long-term and new customers. Additionally, our strategy for growing our services, software and consumables revenue, which are more recurring in nature, yielded a 19% increase for the year and drove higher gross margins. Finally, these factors, combined with our ability to integrate the two acquisitions we made during the year quickly, led to adjusted EBITDA of $7.8 million, above the high-end of our guidance.”

Fourth Quarter Highlights (2022 versus 2021)

Revenue increased 48.5% to $24.5 million;
Gross Profit increased 67.6% to $6.3 million;
GAAP Net Income and diluted EPS increased to $0.4 million and $0.07, respectively;
Non-GAAP Net Income and non-GAAP diluted EPS increased 113.0% and 181.7% to $0.7 million and $0.10, respectively;
Adjusted EBITDA increased 274.0% to $1.8 million;

Full-Year Highlights (2022 versus 2021)

Revenue increased 47.7% to $97.4 million;
Gross Profit increased 50.9% to $23.1 million;
GAAP Net Income and diluted EPS increased to $3.1 million and $0.41, respectively;
Non-GAAP Net Income and non-GAAP diluted EPS increased 164.3% and 165.4% to $4.1 million and $0.54, respectively;
Adjusted EBITDA increased 151.6% to $7.8 million;
Backlog as of December 31, 2022, was $30.3 million.

Fourth Quarter Select Financial Metrics: 2022 versus 2021*

(in except for EPS)

4Q22

4Q21

Change

2022

2021

Change

Total Revenue

24.5

16.5

48.5

97.4

65.9

47.7

Hardware Revenue

17.7

10.9

62.3

71.8

44.4

61.8

Software and Services Revenue

4.7

3.9

21.3

18.3

15.5

18.6

Consumables Revenue

2.1

1.7

22.9

7.3

6.1

19.3

Gross Profit

6.3

3.8

67.6

23.1

15.3

50.9

Operating Income

0.7

(0.9

)

4.4

0.4

1017.3

GAAP Net Income

0.4

(0.7

)

3.1

1.4

120.0

GAAP Diluted Earnings Per Share

0.07

(0.04

)

0.41

0.19

116.5

Non-GAAP Net Income

0.7

0.4

113.0

4.1

1.5

164.3

Non-GAAP Diluted EPS

0.10

0.04

181.7

0.54

0.20

165.4

Adjusted EBITDA

1.8

0.5

274.0

7.8

3.1

151.6

*numbers may not add due to rounding

nm = not measurable/meaningful

Balance Sheet and Liquidity as of December 31, 2022

Cash and cash equivalents were $7.6 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 $12.3 million compared to $2.4 million in 2021.

2023 Commentary and First Quarter Guidance (ending 3/31/23)

1Q23 Guidance

1Q22 Actual

Revenue

$20.0 - $21.0 Million

$19.7 Million

Adjusted EBITDA

$0.8 - $1.0 million

$1.1 Million

“Over the remainder of the year, we expect to grow our recurring revenue businesses, including services and consumables, book new project orders and acquire at least one company to drive top and bottom-line growth in 2023. Additionally, we have made and will continue to increase investments into developing our intellectual property core, including our Vision portal for managed service delivery, which we believe is a competitive differentiator in the market. Finally, we made some recent additions to our team of sales and business development professionals, which we believe enhances our already solid foundation for continued growth in 2023 and beyond,” 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: March 29, 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 the scheduled start time).
Webcast: https://viavid.webcasts.com/starthere.jsp?ei=1606515&tp_key=37450f0c29

Replay Information:

Toll-Free: 1-844-512-2921
Toll/International: 1-412-317-6671
Replay Pin Number: 13737455
Replay Start: Wednesday, March 29, 2023, 2:00 p.m. ET
Replay Expiry: Wednesday, April 05, 2023, 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)







December 31,

December 31,

2022

2021
ASSETS




Current assets:




Cash

$
7,642


$
2,587

Accounts receivable, net


17,085



12,302

Inventory, net


4,417



2,111

Deferred costs


2,729



1,998

Prepaid expenses and other current assets


399



336

Total current assets


32,272



19,334

Operating lease assets


2,681



329

Property and equipment, net


1,817



834

Deferred costs, net of current portion


2,868



1,492

Deferred tax assets


848



1,999

Intangible assets, net


4,531



3,564

Goodwill


10,499



8,128

Other assets


41



50

Total assets

$
55,557


$
35,730

LIABILITIES AND STOCKHOLDERS’ EQUITY




Current liabilities:




Accounts payable

$
19,755


$
10,273

Accrued expenses and other current liabilities


5,357



3,220

Deferred revenue


6,021



4,599

Current portion of long-term debt


3



3

Current portion of operating lease liabilities


529



257

Total current liabilities


31,665



18,352

Deferred revenue, net of current portion


4,331



2,510

Long-term debt


143



146

Noncurrent portion of operating lease liabilities


2,706



83

Other liabilities


130



381

Total liabilities


38,975



21,472

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; 7,416 and 7,007 shares issued and outstanding, respectively


7



7

Additional paid-in capital


38,429



39,216

Accumulated deficit


(21,854
)


