IRVINE, Calif., May 14, 2015 /PRNewswire/ -- DecisionPoint™
Systems, Inc. (OTCQB: DPSI and DPSIP), a leading provider and
integrator of Enterprise Mobility and Wireless Applications
solutions, today reported financial results for the first quarter
ended March 31, 2015. Sales
were $11.7 million, down 29.7 percent
from sales of $16.7 million in the
first quarter of 2014. The net loss was $580,000 compared to a net loss of $113,000 for the first quarter of 2014. On
an EPS basis, the loss per share was $0.08, compared to a $0.04 loss per share for the three months ended
March 31, 2014. Adjusted EBITDA
(a non-GAAP measurement that management uses to measure progress)
was $333,000 for the three-month
period this year compared to $482,000
for the same period in 2014, a decrease of $149,000.
Interim CEO James DeSocio
commented, "The first quarter is typically our weakest quarter, and
this year's first quarter was hobbled by freakish weather,
including record snowfalls in the Midwest and Northeast, and a
general slackness in the US economy. In addition, four
individuals from our sales group left DecisionPoint and joined a
competitor; our sales were lower in many of our accounts that they
were servicing when they worked for us. We have filed
lawsuits for unfair competition and solicitation, breaches of
confidentiality and loyalty, and other improper activities.
Hardware is our largest revenue category, and hardware sales were
down sharply, from $11.5 million in
the first quarter of 2014, to $6.9
million in the quarter we are reporting.
Professional services, which carry a better gross profit margin,
were not down at all, but they were flat at $3.8 million. Software sales were off at
the same rate as hardware sales.
"It is not the first time we have had a poor first quarter, and
it may not be the last, as it is typically our seasonably weakest
quarter," Mr. DeSocio added, "but our annual performance is highly
dependent every year on the steady progression of quarters, with
the highest sales by far in the second half of the year. We
have a lot to make up, but our team is tough and we are capable of
climbing back up and improving our trend, as we established last
year."
CFO Michael Roe said, "Cash
provided by operations in the first quarter of 2015 was
$2.1 million, as compared to
$0.6 million in the first quarter of
2014. Overall indebtedness of $5.4
million was lower by an aggregate of almost $2.8 million from the December 31, 2014 balance of $8.2 million. The gross profit margin for
the quarter just ended was 22 percent, 60 basis points higher than
in the first quarter of 2014; SG&A was down by 23.1 percent, or
about $0.9 million, due to our
continued emphasis on expense control. Our aggressive cost
cutting in 2013 has positioned us to better weather a weaker
quarter.
"Interest expense was also lower, due to lower borrowings.
Our cash was $818,000 at March 31, 2015, compared to $1.6 million at December
31, 2014. In the second quarter we intend to pay
preferred dividends in kind for the first quarter, and will most
likely do the same for the second quarter, preferred dividends
payable in the third quarter, as we also intend to aggressively
press the legal actions underway."
Conference Call:
The Company's management team will host a conference call to
discuss its results for the first quarter ended March 31, 2015 on Thursday
May 14, 2015, at 4:30 pm
ET.
Participants should dial into the call ten minutes before the
scheduled time using the following numbers: 1-888-348-3873
(USA) or +1-412-902-4234
(international) to access the call.
Audio Webcast:
There will also be a simultaneous live webcast through the
Company's website, www.decisionpt.com and selecting the investor
tab. Participants should register on the website approximately ten
minutes prior to the start of the webcast.
Replay:
An audio replay of the conference call will be available for seven
days and can be accessed by dialing 1-877-870-5176 (USA) or +1-858-384-5517 (international) and
using passcode 10065939. For those unable to attend to the live
webcast, it will be archived shortly following the event for 30
days in the Investors section of the Company's website.
About DecisionPoint™ 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
DresnerAllenCaron
Rudy Barrio (investors)
r.barrio@allencaron.com
(212) 691-8087
-FINANCIAL TABLES FOLLOW-
DECISIONPOINT
SYSTEMS, INC.
