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CST: 06/12/2019 15:15:01   

WidePoint Reports Third Quarter 2019 Financial Results

21 Days ago

39% Increase in Revenues Drives Positive Net Income and Ninth Consecutive Quarter of Positive Adjusted EBITDA

FAIRFAX, Va., Nov. 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 Digital Billing & Analytics solutions, today reported results for the third quarter ended September 30, 2019.

Third Quarter 2019 and Recent Operational Highlights:

  • Received $14.7 million in recent contract awards for Telecom Expense Management (TEM) and Mobility Managed Services (MMS)

  • Successfully completed an address canvassing project with CDW-G for 2020 U.S. Census project

  • Announced $2.5 million share repurchase program

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

  • Revenues increased 39% to $­­29.6 million

  • Gross profit increased 17% to $4.3 million

  • Net income totaled $184,000

  • Adjusted EBITDA, a non-GAAP financial measure, increased to $949,000, marking the company’s ninth consecutive quarter of positive adjusted EBITDA, and in line with forecast

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

  • Revenues increased 25% to $73.6 million

  • Gross profit increased 17% to $12.6 million

  • Net income totaled $260,000

  • Adjusted EBITDA totaled $2.6 million

Third Quarter 2019 Financial Summary

           
(in millions, except per share amounts) September 30, 2019     September 30, 2018  
       
  (Unaudited)
Revenues $   29.6     $   21.3  
Gross Profit $   4.3     $   3.7  
Gross Profit Margin 15 %   17 %
Operating Expenses $   4.0     $   3.7  
Income (Loss) from Operations $   0.3     $   (0.1 )
Net Income (Loss) $   0.2     $   (0.1 )
Basic and Diluted Earnings per Share (EPS) $   0.00     $   0.00  
Adjusted EBITDA $   0.9     $   0.6  


Nine Month 2019 Financial Summary

           
(in millions, except per share amounts) September 30, 2019   September 30, 2018
           
  (Unaudited)
Revenues $   73.6     $   58.9  
Gross Profit $   12.6     $   10.8  
Gross Profit Margin 17 %   18 %
Operating Expenses $   12.0     $   11.7  
Income (Loss) from Operations $   0.6     $   (0.9 )
Net Income (Loss) $   0.3     $   (1.0 )
Basic and Diluted Earnings per Share (EPS) $   0.00     $   (0.01 )
Adjusted EBITDA $   2.6     $   0.8  


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
“In the third quarter of 2019, we continued building on the momentum we generated in the first half of the year by growing the topline to drive towards consistent bottom-line profitability,” said WidePoint’s CEO, Jin Kang. “From a financial perspective, the quarter was highlighted by a 39% increase in revenues, positive net income, and our ninth consecutive quarter of positive Adjusted EBITDA.

“Operationally, we secured $14.7 million in recent awards during the third quarter, which include contract expansions and renewals with current customers as well as new contract wins. The expansions indicate that our cross-selling and upselling initiatives continue to be effective; the new wins demonstrate our ability to expand our solutions into new markets with new partners; and the renewals prove that we continue to benefit from high-retention rates with our satisfied customers. We also successfully completed an address canvassing project with CDW-G for the 2020 U.S. Census, and we stand well positioned to effectively execute this program when it fully ramps up at the start of the new year.

“Overall, due to our ability to successfully execute on our strategic initiatives and the financial success we have reaped as a result, we believe that we are well positioned to finish the year in a position of strength and to continue accelerating growth and driving towards sustainable profitability over the long-run.”

Conference Call
WidePoint management will hold a conference call today (November 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: 844-407-9500
International number: 862-298-0850

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 November 21, 2019.

Toll-free replay number: 877-481-4010
International replay number: 919-882-2331
Replay ID: 56430

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 digital billing 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   NINE MONTHS ENDED
    SEPTEMBER 30,   SEPTEMBER 30,
    2019   2018   2019   2018
                         
    (Unaudited)   (Unaudited)
NET INCOME (LOSS) $   183,700     $   (110,000 )   $   260,100     $   (1,044,400 )
Adjustments to reconcile net (loss) income to EBITDA:                      
  Depreciation and amortization   479,300       353,100       1,429,100       1,114,900  
  Amortization of deferred financing costs   1,300       -       3,800       14,800  
  Income tax provision (benefit)   32,300       24,800       126,800       45,700  
  Interest income   (100 )     (900 )     (4,800 )     (6,300 )
  Interest expense   76,800       21,600       227,200       56,700  
EBITDA  $   773,300     $   288,600     $   2,042,200     $   181,400  
Other adjustments to reconcile net (loss) income to Adjusted EBITDA:                      
  Provision for doubtful accounts   12,300       (300 )     23,500       (6,100 )
  Gain on sale of assets held for sale   -       -       -        
  Loss on disposal of leasehold improvements   -       -       -        
  Severance and exit costs   -       -       -        
  Lease account impact on EBITDA         -       -        
  Stock-based compensation expense   163,400       272,800       536,800       593,100  
                         
