Record Revenue Surging Margins at DecisionPoint
By Ken Nagy, CFA
On November 14, 2012,
DecisionPoint Systems, Inc. (
the enterprise mobility and RFID systems integrator, reported
financial results for its fiscal 2012 third quarter and nine
months, ended September 30, 2012.
DECISIONPOINT (DPSI): Free Stock Analysis
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The solid third quarter performance resulted in record revenue,
with sales jumping $2.120 million or nearly 13 percent year
over year to $18.567 million from $16.446 million for the three
months ended September 30, 2011.
Sequentially, third quarter revenues improved by 4.5 percent over
the $17.767 million from the second quarter fiscal 2011. The
upturn in revenues for the three months ended March 31, 2012 was
driven by increased field mobility solution sales and increased
professional services revenue.
Gross margin surged 250 basis points year over year from 20.9
percent in the third quarter of 2011, up to 23.4 percent for the
three months ended September 30, 2012. Sequentially, third
quarter gross margin improved 210 basis points from 21.3 percent
for the three months ended June 30, 2012.
The increase in gross margins was primarily a result of the
higher gross margin from professional services revenue and
improved utilization of professional services resources.
It should be noted that the higher margin professional software
and services revenue has now grown to over 35% of total revenue.
Additionally, the Company has continued to emphasize cost control
and improved efficiencies throughout its operations.
Selling, general and administrative expenses in the third quarter
increased year over year by $1.676 million and sequentially by
$102,000 to $4.951 million. The year over year increase in
selling, general and administrative expenses was primarily the
result of increased personnel and operating expenses relating to
the Illume and Apex acquisitions of $0.6 million as well as
Illume and Apex acquisition related costs of $0.5 million.
Adjusted EBITDA for the third quarter of 2012 improved year over
year by $300,000 to $1.1 million compared to a $0.8 million for
the same quarter of fiscal 2011.
Net loss attributable to common shareholders was $1.262 million
for the fiscal 2012 third quarter compared to net income
attributable to common shareholders of $54,489 for three months
ended September 30, 2011. Based on a weighted average number of
diluted shares of 8.182 million, diluted net loss per share
resulted in a net loss of $0.15 per share for the third quarter
of fiscal 2012. This compared to diluted net income per share of
$0.01 based on a weighted average number of diluted shares of
7.417 million during the three months ended September 30, 2011.
The Company ended the quarter with $392,424 in cash and a working
capital deficit of $9.220 million. This compares to $498,357 in
cash and a working capital deficit of $6.005 million as of June
30, 2011. Still, cash flow from operating activities for the
first nine months of 2012 was $0.7 million compared to $(1.4)
million for the same period in 2011.
Recently DecisionPoint made three acquisitions (CMAC, Apex and
Illume Mobile) which have broadened the Company's software
products and professional services capabilities, opened new
markets and deepened relationships with customers.
Furthermore, the Company's record revenue and gross margin
expansion in the third quarter reflects the growing success of
the strategic shift that DecisionPoint has made over the past two
years to develop its field mobility solutions and professional
services and software divisions.
Likewise, management stated that it continues to see its field
mobility solutions gaining traction with wireless carrier
partners and customers as well as the continued expansion of its
pipeline of opportunities in its retail and warehouse and
As a result of this positive momentum in its field mobility and
retail systems divisions, management believes the Company remains
well positioned for continued revenue and adjusted EBITDA growth.
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