WidePoint Reports First Quarter 2020 Financial Results
May 14 2020 - 4:05PM
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 first quarter ended March 31, 2020.
First Quarter 2020 and Recent Operational
Highlights:
- Selected as strategic vendor for SYNNEX Corporation (NYSE:
SNX), which may potentially expand sales of TM2
- Received a 12-month, sole source indefinite delivery,
indefinite quantity (IDIQ) contract from the U.S. Department of
Homeland Security (DHS) for Cellular Wireless Managed Services
(CWMS)
- Supported and continuing to expand work with the United States
Census 2020 as the U.S. Census Bureau has increased the forecasted
number of field devices needed by 20%
- Partnered with KoolSpan to provide end-to-end encryption for
phone calls and text messages
- Secured $20 million in new contract wins, exercised option
periods, and contract extensions during the first quarter of
2020
First Quarter 2020 Financial Highlights
(results compared to the same year-ago
period):
- Revenues increased 81% to $39.7 million
- Managed Services revenue increased 52% to $11.5 million
- Gross profit increased 17% to $5.0 million
- Net income totaled $484,000, up 26%
- EBITDA, a non-GAAP financial measure, increased 21% to $1.2
million
First Quarter 2020 Financial Summary
(In millions, except per share amounts) |
March 31, 2020 |
|
March 31, 2019 |
|
|
|
|
|
(Unaudited) |
Revenue |
$ |
39.7 |
|
|
$ |
21.9 |
|
Gross Profit |
$ |
5.0 |
|
|
$ |
4.3 |
|
Gross Profit Margin |
|
12.5 |
% |
|
|
19.4 |
% |
Operating Expenses |
$ |
4.2 |
|
|
$ |
3.8 |
|
Income from Operations |
$ |
0.7 |
|
|
$ |
0.5 |
|
Net Income |
$ |
0.5 |
|
|
$ |
0.4 |
|
Basic and Diluted Earnings per Share (EPS) |
$ |
0.01 |
|
|
$ |
0.00 |
|
Ebita |
$ |
1.2 |
|
|
$ |
1.0 |
|
|
|
|
|
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.
Management Commentary
“In the first quarter of 2020, we continued to build upon the
momentum we generated last year and produced one of the most
successful quarters in our company’s history,” said WidePoint’s
CEO, Jin Kang. “From a financial perspective, the quarter was
highlighted by an 81% increase in total revenues to $39.7 million,
a 52% increase in managed services revenues, positive net income,
and a $2.4 million improvement in our cash position. Operationally,
we continued our work on the 2020 U.S. Census project, which was
the primary cause of the uncharacteristically large increase in our
topline, and which should continue contributing to our revenues
until the start of 2021. During the quarter, we also secured an
aggregate of $20 million in contract awards. Subsequent to the
quarter’s end, we secured a 12-month sole source contract with the
U.S. Department of Homeland Security, and we announced that we have
been selected as a SYNNEX vendor, which could open new doors and
help us expand our customer base.
“The current pandemic has diminished our ability to accurately
predict the timing of events in the near-term, but our primary goal
of simultaneously improving the topline and driving profitability
as we help large enterprises navigate the complexities of the
mobile landscape remains unchanged. Many of our customers are on
the frontlines of battling COVID-19 and are working hard to help us
all return to a sense of normalcy. We intend to ensure they have
the necessary devices and cost optimization tools in place to
continue operating in this challenging environment.
“The world may still be fraught with uncertainty, but given the
trends in our industry, our resilient customer base, and our solid
financial position, we believe we are well positioned to continue
successfully pursuing our strategic initiatives to drive growth and
profitability in the long-run.”
Conference Call
WidePoint management will hold a conference call today (May 14,
2020) at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss
these results.
WidePoint President and CEO Jin Kang, Executive Vice President
and Chief Sales and Marketing Officer Jason Holloway, and Executive
Vice President and CFO Kellie Kim will host the conference call,
followed by a question and answer period.
U.S. dial-in number: 844-407-9500International 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 May 28, 2020.
Toll-free replay number: 877-481-4010International replay
number: 919-882-2331Replay ID: 34584
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 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 income to EBITDA is included on
the schedules attached
hereto.