Adjusted EBITDA $   949,000     $   561,100     $   2,602,500     $   768,400  


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

  SEPTEMBER 30,     DECEMBER 31,  
  2019     2018  
               
  (Unaudited)
ASSETS            
CURRENT ASSETS          
Cash and cash equivalents $   7,099,617     $   2,431,892  
Accounts receivable, net of allowance for doubtful accounts         
of $125,496 and $106,733 in 2019 and 2018, respectively   6,952,068       11,089,315  
Unbilled accounts receivable   13,265,684       9,566,170  
Other current assets   856,274       1,086,686  
           
Total current assets   28,173,643       24,174,063  
           
NONCURRENT ASSETS          
Property and equipment, net   581,667       1,012,684  
Operating lease right of use asset, net   5,690,692       -  
Intangibles, net   2,640,164       3,103,753  
Goodwill   18,555,578       18,555,578  
Other long-term assets   141,702       209,099  
           
Total assets $   55,783,446     $   47,055,177  
           
LIABILITIES AND STOCKHOLDERS' EQUITY            
           
CURRENT LIABILITIES          
Accounts payable $   6,108,178     $   7,363,621  
Accrued expenses   14,465,322       10,716,438  
Deferred revenue   2,185,581       2,072,344  
Current portion of operating lease liabilities   499,739       107,325  
Current portion of other term obligations   62,402       192,263  
           
Total current liabilities   23,321,222       20,451,991  
           
NONCURRENT LIABILITIES          
Operating lease liabilities, net of current portion   5,339,380       122,040  
Other term obligations, net of current portion   -       73,952  
Deferred revenue, net of current portion   367,065       466,714  
Deferred tax liability   1,607,629       1,523,510  
           
Total liabilities   30,635,296       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 outstanding, respectively   84,776       84,113  
Additional paid-in capital   95,462,725       94,926,560  
Accumulated other comprehensive loss   (252,183 )     (186,485 )
Accumulated deficit   (70,147,168 )     (70,407,218 )
           
Total stockholders’ equity   25,148,150       24,416,970  
           
Total liabilities and stockholders’ equity $   55,783,446     $   47,055,177  



WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

  THREE MONTHS ENDED     NINE MONTHS ENDED  
  SEPTEMBER 30,     SEPTEMBER 30,  
  2019     2018     2019     2018  
                       
  (Unaudited)
REVENUES $   29,616,940     $   21,294,360     $   73,626,995     $   58,918,317  
                       
COST OF REVENUES (including amortization and depreciation of 
    $233,033, $248,009, $698,192, and $802,174, respectively)
  25,302,919       17,609,287       61,002,387       48,134,084  
GROSS PROFIT   4,314,021       3,685,073       12,624,608       10,784,233  
                       
OPERATING EXPENSES                      
Sales and marketing   406,683       387,407       1,215,556       1,366,989  
General and administrative expenses (including share-based 
     compensation of $163,451, $272,737, $536,828 and $593,075, respectively)
  3,372,269       3,257,262       10,070,383       10,037,904  
Depreciation and amortization   246,293       104,914       730,905       312,763  
Total operating expenses   4,025,245       3,749,583       12,016,844       11,717,656  
                       
INCOME (LOSS) FROM OPERATIONS   288,776       (64,510 )     607,764       (933,423 )
                       
OTHER (EXPENSE) INCOME                      
Interest income   40       936       4,761       6,339  
Interest expense   (78,066 )     (21,644 )     (230,983 )     (71,531 )
Other income   5,324       2       5,324       3  
Total other expense   (72,702 )     (20,706 )     (220,898 )     (65,189 )
                       
INCOME BEFORE INCOME TAX PROVISION   216,074       (85,216 )     386,866       (998,612 )
INCOME TAX PROVISION   32,364       24,795       126,816       45,743  
                       
NET INCOME (LOSS) $   183,710     $   (110,011 )   $   260,050     $   (1,044,355 )
                       
BASIC EARNINGS (LOSS) PER SHARE $   0.00     $   (0.00 )   $   0.00     $   (0.01 )
BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING   84,234,354       83,177,804       84,014,053       83,100,832  
                       
DILUTED EARNINGS (LOSS) PER SHARE $   0.00     $   (0.00 )   $   0.00     $   (0.01 )
DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING   84,271,825       83,177,804       84,051,524       83,100,832  

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