DecisionPoint Systems Reports Third Quarter Results For 2013

         DecisionPoint Systems Reports Third Quarter Results For 2013

Revenues Increase 19% Sequentially to $17.6 Million

PR Newswire

IRVINE, Calif., Nov. 14, 2013

IRVINE, Calif., Nov. 14, 2013 /PRNewswire/ -- DecisionPoint™ Systems, Inc.
(OTCQB: DPSI), a leading provider and integrator of Enterprise Mobility,
Wireless Applications and RFID solutions, today reported financial results for
the third quarter and nine months ended September 30, 2013.

Corporate and Financial Highlights of the Third Quarter 2013

  oRevenue increased sequentially 19% to $17.6 million
  oEBITDA moved to a positive $466,000 from a loss of $383,000 in the second
    quarter, notwithstanding financing and restructuring expenses of $442,000
  oPrincipal under the Company's term loans in the aggregate amount of
    $534,000 was paid down in the third quarter

Business Highlights of the Third Quarter 2013

  oSignificant new software orders received during the period
  oSignificant new software contracts were booked in the quarter including
    from such major names as Johnson Controls, the U.S. Postal Service, Gulf
    Winds among others.

Nicholas Toms, CEO of DecisionPoint, commented, "Based on what we have seen to
date in the third quarter, we expect sales to be robust, and margins to return
to their prior levels in the fourth quarter and to continue to climb as in
process software orders move to delivery and into our quarterly income
statements. We have now added Android Operating Systems to the family of
APEXWare software compatibility, which vastly expands the addressable market.
We are at an inflection point in our development where, at long last, we will
be maintaining both positive EBITDA on a regular basis, and net income on a
GAAP bottom-line basis. We believe that as economic conditions continue to
improve, our results will improve as well.

"We work with some of the biggest names in the industrial and commercial
world, and the family of our clients continues to expand. U.S.P.S, Johnson
Controls, Avis Rent a Car System, Wells Fargo, Goodwill Industries of Denver
and Mission Linen Supply are just a few. We expect revenues for the fourth
quarter ending December 31, 2013 to be up sequentially from the revenues
reported for the third quarter," Mr. Toms added.

Third Quarter 2013 Results
Revenue was $17.6 million, a climb of about 19% from the second quarter of
2013, but a 5% drop from the comparable quarter of 2012, when revenue was
$18.6 million.

Gross profit decreased by 450 basis points to 19.7% from 24.2% in the second
quarter of 2013, and 250 points from 22.2% in the third quarter of 2012. The
drop was largely attributed to the timing of revenue recognition related to in
process software orders, to the timing of orders and shipments, with some
orders anticipated for the third quarter slipping to the fourth quarter. We
anticipate that as higher-margin software and service revenue continue to
grow, margins will continue to return to this long-term increasing trend
starting in the fourth quarter. The reported net loss, a little less than
breakeven, at $167,000 was sharply down from $1.1 million in the second
quarter of this year, vs. a loss of $1.0 million in the third quarter of
2012. On an EPS basis, the loss per share was $0.04, compared to $0.15 loss
per share in the third quarter of 2012.

The operating loss was $0.2 million in this year's third quarter vs. $0.6
million in the third quarter of 2012, due primarily to improved margins and
cost savings. EBITDA (a non-GAAP measurement that management uses to measure
progress) for the third quarter of 2013 was positive $466,000, and a $849,000
positive swing from the second quarter of this year.

Although unit volumes were up, the drop in revenue compared with the same
period last year was largely related to an increase in the number of consumer
devices sold with much lower unit prices and a consequent decrease in the
higher priced rugged devices sold.

Nine Months 2013 Results
Revenue was $46.1 million, down from $54.1 million in the first nine months of
2012, which included an increase of approximately $1.9 million in sales from
the Apex and Illume acquisitions that were completed in mid-2012. 2012
benefited from a stronger recovery in the US economy than was seen in the
earlier part of 2013. Lower-margin hardware sales declined by 21.9% for the
period. Professional services increased slightly, up 0.8% for the nine
months. Software revenues, with their higher margins, increased by 6.9% to
$3.5 million. Gross margin remained steady year-over-year.SG&A expense
increased modestly compared to 2012 due to the inclusion of Apex and Illume
Mobile businesses.