|
|
THREE MONTHS
ENDED |
|
|
MARCH 31, |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
NET INCOME |
$ |
483,900 |
|
|
$ |
384,100 |
|
Adjustments to reconcile net (loss) income to EBITDA: |
|
|
|
|
Depreciation
and amortization |
|
422,800 |
|
|
|
472,700 |
|
|
Amortization
of deferred financing costs |
|
1,300 |
|
|
|
1,300 |
|
|
Income tax
provision (benefit) |
|
177,200 |
|
|
|
28,000 |
|
|
Interest
income |
|
(3,100 |
) |
|
|
(4,500 |
) |
|
Interest
expense |
|
80,800 |
|
|
|
76,200 |
|
|
|
|
|
|
EBITDA |
$ |
1,162,900 |
|
|
$ |
957,800 |
|
|
|
|
|
|
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 RelationsMatt Glover or Charlie
Schumacher949-574-3860WYY@gatewayir.com
WIDEPOINT CORPORATION AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS
|
MARCH
31, |
|
DECEMBER 31, |
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
ASSETS |
CURRENT
ASSETS |
|
|
|
Cash and cash equivalents |
$ |
9,323,673 |
|
|
$ |
6,879,627 |
|
Accounts receivable, net of allowance for doubtful accounts |
|
|
|
of $123,097 and $126,235 in 2020 and 2019, respectively |
|
11,715,126 |
|
|
|
14,580,928 |
|
Unbilled accounts receivable |
|
20,982,875 |
|
|
|
13,976,958 |
|
Other current assets |
|
814,233 |
|
|
|
1,094,847 |
|
|
|
|
|
Total
current assets |
|
42,835,907 |
|
|
|
36,532,360 |
|
|
|
|
|
NONCURRENT
ASSETS |
|
|
|
Property and equipment, net |
|
594,293 |
|
|
|
681,575 |
|
Operating lease right of use asset, net |
|
5,768,669 |
|
|
|
5,932,769 |
|
Intangibles, net |
|
2,320,924 |
|
|
|
2,450,770 |
|
Goodwill |
|
18,555,578 |
|
|
|
18,555,578 |
|
Other long-term assets |
|
463,062 |
|
|
|
140,403 |
|
|
|
|
|
Total
assets |
$ |
70,538,433 |
|
|
$ |
64,293,455 |
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY |
|
|
|
|
CURRENT
LIABILITIES |
|
|
|
Accounts payable |
$ |
12,218,629 |
|
|
$ |
13,581,822 |
|
Accrued expenses |
|
22,070,191 |
|
|
|
14,947,981 |
|
Deferred revenue |
|
2,052,361 |
|
|
|
2,265,067 |
|
Current portion of operating lease liabilities |
|
581,389 |
|
|
|
599,619 |
|
Current portion of other term obligations |
|
79,298 |
|
|
|
133,777 |
|
|
|
|
|
Total
current liabilities |
|
37,001,868 |
|
|
|
31,528,266 |
|
|
|
|
|
NONCURRENT
LIABILITIES |
|
|
|
Operating lease liabilities, net of current portion |
|
5,466,798 |
|
|
|
5,593,649 |
|
Other term obligations, net of current portion |
|
- |
|
|
|
- |
|
Deferred revenue, net of current portion |
|
362,567 |
|
|
|
363,560 |
|
Deferred tax liability |
|
2,049,896 |
|
|
|
1,868,562 |
|
|
|
|
|
Total
liabilities |
|
44,881,129 |
|
|
|
39,354,037 |
|
|
|
|
|
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; 83,837,289 and 83,861,453 shares |
|
|
|
issued and outstanding, respectively |
|
83,837 |
|
|
|
83,861 |
|
Additional paid-in capital |
|
95,550,466 |
|
|
|
95,279,114 |
|
Accumulated other comprehensive loss |
|
(279,924 |
) |
|
|
(242,594 |
) |
Accumulated deficit |
|
(69,697,075 |
) |
|
|
(70,180,963 |
) |
|
|
|
|
Total
stockholders’ equity |
|
25,657,304 |
|
|
|
24,939,418 |
|
|
|
|
|
Total
liabilities and stockholders’ equity |
$ |
70,538,433 |
|
|
$ |
64,293,455 |
|
|
|
|
|
WIDEPOINT CORPORATION AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
|
THREE MONTHS
ENDED |
|
MARCH 31, |
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
REVENUES |
$ |
39,665,356 |
|
|
$ |
21,916,902 |
|
COST OF
REVENUES (including amortization and depreciation of |
|
|
|
$159,618 and $232,191, respectively) |
|
34,700,024 |
|
|
|
17,663,059 |
|
|
|
|
|
GROSS
PROFIT |
|
4,965,332 |
|
|
|
4,253,843 |
|
|
|
|
|
OPERATING
EXPENSES |
|
|
|
Sales and marketing |
|
492,231 |
|
|
|
393,411 |
|
General and administrative expenses (including
share-based |
|
|
|
compensation of $281,441 and $89,266,
respectively) |
|
3,470,092 |
|
|
|
3,134,709 |
|
Product development |
|
- |
|
|
|
- |
|
Depreciation and amortization |
|
263,228 |
|
|
|
240,548 |
|
|
|
|
|
Total operating expenses |
|
4,225,551 |
|
|
|
3,768,668 |
|
|
|
|
|
INCOME FROM
OPERATIONS |
|
739,781 |
|
|
|
485,175 |
|
|
|
10.7 |
% |
|
|
17.2 |
% |
OTHER
(EXPENSE) INCOME |
|
|
|
Interest income |
|
3,093 |
|
|
|
4,462 |
|
Interest expense |
|
(82,117 |
) |
|
|
(77,545 |
) |
Other income |
|
331 |
|
|
|
9 |
|
|
|
|
|
Total other expense |
|
(78,693 |
) |
|
|
(73,074 |
) |
|
|
|
|
INCOME
BEFORE INCOME TAX PROVISION |
|
661,088 |
|
|
|
412,101 |
|
INCOME TAX
PROVISION |
|
177,200 |
|
|
|
28,000 |
|
|
|
|
|
NET
INCOME |
$ |
483,888 |
|
|
$ |
384,101 |
|
|
|
|
|
BASIC
EARNINGS PER SHARE |
$ |
0.01 |
|
|
$ |
0.00 |
|
|
|
|
|
BASIC
WEIGHTED-AVERAGE SHARES OUTSTANDING |
|
83,840,079 |
|
|
|
83,812,448 |
|
|
|
|
|
DILUTED
EARNINGS PER SHARE |
$ |
0.01 |
|
|
$ |
0.00 |
|
|
|
|
|
DILUTED
WEIGHTED-AVERAGE SHARES OUTSTANDING |
|
84,428,065 |
|
|
|
83,814,670 |
|
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