IRVINE, Calif., Nov. 11, 2014 /PRNewswire/ -- DecisionPointâ„¢
Systems, Inc. (OTCQB: DPSI; DPSID), a leading provider and
integrator of Enterprise Mobility, Wireless Applications and RFID
solutions, today reported financial results for the third quarter
and nine months ended September 30,
2014. The Company also announced that Robert Schroeder has been elected Chairman of
the Board of Directors, and that Director James F. DeSocio will serve as Interim CEO,
pending the selection of a new CEO pursuant to an executive search
currently being conducted.
Management
Mr. Schroeder, previously designated
interim Chairman, was elected Chairman by the Board subsequent to
the annual meeting of stockholders. Mr. DeSocio agreed to
serve as Interim CEO, bringing 20 years of enterprise software
sales experience to the position. Brief biographies of both
Mr. Schroeder and Mr. DeSocio are appended to this news
release.
Mr. Schroeder commented, "Some significant changes occurred
during the third quarter at DecisionPoint, most notably the
departure of the former CEO, and the election of new Directors who
bring a wealth of experience and accomplishments to the
Company."
"DecisionPoint is fortunate to have Jim
DeSocio on our board and serve as our interim CEO. We intend
to strengthen DecisionPoint, by bringing in a CEO who will drive
revenue in enterprise mobility, wireless applications and RFID
technology. We also intend to bolster the balance sheet,
increase cash generation, and put the Company back on the growth
track it was on prior to the third quarter. As we work
towards these goals, Jim is ideally suited to take interim
leadership of the Company, and I look forward to working with him,
and with the entire new Board. Taglich Brothers has made a
commitment to DecisionPoint, and as major shareholders, that
commitment is important to DecisionPoint's future."
Mr. Schroeder said that although the decision has been made not
to accompany the third-quarter results with the traditional
conference call, the Company intends to resume conference calls
with webcasts when a permanent CEO is in place.
Results
Financial Highlights
- Third consecutive quarter of positive Adjusted EBITDA, an
improvement of $500,000 from the
third quarter of 2014 compared to the third quarter of 2013
- Nine month Adjusted EBITDA up $3.0
million year over year
- Debt lower by $0.9 million than
at December 31, 2013
Revenues for the third quarter were $14.1
million with a net loss of $563,000, compared to revenues of $17.6 million in the third quarter of 2013 with a
net loss of $167,000. On an EPS
basis, the loss per share was $0.07,
compared to a $0.04 loss per share in
the third quarter of 2013. Adjusted EBITDA (a non-GAAP
measurement that management uses to measure progress) was
$459,000 for the quarter ended
September 30, 2014, almost
$500,000 higher than the negative
$40,000 in the third quarter of
2013.
For the nine months ended September 30,
2014, the strength of the first six months brought the
period to a net gain in revenues, reporting $47.4 million versus $46.1
million for the same period last year. The net loss
for the nine months ended September 30,
2014 was $700,000, a strong
improvement over the loss of $3.4
million for the same period last year. On an EPS
basis, the loss per share was $0.14,
compared to a $0.44 loss per share
for the nine months ended September
30, 2013. Adjusted EBITDA was $1.8 million for the nine-month period this year,
compared to a negative $1.2 million
for the same period in 2013, an increase of $3.0 million.
SG&A expense in the third quarter of 2014 declined by
$1.5 million to $3.0 million, compared to $4.5 million in the third quarter of 2013.
For the nine months ended September 30,
2014, SG&A expenses declined by $3.8 million, or 27% over the prior year's
comparable period. We continue to see the benefits of the
restructuring and other cost saving initiatives undertaken in late
2013 and 2014.
The Company ended the third quarter of 2014 with $1.5 million in cash, compared to $641,000 at December
31, 2013. Current debt was $878,000, down from $1.5
million at December 31, 2013
and long term debt was $1.7 million,
also down from $2.0 million at
December 31, 2013. Net cash
provided by operations during the first nine months of 2014 was
$2.2 million, versus a cash burn
during the same period last year of $2.2
million, for a total improvement of $4.4 million.