|
Unaudited
Condensed Consolidated Balance Sheets
|
(In thousands,
except share and per share data)
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
|
|
|
|
2015
|
|
2014
|
ASSETS
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash
|
|
|
$ 818
|
|
$ 1,616
|
|
Accounts receivable,
net
|
|
5,782
|
|
11,497
|
|
Inventory,
net
|
|
1,573
|
|
2,035
|
|
Deferred
costs
|
|
3,020
|
|
3,177
|
|
Deferred tax
assets
|
|
13
|
|
21
|
|
Prepaid expenses and
other current assets
|
|
209
|
|
81
|
|
|
Total current
assets
|
|
11,415
|
|
18,427
|
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
168
|
|
145
|
Other assets,
net
|
|
116
|
|
124
|
Deferred costs, net
of current portion
|
|
1,235
|
|
1,314
|
Goodwill
|
|
|
8,023
|
|
8,202
|
Intangible assets,
net
|
|
1,660
|
|
2,045
|
|
|
Total
assets
|
|
$ 22,617
|
|
$ 30,257
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' DEFICIT
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts
payable
|
|
$ 7,352
|
|
$ 10,000
|
|
Accrued expenses and
other current liabilities
|
|
2,150
|
|
2,755
|
|
Lines of
credit
|
|
3,453
|
|
5,811
|
|
Current portion of
debt
|
|
614
|
|
813
|
|
Due to related
parties
|
|
107
|
|
73
|
|
Unearned
revenue
|
|
6,266
|
|
6,918
|
|
|
Total current
liabilities
|
|
19,942
|
|
26,370
|
|
|
|
|
|
|
|
|
Long term
liabilities
|
|
|
|
|
|
Unearned revenue, net
of current portion
|
|
1,860
|
|
2,015
|
|
Debt, net of current
portion and discount
|
|
1,373
|
|
1,580
|
|
Deferred tax
liabilities
|
|
431
|
|
460
|
|
Warrant
liability
|
|
597
|
|
519
|
|
Other long term
liabilities
|
|
206
|
|
226
|
|
|
Total
liabilities
|
|
24,409
|
|
31,170
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
-
|
|
-
|
|
|
|
|
|
-
|
|
-
|
STOCKHOLDERS'
DEFICIT
|
|
|
|
|
|
Cumulative
Convertible Preferred stock, $0.001 par value, 10,000,000
shares authorized, 1,547,845
shares issued and outstanding, including cumulative and imputed preferred dividends of $2,322
and $2,295, and with a liquidation
preference of $13,775 and $13,640 at March 31, 2015
and December 31, 2014,
respectively
|
|
12,849
|
|
12,822
|
|
Common stock, $0.001
par value, 100,000,000 shares authorized, 12,883,446 issued and 12,729,563 outstanding as of
March 31, 2015,
and as of December
31, 2014
|
|
13
|
|
13
|
|
Additional paid-in
capital
|
|
17,257
|
|
17,252
|
|
Treasury stock,
153,883 shares of common stock
|
|
(205)
|
|
(205)
|
|
Accumulated
deficit
|
|
(31,259)
|
|
(30,292)
|
|
Unearned ESOP
shares
|
|
(446)
|
|
(484)
|
|
Accumulated other
comprehensive income
|
|
(1)
|
|
(19)
|
|
|
Total
stockholders' deficit
|
|
(1,792)
|
|
(913)
|
|
|
|
Total liabilities
and stockholders' deficit
|
|
$ 22,617
|
|
$ 30,257
|
DECISIONPOINT
SYSTEMS, INC.
|
Unaudited
Condensed Consolidated Statements of Operations and Comprehensive
Loss
|
(In thousands,
except share and per share data)
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$ 11,749
|
|
$ 16,709
|
|
|
|
|
|
|
|
Cost of
sales
|
|
9,167
|
|
13,135
|
|
|
|
|
|
|
|
Gross
profit
|
|
2,582
|
|
3,574
|
|
|
|
|
|
|
|
Selling, general and
administrative expense
|
|
2,857
|
|
3,717
|
|
|
|
|
|
|
|
Operating
loss
|
|
(275)
|
|
(143)
|
|
|
|
|
|
|
|
Other (income)
expense:
|
|
|
|
|
|
Interest
expense
|
|
184
|
|
207
|
|
Fair market value
adjustment of warrant liability
|
|
78
|
|
(251)
|
|
Other (income)
expense, net
|
|
64
|
|
(8)
|
|
|
Total other (income)
expense
|
|
326
|
|
(52)
|
|
|
|
|
|
|
|
Loss before income
taxes
|
|
(601)
|
|
(91)
|
|
|
|
|
|
|
|
(Benefit) provision
for income taxes
|
|
(21)
|
|
22
|
|
|
|
|
|
|
|
Net
loss
|
|
(580)
|
|
(113)
|
|
|
|
|
|
|
|
Cumulative and
imputed dividends on Series A and B preferred stock
|
|
(27)
|
|
(27)
|
Cash and imputed
dividends on Series D and E preferred stock
|
|
-
|
|
(302)
|
Accrued paid-in-kind
dividends on Series D and Series E preferred stock
|
|
(360)
|
|
-
|
|
|
|
|
|
|
|
Net loss
attributable to common shareholders
|
|
$ (967)
|
|
$ (442)
|
|
|
|
|
|
|
|
Net loss per
common share:
|
|
|
|
|
|
Basic and
diluted
|
|
$ (0.08)
|
|
$ (0.04)
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
Basic and
diluted
|
|
12,425,182
|
|
12,314,498
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
loss, net of tax
|
|
|
|
|
|
Net loss
|
|
$ (580)
|
|
$ (113)
|
|
Foreign currency
translation adjustment
|
|
18
|
|
(24)
|
|
|
|
|
|
|
|
Comprehensive
loss
|
|
$ (562)
|
|
$ (138)
|
DECISIONPOINT
SYSTEMS, INC.
