DecisionPoint Sees Top-Line Growth - Analyst Blog
March 29 2012 - 11:54AM
Zacks
DecisionPoint Sees Top-Line Growth
Ken Nagy, CFA
On March 29, 2012, DecisionPoint Systems, Inc.
(DPSI), the Foothill Ranch, California
based enterprise mobility and RFID systems integrator, reported
financial results for its fiscal 2011 fourth quarter and full year,
ended December 31, 2011.
The fourth quarter performance resulted in a slight year over year
increase in revenue, with sales increasing $417,873 to $15.887
million from $15.469 million for the three months ended December
31, 2010.
The small increase in revenues for the three months ended December
31, 2011 was due to the revenue contribution of CMAC.
CMAC, a supply chain consulting and systems integration firm, was
acquired by DecisionPoint in late December 2010.
Gross margin jumped 80 basis points from 21.6 percent in the fourth
quarter of 2010, up to a record 22.4% for the three months ended
December 31, 2011.
The increase in gross margin was primarily a result of a richer mix
of sales of higher margin third party software and professional
services.
While gross margin for the quarter improved to record highs,
selling, general and administrative expenses in the fourth quarter
increased year over year by $1.108 million to $3.329 million.
The increase in selling, general and administrative expenses was
primarily due to additional costs and personnel related to the
Company's acquisition of CMAC and generally higher business
levels.
Net income before dividends improved to $65,350 in the fourth
quarter of 2011 compared to a net loss of $25,268 in the fourth
quarter of 2010.
Still, net loss attributable to common shareholders was
approximately $152,541 for the fiscal 2011 fourth quarter compared
to a net loss attributable to common shareholders of $46,338 for
three months ended December 31, 2010.
The year over year descent in net loss attributable to common
shareholders was primarily the product of a cumulative and imputed
preferred stock dividends charge of $217,891 for the fourth quarter
of 2011 compared to cumulative and imputed preferred stock
dividends of $21,070 during the fourth quarter of 2010.
Based on a weighted average number of basic and diluted shares of
7.460 million, basic and diluted net loss per share resulted in a
net loss of $0.02 per share for the fourth quarter of fiscal 2011.
This compared to a basic and diluted net loss per share of $0.01
based on a weighted average number of basic and diluted shares of
4.333 million during the three months ended December 31, 2010.
For the year ended December 31, 2011, year over year revenues
improved by nearly 4 percent to $58.358 million from $56.244
million for the comparable twelve months of 2010.
Still, the Company reported a net loss for fiscal 2011 of $5.168
million compared to a net loss of $2.208 million for the twelve
months ended December 31, 2010.
Here again, the increase in net loss was primarily a result of
increased in selling, general and administrative expense offset by
higher gross margin offset by improved gross margin.
Selling, general and administrative expense increased year over
year by 41.5 percent or $3.986 million to $13.597 million while
gross margin for fiscal 2011 increased to 20.6 percent compared to
19.3 percent for fiscal 2010.
Here again, the increase in selling, general and administrative
expense was primarily due to additional costs and personnel related
to the Company's acquisition of CMAC and generally higher business
levels while the improvement in gross margin was primarily a result
of a richer mix of sales of higher margin third party software and
professional services.
Based on a weighted average number of basic and diluted shares of
6.019 million, basic and diluted net loss per share resulted in a
net loss of $0.94 per share for the full year fiscal 2011. This
compared to a basic and diluted net loss per share of $0.66 based
on a weighted average number of basic and diluted shares of 3.462
million during the full year ended December 31, 2010.
The Company ended the year with $365,000 in cash and a working
capital deficit of $3.762 million.
Still, in June 2011, DecisionPoint was able to complete a reverse
merger with Comamtech as well as exchange $4.0 million of senior
notes for convertible preferred stock.
With the completion of both the reverse merger and the equity
conversion, the Company was able to improve its capital structure
as well as strengthen its equity base.
Along the same lines, DecisionPoint’s shareholder's equity improved
year over year by $5.377 million to $2.507 million as of December
31, 2011.
Similarly The CMAC acquisition increased DecisionPoint’s mix of
higher margin professional services and software revenue by
enhancing the Company’s ability to deliver operational and
technical supply chain solutions as well as improve the Company’s
Professional Services revenue mix.
Likewise, during the year DecisionPoint built out its field
mobility practice, introducing initial co-branded products through
wireless carrier relationships with Sprint, T-Mobile and Verizon
and in 2012, the Company expects to release additional turnkey, or
bundled, solutions with its partners.
As result of recent and upcoming product releases with wireless
partners, the Company expects continued field mobility growth.
Additionally, DecisionPoint reported that bookings are running
ahead of last year and that with improved customer capital
spending, its retail segment has been building its backlog.
Therefore, the Company projected its fiscal 2012 revenues will
increase by over 25 percent compared to sales from the full year
ended December 31, 2011.
DecisionPoint goal is to continue shifting its revenue mix towards
software and professional services and to continue to expand gross
margin, through increasing sales of new products.
To view a free copy of our most recent research report
on DPSI or subscribe to our daily morning email
alert, visit Ken Nagy's coverage page at
http://scr.zacks.com/.
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