DecisionPoint Systems Announces Fourth Quarter and Full Year 2023 Results
Total quarterly and full-year revenue, up 25% and 19%, respectively
Software and Services quarterly and full-year revenue increased 208% and 130%, respectively
Fourth Quarter Highlights (2023 versus 2022)
-
Revenue increased 24.8% to
$30.5 million ; -
Gross Profit increased 18.7% to
$7.5 million ; Gross Margin decreased 130 basis points to 24.6%; -
GAAP Operating Income increased 3.7% at
$0.7 million ; -
GAAP Net Loss and Diluted Loss per Share of
($0.3) million and ($0.03 ), respectively; -
Non-GAAP Net Income1 and Non-GAAP Diluted EPS1 of
$0.0 million and$0.00 , respectively; -
Adjusted EBITDA1 increased 8.4% to
$1.9 million ;
Full Year 2023 Highlights (versus 2022)
-
Revenue increased 18.7% to
$115.6 million ; -
Gross Profit increased 24.8% to
$28.8 million ; Gross Margin increased 120 basis points to 24.9%; -
GAAP Operating Income increased 7.4% to
$4.8 million ; -
GAAP Net Income and Diluted EPS decreased 20.1% and 21.3% to
$2.5 million and$0.32 , respectively; -
Non-GAAP Net Income and Non-GAAP Diluted EPS decreased 11.4% and 12.4% to
$3.6 million and$0.47 , respectively; -
Adjusted EBITDA increased 12.9% to
$8.9 million ; -
Paid down
$6.2 million of debt related to theApril 1, 2023 acquisition of Macro Integration Services (MIS).
1See GAAP to non-GAAP explanations and reconciliations at the end of this release
Select Financial Metrics: 2023 versus 2022 |
||||||||||||||||
(in $M except for EPS) |
|
4Q23 |
|
|
4Q22 |
|
Change |
FY23 |
FY22 |
Change |
||||||
Total Revenue |
$ |
30.5 |
$ |
24.5 |
24.8 |
% |
$ |
115.6 |
$ |
97.4 |
18.7 |
% |
||||
Hardware Solutions Revenue |
$ |
16.2 |
|
$ |
19.8 |
|
-18.3 |
% |
$ |
73.5 |
|
$ |
79.1 |
|
-7.1 |
% |
Software and Services Revenue |
$ |
14.4 |
|
$ |
4.7 |
|
207.5 |
% |
$ |
42.1 |
|
$ |
18.3 |
|
129.6 |
% |
Gross Profit |
$ |
7.5 |
|
$ |
6.3 |
|
18.7 |
% |
$ |
28.8 |
|
$ |
23.1 |
|
24.8 |
% |
Operating Income |
$ |
0.7 |
|
$ |
0.7 |
|
3.7 |
% |
$ |
4.8 |
|
$ |
4.4 |
|
7.4 |
% |
GAAP Net Income |
$ |
(0.3 |
) |
$ |
0.4 |
|
nm |
$ |
2.5 |
|
$ |
3.1 |
|
-20.1 |
% |
|
GAAP Diluted Earnings Per Share |
$ |
(0.03 |
) |
$ |
0.07 |
|
nm |
$ |
0.32 |
|
$ |
0.41 |
|
-21.3 |
% |
|
Non-GAAP Net Income |
$ |
0.0 |
|
$ |
0.7 |
|
nm |
$ |
3.6 |
|
$ |
4.1 |
|
-11.4 |
% |
|
Non-GAAP Diluted EPS |
$ |
0.00 |
|
$ |
0.11 |
|
nm |
$ |
0.47 |
|
$ |
0.54 |
|
-12.4 |
% |
|
Adjusted EBITDA |
$ |
1.9 |
|
$ |
1.8 |
|
8.4 |
% |
$ |
8.9 |
|
$ |
7.8 |
|
12.9 |
% |
*numbers may not add due to rounding |
||||||||||||||||
nm = not measurable/meaningful |
Balance Sheet and Liquidity as of
Cash and cash equivalents were
2024 Commentary
Smith commented: “2023 was a year of investment, repositioning
“As we look to 2024, we will continue to focus on expanding our services and software offerings to drive recurring revenue and long-term growth through organic investment and M&A. A big part of our focus includes our recently released PointCare Services, a premier suite of deployment and managed services built to address all aspects of selecting, deploying and managing enterprise technology. PointCare Services integrates all of our service offerings to support enterprise mobility, point of sale and RFID technologies, including our Vision Portal, Vizitrace and other managed services. We also re-aligned our cost structure during the fourth quarter of 2023, which will help offset our investments in MIS, PointCare, and Vision, and the hiring of a seasoned team to build out our MMS strategy, product portfolio and go-to-market. We expect these investments will start to bear fruit for our top line in 2024 and become a more meaningful, higher-margin source of recurring revenue in 2025.