Mr DeSocio commented, "DecisionPoint has the products and
services to improve productivity of employees across the
enterprise. The products have been workplace-tested and
proven by large and well-known companies across a wide spectrum of
industrial segments. I believe that the Company has the right
products, the right people, and the right prospects to be a much
larger and prosperous company. I look forward to working with
the DecisionPoint team."
CFO Michael Roe commented, "We
continue to keep an eye on expenses, and to use our internal cash
flow to pay down debt. In the third quarter of 2014, SG&A
expenses continued to trend downward by $400,000 from the second quarter. I look
forward to working with Jim DeSocio
as interim CEO, whose years of experience will be a huge advantage
for DecisionPoint."
Robert Schroeder, Director
Chairman
Mr. Schroeder was elected to the Board of Directors
of the Company on November 18, 2013.
He is Vice President of Investment Banking at Taglich Brothers,
Inc. and specializes in advisory services and capital raising for
small public and private companies. Mr. Schroeder has also served
at Taglich Brothers as Senior Equity Analyst publishing sell-side
research on publicly traded companies. Mr. Schroeder has been with
Taglich since 1993. Prior to joining Taglich, Mr. Schroeder served
in various positions in the brokerage and public accounting
industries. Mr. Schroeder received a B.S. degree in accounting and
economics from New York University. He
currently serves on the board of directors of Air Industries Group,
a publicly traded manufacturer of aerospace parts and assemblies.
He also currently serves on the board of publicly traded
Intellinetics, Inc., a provider of cloud-based enterprise content
management solutions. He became interim Chairman of the Board of
DecisionPoint as of the close of business on October 3, 2014.
James F. DeSocio, Interim
CEO
Mr. DeSocio became a director as of the close of
business on October 3, 2014. He has
more than 20 years of international enterprise software sales
experience. As Executive Vice President of Field Operations at XRS
Corporation, he was responsible for enterprise license revenue,
professional services sales and implementation and business
development and partner programs. During his tenure, XRS
successfully launched its new enterprise Fleet Management software,
XRS (the product), and sold to and implemented product and service
offerings for hundreds of new customers. Prior to XRS, Mr. DeSocio
served as Executive Vice President of Global Sales and Business
Development at Antenna Software. From Dec
2007 through June 2012, Mr.
DeSocio grew Antenna's annual bookings fourfold. Mr. DeSocio also
served as Chief Executive Officer of Riskclick Inc., a
venture-funded startup focused on developing a cloud-based
underwriting solution for the property and casualty insurance
market. Over a three-year period, Mr. DeSocio raised an
$8 million round of funding,
solidified the company product and customer bases and in
July 2007 led the sale of Riskclick
to Skywire Software, which was subsequently sold to Oracle in
June 2008. Mr. DeSocio has also held
various roles with Lawson, now Infor, over a twelve-year period,
including Executive Vice President of Worldwide Field Operations,
in which role he was responsible for all company revenue, and
leader of its successful IPO. Mr. DeSocio holds a business
administration degree from Rutgers
University.
About DecisionPointâ„¢ Systems, Inc.
DecisionPoint
Systems, Inc. delivers improved productivity and operational
advantages to its clients by helping them move their business
decision points closer to their customers. They do this
by making enterprise software applications accessible to the
front-line worker anytime, anywhere. DecisionPoint
utilizes all the latest wireless, mobility, and RFID
technologies.
For more information about DecisionPoint Systems, Inc., visit
www.decisionpt.com.
Forward-Looking Statements
Except for
historical information contained herein, the statements in this
news release are forward-looking statements that are made pursuant
to the safe harbor provisions of the Private Securities Act of
1995. Forward-looking statements involve known and unknown
risks and uncertainties, which may cause a company's actual
results, performance and achievements in the future to differ
materially from forecasted results, performance, and achievements.
Known risks and uncertainties are described in the Company's
periodic filings with the Securities and Exchange Commission.
The Company undertakes no obligation to publicly release the
results of any revisions to its forward-looking statements to
reflect events or circumstances after the date hereof, including
without limitation unanticipated events or changes in the Company's
plans or expectations.
Contacts:
DecisionPoint Systems, Inc.
