DecisionPoint Systems Announces Third Quarter 2022 Results

Rhea-AI Summary

DecisionPoint Systems (DPSI) reported a record third-quarter revenue of $25.7 million, a 41.1% increase year-over-year. GAAP net income rose by 81.5% to $1.1 million, with diluted EPS up 72.8% to $0.15. Adjusted EBITDA increased 73.7% to $2.3 million. Full-year guidance has been raised to $90-$93 million in revenue (up 36%-41%) and adjusted EBITDA of $6.5-$7.0 million. The backlog as of September 30, 2022, stood at $29 million.

Positive

• Revenue increased 41.1% to $25.7 million.
• GAAP net income rose 81.5% to $1.1 million.
• Diluted EPS increased 72.8% to $0.15.
• Adjusted EBITDA grew 73.7% to $2.3 million.
• Full-year revenue guidance raised to $90-$93 million (+36%-41%).
• Adjusted EBITDA guidance increased to $6.5-$7 million.

Negative

• None.

Revenue increased 41.1% to a third quarter record $25.7 million
GAAP Net income and diluted EPS increased by 81.5% and 72.8%, respectively
Full-year guidance for revenue and adjusted EBITDA increased to $90 - $93 million (+36% - 41%) and $6.5 million to $7.0 million, respectively

DELRAY BEACH, Fla., Nov. 14, 2022 /PRNewswire/ -- DecisionPoint™ Systems, Inc. (NYSE American: DPSI), a mobility-first enterprise services and solutions company, today announced third quarter 2022 financial results ended September 30, 2022.

"We saw continued strength during the third quarter growing revenue 41% and adjusted EBITDA by 74%" - Steve Smith, CEO

"We saw continued strength during the third quarter growing revenue 41% and adjusted EBITDA by 74%," said Steve Smith, chief executive officer. "This strength was broad-based across products and services, including run-rate, follow-on product orders from existing customers and 22% growth in our services revenue. Additionally, given the overall supply chain environment and our ability to successfully access products from our OEMs and distributors, we continued to see customers placing orders with longer lead times, rebuilding our backlog to about $29 million despite our strong quarter. Finally, this quarter also demonstrated the operating leverage inherent in our business, as we dropped more to the bottom line than we did in the second quarter."  

Third Quarter Highlights (2022 versus 2021)

• Revenue increased 41.1% to $25.7 million;
• Gross Profit increased 37.4% to $5.8 million;
• GAAP Net Income and diluted EPS increased to $1.1 million and $0.15, respectively;
• Non-GAAP Net Income and non-GAAP diluted EPS increased 69.8% and 61.7% to $1.2 million and $0.16, respectively;
• Adjusted EBITDA increased 73.7% to $2.3 million;
• Backlog as of September 30, 2022, was $29.0 million.

Third Quarter Select Financial Metrics: 2022 versus  2021
(in $M except for EPS)	3Q22	3Q21	Change	YTD 2022	YTD 2021	Change
Total Revenue	$ 25.7	$ 18.2	41.1 %	$  72.9	$  49.5	47.5 %
Hardware Revenue	$ 19.2	$ 12.7	50.7 %	$  54.1	$  33.5	61.7 %
Software and Services Revenue	$   4.7	$   3.9	22.1 %	$  13.7	$  11.6	17.8 %
Consumables Revenue	$   1.8	$   1.6	11.0 %	$     5.2	$    4.4	17.6 %
Gross Profit	$   5.8	$   4.2	37.4 %	$  16.8	$  11.5	45.4 %
Operating Income	$   1.5	$   0.9	73.9 %	$     3.8	$    1.3	184.4 %
GAAP Net Income	$   1.1	$   0.6	81.5 %	$     2.7	$    2.1	26.9 %
GAAP Diluted Earnings Per Share	$ 0.15	$ 0.08	72.8 %	$  0.36	$  0.29	22.9 %
Non-GAAP Net Income	$   1.2	$   0.7	69.8 %	$     3.3	$    1.2	179.5 %
Non-GAAP Diluted EPS	$ 0.16	$ 0.10	61.7 %	$  0.43	$  0.16	161.7 %
Adjusted EBITDA	$   2.3	$   1.3	73.7 %	$     6.1	$    2.6	130.0 %
*numbers may not add due to rounding

Balance Sheet and Liquidity as of September 30, 2022
Cash and cash equivalents were $9.4 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 $13.9 million compared to $2.2 million in the third quarter of 2021.

2022 Commentary

	2021 Actual	New Guidance	2022 vs 2021	Prior Guidance
Revenue	$65.9 Million	$90.0 - $93.0 Million	+36% - 41%	$87.0 - $90.0 Million
Adjusted EBITDA	$5.0 Million	$6.5 - $7.0 million	+30% - 40%	$4.6 - $5.0 Million

"As we look to the end of the year, we are confident in increasing our full-year 2022 guidance for revenue to $90 to $93 million (36% - 41%) and now expect adjusted EBITDA to be between $6.5 and $7.0 million for the year," concluded Smith.

Conference Call and Webcast Information
Management will host an earnings conference call and webcast at 11:00 a.m. Eastern Time. Management's presentation of the results, outlook and strategy will be followed by Q&A with investors.

Live Call Information:
Date: November 14, 2022
Time: 11:00 a.m. Eastern Time
Toll-Free: 1-877-407-3982
Toll/International: 1-201-493-6780
Webcast: https://viavid.webcasts.com/starthere.jsp?ei=1582068&tp_key=949e374fc7

Replay Information:
Toll-Free: 1-844-512-2921
Toll/International: 1-412-317-6671
Replay Pin Number: 13734298
Replay Start: Tuesday, November 14, 2022, 2:00 a.m. ET
Replay Expiry: Tuesday, November 21, 2022, 11:59 a.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.

