PR Newswire | Apr 7, 2021 08:01AM EDT

04/07 07:00 CDT

DecisionPoint Systems Announces Fourth Quarter and Full Year 2020 ResultsRevenues increased by 44% and net income more than tripled year-over-year in 2020 IRVINE, Calif., April 7, 2021

IRVINE, Calif., April 7, 2021 /PRNewswire/ -- 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."

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 Arakakiir@decisionpt.com

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 sharesauthorized; 13,576 and 13,576 shares issued and 14 14outstanding, respectively

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

DecisionPoint Systems, Inc.

Unaudited Condensed Consolidated Statements of Income and Comprehensive Income

(in thousands, except per share data)

Fourth Quarter Ended Year Ended December 31, 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 $ 600 $ 554 $ 2,861 $ 891attributable to common stockholders

Earnings per share attributable tostockholders:

Basic $ 0.04 $ 0.04 $ 0.21 $ 0.07

Diluted $ 0.04 $ 0.04 $ 0.18 $ 0.06

Weighted average common sharesoutstanding

Basic 13,576 13,576 13,576 13,415

Diluted 15,623 15,642 15,622 15,341

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 providedby operating activities:

Depreciation and amortization 891 809

Amortization of deferred financing costs and note 157 304discount

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

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 Year Ended Ended December 31 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 UnauditedCondensed Consolidated Statements of Income and Comprehensive Income.

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SOURCE DecisionPoint Systems, Inc.