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8-K - CURRENT REPORT - DecisionPoint Systems, Inc.ea139159-8k_decision.htm

Exhibit 99.1

 

 

 

DecisionPoint Systems Announces Fourth Quarter and Full Year 2020 Results

 

Revenues increased by 44% and net income more than tripled year-over-year in 2020

 

IRVINE, California -April 7, 2021- DecisionPoint Systems, Inc. (OTCQB: DPSI), today announced financial results for the fourth quarter and 2020.

 

Fourth Quarter 2020

 

Sales for the fourth quarter of 2020 were $18.3 million, an increase of $6.2 million, or 50.7% from the fourth quarter of 2019.

 

Net income for the fourth quarter of 2020 was $0.6 million, an increase of 8.3% from the fourth quarter of 2019, and earnings per diluted share for the fourth quarter of 2020 and 2019 were flat at $0.04 per diluted share.

 

EBITDA increased 22.3% to $1.3 million for the fourth quarter of 2020 versus the fourth quarter of 2019.

 

Full Year 2020

 

Sales for the full year 2020 were $63.4 million, an increase of $19.5 million, or 44.4%, from 2019.

 

Net income for 2020 was $2.9 million, or $0.18 per diluted share, compared with net income of $0.9 million, or $0.06 per diluted share in 2019. For 2020, diluted earnings per share increased 200.0% versus 2019.

 

EBITDA increased 92.9% to $5.1 million for 2020 versus 2019.

 

“2020 was a remarkable year for DecisionPoint Systems, said Steve Smith, chief executive officer. “Despite the pandemic, we grew the business to $63.4 million in 2020 and completed an acquisition during the fourth quarter of 2020 to help accelerate our geographic expansion into 2021 and beyond. This acquisition further solidifies DecisionPoint’s commitment to innovating, growing, and looking for investment opportunities that create shareholder value and make a difference for our customer’ partners and employees. DecisionPoint is committed to providing customers with the best solutions on the market that will create easy, end-to-end support for their entire global operations. Our goal is to continue bringing together the best people, applying the best processes, and combining the best products and services, so we continue to be a relevant and valued partner for our customers while preparing them to meet the demands of tomorrow’s tech-driven world. As we look ahead, we are confident our business will continue to thrive over the long-term given the progress we made over the last year and our continued and planned investments.”

 

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Balance Sheet and Liquidity

 

Our cash and accounts receivable were $18.4 million at December 31, 2020, compared to $11.3 million at December 31, 2019. Cash provided by operations in 2020 was $4.2 million, as compared to $2.5 million in 2019. Overall debt is lower by $1.1 million than it was at the beginning of the year.

 

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 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:
Carol Arakaki

ir@decisionpt.com

 

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DecisionPoint Systems, Inc.

Unaudited Condensed Consolidated Balance Sheets

(in thousands, except per share data)

 

   December 31, 
   2020   2019 
ASSETS        
Current assets:        
Cash  $2,005   $2,620 
Accounts receivable, net   16,438    8,710 
Inventory, net   884    3,825 
Deferred costs   1,744    2,201 
Prepaid expenses and other current assets   67    268 
Total current assets   21,138    17,624 
Operating lease assets   583    516 
Property and equipment, net   751    239 
Deferred costs, net of current portion   2,097    1,258 
Deferred tax assets   1,973    2,659 
Intangible assets, net   4,663    2,394 
Goodwill   8,128    6,990 
Other assets   22    19 
Total assets  $39,355   $31,699 
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities:          
Accounts payable  $12,852   $10,589 
Accrued expenses and other current liabilities   2,807    2,222 
Deferred revenue   4,617    3,630 
Line of credit   1,206    3,177 
Current portion of debt       144 
Due to related parties   34    124 
Current portion of operating lease liabilities   261    140 
Total current liabilities   21,777    20,026 
Deferred revenue, net of current portion   3,140    1,979 
Long-term debt   1,361    390 
Noncurrent portion of operating lease liabilities   340    388 
Other   873     
Total liabilities   27,491    22,783 
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; 13,576 and 13,576 shares issued and outstanding, respectively   14    14 
Additional paid-in capital   38,229    38,142 
Accumulated deficit   (26,379)   (29,240)
Total stockholders’ equity   11,864    8,916 
Total liabilities and stockholders’ equity  $39,355   $31,699 

 

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DecisionPoint Systems, Inc.

