WidePoint Corporation Announces Third Quarter 2013 Financial Results --Federal Government Disruptions Delay Forecasted Revenue Growth--

WASHINGTON, Nov. 14, 2013 /PRNewswire/ -- WidePoint Corporation (NYSE Mkt: WYY), a leading provider of Managed Mobility Solutions featuring enterprise-wide telecommunications management, identity and data assurance, and consulting solutions deliverable in a secured cloud environment; today announced financial results for the three and nine month periods ended September 30, 2013.

Nine Months 2013 Financial Highlights

  • Net revenue decreased 14% to $35.5 million from $41.4 million in last year's comparable period.
  • Gross profit increased to 28% of revenue as compared to 24% in last year's comparable period.
  • Income from operations was approximately $8,000, as compared to income from operations of approximately $110,000 in last year's comparable period.
  • Net income was approximately $399,000, as compared to net loss of approximately $(1,000) in last year's comparable period.

Three Months 2013 Financial Highlights

  • Net revenue decreased 20% to approximately $12.2 million, as compared to approximately $15.2 million in last year's comparable period.
  • Gross margin was 24%, unchanged from last year's comparable period.
  • Loss from operations was approximately $(54,000) compared to income from operations of approximately $459,000 in last year's comparable period.
  • Net income was approximately $295,000 compared to a net income of approximately $244,000 in last year's third quarter.

Business Highlights

  • Awarded customized security solution purchase order from tier-one telecommunications carrier.
  • Awarded additional option year under our GSA MVS contract.
  • Awarded 2nd cybersecurity purchase order from major U.S. based federal contractor.
  • Awarded major new federal government agency service agreement for MMS Services.
  • Won 5 new account relationships with Forbes 500 clients.
  • Consummated a software licensing award with new white label reseller resulting in the conversion of 14+ commercial clients to our telecommunications management service platform.
  • Awarded 3 new reseller state and local telecommunications projects.
  • Conducted industry demonstrations of newly development 'Cert on Chip'/Mobile Security Management capability.
  • Entered into 3 new reseller/partnership agreements, enhancing our channel strategy both domestically and internationally.
  • Expanded our current channel partnership with 7th largest accounting firm by adding two new trained offices in support of our managed mobility services offerings.

Steve Komar, CEO, WidePoint, commented, "During the third quarter, we faced some headwinds that impacted our revenue performance, including federal government sequester-related purchase delays, and slowed contracting pipeline and implementation attributed to the pending federal government shutdown.  In addition, our forecasted revenue performance was affected by the delay through the end of the quarter of the presumed favorable resolution of the long- standing protest of our DHS multi-year telecommunications management award.  That said, our sales and marketing efforts, featuring a deployed national direct sales force and re-positioned portfolio of services solutions, continue to accelerate with growing pipelines and new awards. We are also very pleased with the start of the selective demonstrations of our new 'Cert on Chip'/Mobile Security Management capability, developed specifically to meet the identity protection needs of the mobile communications environment." 

James McCubbin, WidePoint CFO, added, "We continue to invest, manage, and balance our capital around our operating income, all while continuing to pay down debt.  We've achieved this balance while also funding the reinvestment programs we launched in 2013 to competitively re-position the Company in future years."  

Conference Call Information

A conference call and live webcast will take place at 4:30 p.m. Eastern Time, on Thursday, November 14, 2013. Anyone interested in participating should call 1-877-941-8416 if calling within the United States or 1-480-629-9808 if calling internationally. There will be a playback available until November 28, 2013. To listen to the playback, please call 1-877-870-5176 if calling within the United States or 1-858-384-5517 if calling internationally. Please use PIN code 4647019 for the replay. The call will also be accompanied live by webcast over the Internet and accessible at http://public.viavid.com/index.php?id=106556.

About WidePoint

WidePoint is an IT specialist providing a suite of Managed Mobility Solutions, including specialized telecommunications management, cybersecurity, and consulting solutions utilizing its advanced information technology products and services. WidePoint has several wholly owned subsidiaries holding major government and commercial contracts. WidePoint enables enterprises and agencies to deploy fully compliant IT services in accordance with government-mandated regulations and advanced system requirements. For more information, visit www.widepoint.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This press release may contain forward-looking information within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), including all statements that are not statements of historical fact regarding the intent, belief or current expectations of the company, its directors or its officers with respect to, among other things: (i) the company's financing plans; (ii) trends affecting the company's financial condition or results of operations; (iii) the company's growth strategy and operating strategy; (iv) the declaration and payment of dividends; and (v) the risk factors disclosed in the Company's periodic reports filed with the SEC. The words "may," "would," "will," "expect," "estimate," "anticipate," "believe," "intend" and similar expressions and variations thereof are intended to identify forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the company's ability to control, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors including the risk factors disclosed in the company's Forms 10-K and 10-Q filed with the SEC.