Michael Roe
Chief Financial Officer
(949) 465-0065
Allen & Caron, Inc.
Rudy
Barrio (investors)
r.barrio@allencaron.com
(212) 691-8087
Len Hall (media)
len@allencaron.com
(949) 474-4300
-FINANCIAL TABLES FOLLOW-
DECISIONPOINT
SYSTEMS, INC.
Unaudited
Condensed Consolidated Balance Sheets
(In thousands,
except share and per share data)
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
2014
|
|
2013
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
|
Cash
|
$
1,471
|
|
$
641
|
|
Accounts receivable,
net
|
6,860
|
|
10,504
|
|
Due from related
party
|
-
|
|
188
|
|
Inventory,
net
|
642
|
|
1,533
|
|
Deferred
costs
|
3,667
|
|
3,809
|
|
Deferred tax
assets
|
47
|
|
49
|
|
Prepaid expenses and
other current assets
|
463
|
|
188
|
|
|
Total current
assets
|
13,150
|
|
16,912
|
|
|
|
|
|
Property and
equipment, net
|
137
|
|
136
|
Other assets,
net
|
131
|
|
165
|
Deferred costs, net
of current portion
|
1,406
|
|
1,807
|
Goodwill
|
8,295
|
|
8,395
|
Intangible assets,
net
|
2,523
|
|
3,907
|
|
|
Total
assets
|
$
25,642
|
|
$
31,322
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' DEFICIT
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts
payable
|
$
7,910
|
|
$
9,774
|
|
Accrued expenses and
other current liabilities
|
3,658
|
|
2,976
|
|
Lines of
credit
|
4,046
|
|
3,883
|
|
Current portion of
debt
|
878
|
|
1,474
|
|
Due to related
parties
|
152
|
|
77
|
|
Accrued earn out
consideration
|
90
|
|
319
|
|
Warrant
liability
|
549
|
|
803
|
|
Unearned
revenue
|
5,824
|
|
7,481
|
|
|
Total current
liabilities
|
23,107
|
|
26,787
|
|
|
|
|
|
Long term
liabilities
|
|
|
|
|
Unearned revenue, net
of current portion
|
2,037
|
|
2,481
|
|
Debt, net of current
portion and discount
|
1,655
|
|
1,961
|
|
Accrued earn out
consideration, net of current portion
|
-
|
|
149
|
|
Deferred tax
liabilities
|
703
|
|
740
|
|
Other long term
liabilities
|
66
|
|
77
|
|
|
Total
liabilities
|
27,568
|
|
32,195
|
|
|
|
|
|
Commitments,
contingencies, and subsequent events
|
-
|
|
-
|
|
|
-
|
|
-
|
STOCKHOLDERS'
DEFICIT
|
|
|
|
|
Cumulative
Convertible Preferred stock, $0.001 par value, 10,000,000
shares authorized, 1,547,845 and
1,514,155 shares issued and outstanding, including cumulative and imputed preferred dividends of $2,208
and $1,956, and with a liquidation
preference of $13,614 and $13,232 at September 30, 2014
and December 31, 2013,
respectively
|
|
|
|
|
12,735
|
|
12,193
|
|
|
|
|
|
|
Common stock, $0.001
par value, 100,000,000 shares authorized, 12,883,446 issued and 12,729,563 outstanding as of
September 30, 2014, and as of December
31, 2013
|
|
|
|
|
13
|
|
13
|
|
Additional paid-in
capital
|
17,248
|
|
17,231
|
|
Treasury stock,
153,883 shares of common stock
|
(205)
|
|
(205)
|
|
Accumulated
deficit
|
(31,173)
|
|
(29,475)
|
|
Unearned ESOP
shares
|
(520)
|
|
(629)
|
|
Accumulated other
comprehensive loss
|
(24)
|
|
(1)
|
|
|
Total
stockholders' deficit
|
(1,926)
|
|
(873)
|
|
|
|
Total liabilities
and stockholders' deficit
|
$
25,642
|
|
$
31,322
|
DECISIONPOINT
SYSTEMS, INC.
