DecisionPoint Systems Announces Fourth Quarter and Full Year 2021 Results
Strategic growth plan continues to yield gains in revenue, margin, and mix
DELRAY BEACH, Fla., March 31, 2022 /PRNewswire/ -- DecisionPoint Systems, Inc. (OTCQB:DPSI), today announced fourth quarter and full year 2021 financial results.
Full Year 2021
- Revenue was $65.9MM, an increase of $2.6MM (3.9%) from 2020.
- Services revenues, the Company's strategic focus, were $15.5MM, an increase of $2.8MM (17.9%) from 2020.
- Gross profit, $15.3MM, increased by $0.5MM (3.3%) from 2020.
- 2021 EBITDA was $3.0MM ($2.8MM on an Adjusted EBITDA basis).
- Debt was paid down by $1.2MM from December 31, 2020.
Fourth Quarter 2021
- Q4 Revenue was $16.5MM, pressured by industry-wide supply chain issues, which the Company anticipates continuing into 1H 2022.
- Solid booking activity continued however resulting in a backlog expansion to $31.2MM. The Company is working closely with its equipment manufacturer partners to manage through these supply constraints.
- Q4 Adjusted EBITDA was $0.3MM for the fourth quarter 2021, compared with $1.3MM for the fourth quarter of 2020.
"We continue to execute the strategic growth plan we put in place several years ago," commented CEO Steve Smith. "That plan is focused on the growth of what we call "mobility-first services," and on the expansion of our served geographic coverage. We're achieving those goals through both the organic build-out of our business and by select acquisitions.
Smith continued, "While the sale of enterprise hardware such as mobile computers, bar code and RFID scanners, and printers remains a solid core of our business, the provision of associated services, including especially managed operational services, with its recurring revenue streams, is the focus of our strategic intent. The nearly 18% growth in these services in 2021 marks our progress. We plan for services to contribute still larger proportions of our growth going forward, yielding margin expansion, increased forward revenue visibility, and the foundation for robust enterprise value growth."
"The Company also continues to execute on its strategy to make select strategic acquisitions that add technical competencies, operational capacity, and geographic coverage. The full integration of one such acquisition from late 2020, ExtenData, a Rocky Mountains-focused regional leader in solutions and services design and delivery, was completed in 2021. In January 2022, we also acquired Advanced Mobile Group to expand DecisionPoint's mobility-first enterprise solutions and service offerings and grow its capabilities in the mid-Atlantic region. Advanced Mobile Group is a regional leader providing services, hardware, software, integration, and wireless networking solutions, with deep experience in warehousing and distribution, manufacturing, mobile workforce automation, retailing, and healthcare segments, and 600 customers."
CEO Smith concluded, "2021 was another very solid year for DecisionPoint. We grew in all key measures relative to 2020, a tough compare with its outsized singular top line event, and did so overcoming industry headwinds caused by global supply chain constraints. I'm confident that our plans and proven execution capacity will yield still greater successes for our customers and growth for DecisionPoint in 2022 and beyond."
Our cash and accounts receivable were $14.9 million on December 31, 2021, compared to $18.4 million on December 31, 2020. Cash flow from operations in 2021 was $2.4 million, as compared to $4.2 million in 2020. Overall debt is lower by $1.2 million than at the beginning of the year. As of December 31, 2021, we had no borrowings under the line of credit.
A conference call to discuss these financial results is scheduled for Friday, April 1, 2022, at 4:30 p.m. ET (1:30 p.m. PT). Investors, analysts, and all parties interested in listening to the call are invited to dial (877) 407-3982 (domestic) or (201) 493-6780 (international) at 4:30 p.m. ET (1:30 p.m. PT). The conference call will also be available to interested parties through a live webcast at https://viavid.webcasts.com/starthere.jsp?ei=1540399&tp_key=229612448d. Please log in at least 15 minutes prior to the start of the call to register and download any necessary software.
A telephone replay of the call will be available until April 1, 2022, by dialing (844) 512-2921 (domestic) or (412) 317-6671 (international) and entering the conference identification number: 13728547. Please note participants must enter the conference identification number in order to access the replay.
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 www.decisionpt.com.