“From an industry perspective, we believe our high mix of services and software partially insulates us from the challenges other companies in our space are facing on the hardware side.”
Trended Financial Information* | ||||||||||
(in $M except for EPS) |
1Q22 |
2Q22 |
3Q22 |
4Q22 |
1Q23 |
2Q23 |
3Q23 |
4Q23 |
FY22 |
FY23 |
Total Revenue |
|
|
|
|
|
|
|
|
|
|
Hardware Solutions Revenue |
|
|
|
|
|
|
|
|
|
|
Software and Services Revenue |
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
|
|
|
|
|
|
|
|
GAAP Net Income |
|
|
|
|
|
|
|
( |
|
|
GAAP Diluted EPS |
|
|
|
|
|
|
|
( |
|
|
Non-GAAP Net Income |
|
|
|
|
|
|
|
|
|
|
Non-GAAP Diluted EPS |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
nm = not measurable/meaningful | ||||||||||
*numbers may not add due to rounding |
Earnings Conference Call and Webcast Information:
Date:
Time:
Toll-Free: 1-877-407-3982
Toll/International: 1-201-493-6780
Call me™: Click Call me Link for instant telephone access to the event (Call me™ link will be made active 15 minutes before the scheduled start time).
Webcast:https://viavid.webcasts.com/starthere.jsp?ei=1662460&tp_key=aff09932db
Replay Information:
Toll-Free: 1-844-512-2921
Toll/International: 1-412-317-6671
Replay Pin Number: 13742540
Replay Start:
Replay Expiry:
About
Forward-Looking Statements
In this press release, all statements that are not purely about historical facts, including, but not limited to, those in which we use the words "believe," "anticipate," "expect," "plan," "intend," "estimate, "target" and similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. While these forward-looking statements represent our current judgment of what may happen in the future, actual results may differ materially from the results expressed or implied by these statements due to numerous important factors, including, but not limited to, those described in our most recent report on SEC Form 10-K (under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations"), which may be revised or supplemented in subsequent reports on SEC Forms 10-Q and 8-K. We are under no obligation, and expressly disclaim any obligation, to update the forward-looking statements in this press release, whether as a result of new information, future events or otherwise.
Consolidated Balance Sheets (in thousands, except par value) |
||||||||
|
|
|||||||
2023 |
2022 |
|||||||
ASSETS |
|
|
|
|
||||
Current assets: |
||||||||
Cash |
$ |
4,300 |
|
$ |
7,642 |
|
||
Accounts receivable, net of allowance of |
23,768 |
|
17,085 |
|
||||
Inventory, net |
2,133 |
|
4,417 |
|
||||
Deferred costs |
3,826 |
|
2,729 |
|
||||
Prepaid expenses and other current assets |
|
630 |
|
|
399 |
|
||
Total current assets |
34,657 |
|
32,272 |
|
||||
Operating lease assets |
3,392 |
|
2,681 |
|
||||
Property and equipment, net |
2,973 |
|
1,817 |
|
||||
Deferred costs, net of current portion |
3,689 |
|
2,868 |
|
||||
Deferred tax assets, net |
1,161 |
|
848 |
|
||||
Intangible assets, net |
7,815 |
|
4,531 |
|
||||
|
22,081 |
|
10,499 |
|
||||
Other assets |
|
172 |
|
|
41 |
|
||
Total assets |
$ |
75,940 |
|
$ |
55,557 |
|
||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ |
16,857 |
|
$ |
19,755 |
|
||
Accrued expenses and other current liabilities |
6,566 |
|
4,528 |
|
||||
Deferred revenue |
8,066 |
|
6,021 |
|
||||
Current portion of earnout consideration |
5,370 |
|
829 |
|
||||
Current portion of long-term debt |
1,003 |
|
3 |
|
||||
Current portion of operating lease liabilities |
|
874 |
|
|
529 |
|
||
Total current liabilities |
38,736 |
|
31,665 |
|
||||
Deferred revenue, net of current portion |
5,307 |
|
4,331 |
|
||||
Revolving line of credit |
1,300 |
|
- |
|
||||
Long-term debt, net of current portion |
3,639 |
|
