Investor Presentation May 2013
Investor Presentation May 2013
OTCBB:DPSI
Safe Harbor
This presentation is neither an offer to sell nor a solicitation of offers to purchase securities. This presentation is the confidential intellectual property of DecisionPoint Systems, Inc. (“DecisionPoint”). Any use or redistribution of this document or its contents without the express written consent of DecisionPoint is prohibited. This presentation contains statements that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Those statements appear in a number of places in the presentation and include statements regarding the intent, belief or current expectations of DecisionPoint, its directors or its officers with respect to, among other things: (i) trends affecting DecisionPoint’s financial condition or results of operations; (ii) DecisionPoint’s financing plans; and (iii) DecisionPoint’s business and growth strategies, among other things. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. You are cautioned not to place undue reliance on these forward-looking statements, which reflect DecisionPoint’s management’s view only as of the date of this presentation. This presentation is © DecisionPoint Systems, Inc. 2013
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OTCBB:DPSI
Overview
End-to-end provider of software and professional services targeting the growing enterprise mobility space 30 years experience in design, deployment and support of mobile computing and wireless systems
Enable our customers to access enterprise data at the point of decision regardless of location
Deliver the ability to make better, faster and more accurate business decisions by implementing industry-specific, enterprise wireless and mobile computing systems for front-line employees, inside and outside the ‘four-walls’
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OTCBB:DPSI
Investment Highlights
Enterprise mobile solutions have become imperative
Revenue mix shifting to higher margin professional services and software
Well established partnerships with key wireless carriers
Blue chip customer base
Financial resources to support growth
Proven management team with strong domain expertise and sector
experience
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OTCBB:DPSI
Rapidly Growing Mobile Solutions Market
Demand Drivers Global workforce continues to
become more mobile
Standardization of devices on
WindowsMobile, Android, iOS
Hand-held devices and RFID tags
increasingly affordable
Solutions becoming more complex
and require more customization
02468
10121416
2011 2015
$ Bi
llion
s
Enterprise and Government Mobility Market
10% CAGR, totaling $14B by 2015
* Data source: VDC Research
Enterprise Mobile Solutions have Become Imperative
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OTCBB:DPSI
Total Mobile Solution Provider
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Field Workforce Automation Retail Systems Distribution, Manufacturing &
Government
Verticals:
Field Service
Transportation & Logistics
Security Service
Direct Store Delivery
Verticals:
Grocery
Clothing & Apparel
Distribution Centers
Specialty Retail
Department Stores
Home Improvement
Verticals:
Supply Chain
Warehouse Management Systems (WMS)
Continuous or Job-Shop
Batch or Discrete
Make-to-Stock
Make-to-Order
Assemble-to-Order
OTCBB:DPSI
Field Workforce Automation Increasingly, goods are tracked or services are performed by field-based workers Our solutions:
Dramatically improve performance and productivity Increase customer service with immediate wireless connectivity to back office operations Improve communications with field workers
New Products Generating High Margins and Recurring Revenue
Grapevine Cloud-based “Always On” push-to-talk system with no latency Supports up to 100 simultaneous users in a single conversation
Mobile Device Management (MDM) Provides over-the-air (OTA) wireless security, support and upgrades
Fleet Control Targets trucking companies in non-compliance with new DOT regulations
Proof of Delivery Express package tracking within large corporations
CASE STUDY Leading Freight Transportation and Logistics Company 14,500 mobile computing devices currently, increased from 1,000 devices in initial 2009 contract Services include: • Mobile Device Management