Unaudited
Condensed Consolidated Statements of Operations and Comprehensive
Loss
(In thousands,
except share and per share data)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
$
14,143
|
|
$
17,575
|
|
$
47,365
|
|
$
46,067
|
|
|
|
|
|
|
|
|
Cost of
sales
|
11,123
|
|
14,113
|
|
36,989
|
|
36,216
|
|
|
|
|
|
|
|
|
Gross
profit
|
3,020
|
|
3,462
|
|
10,376
|
|
9,851
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expense
|
3,028
|
|
4,485
|
|
10,161
|
|
13,981
|
Adjustment to
earn-out obligations
|
-
|
|
(820)
|
|
-
|
|
(820)
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
(8)
|
|
(203)
|
|
215
|
|
(3,310)
|
|
|
|
|
|
|
|
|
Other (income)
expense, net:
|
|
|
|
|
|
|
|
|
Interest
expense
|
229
|
|
241
|
|
658
|
|
723
|
|
Fair market value
adjustment of warrant liabilities
|
(88)
|
|
(166)
|
|
(254)
|
|
(166)
|
|
Other (income)
expense, net
|
17
|
|
(2)
|
|
(12)
|
|
(16)
|
|
|
Total other expense,
net
|
158
|
|
73
|
|
392
|
|
541
|
|
|
|
|
|
|
|
|
Net loss before
income taxes
|
(166)
|
|
(276)
|
|
(177)
|
|
(3,851)
|
|
|
|
|
|
|
|
|
Provision (benefit)
for income taxes
|
397
|
|
(109)
|
|
519
|
|
(466)
|
|
|
|
|
|
|
|
|
Net
loss
|
(563)
|
|
(167)
|
|
(696)
|
|
(3,385)
|
|
|
|
|
|
|
|
|
Cumulative and
imputed dividends on Series A and B preferred stock
|
(27)
|
|
(27)
|
|
(81)
|
|
(81)
|
Cash and imputed
dividends on Series D and E preferred stock
|
(307)
|
|
(196)
|
|
(921)
|
|
(580)
|
|
|
|
|
|
|
|
|
Net loss attributable
to common shareholders
|
$
(897)
|
|
$
(390)
|
|
$
(1,698)
|
|
$
(4,046)
|
|
|
|
|
|
|
|
|
Net loss per share
-
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
$
(0.07)
|
|
$
(0.04)
|
|
$
(0.14)
|
|
$
(0.44)
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding -
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
12,369,840
|
|
10,019,109
|
|
12,342,371
|
|
9,117,969
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
loss
|
$
(561)
|
|
$
(166)
|
|
$
(719)
|
|
$
(3,383)
|
DECISIONPOINT
SYSTEMS, INC.
Unaudited
Condensed Consolidated Statements of Cash Flows
(In
thousands)
|
|
|
Nine Months ended
September 30,
|
|
2014
|
|
2013
|
Cash flows from
operating activities:
|
|
|
|
Net
loss
|
$
(696)
|
|
$
(3,385)
|
Adjustments to
reconcile net loss to net cash
|
|
|
|
|
provided by (used
in) operating activities:
|
|
|
|
|
|
Depreciation and
amortization
|
1,331
|
|
1,497
|
|
|
Amortization of
deferred financing costs and note discount
|
117
|
|
140
|
|
|
Employee and Director
stock-based compensation
|
89
|
|
31
|
|
|
Acquisition earn-out
adjustment
|
-
|
|
(820)
|
|
|
Change in fair value
of warrants
|
(254)
|
|
(166)
|
|
|
ESOP compensation
expense
|
37
|
|
79
|
|
|
Allowance for
doubtful accounts
|
(30)
|
|
56
|
|
|
Loss on disposal of
property and equipment
|
2
|
|
13
|
|
|
Deferred taxes.
