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DecisionPoint Systems Announces Fourth Quarter and Full-Year 2022 Results

By: via Business Wire

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 $M 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

)

nm

$

4.4

$

0.4

1017.3

%

GAAP Net Income

$

0.4

$

(0.7

)

nm

$

3.1

$

1.4

120.0

%

GAAP Diluted Earnings Per Share

$

0.07

$

(0.04

)

nm

$

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 $M 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

$

3.9

 

$

4.1

$

4.8

$

4.7

$

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

 

 

Contacts

Investor Relations Contact:

Brian Siegel, IRC, MBA

Senior Managing Director, Hayden IR

(346) 396-8696

Brian@haydenir.com

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