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-
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DECISIONPOINT SYSTEMS, INC.
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|
Unaudited Condensed Consolidated Balance Sheets
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(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
|
|
|
|
|
|
|
|
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LIABILITIES AND STOCKHOLDERS' DEFICIT
|
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|
|
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|
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
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|
|
|
|
|
|
|
|
|
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
|
|
-
|
|
-
|
|
|
|
|
|
-
|
|
-
|
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STOCKHOLDERS' DEFICIT
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|
|
|
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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
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|
17,257
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|
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.
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|
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
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|
$ (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,
|
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|
|
|
|
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.