About DecisionPoint™ Systems, Inc.
DecisionPoint Systems, Inc. empowers the mobile workforce to enhance customer
satisfaction and accelerate business growth. They accomplish this by making
enterprise software applications accessible to the front-line mobile worker
anytime, anywhere. DecisionPoint combines its industry leading software
products, application development capabilities, deployment and support
services with the latest wireless, and mobile technologies.

For more information on DecisionPoint Systems visitwww.decisionpt.com

Forward Looking Statements
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.

Contacts:

DecisionPoint Systems, Inc.
Nicholas R. Toms
Chief Executive Officer
(973) 489-1425

Allen & Caron, Inc.
Rudy Barrio (investors)
r.barrio@allencaron.com
(212) 691-8087

Len Hall (media)
len@allencaron.com
(949) 474-4300

–FINANCIAL TABLES FOLLOW–





DECISIONPOINT SYSTEMS, INC.

Unaudited Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)
                                                 September 30,    December 31,
                                                 2013             2012
ASSETS
Current assets
 Cash                                           $         $     
                                                 270             1,103
 Accounts receivable, net                        12,685           12,287
 Due from related party                          195              202
 Inventory, net                                  918              811
 Deferred costs                                  3,773            3,955
 Deferred tax assets                             47               48
 Prepaid expenses and other current assets       919              302
     Total current assets                       18,807           18,708
Property and equipment, net                      139              179
Other assets, net                                151              205
Deferred costs, net of current portion           1,810            2,124
Goodwill                                         8,485            8,571
Intangible assets, net                           4,472            6,023
     Total assets                                $           $    
                                                 33,864           35,810
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
 Accounts payable                                $           $    
                                                 13,036           11,080
 Accrued expenses and other current liabilities  3,040            2,895
 Lines of credit                                 4,247            3,430
 Current portion of debt                         1,963            1,800
 Due to related parties                          160              1
 Accrued earn out consideration                  331              1,186
 Warrant liability                               933              -
 Unearned revenue                                6,639            7,409
     Total current liabilities                  30,349           27,801
Long term liabilities
 Unearned revenue, net of current portion        2,472            2,883
 Debt, net of current portion and discount       2,099            2,922
 Accrued earn out consideration, net of current  154              159
 portion
 Deferred tax liabilities                        1,038            1,078
 Other long term liabilities                     76               80
     Total liabilities                          36,188           34,923
Commitments and contingencies and subsequent     -                -
event
                                                 -                -
STOCKHOLDERS' EQUITY
 Cumulative Convertible Preferred stock, $0.001
 par value, 10,000,000 shares
     authorized, 1,105,155 shares issued and
     outstanding, including
     cumulative and imputed preferred dividends
     of $586 and $361, and
     with a liquidation preference of $8,983
     and $8,758 at September 30, 2013
     and December 31, 2012, respectively         7,609            7,370
 Common stock, $0.001 par value, 100,000,000
 shares authorized,
     12,297,979 issued and 12,144,096
     outstanding as of September 30, 2013,
     and 9,300,439 issued and 9,146,556          12               9
     outstanding as of December 31, 2012
 Additional paid-in capital                      16,621           16,132
 Treasury stock, 153,883 shares of common stock  (205)            (205)
 Accumulated deficit                             (25,720)         (21,674)
 Unearned ESOP shares                            (664)            (767)
 Accumulated other comprehensive income          23               22
     Total stockholders' (deficit) equity        (2,324)          887
                    Total liabilities and        $           $    
                    stockholders' equity         33,864           35,810





DECISIONPOINT SYSTEMS, INC.