|
Unaudited
Condensed Consolidated Statements of Cash Flows
|
(In
thousands)
|
|
|
|
|
|
|
Three Months ended
March 31,
|
|
|
|
|
|
2015
|
|
2014
|
Cash flows from
operating activities:
|
|
|
|
|
Net loss
|
|
|
$ (580)
|
|
$ (113)
|
Adjustments to
reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
282
|
|
451
|
|
|
Amortization of
deferred financing costs and note discount
|
|
35
|
|
65
|
|
|
Employee and Director
stock-based compensation
|
|
33
|
|
10
|
|
|
Change in fair value
of warrants
|
|
78
|
|
(251)
|
|
|
ESOP compensation
expense
|
|
10
|
|
14
|
|
|
Allowance for
doubtful accounts
|
|
16
|
|
(6)
|
|
|
Deferred taxes,
net
|
|
7
|
|
-
|
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
5,665
|
|
925
|
|
|
|
Inventory,
net
|
|
462
|
|
46
|
|
|
|
Deferred
costs
|
|
233
|
|
(51)
|
|
|
|
Prepaid expenses and
other current assets
|
|
(54)
|
|
-
|
|
|
|
Other assets,
net
|
|
-
|
|
(25)
|
|
|
|
Accounts
payable
|
|
(2,640)
|
|
(486)
|
|
|
|
Accrued expenses and
other current liabilities
|
|
(715)
|
|
(116)
|
|
|
|
Due to related
parties
|
|
33
|
|
89
|
|
|
|
Unearned
revenue
|
|
(757)
|
|
8
|
Net cash provided
by operating activities
|
|
2,108
|
|
560
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
|
|
Purchases of property
and equipment
|
|
(33)
|
|
(19)
|
Net cash used in
investing activities
|
|
(33)
|
|
(19)
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
|
Repayments from lines
of credit, net
|
|
(2,353)
|
|
(182)
|
|
Repayment of
debt
|
|
(249)
|
|
(271)
|
|
Dividends
paid
|
|
(252)
|
|
-
|
|
Paid financing
costs
|
|
(100)
|
|
(100)
|
Net cash used in
financing activities
|
|
(2,954)
|
|
(553)
|
|
Effect on cash of
foreign currency translation
|
|
81
|
|
(17)
|
Net decrease in
cash
|
|
(798)
|
|
(29)
|
Cash at beginning
of period
|
|
1,616
|
|
641
|
Cash at end of
period
|
|
$ 818
|
|
$ 612
|
|
|
|
|
|
|
|
|
Supplemental
disclosures of cash flow information:
|
|
|
|
|
|
Interest
paid
|
|
$ 249
|
|
$ 269
|
|
Income taxes
paid
|
|
54
|
|
-
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of non-cash financing activities:
|
|
|
|
|
|
Accrued and imputed
dividends on preferred stock
|
|
$ 27
|
|
$ 329
|
|
Accrued PIK dividends
on Series D and Series E preferred stock
|
|
360
|
|
-
|
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
March 31,
|
|
|
|
2015
|
|
2014
|
EBITDA
Calculation:
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
$ (580)
|
|
$ (113)
|
Depreciation and
amortization
|
|
282
|
|
451
|
Interest
expense
|
|
184
|
|
207
|
Income tax
provision(benefit)
|
|
(21)
|
|
22
|
|
EBITDA
|
|
$ (135)
|
|
$ 567
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Calculation:
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
$ (135)
|
|
$ 567
|
Stock
compensation
|
|
33
|
|
10
|
ESOP
compensation
|
|
10
|
|
14
|
Deferred
taxes
|
|
7
|
|
-
|
Fair market value
adjustment of warrant liability
|
|
78
|
|
(251)
|
Restructuring
costs
|
|
-
|
|
142
|
Non-recurring
legal
|
|
340
|
|
-
|
|
Adjusted
EBITDA
|
|
$ 333
|
|
$ 482
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/decisionpoint-systems-reports-results-for-first-quarter-ended-march-31-2015-300083816.html
SOURCE DecisionPoint Systems, Inc.