Welcome to DecisionPoint Systems, Inc. First Quarter 2023 earnings call and webcast. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Brian Siegel with Hayden IR. Thank you. You may begin. Hello, welcome to the DecisionPoint Systems earnings call. Joining me today are Steve Smith, Chief Executive Officer, and Melinda Wohl, Vice President of Finance. For those of you that have not seen today's release, it is available on the investor section of our website at www.decisionpt.com. Before beginning, I would like to remind everyone that, except for historical information, the matters discussed in this presentation are forward-looking statements that involve several risks and uncertainties. Words like believe, expect, and anticipate mean that these are our best estimates as of this writing, but that there can be no assurances that expected or anticipated results or events will actually take place, so our actual future results could differ significantly from those statements. During this call, we will discuss Non-GAAP measures, including Non-GAAP net income, Non-GAAP EPS and adjusted EBITDA. These Non-GAAP financial measures adjust our GAAP net income and EPS for stock-based composition, compensation, any gains on extinguishing of debt, M&A and other financial transaction costs and other non-recurring, non-operating income and expense items. Further information on the company's risk factors is contained in the company's quarterly and annual reports filed with the SEC. With that, I'll now turn it over to Steve. Take it away, Steve. Thank you, Brian. Good morning, everyone, thank you for joining us today. I'm excited to say our business remains strong as we reported first quarter revenues today. Before I discuss these results, I'm gonna start the call by discussing who is DecisionPoint Systems, our market opportunity, and our growth strategy to capture and expand this opportunity. I'll briefly review our first quarter and then turn it over to Melinda to discuss our financial results. DecisionPoint is a mobility-first enterprise services and solutions company. What does that mean? It means that we aim to be at the center of several emerging secular trends, including enterprise mobility, which encompasses work from home and field mobility, cloud and managed services, SaaS, 5G and IoT. These markets represent hundreds of billions of TAM. We've identified a subset of industries within these markets where we either already have, can acquire, or develop expertise and therefore the ability to become significant players. Currently, these industries are retail, logistics, hospitality, and healthcare, where we have established customers, industry-specific solutions, the right technology partners, and several under or under-penetrated segments for us to go after. Our value proposition to customers is clear. Simply, we enable our customers to be their best at moments that matter. We do this by enabling frontline employees, those task workers who work at the edge of the network to make better, faster, more accurate business decisions inside and outside the four walls and create operational efficiency, effectiveness to drive better customer experiences and business outcomes at their moments that matter, or we like to say the decision points. The business has historically grown at a run rate in the mid-single digits. With M&A and project orders being incremental to those numbers, the latter of which can also introduce some lumpiness at times. We also have an excellent annuity type business replenishing consumables for these devices. Think of the razor and the razor blade model here. That said, over the past three to five years, we've transformed the company to both organically and inorganically increase these growth rates and margins significantly by aggressively moving upmarket to increase various high margin services, especially ones that generate recurring revenue. For example, we offer professional services including consulting, staging, deployment, installation, repair, and customer-specified software customization and hardware and software maintenance support. The gross margins for these services tend to be significantly higher than when we resell technology hardware, and part of our strategy is to increase the services mix within our portfolio to drive higher gross margin and more recurring revenue. We also offer managed services where companies outsource certain IT functions and are opportunistically building our high margin recurring revenue SaaS solutions portfolio, which today includes both packaged and custom-developed software solutions such as MobileConductor and Route Manager for the direct store delivery or the DSD industry. ViziTrace, which helps manage an RFID implementation. As we mentioned in the press release, we've made some investments in developing products in these areas and adding sales and biz dev headcounts to go after these higher margin opportunities and drive growth over the mid to long- term. We said last quarter that we expected this to add about $1 million in incremental operating expense in 2023 versus 2022. Looking at managed services, we offer a comprehensive product portfolio designed to simplify the complexity of designing, deploying, and managing a mobile solution. These managed services include provisioning, monitoring, and helpdesk to improve on the visibility and status of our customer's