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CST: 21/10/2019 00:17:53   

WidePoint Reports Second Quarter 2019 Financial Results

67 Days ago

26% Increase in Revenues and 14% Increase in Gross Profit Drives Eighth Consecutive Quarter of Positive Adjusted EBITDA

FAIRFAX, Va., Aug. 14, 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 second quarter ended June 30, 2019.

Second Quarter 2019 and Recent Operational Highlights:

  • Awarded $5.3 million in federal government contract renewals and modifications

  • Soft-ex, a WidePoint subsidiary, awarded $6.0 million contract renewal with a global communications service provider to deliver both cloud and onsite telecom solutions to government and multinational corporations

  • Secured more than $1.3 million in Trusted Mobility Management (TM2) contracts, the majority of which are high-margin, commercial contracts

  • Received Authority to Operate (ATO) from a major customer to implement WidePoint’s Intelligent Telecommunications Management System (ITMS™), which represents the second significant step toward achieving a FedRAMP certification

Second Quarter 2019 Financial Highlights ( results compared to the same year-ago period) :

  • Revenues increased 26% to $22.1 million

  • Gross profit increased 14% to $4.1 million

  • Net loss totaled $(308,000)

  • Adjusted EBITDA, a non-GAAP financial measure, increased to $0.6 million, marking the company’s eighth consecutive quarter of positive adjusted EBITDA, and in line with forecast

Six Month 2019 Financial Highlights (results compared to the same year-ago period):

  • Revenues increased 17% to $44.0 million

  • Gross profit increased 17% to $8.3 million

  • Net income totaled $76,000

  • Adjusted EBITDA totaled $1.6 million

Second Quarter 2019 Financial Summary

           
(in millions, except per share amounts) June 30, 2019     June 30, 2018  
  (Unaudited)  
Revenues $   22.1     $   17.5  
Gross Profit $   4.1     $   3.5  
Gross Profit Margin 18 %   20 %
Operating Expenses $   4.2     $   4.0  
Income (Loss) from Operations $   (0.2 )   $   (0.4 )
Net Income (Loss) $   (0.3 )   $   (0.5 )
Basic and Diluted Earnings per Share (EPS) $   0.00     $   (0.01 )
Adjusted EBITDA $   0.6     $   0.1  

Six Month 2019 Financial Summary

           
(in millions, except per share amounts) June 30, 2019     June 30, 2018  
  (Unaudited)  
Revenues $   44.0     $   37.6  
Gross Profit $   8.3     $   7.1  
Gross Profit Margin 19 %   19 %
Operating Expenses $   8.0     $   8.0  
Income (Loss) from Operations $   0.3     $   (0.9 )
Net Income (Loss) $   0.1     $   (0.9 )
Basic and Diluted Earnings per Share (EPS) $   0.00     $   (0.01 )
Adjusted EBITDA $   1.6     $   0.2  

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 is reiterating its revenue guidance of $90.0 million to $93.0 million, representing growth of 8% to 12%. The company is also reiterating its adjusted EBITDA guidance of $2.75 million to $3.5 million, which represents an improvement compared to fiscal 2018. The increase in adjusted EBITDA reflects the company’s strategic investments in sales and marketing and product development to accelerate growth, as well as a $400,000 increase due to new Financial Accounting Standards Board (FASB) guidance regarding the treatment of capital lease. The company’s financial outlook is based on current expectations.

Management Commentary
“The second quarter was a continuation of the strong performance we established at the start of the year as we delivered another solid period of financial results, expanded several contracts with current customers, and continued to improve upon our already industry-leading credentials,” said WidePoint’s CEO, Jin Kang. “From a financial perspective, the quarter was highlighted by a 26% increase in revenues, a 14% increase in gross profit, and our eighth consecutive quarter of positive adjusted EBITDA.

“Operationally, we successfully re-secured and expanded several contracts with current customers in both the government and commercial sectors. These contract expansions and the positive effects they have on our financial results show that our cross-selling and upselling strategies continue to be an effective means of increasing our topline as we simultaneously remain conscientious of their effects on our bottom-line. Additionally, we received an ATO from a major customer to implement ITMS™, which is a major step toward ultimately receiving a FedRAMP certification.

“Overall, we remain confident that we will be able to continue to execute on our primary strategic initiatives throughout the course of the year to accelerate growth, improve margins, and drive higher profitability in the long-run.”

Conference Call
WidePoint management will hold a conference call today (August 14, 2019) at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss these results.

WidePoint President and CEO Jin Kang, Chief Sales and Marketing Officer Jason Holloway, and President and CEO of Soft-ex Communications and WidePoint Interim CFO Ian Sparling will host the conference call, followed by a question and answer period.

U.S. dial-in number: 844-369-8770
International number: 862-298-0840

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 Gateway Investor Relations 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 August 21, 2019.