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)
	September 30,		December 31,
	2022		2021
ASSETS
Current assets:
Cash	$	9,447	$	2,587
Accounts receivable, net		14,483		12,302
Inventory, net		1415		2,111
Deferred costs		2,422		1,998
Prepaid expenses and other current assets		184		336
Total current assets		27,951		19,334
Operating lease assets		2,784		329
Property and equipment, net		1,764		834
Deferred costs, net of current portion		2,346		1,492
Deferred tax assets		1,539		1,999
Intangible assets, net		4,711		3,564
Goodwill		10,012		8,128
Other assets		16		50
Total assets	$	51,123	$	35,730
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	18,044	$	10,273
Accrued expenses and other current liabilities		4,098		3,220
Deferred revenue		6,664		4,599
Current portion of long-term debt		3		3
Current portion of operating lease liabilities		421		257
Total current liabilities		29,230		18,352
Deferred revenue, net of current portion		2,872		2,510
Long-term debt		143		146
Noncurrent portion of operating lease liabilities		2,639		83
Other liabilities		221		381
Total liabilities		35,105		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; 7,234 and 7,007 shares issued and outstanding, respectively		7		7
Additional paid-in capital		38,292		39,216
Accumulated deficit		(22,281)		(24,965)
Total stockholders' equity		16,018		14,258
Total liabilities and stockholders' equity	$	51,123	$	35,730

 

DecisionPoint Systems, Inc. Condensed Consolidated Statements of Income and Comprehensive Income (in thousands, except per share data) (Unaudited)
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2022			2021			2022		2021
Net sales:
Product	$	20,988	$	14,349			$	59,259	$	37,846
Service		4,725		3,870				13,681		11,614
Net sales		25,713		18,219				72,940		49,460
Cost of sales:
Product		16,923		11,267				47,213		29,948
Service		3,036		2,764				8,971		7,990
Cost of sales		19,959		14,031				56,184		37,938
Gross profit		5,754		4,188				16,756		11,522
Operating expenses:
Sales and marketing expense		2,291		1,812				6,850		5,611
General and administrative expenses		1,936		1,498				6,155		4,592
Total operating expenses		4,227		3,310				13,005		10,203
Operating income		1,527		878				3,751		1,319
Interest expense		(7)		(17)				(42)		(67)
Gain on extinguishment of debt		-		—				-		1,211
Other expense		-		—				(17)		—
Income before income taxes		1,520		861				3,692		2,463
Income tax expense		(409)		(249)				(1,008)		(348)
Net income and comprehensive income attributable to common stockholders	$	1,111	$	612			$	2,684	$	2,115
Earnings per share attributable to stockholders (1):
Basic	$	0.15	$	0.09			$	0.37	$	0.31
Diluted	$	0.15	$	0.08			$	0.36	$	0.29
Weighted average common shares outstanding
Basic		7,290		6,958				7,210		6,928
Diluted		7,593		7,230				7,510		7,274

 

	DecisionPoint Systems, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) (Unaudited)
		Nine Months Ended
		September 30,
		2022		2021
Cash flows from operating activities
Net income		$	2,684	$	2,115
Adjustments to reconcile net income to net cash provided by operating activities:
	Loss on fixed asset disposal		22		-
	Depreciation and amortization		1,750		1,031
	Gain on extinguishment of debt		-		(1,211)
	Amortization of deferred financing costs		-		25
	Share-based compensation expense		325		109
	Deferred income taxes, net		460		171
	Allowance for doubtful accounts		32		-
	Changes in operating assets and liabilities:
	Accounts receivable		(811)		4,548
	Inventory, net		825		(267)
	Deferred costs		(1,155)		(21)
	Prepaid expenses and other current assets		186		(346)
	Accounts payable		7,213		(3,225)
	Accrued expenses and other current liabilities		(139)		(161)
	Due to related parties		-		(34)
	Operating lease liabilities		265		(5)
	Deferred revenue		2,279		(504)
	Net cash provided by operating activities		13,936		2,225
Cash flows from investing activities
Cash paid for acquisitions, net of cash acquired			(4,525)		(170)
Purchases of property and equipment			(1,299)		(235)
Net cash used in investing activities			(5,824)		(405)
Cash flows from financing activities
Line of credit, net			-		(1,206)
Payment under term loan			(3)		-
Cash paid for cashless exercise of stock options			(1,403)		(25)
Proceeds from exercise of stock options			154		2
Net cash used in financing activities			(1,252)		(1,229)
Change in cash			6,860		591
Cash, beginning of period			2,587		2,005
Cash, end of period		$	9,447	$	2,596

 

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SOURCE DecisionPoint Systems, Inc.

FAQ

What was DecisionPoint Systems' revenue for Q3 2022?

DecisionPoint Systems' revenue for Q3 2022 was $25.7 million, an increase of 41.1% year-over-year.

How much did GAAP net income increase for DPSI in Q3 2022?

GAAP net income for DecisionPoint Systems increased by 81.5% to $1.1 million in Q3 2022.

What is the adjusted EBITDA forecast for DecisionPoint Systems in 2022?

The adjusted EBITDA forecast for DecisionPoint Systems in 2022 is between $6.5 million and $7.0 million.

What is the backlog amount reported by DPSI as of September 30, 2022?

DecisionPoint Systems reported a backlog of $29 million as of September 30, 2022.

What is the new revenue guidance for DecisionPoint Systems for the full year 2022?

The new revenue guidance for DecisionPoint Systems for the full year 2022 is $90 million to $93 million.