WidePoint Corporation Announces Third Quarter 2015 Financial Results

Nov 09, 2015, 16:05 ET from WidePoint Corporation

MCLEAN, Va., Nov. 9, 2015 /PRNewswire/ -- WidePoint Corporation (NYSE Mkt: WYY), a leading provider of Managed Mobility Services (MMS) specializing in Cybersecurity and Telecommunications Lifecycle Management (TLM) solutions, today announced financial results for the third quarter ended September 30, 2015.

Recent Business Highlights

  • Awarded initial task orders to commence work from one of the three remaining Department of Homeland Security (DHS) component agencies under our $600 million DHS BPA
  • Partnered with Bob Day & Associates LLC to pursue new and expanded business opportunities within the Homeland Security and cyber technology markets
  • Engaged Deep Water Point to develop, pursue, and expand our federal business reach as we scale our marketing footprint with other departmental-level federal organizations
  • Awarded approximately $6.5 million in new managed mobility services for federal, municipal, and commercial work
  • Awarded approximately $2.3 million, with renewals, in new consulting support work
  • Launched New Online Bill Presentment and Analytics Solutions for the Communication Service Provider (CSP) consumer market at BroadSoft Connections 2015
  • Continued engagements with DoD and DHS component/agencies for Certificate-on-DeviceTM – derived credentialing and other next-generation identity management services
  • Continued development with strategic partners of our Certificate-on-Device product roadmap for individuals, derived credentials, machine device credentials, and other "Internet of Things" components; continued consolidation of platforms and integration efforts of our enterprise solutions

Third Quarter 2015 Financial Highlights

  • Net revenue increased 17% to $17.0 million from $14.5 million in the third quarter of 2014, driven principally by increases in our DHS BPA expansion, partially offset by decreases in software reselling activities within our managed services offerings.
  • Gross profit was $3.1 million compared to $4.0 million in the third quarter of 2014, which, as in the prior quarter, supports extra capacity for expanded next-generation identity management services and managed mobility services.
  • Adjusted EBITDA loss was approximately $1.1 million compared to $404,000 in the third quarter of 2014, driven by continued technology, sales and marketing, and infrastructure investments in support of our next-generation identity management services and managed mobility services.
  • Net loss was approximately $1.8 million compared to net loss of approximately $5.9 million in the third quarter of 2014 or basic and diluted loss per share of 0.02 per share compared to $0.08 in the third quarter of 2014.

James McCubbin, WidePoint's chief financial officer, stated, "Our financial results in the third quarter of 2015 were weaker than we expected as a result of delays in anticipated contract awards. While we did receive awards late in the third quarter and early in the fourth quarter of 2015, including new initial task orders from one of the last three agencies remaining to be won under our DHS BPA contract, the timing put us behind schedule. We still remain confident, timing issues aside, that we will continue to win additional work under our DHS BPA. We believe that our revenues, gross margins, and overall financial metrics and results, should improve, as our new next-generation identity management services come on line."

Steve L. Komar, WidePoint's chief executive officer, stated, "We continue to make great strides in our development efforts of our next generation identity management services and channel marketing efforts with our strategic partners. While contract delays caused some timing issues that negatively effected our financial performance in the third quarter of 2015, we remain confident in our products and services, and in the increasing demand we see for them in the market today and in the future, in both the government and commercial sectors."

Conference Call Information

A conference call and live webcast will take place at 4:30 p.m. Eastern Time, on Monday, November 9, 2015. Anyone interested in listening to our analyst call should call 1-877-419-6591 if calling within the United States or 1-719-325-4747 if calling internationally. There will be a playback available until November 23, 2015. To listen to the playback, please call 1‑877‑870‑5176 if calling within the United States or 1-719-325-4752 if calling internationally. Please use PIN code 4105835 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=116997.

About WidePoint

WidePoint is a leading provider of secure, cloud-delivered, enterprise-wide information technology-based solutions that can enable enterprises and agencies to deploy fully compliant IT services in accordance with government mandated regulations and advanced system requirements. WidePoint has several major government and commercial contracts. 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.