device landscape. Our company has spent this past year developing our new portal for managed services, Vision. The comprehensive landscape of our services is broad and diverse, depending on the customer and industry needs of each client. Vision offers our customers a customizable solution for monitoring actions on everything in their IT infrastructure. DecisionPoint can now manage the entire life cycle of mobility and IT infrastructure all in one view. Vision provides real-time visibility to manage the health, location, and status of your mission-critical IT assets, no matter where they are located in the enterprise. Vision also enables customers to monitor the progress of rollouts. This enables our customers to minimize downtime and simplify the management of a large distributed enterprise. Moving to our four pillars of growth strategy. The first pillar is to increase share in our current verticals, specifically grocery, hospitality, and specialty retail, supply chain, healthcare, warehousing, distribution, and transportation. The second pillar is to leverage our experience in these verticals into adjacencies. Examples would include, in retail, grocery, quick serve restaurants, and convenience stores, along with big box retail, hospitality, and supply chain logistics. The third pillar is to drive growth and margin expansion by increasing service and software attach rates. These include professional services, managed services, ISV and SaaS services, software from partners, and repair and maintenance services. The fourth pillar is geographic expansion, where we can pick up new customers, expand field sales, and increase our coverage. Our M&A strategy supports these four pillars and complements our organic growth. Note, we aren't going to just make acquisitions to achieve more scale. We have specific requirements of the companies we target. These include a track record of positive revenue growth and EBITDA, integration-ready solutions and operations, and cultural compatibility. By focusing on these areas, we have developed a successful integration strategy that allows us to move quickly to reduce SG&A costs, streamline operations, and drive revenue synergies by expanding their offerings nationwide throughout our system. We will generally look to add one to two acquisitions per year at $2 million+ in EBITDA. If you look at our four pillars growth strategy plus M&A, you will see that our acquisition of Macro Integration Services, or MIS, at the beginning of Q2 hits every one of these on the head. MIS has a service mix of about 70%, therefore significantly higher gross margin than DecisionPoint. They will strengthen our presence in the broader retail vertical while expanding our capabilities in grocery, food service, and hospitality parts of retail. They also brought us a presence in the Southeast and the Mid-Atlantic area with a 100,000 sq ft warehouse staging and integration center, a complete go-to-market team, including sales, technical, and project management personnel, as well as adding additional solutions and capabilities and access to new customers. We expect that in Q2 through Q4 of this year, they will add at least $12 million in revenue and at least $1.2 million in incremental EBITDA. Moving to our results. Our first quarter continued the streak of record quarters, with revenue growth 37% to $27 million. The strength was broad-based across run rate, follow-on orders and services, the latter of which grew by 18%. A large retail customer equipment order skewed gross margin, while the 18% growth in services validates our strategy of growing our software and services revenue over time to generate higher gross and operating margins. Adjusted EBITDA increased 98% to $2.2 million in the quarter. We left 2022 with a strong backlog of over $30 million, which as I mentioned on prior calls, is due to customers placing orders with longer lead times to ensure access to supply. We have a strong relationship with our vendors, as such, we tend to not only have taken on some inventory to ensure delivery, but we are well-positioned with them should we get additional orders beyond those in our backlog and run rate business. For the second quarter, including MIS, we are expecting to report revenues in the range of $29 million-$31 million, with adjusted EBITDA between $1.5 million and $1.8 million. In closing, we delivered a great quarter with strong revenue and adjusted EBITDA growth. I want to thank every dedicated employee within this company for their continued hard work, enabling us to deliver on these results. I look forward to speaking with you again on our second quarter call in August. I will turn it over to Melinda to review our financials. Thank you, Steve. Details of our first quarter operating performance compared to 2022's first quarter were as follows. We saw continued strong demand in Q1 with total revenue up 38% to $27 million. During the quarter, we worked through a portion of our $30 million backlogs from last quarter and rebuilt it to $26 million, which is still about four times our historical norms. Backlog remains higher than normal due to the global supply chain issues that are impacting many companies. As a result, our clients are putting orders with longer lead times. As Steve has mentioned, we have fortunately been able to leverage our strong partnerships with OEMs such as Zebra and our distributors