SOURCE: DecisionPoint Systems, Inc

DecisionPoint Systems, Inc

November 16, 2009 10:49 ET

DecisionPoint Reports Strong Profit for Third Quarter 2009

Focus on Higher Margin Business and Cost Controls Continue to Drive Margin Growth

FOOTHILL RANCH, CA--(Marketwire - November 16, 2009) - DecisionPoint Systems, Inc. (OTCBB: DNPI), a leading provider of Enterprise Mobility and RFID solutions, today announced operating results for the fiscal third quarter and nine months ended September 30, 2009.

Financial Highlights

--  Third quarter revenues were $11.5 million
--  Third quarter gross margins grew to 20.6%
--  Third quarter operating income rose 32.6% compared to prior year's
    period
--  Third quarter net income was $165,000 or $0.01 per share compared to
    net  profit of $26,000 for the same period last year
    

Nicholas Toms, Chief Executive Officer of DecisionPoint commented, "These are excellent results. We have achieved a net income of $165,000 or $0.01 per share by continuing to focus on higher margin business and tight cost controls. Strong gains in field mobility and managed services continue to drive margin improvements."

Third quarter 2009 revenues were $11.5 million compared to $13.3 million for the same period last year. For the nine months ended September 30, 2009, revenues were $35.2 million compared to $41.8 million for the same period last year. The decline was primarily attributable to challenging economic conditions during 2009.

Third quarter gross profit margins continued to improve sequentially to 20.6% versus 20.4% in the prior quarter and 19.2% for the same period last year. Tight cost controls have successfully decreased selling, general and administrative costs to $1.9 million for the third quarter compared with $2.2 million for the prior year's period. As a result of these improvements, third quarter operating profits increased 32.6% to $429,000 from $324,000 in the same period last year.

Nine-month operating income increased 47% to $818,000, from $555,000 for the same period last year. Nine-month gross margins improved to 19.5% compared to 18.9% in the previous year's period.

Third quarter net income was $165,000 or $0.01 per share, compared with $26,000 for the same period last year. Nine-month net loss improved to only $277,000 or (.02) per share, compared with a net loss of $1.1 million for the same period last year.

Recent Highlights

In September, DecisionPoint announced that the United States Air Force had issued a supplemental order for $623,000 for additional BITS (Barcode Inventory Tracking System) Kits bringing the value of the ongoing program for tracking "Go To War" equipment support units to $5.4 million.

In addition, the Company continued to close business for its MobileArc Field Mobility suite of products and services. Decision Point recently announced the completion of a $2.7 million mobile security solution rollout for the leading provider of security solutions in the U.S. This is one of over two dozen new field mobility contracts secured in the third quarter, representing an aggregate value of over $5 million in deployments scheduled over the next two to three quarters.

This success was facilitated by the launch of the MobileCare suite of post-deployment support services geared towards helping customers deploy and support mobile computing systems to field-based workforces. In addition, DecisionPoint drove increased awareness and education of mobility-based systems by revamping its website at www.decisionpt.com and launching a mobility systems-oriented blog, www.decisionpt.com/blog.

Business Outlook

"We are excited about our business outlook, as the momentum we have experienced in the first nine months of the year continues into the fourth quarter," noted Toms. "Our pipeline of projects is approaching $100 million and we have had a 22% increase in our unearned revenue since last quarter. Our strategy is working and we look forward to the rest of the year."

DecisionPoint Systems, Inc. (OTCBB: DNPI) 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 on DecisionPoint Systems visit http://www.decisionpt.com/news.

Under The Private Securities Litigation Reform Act of 1995: 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 achievement in the future to differ materially from forecasted results, performance, and achievement. These 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 these forward-looking statements that may be made to reflect events or circumstances after the date hereof, or to reflect the occurrence of unanticipated events or changes in the Company's plans or expectation.