net
|
(9)
|
|
(5)
|
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
Accounts
receivable
|
3,669
|
|
(468)
|
|
|
|
Due from related
party
|
184
|
|
-
|
|
|
|
Inventory,
net
|
891
|
|
(107)
|
|
|
|
Deferred
costs
|
543
|
|
496
|
|
|
|
Prepaid expenses and
other current assets
|
(251)
|
|
(578)
|
|
|
|
Other assets,
net
|
11
|
|
5
|
|
|
|
Accounts
payable
|
(1,854)
|
|
1,961
|
|
|
|
Accrued expenses and
other current liabilities
|
447
|
|
106
|
|
|
|
Due to related
parties
|
69
|
|
158
|
|
|
|
Unearned
revenue
|
(2,085)
|
|
(1,163)
|
Net cash provided
by (used in) operating activities
|
2,211
|
|
(2,150)
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
|
|
Purchases of property
and equipment
|
(42)
|
|
(33)
|
Net cash used in
investing activities
|
(42)
|
|
(33)
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
|
Borrowings from lines
of credit, net
|
165
|
|
817
|
|
|
Proceeds from
issuance of term debt
|
-
|
|
1,000
|
|
|
Repayment of
debt
|
(819)
|
|
(1,552)
|
|
|
Paid financing
costs
|
(100)
|
|
(119)
|
|
|
Dividends
paid
|
(499)
|
|
(296)
|
|
|
Payments for
contingent acquisition liability
|
(84)
|
|
-
|
|
|
Common stock issued
in private placement, net of costs
|
-
|
|
1,502
|
Net cash (used in)
provided by financing activities
|
(1,337)
|
|
1,352
|
|
|
Effect on cash of
foreign currency translation
|
(2)
|
|
(2)
|
Net increase
(decrease) in cash
|
830
|
|
(833)
|
Cash at beginning
of period
|
641
|
|
1,103
|
Cash at end of
period
|
$
1,471
|
|
$
270
|
|
|
|
|
Supplemental
disclosures of cash flow information:
|
|
|
|
|
|
Interest
paid
|
$
634
|
|
$
705
|
|
|
Income taxes
paid
|
32
|
|
234
|
|
|
|
|
|
|
Supplemental
disclosure of non-cash financing activities:
|
|
|
|
|
|
Accrued and imputed
dividends on preferred stock
|
$
1,002
|
|
$
661
|
|
|
Warrants issued in
connection with common stock private placement
|
-
|
|
1,099
|
Non-GAAP Financial Measures:
To supplement the Company's consolidated financial statements
presented on a GAAP basis, the Company has provided non-GAAP
financial information; namely, earnings before interest, taxes,
depreciation and amortization (EBITDA) and adjusted EBITDA.
The Company's management believes adjusted EBITDA provides
investors with a better understanding of how the Company's current
results relate to the Company's historical performance.
Management also believes that adjusted EBITDA reflects the
essential operating activities of the Company. The non-GAAP
financial measures provided are not meant to be considered in
isolation or as a substitute for GAAP financials. A reconciliation
of non-GAAP financial measures to GAAP measures appears below:
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
EBITDA
Calculation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
$
(563)
|
|
$
(168)
|
|
$
(696)
|
|
$
(3,385)
|
Depreciation and
amortization
|
434
|
|
502
|
|
1,331
|
|
1,497
|
Interest
expense
|
229
|
|
241
|
|
658
|
|
723
|
Income tax
provision(benefit)
|
397
|
|
(109)
|
|
519
|
|
(466)
|
|
EBITDA
|
$
497
|
|
$
466
|
|
$
1,812
|
|
$
(1,631)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Calculation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
$
497
|
|
$
466
|
|
$
1,812
|
|
$
(1,631)
|
Stock
compensation
|
39
|
|
11
|
|
89
|
|
31
|
ESOP
compensation
|
11
|
|
27
|
|
37
|
|
79
|
Deferred
taxes
|
-
|
|
-
|
|
(9)
|
|
(5)
|
Fair market value
adjustment of warrant liability
|
(88)
|
|
(166)
|
|
(254)
|
|
(166)
|
Adjustment to
earn-out obligations
|
-
|
|
(820)
|
|
-
|
|
(820)
|
Restructuring
costs
|
-
|
|
-
|
|
142
|
|
-
|
Capital raising
costs
|
-
|
|
442
|
|
-
|
|
1,300
|
|
Adjusted
EBITDA
|
$
459
|
|
$
(40)
|
|
$
1,817
|
|
$
(1,212)
|
SOURCE DecisionPoint Systems, Inc.