to gain access to products to ship and build up inventory. Moving to gross profit, we saw a 29.4% increase from the prior year, which was a result of higher sales volume. Gross margin was impacted by a higher mix of equipment sales due to the ongoing fulfillment of a retail customer order. GAAP operating expenses were 18% of revenue versus 22.5% last year. The absolute increase was a result of additions to sales and biz dev personnel, acquisition costs, and also a full quarter of depreciation and amortization. We expect to continue to realize the benefit of cost synergies and improve our operating leverage over time as we see sales return on these investments. GAAP net income and diluted EPS were approximately $0.9 million and $0.11. Weighted average shares outstanding increased by 125,000 from last year. Our Non-GAAP net income and diluted EPS were $1.3 million and $0.16, up about 1% each compared to last year. The Non-GAAP net income and EPS numbers excluded the following: Stock-based compensation of $196,000 this year versus $225,000 last year. M&A-related expenses of $221,000 versus $177,000 last year. Adjusted EBITDA was $2.2 million, up 90% compared to $1.1 million last year. Turning to our balance sheet, we ended the quarter with cash and cash equivalents totaling $18 million versus $7.6 million at December 31, 2022. Deferred revenue increased by 62% to $16.7 million, of which approximately $12.2 million is expected to be recognized over the next 12 months. Total debt at the end of the quarter was about $12.1 million. The higher cash and debt was to fund the MIS acquisition on the last day of the quarter. As Steve mentioned, the deal closed on the first day of Q2. Our plans are to pay this debt down as swiftly as possible. Net cash used in operating activities was $1.5 million versus cash provided by operating activities of $11.7 million. The swing was a result of a decrease in deferred revenue collections and an increase in accounts receivable. With that operator, we can move to questions. Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. We will pause one moment to pull for questions. Our first question is from Howard Halpern with Taglich Brothers. Please proceed. Congratulations on the quarter, guys. In, in terms of the MIS acquisition, what type of activity are you seeing in the first, you know, month and change of that acquisition in terms of cross-selling or new customers? If you could just give a little insight into that. Well, the first thing we're seeing, Howard, is them living up to the due diligence that we did on them. We knew this would be a perfectly centered on target hit to our acquisition strategy. They play in retail, they play in food and retail, and they play in grocery, convenience store, and quick serve restaurants to be specific. Those are new verticals for us. In the retail vertical, they all represent food, and that is the place you want to be. In addition to where we already are. First thing that we saw was living up to the acquisition as our due diligence proved out. We really like what we see thus far. I visited with about a half a dozen, maybe 10 customers in all. We were aligned very closely with senior management there. We like everything we're seeing and hearing with the acquisition and are very comfortable with what they'll do for us as an overall entity going forward. As you know, they're heavy into services. We referenced 70% services historically. They have lived up to that and notched above it in Q1. Okay. In terms of the services overall, is that gonna help drive your service gross margin toward, you know, to maintain that upper 30% area, closing in on 40% over time? That's the goal, that's the target. With every acquisition and with every organic investment we make, we're driving to those results. We're gonna continue to remain that, be at the center of our focus. We believe future state, this company can be a 30% to 40% services company and maybe more. We also think that it'll increase our gross profit and our gross margin over time. That's the strategy. We're executing on the strategy. Okay. In terms of the warehouse that you mentioned, are there any incremental investments that you're gonna make within that warehouse? Overall, how is that warehouse gonna help you know, leverage operations, going forward? Yeah. I'm happy to center on that, Howard, because we're real excited about this presence that we've added. Recall the facility we had in Laguna Hills, California, is 20,000 sq ft with an option to go to 30,000 sq ft. Here we take a major step forward, a giant step forward with regard to our facility by centering ourselves in the southeast here in Greensboro, North Carolina. It's 100,000 sq ft, and it's not just warehouse. It's warehouse, staging, and an integration center. The staging and integration center are very key adjectives here in that we could bring in point-of-sale equipment from all the point-of-sale providers, HP being the primary. We could also integrate our customer solutions on premise in Greensboro before we even deliver it to the grocery store, the convenience store, or the quick serve restaurants. It's the warehouse space, yes, but the real thing that has as excited on top of that is the integration and staging capabilities. I don't need to tell you that real estate in North Carolina is a little less expensive than that in California. Yeah. Okay. In