(24,965
)
Total stockholders’ equity


16,582



14,258

Total liabilities and stockholders’ equity

$
55,557


$
35,730

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





Year Ended December 31,


2022

2021
Net sales:




Product

$
79,079


$
50,480

Service


18,336



15,463

Net sales


97,415



65,943

Cost of sales:




Product


62,214



39,943

Service


12,106



10,696

Cost of sales


74,320



50,639

Gross profit


23,095



15,304

Operating expenses:




Sales and marketing expense


9,218



7,354

General and administrative expenses


9,430



7,552

Total operating expenses


18,648



14,906

Operating income


4,447



398

Interest expense


(56
)


(79
)
Gain on extinguishment of debt


—



1,211

Other expense


(15
)


—

Income before income taxes


4,376



1,530

Income tax expense


(1,265
)


(116
)
Net income and comprehensive income attributable to common stockholders

$
3,111


$
1,414

Earnings per share attributable to stockholders:




Basic

$
0.43


$
0.20

Diluted

$
0.41


$
0.19

Weighted average common shares outstanding




Basic


7,261



6,947

Diluted


7,562



7,593

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





Years Ended December 31,


2022

2021
Cash flows from operating activities




Net income

$
3,111


$
1,414

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




Depreciation and amortization


2,465



1,387

Amortization of deferred financing costs and note discount


-



24

Loss on fixed asset disposal


22



-

Share-based compensation expense


577



1,003

Acquisition earn-out adjustment


-



(187
)
Gain on extinguishment of debt


-



(1,211
)
Deferred income taxes, net


254



(26
)
Provision for doubtful accounts


249



-

Changes in operating assets and liabilities:




Accounts receivable


(3,630
)


4,136

Inventory, net


(2,177
)


(1,227
)
Deferred costs


(1,984
)


351

Prepaid expenses and other current assets


(54
)


(294
)
Other assets, net


-



(28
)
Accounts payable


8,924



(2,579
)
Accrued expenses and other current liabilities


914



278

Due to related parties


-



(34
)
Operating lease liabilities


543



(7
)
Deferred revenue


3,095



(648
)
Net cash provided by operating activities


12,309



2,352

Cash flows from investing activities




Purchases of property and equipment


(1,477
)


(371
)
Cash paid for acquisitions, net of cash acquired


(4,525
)


(170
)
Net cash used in investing activities


(6,002
)


(541
)
Cash flows from financing activities




Repayment of term debt


(3
)


—

Line of credit, net


—



(1,206
)
Taxes paid in lieu of shares issued for share-based compensation


(1,403
)


(25
)
Proceeds from exercise of stock options


154



2

Net cash used in financing activities


(1,252
)


(1,229
)
Change in cash


5,055



582

Cash, beginning of year


2,587



2,005

Cash, end of year

$
7,642


$
2,587

Trended Financial Information

Trended Financial Information*

(in except for EPS)

1Q21

2Q21

3Q21

4Q21

1Q22

2Q22

3Q22

4Q22

FY21

FY22

Total Revenue

16.1

15.2

18.2

16.5

19.7

27.5

25.7

24.5

65.9

97.4

Hardware Revenue

10.5

10.3

12.7

10.9

14.3

20.6

19.2

17.7

44.4

71.8

Software and Services Revenue

4.1

3.6

3.9

4.1

4.8

4.7

15.5

18.3

Consumables Revenue

1.5

1.3

1.6

1.7

1.3

2.1

1.8

2.1

6.1

7.3

Gross Profit

3.8

3.5

4.2

3.8

4.7

6.3

5.8

6.3

15.3

23.1

Operating (loss) Income

0.3

0.1

0.9

(0.9

)

0.2

2.0

1.5

0.7

0.4

4.4

Net (loss) Income

1.3

0.2

0.6

(0.7

)

0.9

0.7

1.1

0.4

1.4

3.1

Diluted EPS

0.17

0.02

0.04

(0.04

)

0.11

0.09

0.15

0.07

0.19

0.41

Non-GAAP Net Income

0.2

0.3

0.7

0.4

1.3

0.8

1.2

0.7

1.5

4.1

Non-GAAP Diluted EPS

0.03

0.04

0.10

0.04

0.16

0.11

0.16

0.10

0.20

0.54

djusted EBITDA

0.8

0.6

1.3

0.5

1.1

2.7

2.3

1.8

3.1

7.8

*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:

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

Twelve Months Ended


December 31

December 31


2022

2021

2022

2021
Net income, as reported

$
427

$
(701
)

$
3,111

$
1,414

Share-based compensation


251


894



577


1,003

Business acquisition costs


39


176



281


306

NYSE American uplisting costs


88


-



88


23

Gain on extinguishment of debt


-


-



-


(1,211
)
Non-GAAP net income

$
805

$
369


$
4,057

$
1,535

Depreciation and amortization


715


356



2,465


1,387

Income taxes


257


(232
)


1,265


116

Interest expense


14


12



56


79

Adjusted EBITDA

$
1,791

$
505


$
7,843

$
3,117

View source version on businesswire.com: https://www.businesswire.com/news/home/20230329005387/en/

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

Company Name:	DecisionPoint Systems Inc.
Stock Symbol:	DPSI
Market:	OTC
Website:	decisionpt.com

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