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:
ir@decisionpt.com
DecisionPoint Systems, Inc. Condensed Consolidated Balance Sheets (in thousands, except per share data) (unaudited) | ||||||||
December 31, | December 31, | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash | $ | 2,587 | $ | 2,005 | ||||
Accounts receivable, net | 12,302 | 16,438 | ||||||
Inventory, net | 2,111 | 884 | ||||||
Deferred costs | 1,998 | 1,744 | ||||||
Prepaid expenses and other current assets | 336 | 67 | ||||||
Total current assets | 19,334 | 21,138 | ||||||
Operating lease assets | 329 | 583 | ||||||
Property and equipment, net | 834 | 751 | ||||||
Deferred costs, net of current portion | 1,492 | 2,097 | ||||||
Deferred tax assets | 1,999 | 1,973 | ||||||
Intangible assets, net | 3,564 | 4,663 | ||||||
Goodwill | 8,128 | 8,128 | ||||||
Other assets | 50 | 22 | ||||||
Total assets | $ | 35,730 | $ | 39,355 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 10,273 | $ | 12,852 | ||||
Accrued expenses and other current liabilities | 3,220 | 2,807 | ||||||
Deferred revenue | 4,599 | 4,617 | ||||||
Line of credit | — | 1,206 | ||||||
Due to related parties | — | 34 | ||||||
Current portion of long-term debt | 3 | — | ||||||
Current portion of operating lease liabilities | 257 | 261 | ||||||
Total current liabilities | 18,352 | 21,777 | ||||||
Deferred revenue, net of current portion | 2,510 | 3,140 | ||||||
Long-term debt | 146 | 1,361 | ||||||
Noncurrent portion of operating lease liabilities | 83 | 340 | ||||||
Other liabilities | 381 | 873 | ||||||
Total liabilities | 21,472 | 27,491 | ||||||
Stockholders' equity: | ||||||||
Preferred stock | — | — | ||||||
Common stock | 7 | 7 | ||||||
Additional paid-in capital | 39,216 | 38,236 | ||||||
Accumulated deficit | (24,965) | (26,379) | ||||||
Total stockholders' equity | 14,258 | 11,864 | ||||||
Total liabilities and stockholders' equity | $ | 35,730 | $ | 39,355 | ||||
DecisionPoint Systems, Inc. Condensed Consolidated Statements of Income and Comprehensive Income (in thousands, except per share data) (unaudited) | ||||||||||||||||
Fourth Quarter Ended | Year Ended | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Net sales: | ||||||||||||||||
Product | $ | 12,634 | $ | 14,733 | $ | 50,480 | $ | 50,673 | ||||||||
Service | 3,849 | 3,568 | 15,463 | 12,687 | ||||||||||||
Net sales | 16,483 | 18,301 | 65,943 | 63,360 | ||||||||||||
Cost of sales: | ||||||||||||||||
Product | 9,995 | 11,550 | 39,943 | 40,129 | ||||||||||||
Service | 2,706 | 2,264 | 10,696 | 8,413 | ||||||||||||
Cost of sales | 12,701 | 13,814 | 50,639 | 48,542 | ||||||||||||
Gross profit | 3,782 | 4,487 | 15,304 | 14,818 | ||||||||||||
Operating expenses: | ||||||||||||||||
Sales and marketing expense | 1,743 | 1,586 | 7,354 | 5,587 | ||||||||||||
General and administrative expenses | 2,960 | 1,971 | 7,552 | 5,203 | ||||||||||||
Total operating expenses | 4,703 | 3,557 | 14,906 | 10,790 | ||||||||||||
Operating (loss) income | (921) | 930 | 398 | 4,028 | ||||||||||||
Interest expense | (12) | (87) | (79) | (319) | ||||||||||||
Gain on extinguishment of debt | — | — | 1,211 | — | ||||||||||||
Other income | — | 1 | — | 213 | ||||||||||||
Income (loss) before income taxes | (933) | 844 | 1,530 | 3,922 | ||||||||||||
Income tax (expense) benefit | 232 | (244) | (116) | (1,061) | ||||||||||||
Net income (loss) and comprehensive income (loss) | $ | (701) | $ | 600 | $ | 1,414 | $ | 2,861 | ||||||||
Earnings (loss) per share (1): | ||||||||||||||||
Basic | $ | (0.10) | $ | 0.09 | $ | 0.20 | $ | 0.42 | ||||||||
Diluted | $ | (0.10) | $ | 0.08 | $ | 0.19 | $ | 0.37 | ||||||||
Weighted average common shares outstanding (1) | ||||||||||||||||
Basic | 7,003 | 6,788 | 6,947 | 6,788 | ||||||||||||
Diluted | 7,003 | 7,811 | 7,593 | 7,811 | ||||||||||||
(1) | All share and per share information has been retroactively adjusted to reflect reverse stock split. |
