The next big winner in mobile computing and RFID: Decision Point Systems
August 21, 10:36 AM
Boston Investing Examiner
Heather White
In my interview yesterday with CEO of Decision Point Systems (OTC.BB: DNPI) Nicholas Toms, it is very clear to me in his modest albeit enthusiastic intensity, that he is a man of tremendous knowledge and passion about the current and future success of DNPI. He is without a doubt a visionary that will not only see Decision Point through the growth stages, but also lead DNPI to being a major power house riding the technological wave of mobile communications for enterprise, a burgeoning industry.
Toms touched upon a key factor for continued success and growth for DNPI by saying "We are very very focused on reoccurring revenue and have built a proprietary mobile systems support network and mobile care center for wireless network support management and device support management. We are also focused on our ability to provide applications support."
DNPI is doing this for some major companies and with some marquis partners. In fact, Motorola (NYSE: MOT) recently recognized DecisionPoint as one of the top 10 Wireless LAN Partners in North America.
Just having gone public in July of 2009, this is a company in its infancy as a public company and based on its ability for growth and strong management, should have massive attention by Wall Street in the very near term.
Just releasing their Q2 numbers yesterday , they are already proving that a even small cap company is this rocky economic climate can show solid fundamentals and a strong business strategy, that can and will, weather any economic storm.
Although the the beginning of the year was a bit rocky for all companies based on the effects of our damaged market place, DNPI was still able to pull out 12 million in revenues for Q2. More impressively were also able to pull out record operating profits of $520 thousand a 194% increase from their operating profits of $210 thousand last year.
Even their 6 month operating profit has grown 69% from $231 thousand last year to $398 thousand this year this year.
In addition their profit margins increase over 20.4% a rise of over 3% from 17.6% increase they saw the same time last year. Smart management is focusing on reducing costs and at the same time increasing revenues in the propriety software and services sector. These are the areas of their business which yields larger profit margins and now accounts for 32% of their overall revenue.
In any Wall Street success story it can't all be about the numbers. DNPI numbers albeit strong, on wall street there is always a need for a solid and intriguing story, and how that story fits into the rest of the investment space with in a particular industry.
The mobile commuting industry in and of itself has been thought to be the next big boom in the technology industry, similar to the dot com wave of the late 90's. Even Jim Cramer of Mad money recently said j that if the company that you are looking at is in the mobile commuting and internet space its probably a good bet.
With a tremendous amount of growth and attention in this sector and DNPI being at the right place at the right time, this company seems to be at the epicenter of it all and ready to take off big time.
The Decision Point story is not only not only sexy, but coupled with a successful leader like Toms, a stellar jam packed pipe line of top notch clientele , this story is indicative of the poise that is needed to make DNPI the next great winner.
Toms speaks with such integrity and excitement about the positive things that are going on with DNPI that you recognize that this man not only has passion for DNPI, but based on his past proven track record of performance and experience he is determined to propel this company to the next level.
So lets talk about this mans track record. In 1989 Toms was the CEO of PEAK. At the time a company with only $5 million in revenue that privately traded only at $0.23 a share. Having surrounded himself with experts in bar-code technologies and setting the company up in the forefront for such technology, Toms was able to grow PEAK in 9 short years to a very profitable $300 million in revenues.
PEAK was taken public in 1992 by William Blair for $8 per share, then there were a series of secondary offerings at the $12 level, when finally they were bought out at $18 per share. PEAK is an amazing success story and one that Toms is looking to reproduce ten fold with DNPI.
Having the natural ability to not only grow a company organically from the inside out, Toms also understands the fine art of surrounding himself with key players and experts in the technology fields that can bring his company to the next level and also utilize external growth via mergers and acquisitions to make sure that he is capturing the bulk of the market share, ensuring future success.
Toms talked to me at length about his clientele base which are all heavy hitters with deep pockets, that are giving DNPI long term contracts worth millions of dollars. This is incredibly important to realize that this little company is even capturing market share from huge its competitors like IBM Global Solutions who they have out bid on more that one occasion.
Being able to talk the talk and walk the walk has added to there top notch reputation and is allowing them to become an industry standard in RFID technology and mobile commuting
Toms believes this is due in part to a few key factors of the companies business strategy. DNPI focuses on delivering only the best technology, products and services to their clients, providing them a high level of client satisfaction and long term retention and reoccurring revenues that will allow them to continue to grow regardless of any economic climate.
Such customer care and making sure that at every turn their clients are taken care of is always the key to keeping these heavy hitting clients with those deep pockets around. DNPI's level of service and commitment to excellence has let to contracts with some of the biggest names in business.
Companies such as Celgene, Pfizer, Mobile MINI, Siemans, Smith and Wesson, Conair, Avis, Budget, Pitney Bowes, Wackenhut, Aramarc, US Airforce, Coca Cola, and Scientific Games turn to DNPI for their expertise..
Even on of their biggest competitors, IBM Global Services, has hired DNPI as their Tier 3 Help Desk for one of their trucking companies. You know a company is solid when their competition is hiring them to do a job for them.
This is only part one is a series of articles based on my interviews with Toms. Please stay tuned form the next round which will cover:
A company overview of heavy hitting clients and the value DNPI has brought to them
DNPI's both short and long term plans for financing and continued growth
Additional customer contracts in the works adding more revenue
Growth forecast for the rest of the year and moving into 201
Why DNPI is poised to be the next PEAK
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