DecisionPoint Systems Announces Third Quarter 2023 Results
$DPSI--DecisionPoint™ Systems, Inc. (NYSE American: DPSI), the leading mobility-first enterprise services and solutions company, today announced third quarter 2023 financial results ended September ...
Record third quarter revenue of $27.1 million (+5%)
Record gross margin of 27.6% (+520 bps) and software/services mix of 45%
Provides 2023 guidance of 14-16% revenue growth and 13-17% adjusted EBITDA growth
DELRAY BEACH, Fla.: $DPSI--DecisionPoint™ Systems, Inc. (NYSE American: DPSI), the leading mobility-first enterprise services and solutions company, today announced third quarter 2023 financial results ended September 30, 2023.
Steve Smith, chief executive officer of DecisionPoint Systems, commented: “Our services-oriented strategy is fueling our growth model and clearly differentiates us from our peers in the industry. We continued to show year-over-year growth in the third quarter, driven by a record mix of software and services at 45% of revenue. This differentiation has allowed us to buck industry trends and drive profitable growth.
“We also continued to see synergies from our acquisition of Macro Integration Services (MIS) and are already creating growth opportunities due to the cross-selling activities across the Company. For example, we’re conducting broader, CIO-level meetings around our combined mobile and services portfolio at several MIS customers.
“Finally, strong cash flow from operations enabled us to pay down another $1.5 million in debt related to the Macro Integration Services acquisition.”
Third Quarter Highlights (2023 versus 2022)
- Revenue increased 5.4% to $27.1 million;
- Gross Profit increased 30.3% to $7.5 million; Gross Margin increased 520 basis points to 27.6%;
- GAAP Operating Income was flat at $1.5 million;
- GAAP Net Income and diluted EPS decreased 1.0% and 11.2% to $1.0 million and $0.13, respectively;
- Non-GAAP Net Income1 and non-GAAP diluted EPS decreased 8.4% and 16.6% to $1.1 million and $0.13, respectively;
- Adjusted EBITDA1 increased 1.3% to $2.3 million;
- Paid down $1.5 million of debt related to the April 1, 2023 acquisition of MIS.
1See GAAP to non-GAAP explanations and reconciliations at the end of this release
Third Quarter Select Financial Metrics: 2023 versus 2022 | ||||||||||||||||||
(in $M except for EPS) | 3Q23 | 3Q22 | Change | YTD 2023 | YTD 2022 | Change | ||||||||||||
Total Revenue | $ | 27.1 | $ | 25.7 | 5.4 | % | $ | 85.1 | $ | 73.0 | 16.5 | % | ||||||
Hardware Solutions Revenue | $ | 14.0 | $ | 19.2 | -27.1 | % | $ | 52.8 | $ | 54.1 | -2.4 | % | ||||||
Software and Services Revenue | $ | 11.7 | $ | 4.7 | 147.6 | % | $ | 27.7 | $ | 13.7 | 102.5 | % | ||||||
Consumables Revenue | $ | 1.4 | $ | 1.8 | -21.5 | % | $ | 4.5 | $ | 5.2 | -13.5 | % | ||||||
Gross Profit | $ | 7.5 | $ | 5.8 | 30.3 | % | $ | 21.3 | $ | 16.8 | 26.8 | % | ||||||
Operating Income | $ | 1.5 | $ | 1.5 | -0.7 | % | $ | 4.1 | $ | 3.8 | 6.6 | % | ||||||
GAAP Net Income | $ | 1.1 | $ | 1.1 | -1.0 | % | $ | 2.8 | $ | 2.7 | 3.7 | % | ||||||
GAAP Diluted Earnings Per Share | $ | 0.13 | $ | 0.15 | -11.2 | % | $ | 0.36 | $ | 0.36 | 0.0 | % | ||||||
Non-GAAP Net Income | $ | 1.1 | $ | 1.2 | -8.4 | % | $ | 3.5 | $ | 3.3 | 4.6 | % | ||||||
Non-GAAP Diluted EPS | $ | 0.13 | $ | 0.16 | -16.6 | % | $ | 0.45 | $ | 0.43 | 4.8 | % | ||||||
Adjusted EBITDA | $ | 2.3 | $ | 2.3 | 1.5 | % | $ | 6.8 | $ | 6.1 | 11.5 | % | ||||||
*numbers may not add due to rounding | ||||||||||||||||||
Balance Sheet and Liquidity as of September 30, 2023
Cash and cash equivalents were $3.6 million, compared to $7.6 million on December 31, 2022. Short-term and long-term debt were $1.0 million and $5.7 million, respectively.