143 |
|
||||
Noncurrent portion of operating lease liabilities |
3,093 |
|
2,706 |
|
||||
Long-term portion of earnout consideration |
4,316 |
|
- |
|
||||
Deferred tax liabilities |
- |
|
- |
|
||||
Other liabilities |
|
6 |
|
|
130 |
|
||
Total liabilities |
56,397 |
|
38,975 |
|
||||
Commitments and contingencies (Note 13) |
||||||||
Stockholders’ equity: |
||||||||
Preferred stock, |
- |
|
- |
|
||||
Common stock, |
8 |
|
7 |
|
||||
Additional paid-in capital |
38,902 |
|
38,429 |
|
||||
Accumulated deficit |
|
(19,367 |
) |
|
(21,854 |
) |
||
Total stockholders’ equity |
|
19,543 |
|
|
16,582 |
|
||
Total liabilities and stockholders’ equity |
$ |
75,940 |
|
$ |
55,557 |
|
||
Consolidated Statements of Income and Comprehensive Income (in thousands, except per share data) |
|||||||||||||||
Three Months | Year Ended | ||||||||||||||
|
|
||||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net sales: | |||||||||||||||
Product | $ |
16,146 |
|
$ |
19,820 |
|
$ |
73,494 |
|
$ |
79,079 |
|
|||
Service |
14,357 |
|
4,655 |
|
42,100 |
|
18,336 |
|
|||||||
Net sales |
30,503 |
|
24,475 |
|
115,594 |
|
97,415 |
|
|||||||
Cost of sales: | |||||||||||||||
Product |
13,402 |
|
15,001 |
|
59,607 |
|
62,214 |
|
|||||||
Service |
9,558 |
|
3,135 |
|
27,162 |
|
12,106 |
|
|||||||
Cost of sales |
22,960 |
|
18,136 |
|
86,769 |
|
74,320 |
|
|||||||
Gross profit |
7,543 |
|
6,339 |
|
28,825 |
|
23,095 |
|
|||||||
Operating expenses: | |||||||||||||||
Sales and marketing expense |
2,969 |
|
2,368 |
|
9,957 |
|
9,218 |
|
|||||||
General and administrative expenses |
3,851 |
|
3,275 |
|
14,093 |
|
9,430 |
|
|||||||
Total operating expenses |
6,820 |
|
5,643 |
|
24,050 |
|
18,648 |
|
|||||||
Operating income |
723 |
|
696 |
|
4,775 |
|
4,447 |
|
|||||||
Interest expense, net |
(771 |
) |
(14 |
) |
(1,156 |
) |
(56 |
) |
|||||||
Other expense |
(23 |
) |
2 |
|
- |
|
(15 |
) |
|||||||
Income before income taxes |
(71 |
) |
684 |
|
3,619 |
|
4,376 |
|
|||||||
Income tax expense |
(197 |
) |
(257 |
) |
(1,132 |
) |
(1,265 |
) |
|||||||
Net income and comprehensive income attributable to common stockholders | $ |
(268 |
) |
$ |
427 |
|
$ |
2,487 |
|
$ |
3,111 |
|
|||
Earnings per share attributable to stockholders (1): | |||||||||||||||
Basic | $ |
(0.03 |
) |
$ |
0.06 |
|
$ |
0.33 |
|
$ |
0.43 |
|
|||
Diluted | $ |
(0.03 |
) |
$ |
0.06 |
|
$ |
0.32 |
|
$ |
0.41 |
|
|||
Weighted average common shares outstanding | |||||||||||||||
Basic |
7,678 |
|
7,401 |
|
7,555 |
|
7,261 |
|
|||||||
Diluted |
7,779 |
|
7,758 |
|
7,679 |
|
7,562 |
|
|||||||
Consolidated Statements of Cash Flows (in thousands) |
|||||||
Years Ended |
|||||||
|
|||||||
2023 |
2022 |
||||||
Cash flows from operating activities |
|
|
|
|
|||
Net income |
$ |
2,487 |
|
$ |
3,111 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||
Depreciation and amortization |
2,971 |
|
2,465 |
|
|||
Loss on fixed asset disposal |
- |
|
22 |
|
|||
Share-based compensation expense |
283 |
|
577 |
|
|||
Deferred income taxes, net |
(1,924 |
) |
254 |
|
|||
Provision for credit losses |
240 |
|
249 |
|
|||
Provision for inventory obsolescence |
89 |
|
- |
|
|||
Changes in operating assets and liabilities: |
|||||||
Accounts receivable |
3,201 |
|
(3,630 |
) |
|||
Inventory, net |
4,825 |
|
(2,177 |
) |
|||
Deferred costs |
(1,918 |
) |
(1,984 |
) |
|||
Prepaid expenses and other current assets |
(207 |
) |
(54 |
) |
|||
Accounts payable |
(5,707 |
) |
8,924 |
|
|||
Accrued expenses and other current liabilities |
(1,644 |
) |
914 |
|
|||
Operating lease liabilities |
(92 |
) |
543 |
|
|||
Deferred revenue |
|
1,877 |
|
3,095 |
|
||
Net cash provided by operating activities |
|
4,481 |
|
12,309 |
|
||
Cash flows from investing activities |
|||||||