• Security and support • Custom reporting • Monthly building, testing and delivering of
application updates • Initial contract: $0.2 million • Annual recurring revenue: $0.9 million
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OTCBB:DPSI
Retail Systems
Leading Provider to Tier 1 Retail Chains
Market Trends Driving Growth Most retailers migrating from 20 year old technology Seeking process improvement and productivity gains Competitive drive to function like Apple stores
New Products Increase Productivity at Reduced Cost
Mobile point-of-sale including: iPad retailing iPad clienteling Inventory and shelf price management Business two-way radio
Partnership with Global Bay Software provides Apple applications
CASE STUDY Leading multi-channel specialty retailer of apparel and accessories Total custom system upgrade including: • Software creation and hardware for:
• Warehouse and distribution centers • Wireless network • In-store systems with customer-facing tablets
• Integration with existing enterprise software • MobileCare Technical Support Services • Initial contract: $3.2 million • Annual recurring revenue: $0.3 million
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OTCBB:DPSI
Warehouse Distribution, Manufacturing & Government
Increasing need to maximize service levels while meeting financial performance requirements Challenges include:
Achieving high customer satisfaction with accurate and on-time shipments Maximizing fill rates and inventory turns Efficient space utilization Labor and equipment time-and-motion efficiency
Solutions optimize return on invested resources:
Faster cycle times Lower and accurate inventory counts Higher services levels
CASE STUDY Complete RFID pedigree and authentication system • Implemented enterprise-wide • Initial contract: $4.0 million • Annual recurring revenue: $0.5 million
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OTCBB:DPSI
Sales Process & Partners
Direct Sales 25 salespeople
Located
nationwide
Supported by
30 engineers
and technicians
Partners Leveraging the sales force of our partners
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OEM’s
OTCBB:DPSI
Growth Strategy
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Extract greater share of spend from existing partners and
customers
Further penetrate existing verticals
Leverage partners’ reach to acquire new customers
Introduce new products and services
Acquire complementary businesses
Broaden geographic footprint
OTCBB:DPSI
Two Strategic Software Acquisitions Completed
June 2012 Acquisition of Apex Systems Integrators - Toronto Canada Provider of wireless mobile workforce software product solution Accretive to earnings by annualized $0.15 per share
July 2012 Acquisition of Illume Mobile Division of Macrosolve - Tulsa OK Provider of software solutions running on IOS (Apple) and Android
Positive financial impact Shifts revenue mix to higher margin software and professional services by 400-600 basis points Expands gross margins 200-400 basis points
Operational benefits Both acquisition address markets of field mobility, retail, and supply chain Add proprietary software products and strong domain knowledge for Apple and Android systems Cross selling opportunities from complementary customer bases Establishes initial presence in important growing Canadian market
Acquired capabilities round out DP’s product offerings
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OTCBB:DPSI
Seasoned Management Team Name / Title Selected Prior Experience
Nic Toms Chairman, CEO and Director
Chairman, President and CEO of Peak Technologies CEO of Cape Systems Group, Inc. Skadden Arps Slate Meagher & Flom
Michael Roe Chief Accounting Officer
CAO, Metagenics, Inc. CFO, Duncan Solutions VP Finance/Investor relations, QLogic Corp.
Ralph Hubregsen Chief Operating Officer
Vice President Worldwide Channels, Symplified Founder/President, Venado Technologies Founder/President, Saillent Consulting Group
John Chis SVP Sales North America
20 years with Symbol Technologies and Telxon (acquired by Symbol) Sales, marketing and operations management experience