Unaudited Condensed Consolidated Statements of Income and Comprehensive Income

(in thousands, except per share data)

 

   Fourth Quarter Ended
December 31,
   Year Ended
December 31,
 
   2020   2019   2020   2019 
Net sales:                
Product  $14,733   $9,154   $50,673   $31,990 
Service   3,568    2,994    12,687    11,899 
Net sales   18,301    12,148    63,360    43,889 
Cost of sales:                    
Product   11,550    7,150    40,129    25,866 
Service   2,264    1,987    8,413    7,267 
Cost of sales   13,814    9,137    48,542    33,133 
Gross profit   4,487    3,011    14,818    10,756 
Operating expenses:                    
Sales and marketing expense   1,586    1,232    5,587    4,907 
General and administrative expenses   1,971    958    5,203    3,999 
Total operating expenses   3,557    2,190    10,790    8,906 
Operating income   930    821    4,028    1,850 
Interest expense   87    77    319    649 
Other income   1    1    213    - 
Income before income taxes   844    745    3,922    1,201 
Income tax expense   244    191    1,061    310 
Net income and comprehensive income attributable to common stockholders  $600   $554   $2,861   $891 
Earnings per share attributable to stockholders:                    
Basic  $0.04   $0.04   $0.21   $0.07 
Diluted  $0.04   $0.04   $0.18   $0.06 
Weighted average common shares outstanding                    
Basic   13,576    13,576    13,576    13,415 
Diluted   15,623    15,642    15,622    15,341 

 

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DecisionPoint Systems, Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)

 

  

Years Ended

December 31,

 
   2020   2019 
Cash flows from operating activities        
Net income  $2,861   $891 
Adjustments to reconcile net income to net cash provided by operating activities:          
Depreciation and amortization   891    809 
Amortization of deferred financing costs and note discount   157    304 
Share-based compensation expense   87    324 
Acquisition earn-out adjustment   -    (110)
Deferred income taxes, net   686    265 
Provision for doubtful accounts   25    5 
Changes in operating assets and liabilities:          
Accounts receivable   (5,853)   (503)
Inventory, net   2,945    (3,469)
Deferred costs   (382)   (746)
Prepaid expenses and other current assets   254    (148)
Other assets, net   (8)   21 
Accounts payable   585    4,047 
Accrued expenses and other current liabilities   294    275 
Due to related parties   (90)   16 
Operating lease liabilities   6    (163)
Deferred revenue   1,738    717 
Net cash provided by operating activities   4,196    2,535 
Cash flows from investing activities          
Purchases of property and equipment   (93)   (175)
Cash paid for acquisitions, net of cash acquired   (3,409)   (500)
Net cash used in investing activities   (3,502)   (675)
Cash flows from financing activities          
Repayment of term debt   (646)   (1,636)
Line of credit, net   (1,971)   (19)
Proceeds from issuance of term debt   1,361     
Debt issuance costs   (53)   (36)
Proceeds from exercise of stock options       1 
Net cash used in financing activities   (1,309)   (1,690)
Change in cash   (615)   170 
Cash, beginning of year   2,620    2,450 
Cash, end of year  $2,005   $2,620 

 

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Non-GAAP Financial Measure:

 

This press release includes information relating to EBITDA which the Securities and Exchange Commission has defined as a “non-GAAP financial measure.” EBITDA is defined as net income before interest expense, net, income tax expense, and depreciation and amortization (EBITDA). We believe 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 EBITDA may not be comparable to similar measures disclosed by other companies, because not all companies calculate EBITDA in the same manner.

 

The following is a reconciliation of net income to EBITDA (unaudited and in thousands):

 

   Fourth Quarter Ended
December 31
   Year Ended
December 31
 
   2020   2019   2020   2019 
Reconciliation of Net Income to EBITDA                
Net income  $600   $554   $2,861   $891 
Interest expense   87    77    319    649 
Income tax expense   244    191    1,061    310 
Depreciation and amortization (1)   324    203    888    809 
EBITDA  $1,255   $1,025   $5,129   $2,659 

 

(1)Recorded within general and administration expenses within our Unaudited Condensed Consolidated Statements of Income and Comprehensive Income.

 

 

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