DecisionPoint Systems Announces Second Quarter 2022 Results

Rhea-AI Summary

DecisionPoint Systems (NYSE American: DPSI) reported a record second-quarter revenue of $27.5 million, up 81.3% from the previous year, driven by robust demand across its verticals. GAAP net income rose to $0.7 million, marking a 324.1% increase. Additionally, non-GAAP net income skyrocketed 227.4% to $0.8 million. The company raised its full-year revenue guidance to $87-90 million, a 33-36% growth forecast. Cash reserves improved to $8.5 million, with a notable increase in operating cash flow to $12.9 million.

Positive

• Second quarter revenue increased 81.3% to $27.5 million.
• GAAP net income rose 324.1% to $0.7 million.
• Non-GAAP net income increased 227.4% to $0.8 million.
• Adjusted EBITDA jumped 392.6% to $2.7 million.
• Raised full-year 2022 revenue guidance to $87.0 - $90.0 million (33-36% growth).
• Cash and cash equivalents reached $8.5 million, up from $2.6 million.

Negative

• None.

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

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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SOURCE DecisionPoint Systems, Inc.

FAQ

What was the revenue growth for DecisionPoint Systems (DPSI) in Q2 2022?

DecisionPoint Systems (DPSI) reported revenue growth of 81.3%, reaching $27.5 million in Q2 2022.

How much did GAAP net income increase for DPSI in Q2 2022?

GAAP net income for DecisionPoint Systems (DPSI) increased by 324.1% to $0.7 million in Q2 2022.

What is the adjusted EBITDA for DecisionPoint Systems (DPSI) in Q2 2022?

Adjusted EBITDA for DecisionPoint Systems (DPSI) surged 392.6% to $2.7 million in Q2 2022.

What is the revised revenue guidance for DPSI for the full year 2022?

DecisionPoint Systems (DPSI) raised its full-year revenue guidance to $87.0 - $90.0 million, indicating a growth of 33-36%.

What was the cash position of DecisionPoint Systems (DPSI) as of June 30, 2022?

As of June 30, 2022, DecisionPoint Systems (DPSI) had cash and cash equivalents of $8.5 million.