Bryan Moss SVP Professional Services
Founder/President, CMAC, Inc. Senior Director, Supply Chain Practice, Accenture
Don Dalicandro CEO, APEX System Integrators and Director
Founder/CEO, APEX System Integrators, Inc. Managing Partner, ASECO Integrated Systems Ltd. Founder/CEO, Azertech
Brent Felker VP Field Mobility
Senior Sales VP of Peak Technologies Initiated Field Mobility Practice at Motorola/Symbol Initiated Field Mobility Practice at Psion/Teklogix
Stephanie Storm Director of Operations
Director of Sales Operations, Datamax – O’Neil Corp Director of Sales Operations, PairGain Technologies
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OTCBB:DPSI
25%
40%
35%
Field Workforce Automation Supply Chain Retail Systems
Shifting Revenue Mix
Goal: Increase Mix of Software & Professional Services to 60% of Revenue
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Markets Served 2012
2012 Revenue Mix
23%
9%
68%
Professional Services Software and Other
Hardware
OTCBB:DPSI
P&L 2012 ($ in ‘000 except for EPS and WASO)
2012 2011 2013 2012
Net sales 71,501$ 58,359$ 13,772$ 17,810$ Cost of sales 55,949 46,368 10,948 14,057Gross profit 15,552 11,991 2,824 3,753
Selling, general and administrative expense 18,661 13,597 5,033 3,835
Operating loss (3,109) (1,606) 2,209 (82)
Other expense (income):Interest expense 998 1,160 226 142 Other income, net (116) (363) (6) (29)
Total other expense 882 3,462 220 113
Loss before income taxes (3,991) (5,068) (2,429) (195)
Provision (tax benefit) for income taxes (125) 100 (327) 42
Net loss (3,866) (5,168) (2,102) (237)
Cumulative and imputed preferred stock dividends (954) (486) (220) (222)
Net loss attributable to common shareholders (4,820)$ (5,654)$ (2,322)$ (459)$
Net loss per share - Basic and diluted (0.61)$ (0.94)$ (0.27)$ (0.06)$
Weighted-average shares outstanding -Basic and diluted 7,900,693 6,019,900 8,620,807 7,392,441
Q1 ended March 31,Years ended December 31,
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OTCBB:DPSI
Adjusted EBITDA Trend ($ in ‘000 )
2012 2011 2013 2012EBITDA Calculation
Net Loss (3,866)$ (5,168)$ (2,102)$ (237)$ Depreciation and amortization 1,510 560 502 160 Interest Expense 998 1,160 226 142 Income Taxes (125) 100 (327) 42
EBITDA (1,483)$ (3,348)$ (1,701)$ 107$
Employee stock-based compensation 52 200 5 21 Non-employee stock-based compensation 514 283 ESOP compensation expense 132 125 35 33
1,602 360
175
700 Restructuring costs 430 (27) Financing/Acquisition Costs 642 Loss on debt extinguishment 2,665
Adjusted EBITDA 2,122$ (75)$ (1,019)$ 494$
Q1 ended March 31,Years ended December 31,
One time cash transaction expenses in connection with the acquisition of ApexOne time cash expenses in connection with the acquisition of Illume MobileOne time cash expenses in connection with the replacement of Preferred C shares and investor
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OTCBB:DPSI
P&L Trend and High-Level Forecast
Revenue Q1 2013 Y/E 2012 Y/E 2011DPS 10.7$ 58.9$ 47.6$ Illume 0.2 0.4 -Apex 0.5 1.1 -CMAC 2.4 11.1 10.8 Total Revenue 13.8$ 71.5$ 58.4$
Gross Margin 22.0% 21.8% 20.5%EBITDA -$1.7 -$1.5 -$3.3EBITDA Margin % -12.4% -2.1% -5.7%EBITDA - Adjusted* -$1.0 $2.1 -$0.1EBITDA-Adjusted* Margin % 7.4% 3.0% -0.2%
* Excludes deal costs, severance and one-time items
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OTCBB:DPSI
Borrowings/Repayments
12/31/2011 Borrowings Repayments
Currency movement/
discount 12/31/2012 Borrowings Repayments
Currency movement/
discount 3/31/2012
SVB Term Loan $1,970 ($1,000) $26 996$ 1,000$ (278)$ (15)$ 1,703$
RBC Term Loan (APEX) $2,343 ($419) $128 2,052$ (205)$ (35)$ 1,812$
BDC Term Loan (APEX) $1,598 $76 1,674$ (33)$ 1,641$
$1,970 $3,941 ($1,419) $230 4,722$ 1,000$ (483)$ (83)$ 5,156$
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OTCBB:DPSI
Key Takeaways
Enterprise mobile solutions have become imperative
Revenue mix shifting to higher margin professional services and software
Well established partnerships with key wireless carriers
Blue chip customer base
Financial resources to support growth
Proven management team with strong domain expertise and sector experience
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