2023 Commentary and Guidance (ending 12/31/23)
| 2023 Guidance | 2022 Actual | 2023 vs 2022 | |||
Revenue | $111.0 million - $113.0 million | $97.1 million | +14% - 16% | |||
Adjusted EBITDA | $8.9 - $9.2 million | $7.8 Million | +13% - 17% |
“For the full year 2023, we now expect revenue in the range of $111.0 to $113.0 million with $8.9 to $9.2 million in adjusted EBITDA. Note this increase in adjusted EBITDA is coming despite investing $1 million in expanding our managed services capabilities in 2023, which we expect to begin generating positive returns in 2024. Additionally, to drive further growth, especially in our managed services offerings, we recently shifted resources internally while further increasing our investment in business development by adding several high-level, quota-carrying key account managers who are well-regarded within the industry. We expect these additions to contribute nominally to revenue in our fourth quarter and, more significantly, in 2024,” concluded Smith.
| Trended Financial Information* | |||||||||||||||||||||||||||
| (in $M except for EPS) |
| 1Q22 |
| 2Q22 |
| 3Q22 |
| 4Q22 |
| 1Q23 |
| 2Q23 |
| 3Q23 | FY 2022 | YTD FY2023 | |||||||||||
| Total Revenue | $ | 19.7 | $ | 27.5 | $ | 25.7 | $ | 24.5 | $ | 27.0 | $ | 30.9 | $ | 27.1 | $ | 97.4 | $ | 85.1 | |||||||||
| Hardware Solutions Revenue | $ | 14.3 | $ | 20.6 | $ | 19.2 | $ | 17.7 | $ | 20.5 | $ | 18.3 | $ | 14.0 | $ | 71.8 | $ | 52.8 | |||||||||
| Software and Services Revenue | $ | 4.1 | $ | 4.8 | $ | 4.7 | $ | 4.7 | $ | 4.9 | $ | 11.2 | $ | 11.7 | $ | 18.3 | $ | 27.7 | |||||||||
| Consumables Revenue | $ | 1.3 | $ | 2.1 | $ | 1.8 | $ | 2.1 | $ | 1.6 | $ | 1.5 | $ | 1.4 | $ | 7.3 | $ | 4.5 | |||||||||
| Gross Profit | $ | 4.7 | $ | 6.3 | $ | 5.8 | $ | 6.3 | $ | 6.1 | $ | 7.7 | $ | 7.5 | $ | 23.1 | $ | 21.3 | |||||||||
| Operating (loss) Income | $ | 0.2 | $ | 2.0 | $ | 1.5 | $ | 0.7 | $ | 1.2 | $ | 1.3 | $ | 1.5 | $ | 4.4 | $ | 4.1 | |||||||||
| Net (loss) Income | $ | 0.9 | $ | 0.7 | $ | 1.1 | $ | 0.4 | $ | 0.9 | $ | 0.8 | $ | 1.1 | $ | 3.1 | $ | 2.8 | |||||||||
| Diluted EPS | $ | 0.11 | $ | 0.09 | $ | 0.15 | $ | 0.07 | $ | 0.11 | $ | 0.11 | $ | 0.13 | $ | 0.41 | $ | 0.35 | |||||||||
| Non-GAAP Net Income | $ | 1.3 | $ | 0.8 |
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