Balance Sheets

                                               September 30,
                                                   2009       December 31,
                                                (unaudited)       2008
                                                ------------  ------------
ASSETS
Current assets
  Cash and cash equivalents                     $    100,255  $    944,941
  Accounts receivable, net                         8,177,093     8,069,039
  Inventory, net                                   1,778,776     2,643,466
  Deferred costs                                   3,911,355     3,705,483
  Deferred tax assets                                155,000        73,000
  Prepaid expenses                                    68,480        25,059
                                                ------------  ------------
    Total current assets                          14,190,959    15,460,988

Property and equipment, net                           56,511        78,161
Other assets, net                                     85,942        24,875
Goodwill                                           4,860,663     4,860,663
                                                ------------  ------------
    Total assets                                $ 19,194,075  $ 20,424,687
                                                ============  ============

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
  Accounts payable                              $  7,762,959  $  7,864,693
  Line of credit                                   3,542,528     3,377,208
  Current portion of debt                            504,233     1,953,800
  Accrued expenses and other current
   liabilities                                     3,432,186     4,032,667
  Unearned revenue                                 8,507,931     8,690,151
  Current portion of holding share liability         235,586        36,103
                                                ------------  ------------
    Total current liabilities                     23,985,423    25,954,622

Long-term liabilities
  Holding share liability, net of current
   portion                                                 -       235,587
  Debt, net of current portion                             -     2,866,024
                                                ------------  ------------
    Total liabilities                             23,985,423    29,056,233

Commitments and contingencies

STOCKHOLDERS' EQUITY (DEFICIT)
  Convertible preferred stock, $0.001 par
   value, 10,000,000 shares authorized, 975
   shares and none issued and outstanding,
   respectively                                            1             -
  Common stock, $0.001 par value, 100,000,000
   shares authorized, 28,000,000 and 12,243,224
   shares issued and outstanding, respectively        28,000        12,243
  Additional paid-in capital                       6,209,026     2,192,146
  Accumulated deficit                             (9,858,118)   (9,581,209)
  Unearned ESOP shares                            (1,170,257)   (1,254,726)
                                                ------------  ------------
    Total stockholders’ deficit                   (4,791,348)   (8,631,546)
                                                ------------  ------------
      Total liabilities and stockholders'
       equity                                   $ 19,194,075  $ 20,424,687
                                                ============  ============


Operating Statements

                              Three Months              Nine Months
                           Ended September 30,       Ended September 30,
                            2009         2008         2009         2008
                        -----------  -----------  -----------  -----------

Net sales               $11,531,043  $13,337,363  $35,229,426  $41,829,853

Cost of sales             9,153,966   10,771,576   28,353,988   33,937,580
                        -----------  -----------  -----------  -----------

Gross profit              2,377,077    2,565,787    6,875,438    7,892,273

Selling, general and
 administrative expense   1,947,595    2,241,898    6,057,902    7,337,762
                        -----------  -----------  -----------  -----------

Operating income            429,482      323,889      817,536      554,511

Other income (expense):
  Other income
   (expense), net             9,351        3,008     (212,801)    (612,289)
  ESOP contribution,
   net                      (28,156)     (26,756)     (84,469)     (80,260)
  Interest expense         (300,319)    (274,099)    (773,239)    (931,785)
                        -----------  -----------  -----------  -----------
     Total other
      expense              (319,124)    (297,847)  (1,070,509)  (1,624,334)

Net income (loss)
 before income taxes        110,358       26,042     (252,973)  (1,069,823)

(Benefit) provision for
 income taxes               (54,605)           -       23,936        2,200

                        -----------  -----------  -----------  -----------
Net income (loss)       $   164,963  $    26,042  $  (276,909) $(1,072,023)
                        ===========  ===========  ===========  ===========

Net Earnings per Share -
  Basic                 $      0.01  $      0.01  $     (0.02) $     (0.21)
                        ===========  ===========  ===========  ===========
  Diluted               $      0.01  $      0.00  $     (0.02) $     (0.21)
                        ===========  ===========  ===========  ===========

Weighted Average Shares
 Outstanding -
  Basic                  21,595,410    5,038,087   11,863,284    5,038,087
                        ===========  ===========  ===========  ===========
  Diluted                32,209,115   11,665,576   11,863,284    5,038,087
                        ===========  ===========  ===========  ===========

Contact Information

  • Contacts:
    Donald W. Rowley
    Chief Financial Officer
    DecisionPoint Systems, Inc.
    949.465.0065 x105 t

    Laurel Moody
    Corporate Profile, LLC
    646.810.0608 t