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CST: 21/08/2019 19:08:43   

WidePoint Reports Fourth Quarter and Full Year 2018 Financial Results

153 Days ago

Revenue up 24% in the Fourth Quarter; Sixth Consecutive Quarter of Positive Adjusted EBITDA

FAIRFAX, Va., March 21, 2019 (GLOBE NEWSWIRE) -- WidePoint Corporation (NYSE American: WYY), the leading provider of Trusted Mobility Management (TM2) specializing in Telecommunications Lifecycle Management, Identity Management and Bill Presentment & Analytics solutions, today reported results for the fourth quarter and full year ended December 31, 2018.

Fourth Quarter 2018 and Recent Operational Highlights:

  • Secured $1.6 million contract expansion with the U.S. Customs and Border Protection (CBP) agency, increasing the number of devices managed by 50% from 30,000 to 45,000
  • Teamed with Leidos on the NASA Nest contract to provide Managed Mobility Services in support of the agency’s mission
  • Added two new members to the Board of Directors, expanding the total number of directors to seven, including six independent directors and one inside director
  • Relocated company headquarters to Fairfax, VA as part of consolidation strategy

Fourth Quarter 2018 Financial Highlights ( results compared to the same year-ago period) :

  • Revenues increased 24% to $24.8 million
  • Gross profit increased 25% to $4.5 million
  • Net loss narrowed to $0.4 million
  • Adjusted EBITDA, a non-GAAP financial measure, increased to $1.0 million, marking the company’s sixth consecutive quarter of positive adjusted EBITDA

Twelve Month 2018 Financial Highlights (results compared to the same year-ago period):

  • Revenues increased 10% to a record $83.7 million
  • Gross profit increased 12% to $15.3 million
  • Net loss narrowed to $1.5 million
  • Adjusted EBITDA totaled $1.8 million

Fourth Quarter 2018 Financial Summary

       
(in millions, except per share amounts) December 31, 2018   December 31, 2017
   
  (Unaudited)
Revenues $ 24.8     $ 19.9  
Gross Profit $ 4.5     $ 3.6  
Gross Profit Margin   18 %     18 %
Operating Expenses $ 3.7     $ 4.3  
Loss from Operations $ 0.7     $ (0.7 )
Net Loss $ (0.4 )   $ (0.8 )
Basic and Diluted Earnings per Share (EPS) $ (0.00 )   $ (0.01 )
Adjusted EBITDA $ 1.0     $ 0.3  
       

Fiscal Year 2018 Financial Summary

       
(in millions, except per share amounts) December 31, 2018   December 31, 2017
   
  (Unaudited)
Revenues $ 83.7     $ 75.9  
Gross Profit $ 15.3     $ 13.7  
Gross Profit Margin   18 %     18 %
Operating Expenses $ 15.5     $ 17.2  
Loss from Operations $ (0.2 )   $ (3.5 )
Net Loss $ (1.5 )   $ (3.5 )
Basic and Diluted Earnings per Share (EPS) $ (0.02 )   $ (0.04 )
Adjusted EBITDA $ 1.8     $ (0.9 )
               

The following statements are forward-looking, and actual results could differ materially depending on market conditions and the factors set forth under the “Safe Harbor Statement” below.

Financial Outlook
For the fiscal year ending December 31, 2019, the company anticipates revenues in the range of $90.0 million to $93.0 million, and adjusted EBITDA of $1.9 million to $2.0 million. The company’s financial outlook statements are based on current expectations.

Management Commentary
“The fourth quarter was a strong finish to what was a pivotal year for WidePoint as we delivered strong financial performance, expanded key customer relationships, as well as secured and implemented several contracts with new customers,” said WidePoint’s CEO, Jin Kang. “All of these initiatives enabled us to achieve our primary goals in 2018 of not only stabilizing the business but beginning the process of driving strong, sustainable, and profitable growth.

“Our financial performance in the fourth quarter was highlighted by a 24% increase in revenues, a 25% increase in gross profit, and positive adjusted EBITDA of $1.0 million; marking our sixth consecutive quarter of positive adjusted EBITDA. From a business development standpoint, we continue to execute on our strategy of maintaining solid relationships with our systems integrator partners and customers to upsell and pursue new business. This is evidenced by our recent contracts with Leidos and CBP. Over the course of the past year, we made significant progress in bolstering our credentials and improving our compliance with various government organizations to increase our competitive advantage.