Toll-free replay number: 877-481-4010
International replay number: 919-882-2331
Replay ID: 51160

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     SIX MONTHS ENDED  
        JUNE 30,     JUNE 30,  
        2019     2018     2019     2018  
        (Unaudited)     (Unaudited)  
NET (LOSS) INCOME $   (307,800 )   $   (472,200 )   $   76,300     $   (934,400 )
Adjustments to reconcile net (loss) income to EBITDA:                      
  Depreciation and amortization   477,100     368,600       949,800     762,000  
  Amortization of deferred financing costs   1,200     7,000       2,500     14,800  
  Income tax provision (benefit)   66,500     14,700       94,500     20,900  
  Interest income   (200 )   (2,100 )     (4,700 )   (5,400 )
  Interest expense   74,200     23,900       152,900     49,900  
                             
EBITDA   $   311,000     $   (60,100 )   $   1,271,300     $   (92,200 )
Other adjustments to reconcile net (loss) income to Adjusted EBITDA:                      
  Provision for doubtful accounts   3,600     -       11,200     (5,800 )
  Stock-based compensation expense   284,100     195,900       320,300     320,300  
                             
Adjusted EBITDA $   598,700     $   135,800     $   1,602,800     $   222,300  
                             

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:
Gateway Investor Relations
Matt Glover or Charlie Schumacher
949-574-3860
WYY@gatewayir.com



WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

  JUNE 30,     DECEMBER 31,  
  2019     2018  
           
ASSETS    
CURRENT ASSETS          
Cash and cash equivalents $   5,422,065     $   2,431,892  
Accounts receivable, net of allowance for doubtful accounts           
of $117,120 and $106,733 in 2019 and 2018, respectively   7,868,097     11,089,315  
Unbilled accounts receivable   11,259,905     9,566,170  
Other current assets   1,254,269     1,086,686  
           
Total current assets   25,804,336     24,174,063  
           
NONCURRENT ASSETS          
Property and equipment, net   658,074     1,012,684  
Operating lease right of use asset, net   5,827,822     -  
Intangibles, net   2,826,141     3,103,753  
Goodwill   18,555,578     18,555,578  
Other long-term assets   142,952     209,099  
           
Total assets $   53,814,903     $   47,055,177  
           
LIABILITIES AND STOCKHOLDERS' EQUITY    
           
CURRENT LIABILITIES          
Accounts payable $   6,575,453     $   7,363,621  
Accrued expenses   12,369,314     10,716,438  
Deferred revenue   2,065,446     2,072,344  
Current portion of operating lease liabilities   420,932     107,325  
Current portion of other term obligations   36,049     192,263  
           
Total current liabilities   21,467,194     20,451,991  
           
NONCURRENT LIABILITIES          
Operating lease liabilities, net of current portion   5,534,028     122,040  
Other term obligations, net of current portion   -     73,952  
Deferred revenue   381,261     466,714  
Deferred tax liability   1,581,020     1,523,510  
           
Total liabilities   28,963,503     22,638,207  
           
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; 84,775,186 and 84,112,446 shares          
issued and outsanding, respectively   84,776     84,113  
Additional paid-in capital   95,299,274     94,926,560  
Accumulated other comprehensive loss   (201,772 )   (186,485 )
Accumulated deficit   (70,330,878 )   (70,407,218 )
           
Total stockholders’ equity   24,851,400     24,416,970  
           
Total liabilities and stockholders’ equity $   53,814,903     $   47,055,177  



WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

  THREE MONTHS ENDED     SIX MONTHS ENDED  
  JUNE 30,     JUNE 30,  
    2019       2018       2019       2018  
  (Unaudited)
REVENUES $   22,093,153     $   17,544,338     $   44,010,055     $   37,623,957  
COST OF REVENUES (including amortization and depreciation of                      
  $232,968, $258,201, $465,159, and $554,165, respectively)   18,036,409     13,997,185       35,699,468     30,524,797  
                             
GROSS PROFIT   4,056,744     3,547,153       8,310,587     7,099,160  
                             
OPERATING EXPENSES                      
  Sales and marketing   415,462     444,945       808,873     979,582  
  General and administrative expenses (including share-based                      
    compensation of $284,111, $195,934, $373,377 and $320,338, respectively)   3,563,405     3,427,301       6,698,114     6,780,642  
  Depreciation and amortization   244,064     110,463       484,612     207,849  
                             
      Total operating expenses   4,222,931     3,982,709       7,991,599     7,968,073  
                             
(LOSS) INCOME FROM OPERATIONS   (166,187 )   (435,556 )     318,988     (868,913 )
                             
OTHER (EXPENSE) INCOME                      
  Interest income   259     2,077       4,721     5,403  
  Interest expense   (75,372 )   (23,937 )     (152,917 )   (49,887 )
  Other income   (9 )   3       -     1  
                             
      Total other expense   (75,122 )   (21,857 )     (148,196 )   (44,483 )
                             
(LOSS) INCOME BEFORE INCOME TAX PROVISION   (241,309 )   (457,413 )     170,792     (913,396 )
INCOME TAX PROVISION   66,452     14,758       94,452     20,948  
                             
NET (LOSS) INCOME $   (307,761 )   $   (472,171 )   $   76,340     $   (934,344 )
                             
BASIC EARNINGS (LOSS) PER SHARE $   (0.00 )   $   (0.01 )   $   0.00     $   (0.01 )
                             
BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING   83,990,722     83,081,597       83,902,077     83,061,707  
                             
DILUTED EARNINGS (LOSS) PER SHARE $   (0.00 )   $   (0.01 )   $   0.00     $   (0.01 )
                             
DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING   83,990,722     83,081,597       83,965,994     83,061,707  

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