terms of also the vertical that you're in and the new vertical, you know, overall in food, is there any kind of hesitation on customers' parts with, I guess, economic uncertainty? Or are you in verticals that are sort of need what you offer and, you know, and therefore not as hesitant as maybe some other types of industries? You know, I love this industry. I've been part of it for 28 years, Howard, as you know. The thing I always loved about it is it thrived in the bad times, and it thrived in the good times. Why? Because we're selling tools. We're selling solutions to the task worker that enable them to be their best at moments that matter. What customer that we serve doesn't wanna be their best at moments that matter? Whether you're delivering a package, delivering food to a restaurant, serving customers at a retail establishment, returning cars at Avis, or administering medications to patients in hospitals, those moments that matter will always matter, even in the bad times. As such, we're delivering tools that enable our customers to be their best at moments that matter. That's what I mean behind it. This industry has thrived in the good and the bad times. Now, having said that, I'm not an economist. I can't tell you what macro trends are gonna do to this world. We certainly face them here today. You know, if you look at historical track record here at Decision Point, we've delivered 23% CAGR growth over the last six years. We have been able to outmaneuver and outpace the macro trends, and we like our chances going forward. Okay. One last one. Most of your larger customers now, have they migrated to your Vision Portal? How happy are they with it? They love it, and the existing customers have. We have approximately 30 customers in a production way on the portal. We moved everybody over. As of the end of April, that effort was complete after developing the portal, as you know, in 2022 and 2023. We're still gonna continue to invest in the portal. We think there's incremental functionality that we can add, and we also think there's incremental functionality that our customers will want and pay for. Okay. It's an anchor tenant. It's kind of like we just broke from the starting gate here, and there's lots of upside going forward. A portal and giving visibility to assets and activities is table stakes if you're in the services business. Okay. You have now the opportunity to migrate, MIS customers over to that portal as time goes on. Of course. Yeah. Thanks for filling in those blanks. We'll take that asset to our newly acquired company, and we'll start to sell the customers on the benefits of it, and we'll migrate them as appropriate. Okay. Well, guys, keep up the great work. Thanks, Howard. Our next question is from Michael Taglich, member of DecisionPoint Systems Board of Directors. Please proceed. Hello, Steve. Great quarter again, and it's unusual for me to ask a question on a conference call. Regarding the guidance we gave in Q2 for Q2, is there a reason expected, margins are gonna be materially different or expenses are gonna be materially different for Q1? Melinda, any comment on the expense side of it? The expenses we're gonna incorporate with our new sales and biz dev related people. That should still keep the margins within play with our new guidance of the 29%-31%, Mike. Okay. Our gross margin should feel similar roughly, 'cause the quarter's not over yet, in Q2 versus Q1, and we're gonna have some additional SG&A. What order of magnitude do you expect from an SG&A standpoint in Q2 versus Q1? How much do you think we'll spend, Melinda? It's gonna be higher than Q1 just because we're incorporating the new acquisition, and we need to kinda figure that out a little bit more as we go over the quarter. Correct me if I'm wrong. The guidance you gave is exclusive of Macro's economics. That's correct. Macro, which we've told The Street it's gonna be accretive, right? is the additional expenses would be in Macro, as well as the additional cash flow on top of it. Yes. Correct? Yes. Okay. T hen the- Mike, I'll just add to that with a comment 'cause I think I know where you're going here. We've guided slightly down on the EBITDA line. Is that where this stream of questions are going? At the end of the day, yes. Okay. All right. As you know, as a board member, we've acquired five companies already, and you always end up spending a bit more money on the integration of these companies. You hire some consultants to bring over data and databases. There's always a little expense that are sort of unaccounted for and around the corner and surprises. you know, we have accounted for all of that with the guidance that we provided both on EBITDA and revenue. Good. Okay. That's a great answer. It's a plug number is the difference in EBITDA, based on your experience in integrating companies that you would expense and not capitalize but one time in nature-ish. Yes. You know, you've sat in enough board meetings, you know. Yeah. That's the plan. I got it. Yep. Okay. That's the plan. No guarantees. These are guesses about the future. Okay. Yes. I'm very proud of the job you've done. You should be too. Great teamwork for the whole company. Thank you. I'm done. There are no more questions at this time. This will conclude today's conference. You may disconnect your lines at this time. Thank you again for your participation.