WidePoint Reports First Quarter 2019 Financial Results
May 14 2019 - 4:05PM
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 first quarter ended March 31, 2019.
First Quarter 2019 and Recent Operational
Highlights:
- Secured more than $1.3 million in Trusted Mobility Management
(TM2) contracts, the majority of which are high-margin, commercial
contracts
- Successfully implemented ITMSTM Instance with GovCloud, an
industry first that strengthens the competitive advantage of TM2
and represents the fist significant step towards achieving a
FedRAMP certification
- Secured $1.6 million contract expansion with the U.S. Customs
and Border Protection (CBP) agency, increasing the number of
devices managed by 50% to 45,000
- Teamed with Leidos on the NASA Nest contract to provide Managed
Mobility Services in support of the agency’s mission
- Relocated company headquarters to Fairfax, VA as part of
consolidation and cost-savings strategy
First Quarter 2019 Financial Highlights
(results compared to the same year-ago
period):
- Revenues increased 9% to $21.9 million
- Gross profit increased 20% to $4.3 million
- Adjusted EBITDA, a non-GAAP financial measure, increased to
$1.0 million, marking the company’s seventh consecutive quarter of
positive adjusted EBITDA
First Quarter 2019 Financial Summary
|
|
|
|
|
(in millions, except per share
amounts) |
March 31, 2019 |
|
March 31, 2018 |
|
|
|
|
|
(Unaudited) |
|
Revenues |
$ |
21.9 |
|
|
$ |
20.1 |
|
|
Gross
Profit |
$ |
4.3 |
|
|
$ |
3.6 |
|
|
Gross Profit
Margin |
|
19 |
% |
|
|
18 |
% |
|
Operating
Expenses |
$ |
3.8 |
|
|
$ |
4.0 |
|
|
Income (Loss) from
Operations |
$ |
0.5 |
|
|
$ |
(0.4 |
) |
|
Net Income
(Loss) |
$ |
0.4 |
|
|
$ |
(0.5 |
) |
|
Basic and Diluted
Earnings per Share (EPS) |
$ |
0.00 |
|
|
$ |
(0.01 |
) |
|
Adjusted
EBITDA |
$ |
1.0 |
|
|
$ |
0.1 |
|
|
|
|
|
|
|
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 OutlookFor the fiscal year ending
December 31, 2019, the company is reiterating its revenues guidance
of $90.0 million to $93.0 million, representing growth of 8% to
12%. The company is also raising its adjusted EBITDA guidance to
$2.75 million to $3.5 million, which represents an improvement
compared to fiscal 2018. The increase 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 FASB guidance regarding the treatment of capital lease. The
company’s financial outlook is based on current expectations.
Management Commentary“The first quarter was a
strong start to what we anticipate will be a solid year for
WidePoint as we delivered continued solid financial results,
expanded on new and current customer relationships, and improved
our industry leading suite of credentials,” said WidePoint’s CEO,
Jin Kang. “Our financial performance in the first quarter was
highlighted by our first quarter of GAAP profitability in nearly
six years, a 20% increase in gross profit and positive adjusted
EBITDA of approximately $1.0 million, all of which demonstrate
improved leverage in our financial model.
“Operationally, the recent contracts we secured in the first
quarter with CBP, CNA, and others, highlight that our internal
sales team, our strategic partnerships with systems integrators, as
well as our cross-selling and up-selling initiatives continue to be
an effective means of landing new business. We also made
substantial progress this quarter in bolstering our credentials by
successfully implementing ITMSTM Instance with GovCloud, which is a
first for our industry and a crucial step towards achieving a
FedRAMP certification.
“We remain optimistic about the remainder of 2019 and beyond,
and we look forward to continuing with our strategy to more
aggressively grow the topline while improving our margins,
improving profitability and returning greater value to our
supportive shareholders.”
Conference CallWidePoint management will hold a
conference call today (May 14, 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 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: 877-407-9210International 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 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 14, 2019.
Toll-free replay number: 877-481-4010International replay
number: 919-882-2331Replay ID: 47592
About WidePointWidePoint 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 MeasuresWidePoint 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.
