DecisionPoint Systems Reports First Quarter 2011 Results

Q1 Revenue Up 16% Year-Over-Year to $12.8 Million

FOOTHILL RANCH, CA – May 24, 2011 – DecisionPoint Systems, Inc. (OTC.BB: DNPI), a leading enterprise mobility and RFID systems integrator, reported financial results for the first quarter ended March 31, 2011.

Revenue in the first quarter of 2011 increased 15.6% to $12.8 million from $11.1 million in the same period a year ago. The year-over-year increase was primarily attributable to the revenue contribution from the CMAC acquisition, which closed on December 30, 2010.

Gross profit in the first quarter of 2011 increased 14.1% to $2.3 million from $2.0 million in the same period of 2010. Gross profit margin was 18.2% compared to 18.4% in the same period a year ago. Loss from operations in the first quarter increased to $1.2 million or 9.1% of revenue from $0.4 million or 3.6% of revenue for the same period a year ago.

Selling, general and administrative expenses in the first quarter of 2011 increased year-over-year to $3.5 million from $2.4 million in the same period a year ago. The $1.1 million year-over-year increase was primarily related to the acquisition and operation of CMAC. Interest expense of $0.3 million in the first quarter of 2011 was significantly lower than the $0.5 million in the same period a year ago due to prepayment expense related to the early repayment of our subordinated debt.

Net loss for the first quarter was $1.8 million or $(0.06) per share compared to a net loss of $1.2 million or $(0.05) per share in the same period a year ago.

Management Commentary

“We performed according to our plan in the first quarter,” said Nicholas Toms, CEO of DecisionPoint Systems. “Growth in the first half of the year is historically seasonally slower than in the back half of the year. However, the imperative for mobile solutions continues to build robust pipeline and sales activity in our core business. The integration of our CMAC acquisition, which is on plan, is providing significant cross-selling opportunities, while its focus on professional services and software is expected to improve gross margin and drive our shift to a richer mix of software and service revenues. The team at CMAC will further provide us with additional resources to grow our current professional services revenue through its experienced staff of in-house consultants and database of contract professional services consultants.”

Donald Rowley, CFO of DecisionPoint Systems, commented, “We have switched CMAC from a cash basis accounting to an accrual basis consistent with DecisionPoint’s own accounting policies. As a result and as expected, this action will initially depress revenue and earnings in the early part of the year but will correct itself as the deferred revenue accrual starts dropping into recognized income in later periods.”

“Our recently introduced Grapevine Push-to-Talk product, a cloud-based SaaS product that keeps workforces connected no matter how widely dispersed, will further shift our mix toward recurring revenues, as that product’s high utility and competitive operating costs become more recognized in the marketplace. We continued to add well respected customers during the first quarter,” continued Mr. Toms.

‘We also recently received the required shareholder and regulatory approvals necessary to close our reverse merger with Comamtech, which is expected to take place by the end of this month. This merger, in addition to the just completed $4.0 million financing from a strategic private equity fund, will result in a stronger balance sheet for DecisionPoint, and both are the final building blocks that should be necessary for a successful Nasdaq Capital Market listing application. We’re excited that the vision we have had for DecisionPoint is coming into view and we are confident that the demand for our products and services will carry us to our goal of reaching $100 million in revenue and sustained profitability in fiscal 2012.”

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.

About DecisionPoint Systems, Inc.
DecisionPoint Systems, Inc. (OTC.BB:DNPI) delivers improved productivity and operational advantages to its clients by helping them move their business decision points closer to their customers. They do this by making enterprise software applications accessible to the front-line worker anytime, anywhere. DecisionPoint utilizes the latest wireless, mobility, and RFID technologies. For more information on DecisionPoint Systems visit

Company Contact:
Donald W. Rowley
Chief Financial Officer
DecisionPoint Systems, Inc.
Tel 949-465-0065 x105

Investor Relations Contacts:
Stephanie Prince/Jody Burfening
Lippert/Heilshorn & Associates
T: 212-838-3777