DecisionPoint Systems Announces Fourth Quarter and Full-Year 2022 Results
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: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
|
|||||||
|
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
|
|||||||
|
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 |
|
||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20230329005387/en/