Unaudited Condensed Consolidated Statements of Operations and Comprehensive
Loss

(In thousands, except share and per share data)
                             Three Months Ended       Nine Months Ended
                             September 30,            September 30,
                             2013         2012        2013         2012
Net sales                   $ 17,575    $ 18,567   $ 46,067    $ 54,144
Cost of sales               14,113       14,445      36,216       42,559
Gross profit                3,462        4,122       9,851        11,585
Selling, general and         4,485        4,741       13,981       13,370
administrative expense
Adjustment to earn-out       (820)        -           (820)        -
obligations
Operating loss               (203)        (619)       (3,310)      (1,785)
Other expense:
       Interest expense      241          350         723          698
       Other income, net     (168)        (19)        (182)        (80)
           Total other       73           331         541          618
           expense
Net loss before income       (276)        (950)       (3,851)      (2,403)
taxes
Provision (benefit) for      (109)        64          (466)        132
income taxes
Net loss                     (167)        (1,014)     (3,385)      (2,535)
Cumulative and imputed       (223)        (249)       (661)        (710)
preferred stock dividends
Net loss attributable to     $  (390)   $ (1,263)  $ (4,046)   $ (3,245)
common shareholders
Net loss per share -
       Basic and diluted     $  (0.04)   $  (0.15)  $  (0.44)  $  (0.42)
Weighted average shares
outstanding -
       Basic and diluted     10,019,109   8,182,103   9,117,969    7,698,635
Comprehensive loss           $   (166)  $  (992)   $ (3,383)   $  (2,507)





DECISIONPOINT SYSTEMS, INC.

Unaudited Condensed Consolidated Statements of Cash Flows

(In thousands)
                                                  Nine Months ended September
                                                  30,
                                                  2013           2012
Cash flows from operating activities:
Net loss                                          $   (3,385)  $   (2,535)
Adjustments to reconcile net loss to net cash
   (used in) provided by operating activities:
       Depreciation and amortization              1,497          992
       Amortization of deferred financing costs   140            160
       and note discount
       Employee stock-based compensation          6              50
       Non-employee stock-based compensation      -              341
       Non-cash interest income                   -              (24)
       Acquisition earn-out adjustment            (820)          -
       Change in fair value of warrants           (166)          -
       ESOP compensation expense                  104            98
       Deferred taxes, net                        (5)            28
       Allowance for doubtful accounts            56             13
       Loss on disposal of property and           13             -
       equipment
       Changes in operating assets and
       liabilities:
             Accounts receivable                  (468)          3,899
             Due from related party               -              (357)
             Inventory, net                       (107)          (184)
             Deferred costs                       496            (583)
             Prepaid expenses and other current   (578)          179
             assets
             Other assets, net                    5              (11)
             Accounts payable                     1,961          (572)
             Accrued expenses and other current   106            178
             liabilities
             Due to related parties               158            (791)
             Unearned revenue                     (1,163)        (186)
Net cash (used in) provided by operating          (2,150)        695
activities
Cash flows from investing activities
   Cash paid for acquisitions                     -              (5,051)
   Purchases of property and equipment            (33)           (50)
Net cash used in investing activities             (33)           (5,101)
Cash flows from financing activities
   (Repayments) borrowings from lines of credit,  817            718
   net
   Proceeds from issuance of term debt            1,000          4,033
   Cash received in reverse recapitalization, net -              1,500
   of expenses
   Repayment of debt                              (1,552)        (962)
   Paid financing costs                           (119)          (296)
   Dividends paid                                 (296)          (482)
   Common stock issued in private placement, net  1,502          -
   of costs
Net cash provided by financing activities         1,352          4,511
   Effect on cash of foreign currency             (2)            (79)
   translation
Net (decrease) increase in cash                   (833)          26
Cash at beginning of period                       1,103          366
Cash at end of period                             $   270     $    392
Supplemental disclosures of cash flow
information:
   Interest paid                                  $   705     $    858
   Income taxes paid                              234            56
Supplemental disclosure of non-cash financing
activities:
   Accrued and imputed dividends on preferred     $   661     $    261
   stock
   Warrants issued in connection with common      1,099          -
   stock private placement
       and related accrued interest



EBITDA Calculation –  Three months                 Nine months

(In thousands)        ended September 30,          ended September 30,
                      2013         2012            2013           2012
Net Loss              $       $            $           $    
                      (167)        (1,014)        (3,385)       (2,535)
Depreciation and      502          575             1,497          992
amortization
Interest expense      240          349             723            698
Tax provision         (109)        64              (466)          132
(benefit)
 EBITDA:         466          (26)            (1,631)        (713)

SOURCE DecisionPoint Systems, Inc.

Website: http://www.decisionpt.com