“Due to the success we’ve had stabilizing the business and the momentum we’ve generated, we’re excited and optimistic about 2019. We look forward to continuing with our strategy to profitably grow the business and return greater value to our shareholders.”

Conference Call
WidePoint management will hold a conference call today (March 21, 2019) at 4:30 p.m. Eastern time (1:30 p.m. local time) to discuss these results.

WidePoint President and CEO Jin Kang, Chief Sales and Marketing Officer Jason Holloway, and CFO Kito Mussa will host the conference call, followed by a question and answer period.

U.S. dial-in number: 877-407-9210
International number: 201-689-8049

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios at 949-574-3860.    

The conference call will be broadcast live and available for replay here and via the investor relations section of the company’s website.

A replay of the conference call will be available after 7:30 p.m. Eastern time on the same day through April 21, 2019.

Toll-free replay number: 877-481-4010
International replay number: 919-882-2331
Replay ID: 45084

About WidePoint

WidePoint Corporation (NYSE American: WYY) is a leading provider of trusted mobility management (TM2) solutions, including telecom management, mobile management, identity management, and bill presentment and analytics. For more information, visit widepoint.com.

Non-GAAP Financial Measures
WidePoint uses a variety of operational and financial metrics, including non-GAAP financial measures such as Adjusted EBITDA, to enable it to analyze its performance and financial condition. The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. A reconciliation of GAAP Net loss to Adjusted EBITDA is included on the schedules attached hereto.

                     
        THREE MONTHS ENDED   FISCAL YEAR ENDED
        DECEMBER 31,   DECEMBER 31,
          2018       2017       2018       2017  
         
        (Unaudited)
NET LOSS $     (412,100 )   $   (764,900 )   $     (1,456,500 )   $   (3,533,900 )
Adjustments to reconcile net loss to EBITDA:              
  Depreciation and amortization     192,800         385,200         1,307,700         1,493,200  
  Income tax provision (benefit)     1,147,600         5,300         1,193,300         38,000  
  Interest income     (500 )       (3,800 )       (6,800 )       (15,400 )
  Interest expense     8,000         15,800         79,500         52,200  
                     
EBITDA   $     935,800     $   (362,400 )   $     1,117,200     $   (1,965,900 )
Other adjustments to reconcile net loss to Adjusted EBITDA:              
  Other (expense) income     -         (2,000 )       -         (3,800 )
  Provision for doubtful accounts     10,900         31,300         4,800         62,500  
  Gain on sale of assets held for sale     -         -         -         (66,700 )
  Loss on disposal of leasehold improvements     -         -         -         172,800  
  Severance and exit costs     -         353,100         -         540,600  
  Stock-based compensation expense     90,300         249,200         683,400         387,200  
                     
Adjusted EBITDA $     1,037,000     $   269,200     $     1,805,400     $   (873,300 )
                     

Safe Harbor Statement
The information contained in any materials that may be accessed above was, to the best of WidePoint Corporations’ knowledge, timely and accurate as of the date and/or dates indicated in such materials. However, the passage of time can render information stale, and you should not rely on the continued accuracy of any such materials. WidePoint Corporation has no responsibility to update any information contained in any such materials. In addition, you should refer to periodic reports filed by WidePoint Corporation with the Securities and Exchange Commission for information regarding the risks and uncertainties to which forward-looking statements made in such materials are subject. Such risks and uncertainties may cause WidePoint Corporation’s actual results to differ materially from those described in the forward-looking statements.