For More Information:


Jim McCubbin, EVP & CFO

Brett Maas or Dave Fore

WidePoint Corporation

Hayden IR

7926 Jones Branch Drive, Suite 520

(646) 536-7331

McLean, VA 22102

brett@haydenir.com

(703) 349-2577


jmccubbin@widepoint.com


-tables follow-

 

 

WIDEPOINT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS






SEPTEMBER 30,


DECEMBER 31,


2013


2012





ASSETS

CURRENT ASSETS




Cash and cash equivalents

$     2,409,230


$   1,857,614

Accounts receivable, net of allowance for doubtful accounts 

6,950,553


6,932,366

of $30,043 and $76,886 in 2013 and 2012, respectively




Unbilled accounts receivable

1,187,498


2,969,450

Inventories

268,803


286,920

Prepaid expenses and other assets

341,918


482,389

Income taxes receivable

-


138,575

Deferred income taxes

473,430


473,430





Total current assets

11,631,432


13,140,744





NONCURRENT ASSETS




Property and equipment, net

1,428,489


1,428,323

Intangibles, net

3,943,548


4,969,241

Goodwill

16,618,467


16,618,467

Deferred income tax asset, net of current

3,948,658


3,346,948

Deposits and other assets

71,027


76,118





TOTAL ASSETS

$   37,641,621


$ 39,579,841





LIABILITIES AND STOCKHOLDERS' EQUITY





CURRENT LIABILITIES




Short term note payable

$          34,001


$      113,018

Accounts payable

5,413,060


5,555,419

Accrued expenses

3,210,284


3,539,710

Deferred revenue

280,987


173,655

Income taxes payable

73,520


-

Current portion of long-term debt

199,033


1,102,741

Current portion of deferred rent

9,023


51,196

Current portion of capital lease obligations

10,552


42,878





Total current liabilities

9,230,460


10,578,617





NONCURRENT LIABILITIES




Long-term debt, net of current portion

3,658,929


4,918,732

Capital lease obligation, net of current portion

102,715


102,244

Deferred rent, net of current portion

69,631


15,786

Deferred revenue

21,105


25,231

Deposits and other liabilities

1,964


1,964





Total liabilities

13,084,804


15,642,574





STOCKHOLDERS' EQUITY




Common stock, $0.001 par value; 110,000,000 shares




authorized; 63,857,357 and 63,751,857 shares issued 




and outstanding, respectively

63,857


63,752

Additional paid-in capital

69,814,932


69,594,390

Accumulated deficit

(45,321,972)


(45,720,875)





Total stockholders' equity

24,556,817


23,937,267





Total liabilities and stockholders' equity

$   37,641,621


$ 39,579,841

 

 

WIDEPOINT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS












THREE MONTHS ENDED


NINE MONTHS ENDED 





SEPTEMBER 30,


SEPTEMBER 30,





2013


2012


2013


2012

REVENUES

$ 12,222,505


$ 15,210,896


$ 35,534,573


$ 41,423,281

COST OF REVENUES (including amortization and depreciation of $363,040, $419,658, $1,100,968 and $1,262,105, respectively)








9,243,536


11,637,696


25,754,110


31,645,847












GROSS PROFIT

2,978,969


3,573,200


9,780,463


9,777,434












OPERATING EXPENSES









Sales and Marketing

675,780


705,190


2,361,900


2,222,305


General and Administrative Expenses (including share-based compensation of $68,659, $55,593, $180,927 and $165,873, respectively, and gain on change in fair value of contingent obligation of  $661,000, $0, $1,250,000 and $0, respectively)

























2,282,991


2,334,492


7,196,607


7,231,857


Depreciation and Amortization

74,142


74,682


213,661


213,658














Total Operating Expenses

3,032,913


3,114,364


9,772,168


9,667,820












(LOSS) INCOME FROM OPERATIONS

(53,944)


458,836


8,295


109,614












OTHER INCOME (EXPENSE)









Interest Income

2,727


956


6,188


4,179


Interest Expense

(15,414)


(85,366)


(130,933)


(264,570)


Other Income (Expense)

5,927


11,091


14,432


19,946














Total Other Income (Expense)

(6,760)


(73,319)


(110,313)


(240,445)












(LOSS) INCOME BEFORE PROVISION FOR INCOME TAXES

(60,704)


385,517


(102,018)


(130,831)

INCOME TAX (BENEFIT) PROVISION

(355,525)


141,809


(500,921)


(129,880)












NET INCOME (LOSS)

$      294,821


$      243,708


$      398,903


$           (951)












BASIC EARNINGS PER SHARE

$          0.005


$          0.004


$          0.006


$        (0.000)












BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING

63,824,647


63,651,857


63,776,387


63,427,681












DILUTED EARNINGS PER SHARE

$          0.005


$          0.004


$          0.006


$        (0.000)












DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING

64,014,359


63,820,891


64,103,082


63,427,681

 

 

WIDEPOINT CORPORATION AND SUBSIDIARIES

RECONCILIATION OF GAAP EARNINGS TO NON-GAAP ADJUSTED EARNINGS

BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA)












THREE MONTHS ENDED


NINE MONTHS ENDED 





SEPTEMBER 30,


SEPTEMBER 30,





2013


2012


2013


2012












NET INCOME (LOSS)

$      295,000


$      244,000


$      399,000


$        (1,000)

Adjustments to GAAP net income (loss):









Gain on change in fair value of contingent obligation

(661,000)


-


(1,250,000)


-


Depreciation and amortization

437,000


494,000


1,315,000


1,476,000


Amortization of deferred financing costs

5,000


-


9,000


-


Income tax provision (benefit)

(356,000)


142,000


(501,000)


(130,000)


Interest income

(3,000)


(1,000)


(6,000)


(4,000)


Interest expense

15,000


85,000


131,000


265,000


Other (expense) income

(6,000)


(11,000)


(14,000)


(20,000)


Stock-based compensation expense

69,000


56,000


181,000


166,000


Avalon business combination transaction and related costs

-


-


-


12,000


Avalon integration initiatives 

400


20,000


20,000


81,000












Adjusted EBITDA

$    (204,600)


$   1,029,000


$      284,000


$   1,845,000

 

SOURCE WidePoint Corporation



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