|
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|
|
|
|
|
|
|
THREE MONTHS ENDED |
|
|
|
|
MARCH 31, |
|
|
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
NET INCOME
(LOSS) |
$ |
384,100 |
|
|
$ |
(462,200 |
) |
Adjustments to
reconcile net income (loss) to EBITDA: |
|
|
|
|
Depreciation and
amortization |
|
472,700 |
|
|
|
393,400 |
|
|
Amortization of
deferred financing costs |
|
1,300 |
|
|
|
7,800 |
|
|
Income tax
provision |
|
28,000 |
|
|
|
6,200 |
|
|
Interest
income |
|
(4,500 |
) |
|
|
(3,300 |
) |
|
Interest
expense |
|
76,200 |
|
|
|
26,000 |
|
|
|
|
|
|
|
|
EBITDA |
|
$ |
957,800 |
|
|
$ |
(32,100 |
) |
Other adjustments
to reconcile net loss to Adjusted EBITDA: |
|
|
|
|
Provision for
doubtful accounts |
|
7,600 |
|
|
|
(5,800 |
) |
|
Stock-based
compensation expense |
|
89,300 |
|
|
|
124,400 |
|
|
|
|
|
|
|
|
Adjusted
EBITDA |
$ |
1,054,700 |
|
|
$ |
86,500 |
|
|
Safe Harbor StatementThe 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
RelationsMatt Glover or Charlie
Schumacher949-574-3860WYY@gatewayir.com
WIDEPOINT CORPORATION AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS
|
|
|
|
|
MARCH 31, |
|
DECEMBER 31, |
|
2019 |
|
2018 |
|
|
|
|
ASSETS |
CURRENT ASSETS |
|
|
|
Cash and cash equivalents |
$ |
4,567,168 |
|
|
$ |
2,431,892 |
|
Accounts receivable, net of allowance for doubtful accounts |
|
|
|
of $112,754 and $106,733 in 2019 and 2018, respectively |
|
11,220,420 |
|
|
|
11,089,315 |
|
Unbilled accounts receivable |
|
8,232,585 |
|
|
|
9,566,170 |
|
Other current assets |
|
1,200,056 |
|
|
|
1,086,686 |
|
|
|
|
|
Total current assets |
|
25,220,229 |
|
|
|
24,174,063 |
|
|
|
|
|
NONCURRENT ASSETS |
|
|
|
Property and equipment, net |
|
737,766 |
|
|
|
1,012,684 |
|
Operating lease right of use asset, net |
|
5,969,894 |
|
|
|
- |
|
Intangibles, net |
|
2,959,442 |
|
|
|
3,103,753 |
|
Goodwill |
|
18,555,578 |
|
|
|
18,555,578 |
|
Other long-term assets |
|
233,073 |
|
|
|
209,099 |
|
|
|
|
|
Total assets |
$ |
53,675,982 |
|
|
$ |
47,055,177 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
CURRENT LIABILITIES |
|
|
|
Accounts payable |
$ |
9,374,095 |
|
|
$ |
7,363,621 |
|
Accrued expenses |
|
9,676,357 |
|
|
|
10,716,438 |
|
Deferred revenue |
|
1,690,592 |
|
|
|
2,072,344 |
|
Current portion of finance leases |
|
481,562 |
|
|
|
107,325 |
|
Current portion of other term obligations |
|
88,226 |
|
|
|
192,263 |
|
|
|
|
|
Total current liabilities |
|
21,310,832 |
|
|
|
20,451,991 |
|
|
|
|
|
NONCURRENT LIABILITIES |
|
|
|
Finance leases, net of current portion |
|
5,594,671 |
|
|
|
122,040 |
|
Other term obligations, net of current portion |
|
- |
|
|
|
73,952 |
|
Deferred revenue |
|
351,262 |
|
|
|
466,714 |
|
Deferred tax liability |
|
1,558,162 |
|
|
|
1,523,510 |
|
|
|
|
|
Total liabilities |
|
28,814,927 |
|
|
|
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; 84,112,446 and 84,112,446 shares |
|
|
|
issued and oustanding, respectively |
|
84,113 |
|
|
|
84,113 |
|
Additional paid-in capital |
|
95,015,826 |
|
|
|
94,926,560 |
|
Accumulated other comprehensive loss |
|
(215,767 |
) |
|
|
(186,485 |
) |
Accumulated deficit |
|
(70,023,117 |
) |
|
|
(70,407,218 |
) |
|
|
|
|
Total stockholders’ equity |
|
24,861,055 |
|
|
|
24,416,970 |
|
|
|
|
|
Total liabilities and stockholders’ equity |
$ |
53,675,982 |
|
|
$ |
47,055,177 |
|
|
WIDEPOINT CORPORATION AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED |
|
|
|
|
MARCH 31, |
|
|
|
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
(Unaudited) |
REVENUES |
$ |
21,916,902 |
|
|
$ |
20,079,619 |
|
COST OF REVENUES
(including amortization and depreciation |
|
|
|
|
of $232,191, and
$295,979, respectively) |
|
17,663,059 |
|
|
|
16,527,612 |
|
GROSS PROFIT |
|
4,253,843 |
|
|
|
3,552,007 |
|
|
|
|
|
|
|
|
OPERATING
EXPENSES |
|
|
|
|
Sales and marketing |
|
393,411 |
|
|
|
534,637 |
|
|
General and administrative expenses (including share-based |
|
|
|
|
|
compensation of
$89,266, and $124,404, respectively) |
|
3,134,709 |
|
|
|
3,353,341 |
|
|
Depreciation and amortization |
|
240,548 |
|
|
|
97,386 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
3,768,668 |
|
|
|
3,985,364 |
|
|
|
|
|
|
|
|
INCOME (LOSS) FROM
OPERATIONS |
|
485,175 |
|
|
|
(433,357 |
) |
|
|
|
|
|
|
|
OTHER (EXPENSE)
INCOME |
|
|
|
|
Interest
income |
|
4,462 |
|
|
|
3,326 |
|
|
Interest
expense |
|
(77,545 |
) |
|
|
(25,950 |
) |
|
Other income |
|
9 |
|
|
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Total other expense |
|
(73,074 |
) |
|
|
(22,626 |
) |
|
|
|
|
|
|
|
INCOME (LOSS)
BEFORE INCOME TAX PROVISION |
|
412,101 |
|
|
|
(455,983 |
) |
INCOME TAX
PROVISION |
|
28,000 |
|
|
|
6,190 |
|
|
|
|
|
|
|
|
NET INCOME
(LOSS) |
$ |
384,101 |
|
|
$ |
(462,173 |
) |
|
|
|
|
|
|
|
BASIC EARNINGS
(LOSS) PER SHARE |
$ |
0.00 |
|
|
$ |
(0.01 |
) |
BASIC
WEIGHTED-AVERAGE SHARES OUTSTANDING |
|
83,812,448 |
|
|
|
83,041,597 |
|
|
|
|
|
|
|
|
DILUTED EARNINGS
(LOSS) PER SHARE |
$ |
0.00 |
|
|
$ |
(0.01 |
) |
DILUTED
WEIGHTED-AVERAGE SHARES OUTSTANDING |
|
83,814,670 |
|
|
|
83,041,597 |
|
|
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