Investor Relations:

Liolios
Matt Glover or Charlie Schumacher
949-574-3860
WYY@liolios.com


WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

         
  DECEMBER 31,  
    2018       2017    
     
  (Unaudited)  
ASSETS  
CURRENT ASSETS        
Cash and cash equivalents $     2,431,892     $ 5,272,457    
Accounts receivable, net of allowance for doubtful accounts        
of $106,733 and $107,618 in 2018 and 2017, respectively     11,089,315       8,131,025    
Unbilled accounts receivable     9,566,170       8,131,448    
Other current assets     1,086,686       767,944    
         
Total current assets     24,174,063       22,302,874    
         
NONCURRENT ASSETS        
Property and equipment, net     1,012,684       1,318,420    
Intangibles, net     3,103,753       3,671,506    
Goodwill     18,555,578       18,555,578    
Other long-term assets     209,099       44,553    
         
Total assets $     47,055,177     $ 45,892,931    
         
LIABILITIES AND STOCKHOLDERS' EQUITY  
         
CURRENT LIABILITIES        
Accounts payable $     7,363,621     $ 7,266,212    
Accrued expenses     10,716,438       9,796,350    
Deferred revenue     2,072,344       2,348,578    
Current portion of capital leases     107,325       101,591    
Current portion of other term obligations     192,263       203,271    
         
Total current liabilities     20,451,991       19,716,002    
         
NONCURRENT LIABILITIES        
Capital leases, net of current portion     122,040       232,109    
Other term obligations, net of current portion     73,952       78,336    
Deferred revenue     466,714       264,189    
Deferred tax liability     1,523,510       392,229    
         
Total liabilities     22,638,207       20,682,865    
         
STOCKHOLDERS' EQUITY        
Preferred stock, $0.001 par value; 10,000,000 shares        
authorized; 2,045,714 shares issued and none outstanding   -       -    
Common stock, $0.001 par value; 110,000,000 shares        
authorized; 84,112,446 and 83,031,595 shares        
issued and oustanding, respectively     84,113       83,032    
Additional paid-in capital     94,926,560       94,200,237    
Accumulated other comprehensive loss     (186,485 )     (122,461 )  
Accumulated deficit     (70,407,218 )     (68,950,742 )  
         
Total stockholders’ equity     24,416,970       25,210,066    
         
Total liabilities and stockholders’ equity $     47,055,177     $ 45,892,931    
         


WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                       
        THREE MONTHS ENDED   YEARS ENDED  
        DECEMBER 31,   DECEMBER 31,  
          2018       2017       2018       2017    
           
        (Unaudited)  
REVENUES $     24,760,579     $   19,927,629     $     83,678,896     $   75,884,246    
COST OF REVENUES (including amortization and depreciation                
  of $892,314, and $1,154,901, respectively)     20,275,135         16,334,655         68,409,219         62,194,187    
                       
GROSS PROFIT     4,485,444         3,592,974         15,269,677         13,690,059    
                       
OPERATING EXPENSES                
  Sales and marketing     376,704         493,021         1,743,693         2,202,913    
  General and administrative expenses (including share-based                
    compensation of $683,404, and $387,210, respectively)     3,263,148         3,724,292         13,301,052         14,392,660    
  Product development     -         -         -         219,141    
  Depreciation and amortization     102,574         125,440         415,337         338,314    
                       
      Total operating expenses     3,742,426         4,342,753         15,460,082         17,153,028    
                       
LOSS FROM OPERATIONS     743,018         (749,779 )       (190,405 )       (3,462,969 )  
                       
OTHER (EXPENSE) INCOME                
  Interest income     458         3,788         6,797         15,352    
  Interest expense     (8,009 )       (15,756 )       (79,540 )       (52,158 )  
  Other income     (5 )       2,047         (2 )       3,805    
                       
      Total other expense     (7,556 )       (9,921 )       (72,745 )       (33,001 )  
                       
LOSS BEFORE INCOME TAX PROVISION     735,462         (759,700 )       (263,150 )       (3,495,970 )  
INCOME TAX PROVISION     1,147,583         5,244         1,193,326         37,967    
                       
NET LOSS $     (412,121 )   $   (764,944 )   $     (1,456,476 )   $   (3,533,937 )  
                       
BASIC LOSS PER SHARE $     (0.00 )   $   (0.01 )   $     (0.02 )   $   (0.04 )  
                       
BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING     83,788,535         83,011,331         83,274,171         82,911,730    
                       
DILUTED LOSS PER SHARE $     (0.00 )   $   (0.01 )   $     (0.02 )   $   (0.04 )  
                       
DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING     83,788,535         83,011,331         83,274,171         82,911,730    
                       

 

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