DecisionPoint Systems, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) | ||||||||
Years Ended | ||||||||
2021 | 2020 | |||||||
Cash flows from operating activities | ||||||||
Net income | $ | 1,414 | $ | 2,861 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 1,387 | 891 | ||||||
Amortization of deferred financing costs and note discount | 24 | 157 | ||||||
Share-based compensation expense | 1,003 | 87 | ||||||
Acquisition earn-out adjustment | (187) | - | ||||||
Gain on extinguishment of debt | (1,211) | - | ||||||
Deferred income taxes, net | (26) | 686 | ||||||
Provision for doubtful accounts | - | 25 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 4,136 | (5,853) | ||||||
Inventory, net | (1,227) | 2,945 | ||||||
Deferred costs | 351 | (382) | ||||||
Prepaid expenses and other current assets | (294) | 254 | ||||||
Other assets, net | (28) | (8) | ||||||
Accounts payable | (2,579) | 585 | ||||||
Accrued expenses and other current liabilities | 277 | 294 | ||||||
Due to related parties | (34) | (90) | ||||||
Operating lease liabilities | (7) | 6 | ||||||
Deferred revenue | (648) | 1,738 | ||||||
Net cash provided by operating activities | 2,352 | 4,196 | ||||||
Cash flows from investing activities | ||||||||
Purchases of property and equipment | (371) | (93) | ||||||
Cash paid for acquisitions, net of cash acquired | (170) | (3,409) | ||||||
Net cash used in investing activities | (541) | (3,502) | ||||||
Cash flows from financing activities | ||||||||
Repayment of term debt | — | (646) | ||||||
Line of credit, net | (1,206) | (1,971) | ||||||
Proceeds from issuance of term debt | — | 1,361 | ||||||
Debt issuance costs | — | (53) | ||||||
Taxes paid in lieu of shares issued for share-based compensation | (25) | — | ||||||
Proceeds from exercise of stock options | 2 | — | ||||||
Net cash used in financing activities | (1,229) | (1,309) | ||||||
Change in cash | 582 | (615) | ||||||
Cash, beginning of year | 2,005 | 2,620 | ||||||
Cash, end of year | $ | 2,587 | $ | 2,005 | ||||
This press release includes information relating to Adjusted EBITDA which the Securities and Exchange Commission has defined as a "non-GAAP financial measure." Adjusted EBITDA is defined as net income (loss) before interest expense, income tax expense (benefit), depreciation and amortization, other income (expense), gain (loss) on extinguishment of debt and share based compensation expense. We believe Adjusted EBITDA may provide investors with useful information of how our current primary operating results relate to our historical performance. The non-GAAP financial measure provided is not meant to be considered as a substitute for GAAP financials. We caution investors that amounts presented in accordance with our definitions of Adjusted EBITDA may not be comparable to similar measures disclosed by other companies, because not all companies calculate Adjusted EBITDA in the same manner.
The following is a reconciliation of net income to Adjusted EBITDA (unaudited and in thousands):
Fourth Quarter Ended | Year Ended | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Reconciliation of Net Income (Loss) to Adjusted EBITDA | ||||||||||||||||
Net income (loss) | $ | (701) | $ | 600 | $ | 1,414 | $ | 2,861 | ||||||||
Interest expense | 12 | 87 | 79 | 319 | ||||||||||||
Income tax expense (benefit) | (232) | 244 | 116 | 1,061 | ||||||||||||
Depreciation and amortization | 356 | 324 | 1,387 | 888 | ||||||||||||
EBITDA | $ | (565) | $ | 1,255 | $ | 2,996 | $ | 5,129 | ||||||||
Share based compensation | 894 | 14 | 1,003 | 87 | ||||||||||||
Gain on extinguishment of debt | - | - | (1,211) | - | ||||||||||||
Other income | - | (1) | - | (213) | ||||||||||||
Adjusted EBITDA | $ | 329 | $ | 1,268 | $ | 2,788 | $ | 5,003 | ||||||||
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SOURCE DecisionPoint Systems, Inc.