DecisionPoint Investor Presentation-January 2011

21
Investor Presentation January 2011

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DecisionPoint Investor Presentation-January 2011

Transcript of DecisionPoint Investor Presentation-January 2011

Page 1: DecisionPoint Investor Presentation-January 2011

Investor PresentationJanuary 2011

Page 2: DecisionPoint Investor Presentation-January 2011

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Safe HarborThis 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. 2010

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Overview

Enables more  direct  customer  interaction  by moving decision points closer to the front line worker

Designs,  develops,  installs  and  supports  solutions combining  software  and  hardware  for  the  Enterprise Wireless Mobile and RFID  Computing markets

Comprehensive  solutions make  real‐time,  interactive data  accessible  to  workers  anytime,  anywhere  over wireless networks via hand‐held devices and electronic tagging

Hardware and software agnostic 

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Growing imperative for companies to have a mobile solution 

Building revenue momentum – on path to exceed $100M annually

Increasing earnings growth being driven through operating leverage

Revenue mix shifting in favor of recurring and higher margin services and software 

Blue chip customer base

Pending reverse merger strengthens balance sheet

Proven management with strong domain expertise and sector experience

Investment Highlights

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Demand Drivers• Standardization of Windows CE

• Mobile technology maturation easing 

implementation

• Growing imperative for companies to 

have a mobile solution

• Increased affordability of RFID tags

• Solutions becoming more complex

5

Mobile Solutions Market

DecisionPoint is at the Epicenter of Market Growth Trends

0

2

4

6

8

10

12

2009 2010 2011 2012

FAMRFIDMMW

$ Billions

• Mobile Middleware (MMW): $1.6B by 2013• Radio Frequency Identification (RFID): $4.0B in 2009 to 

$8.4B by 2012• Field Asset Management (FAM): $0.3B in 2008 to $1.6B by 

2013• 40% CAGR in three main markets, totaling $11.0B by 2012

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Delivery of Total Solutions & Ongoing Support Results in Sticky Customer Relationships

Carrier – ISV – Pilot Program – Rollout

Simplifies the Process – Time and Cost EffectiveDelivers Total Solutions

Provides Ongoing Service & Support

Customer Process 

Customer  Support

Carrier PartnershipsAT&TSprint NextelT-MobileVerizon

ISV PartnershipsCXTDatatracTotal MobileDecisionPoint

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Track Record of Success - Case Studies

®

Vehicle return management systems at all 200 US locations

$5.0M implementation program to date

$2.5M annual recurring revenue

Manage night security at all 2500 BankAmerica locations in North America

$3.5M implementation program to date

Real‐time management of SLAs

Significant follow‐on bids in progress

Product and Service Traction with Blue‐Chip Customer Base Worldwide

Complete RFID pedigree and authentication system

Implemented enterprise‐wide

$4.0M implementation program to date

$500K annual recurring revenue

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Proprietary, Patented Technology Solutions

Field Mobility Services RetailWarehouse Distribution & 

Manufacturing

Field Asset Management (FAM)

Maintenance Work Orders

Rounds & Readings

Inspections & Claims

Parts Management

Physical Inventory/Audit

Field Sales Automation

GPS & Turn‐by‐Turn Navigation

Proof of Delivery

Mobile Point‐of‐Sale (POS)

Price Management

Line Busting

Gift Registries

Price Checkers

Item & Shelf Labeling

Store Management Alerts & Reporting

Inventory Management

Business Two‐Way Radio

Enterprise Asset Management (EAM)

Item & Shelf Labeling

Inventory Management

Process Control

Supply Chain Management (SCM)

Business Two‐Way Radio

RFID Tracking for Pharma

Total Solution Expertise

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Blue Chip Customer Base Field Mobility Clients Retail Warehouse Distribution &

Manufacturing

Verticals Served                Grocery – Retail – Warehouse/Distribution – Manufacturing – Pharmaceutical ‐ Telecommunications

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Area Readers

Proprietary MobileTag RFID Middleware

ALEInterface

DecisionPoint's Software Architecture

Tag AcquisitionProcessor (TAP)

RTLS(Active Tags)

CASE ToolsDrivers

Mobile Devices &Point RFID Readers

AeroScout Engine

TransactionProcessing

BusinessInterfaces

AS/400MainframeDatabase

SQLERPWMSEDI

BusinessReporting

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Direct Sales

18 salespeople

Located nationwide

Leads generated 

by:

• Website

• Direct Marketing

• Trade Shows

• Seminars

• Partner Leads

Sales Process & PartnersPartner Private Label/OEM

Pitney Bowes

• “Arrival” package 

tracking

•Tracks express 

packages from 

receipt to ultimate 

addressee within 

large corporations

• Sold to 100’s of 

Pitney Bowes 

Clients

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Q4 News & EventsDecember 30: Completed CMAC, Inc. Aquisition

December 23: Announced Acquisition of CMAC, Inc. with 2010 revenue of $10.4M

December 6: Announced Expansion of Board of Directors With Appointment of Robert 

M. Chaiken

November 11: Received A6 security clearance certification for US government contracts

November 3: Reported Record 3Q Revenue of $16.4M, up 43% Year‐Over‐Year

November 2: Launched MobileCare Up and Running and Keep it Running bundled 

support service offerings

October 20: Announced Reverse Merger Agreement with Copernic: Merged Company 

to apply for NASDAQ Capital Market Listing

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Competitive Analysis – U.S.

Full System Integration Capabilities

Comments:

Equipment/Brand Agnostic

RFID Expertise

Proprietary Software

“One-stop-shop”

DifferentiatingFactors

Niche player in upper Midwest

Nationwide Capabilities

Niche playerin Southeast

DOS to CE Solutions

Niche playerin East

WMS national company

Horizontal National Company

Broadest Set of Capabilities in North America

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Growth Strategy

• Extract greater share of spend from existing partners and customers

• Double revenue mix of software and professional services from ~35% to 60%+ by end of 2012

• Further penetrate existing verticals  

• Leverage partners’ reach to acquire new customers

• Introduce new products and services 

• Acquire complementary businesses 

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Seasoned Management TeamName / Title Age Selected Prior Experience

Nic TomsChairman, CEO and Director

61 Chairman, President and CEO of Peak TechnologiesCEO of Cape Systems Group, Inc.Skadden Arps Slate Meagher & Flom

Don RowleyCFO and Director

59 CFO of Peak TechnologiesCFO of Norand Corporation (now part of Intermec)

John ChisSVP Sales North America

54 20 years with Symbol Technologies and Telxon (acquired by Symbol) sales, marketing and operations management experience

Brent FelkerDirector of Field Mobility

49 Formerly Senior Sales VP of Peak Technologies Initiated Field Mobility Practice at Motorola/SymbolInitiated Field Mobility at Psion/Teklogix

Melinda WohlVP Finance and Controller

40 Controller for an international manufacturer/distributor of electronic components

Roy CeccatoVP Finance, Compliance

51 Former CFO and Director of Public OEM Commercial Trailer Manufacturer  and Sarbanes‐Oxley compliance experience 

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Financial Highlights

$9.7

$2.0 $2.5 $3.0

$10.1

18.9% 20.2% 18.4% 19.0%18.0%

0

4

8

12

16

20

FY2008 FY2009 1Q10 2Q10 3Q100%

10%

20%

30%

Gro ss P ro f it Gro ss M argin

Gross Profit(1)

(1) Cost of revenue includes fully-loaded technical staff

$53.3$48.3

$11.1 $13.3 $16.4

0

13

26

39

52

65

FY2008 FY2009 1Q10 2Q10 3Q10

Revenue$$ mm

$$ mm

Operating Income$$ mm

$0.48$0.9

$1.8

($0.39) $0.04

-1

0

1

2

3

FY2008 FY2009 1Q10 2Q10 3Q10

YTD 2010 = $40.8M

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Target Business Model

Key Takeaway

40%+30%Recurring Revenue

10%+1.3%Operating Income %

$10M+$0.6MOperating Income

24%-25%19.2%Gross Profit %

$100M+$48.6MRevenue

2012ProForma* YTD9/30/10

* ProForma for CMAC acquisition, completed Dec. 30, 2010

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Benefits of Reverse MergerAnnounced on October 20

Expected completion during 1Q’11

Merged company to be named DecisionPoint

Entire management team of DecisionPoint will become management team of merged 

company

Merged company will apply for NASDAQ Capital Market Listing

Deal strengthens balance sheet

$3.4Stockholders’ Equity

$25.0Current Liabilities$6.0Debt

$4.5Adjusted Working Capital

$30.0Total Assets $24.0Current Assets

$3.5Cash

PRO FORMA COMBINED BALANCE SHEET9/30/10 (000’s)

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BALANCE SHEETas of 9/30/10

Current Assets $16,345

Goodwill $4,861

Total Assets $21,456

Current Liabilities** $25,789

Total Liabilities $25,789

CAPITALIZATIONas of 9/30/10

Summary Balance Sheet & Capitalization

130130Bridge Note Warrants ($1.00)

1,000600Convertible Warrants ($0.60)

Shares (000)$ M

41,891$11,433

1,000500Convertible Warrants ($0.50)

488610Series B Warrants ($1.25)

488488Series A Warrants ($1.00)

1,950975Convertible Preferred

2,59467Vested Options

33,230$8,063Common Stock*

$ M

* Management owns 19.2% plus company ESOP owns 34.2%

** On 12/30/10, $2.0M subordinated debt paid off and replaced with 3 year $3.0M term loan.

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Investment Highlights

Growing imperative for companies to have a mobile solution 

Building revenue momentum – on path to exceed $100M annually

Increasing earnings growth being driven through operating leverage

Revenue mix shifting in favor of recurring and higher margin services and software 

Blue chip customer base

Pending reverse merger strengthens balance sheet

Proven management with strong domain expertise and sector experience

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Thank you