Purchases of property and equipment |
(893 |
) |
(1,477 |
) |
|||
Cash paid for acquisitions, net of cash acquired |
|
(12,917 |
) |
(4,525 |
) |
||
Net cash used in investing activities |
|
(13,810 |
) |
(6,002 |
) |
||
Cash flows from financing activities |
|||||||
Proceeds from term loan |
5,000 |
|
- |
|
|||
Repayment of term debt |
(504 |
) |
(3 |
) |
|||
Line of credit, net |
1,300 |
|
- |
|
|||
Proceeds from exercise of warrants |
220 |
|
- |
|
|||
Taxes paid in lieu of shares issued for share-based compensation |
(67 |
) |
(1,403 |
) |
|||
Proceeds from exercise of stock options |
|
38 |
|
154 |
|
||
Net cash provided by (used in) financing activities |
|
5,987 |
|
(1,252 |
) |
||
Change in cash |
(3,342 |
) |
5,055 |
|
|||
Cash, beginning of year |
|
7,642 |
|
2,587 |
|
||
Cash, end of year |
$ |
4,300 |
|
$ |
7,642 |
|
Non-GAAP Financial Measures
To supplement our consolidated financial statements presented on a GAAP basis, we have provided certain non-GAAP financial measures, namely non-GAAP Net Income, non-GAAP diluted EPS and Adjusted EBITDA, all of which are considered by management to be performance measures. Non-GAAP Net Income is defined as net income (loss) before: (1) share-based compensation, (2) business acquisition costs, (3) integration costs, and (4) NYSE American uplisting costs, as applicable. Adjusted EBITDA is calculated as Non-GAAP Net Income before interest, taxes, depreciation and amortization. Non-GAAP diluted EPS is calculated as Non-GAAP Net Income divided by the diluted weighted-average number of common shares outstanding.
Management believes that these non-GAAP measures reflect the essential operating activities of the Company [because these non-GAAP measures exclude expenses and transactions that are not part of our core operations and may be one time in nature]. We believe that [by excluding such expenses and transactions] these non-GAAP measures provide investors with a better understanding of how the results relate to our historical performance and how our results compare to other publicly-traded companies. The presentation of non-GAAP financial measures is not meant to be considered in isolation or as a substitute for GAAP financials. Our non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies, as other companies may calculate non-GAAP financial measures differently. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures appears below:
Reconciliation of Select GAAP Financial Measures to Non-GAAP Financial Measures (in thousands, except per share data) (Unaudited) |
|||||||||||||||
Three Months Ended |
Year Ended |
||||||||||||||
|
|
||||||||||||||
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Net income (loss), as reported |
$ |
(268 |
) |
$ |
427 |
$ |
2,487 |
$ |
3,111 |
||||||
Share-based compensation |
|
22 |
|
|
251 |
|
|
283 |
|
|
577 |
|
|||
Business acquisition costs |
|
97 |
|
|
39 |
|
|
533 |
|
|
281 |
|
|||
Integration costs |
|
137 |
|
|
- |
|
|
291 |
|
|
- |
|
|||
NYSE American uplisting costs |
|
- |
|
|
88 |
|
|
- |
|
|
88 |
|
|||
Non-GAAP Net Income |
$ |
(12 |
) |
$ |
805 |
|
$ |
3,594 |
|
$ |
4,057 |
|
|||
Depreciation and amortization |
|
943 |
|
|
715 |
|
|
2,971 |
|
|
2,465 |
|
|||
Income taxes |
|
197 |
|
|
257 |
|
|
1,132 |
|
|
1,265 |
|
|||
Interest expense |
|
771 |
|
|
14 |
|
|
1,156 |
|
|
56 |
|
|||
Adjusted EBITDA |
$ |
1,899 |
|
$ |
1,791 |
|
$ |
8,853 |
|
$ |
7,843 |
|
|||
Diluted EPS, as reported |
$ |
(0.04 |
) |
$ |
0.05 |
|
$ |
0.32 |
|
$ |
0.41 |
|
|||
Non-GAAP Diluted EPS |
$ |
(0.00 |
) |
$ |
0.11 |
|
$ |
0.47 |
|
$ |
0.54 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240401680091/en/
Investor Relations Contact:
Senior Managing Director, Hayden IR
(346) 396-8696
Brian@haydenir.com
Source: