DecisionPoint Investor Presentation-January 2011
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Transcript of DecisionPoint Investor Presentation-January 2011
Investor PresentationJanuary 2011
OTCBB:DNPI 2
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
Thank you