-tables follow-

 

WIDEPOINT CORPORATION

CONSOLIDATED BALANCE SHEETS






SEPTEMBER 30,


DECEMBER 31,


2015


2014





ASSETS

CURRENT ASSETS




Cash and cash equivalents

$ 10,443,065


$ 13,154,699

Accounts receivable, net of allowance for doubtful accounts of $147,331 and $88,719 in 2015 and 2014, respectively

9,546,162


8,543,050

Unbilled accounts receivable

6,517,707


5,547,416

Inventories

26,716


37,025

Prepaid expenses and other assets

417,907


426,736

Income taxes receivable

-


25,984

Deferred income taxes

-


18,584





Total current assets

26,951,557


27,753,494





NONCURRENT ASSETS




Property and equipment, net

1,544,090


1,614,182

Intangibles, net

5,375,798


5,992,992

Goodwill

18,555,578


18,555,578

Deferred income tax asset, net of current

14,272


-

Deposits and other assets

136,554


161,994





TOTAL ASSETS

$ 52,577,849


$ 54,078,240





LIABILITIES AND STOCKHOLDERS' EQUITY





CURRENT LIABILITIES




Line of credit advance

$   2,013,665


$                  -

Short term note payable

48,738


137,025

Accounts payable

6,448,509


6,165,477

Accrued expenses

6,490,586


5,980,110

Deferred revenue

1,953,168


710,275

Income taxes payable

94,236


12,574

Current portion of long-term debt

879,181


2,184,016

Current portion of deferred rent

-


9,274

Current portion of capital lease obligations

47,935


76,597





Total current liabilities

17,976,018


15,275,348





NONCURRENT LIABILITIES




Long-term debt, net of current portion

663,267


1,327,800

Capital lease obligation, net of current portion

11,682


36,669

Deferred rent, net of current portion

159,266


152,815

Deferred revenue

36,816


56,977

Deferred income taxes

447,811


447,811

Deposits and other liabilities

-


1,964





Total liabilities

19,294,860


17,299,384





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; 82,520,696 and 81,656,763 shares issued and outstanding, respectively

82,521


81,657

Additional paid-in capital

93,569,933


92,661,000

Accumulated other comprehensive (loss)

(222,512)


(147,515)

Accumulated deficit

(60,146,953)


(55,816,286)





Total stockholders' equity

33,282,989


36,778,856





Total liabilities and stockholders' equity

$ 52,577,849


$ 54,078,240

 

WIDEPOINT CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS
















THREE MONTHS ENDED


NINE MONTHS ENDED





SEPTEMBER 30,


SEPTEMBER 30,





2015


2014


2015


2014

REVENUES

$16,994,858


$14,555,908


$ 52,123,171


$  36,552,708

COST OF REVENUES (including amortization and depreciation of $290,011, $309,276, $873,724, and $976,116, respectively)

13,875,473


10,571,518


42,127,589


26,487,285












GROSS PROFIT

3,119,385


3,984,390


9,995,582


10,065,423












OPERATING EXPENSES









Sales and Marketing

764,845


868,152


2,333,039


2,751,323


General and Administrative Expenses (including share-based compensation of $89,229, $70,397, $208,091 and $237,101, respectively)

3,893,348


3,816,100


11,507,309


10,538,220



Depreciation and Amortization

92,968


179,977


283,211


392,706















Total Operating Expenses

4,751,161


4,864,229


14,123,559


13,682,249












LOSS FROM OPERATIONS

(1,631,776)


(879,839)


(4,127,977)


(3,616,826)












OTHER INCOME (EXPENSE)









Interest Income

7,020


6,290


17,924


11,614


Interest (Expense)

(30,868)


(47,020)


(111,253)


(139,578)


Other Income (Expense)

(37,814)


(5,159)


37,826


6,640















Total Other Income (Expense)

(61,662)


(45,889)


(55,503)


(121,324)












LOSS BEFORE PROVISION FOR INCOME TAXES

(1,693,438)


(925,728)


(4,183,480)


(3,738,150)

INCOME TAX PROVISION

69,842


4,975,968


147,187


3,759,483












NET LOSS

$(1,763,280)


$ (5,901,696)


$  (4,330,667)


$   (7,497,633)












BASIC EARNINGS PER SHARE

$       (0.021)


$        (0.081)


$         (0.053)


$          (0.106)












BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING

82,515,103


73,195,464


82,130,665


71,029,985












DILUTED EARNINGS PER SHARE

$       (0.021)


$        (0.081)


$         (0.053)


$          (0.106)












DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING

82,515,103


73,195,464


82,130,665


71,029,985

 

WIDEPOINT CORPORATION

ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION






THREE MONTHS ENDED


NINE MONTHS ENDED





SEPTEMBER 30,


SEPTEMBER 30,





2015


2014


2015


2014












NET LOSS

$(1,763,300)


$ (5,901,700)


$  (4,330,700)


$   (7,497,633)

Adjustments to GAAP net income (loss):









Depreciation and amortization

382,900


401,400


1,156,900


1,368,822


Amortization of deferred financing costs

2,900


3,800


8,700


4,700


Income tax provision (benefit)

69,900


4,976,000


147,200


3,759,500


Interest income

(7,000)


(6,300)


(17,900)


(11,600)


Interest expense

30,900


47,000


111,300


139,600


Other (expense) income

37,800


5,200


(37,800)


(6,600)


Provision for doubtful accounts

80,027


-


56,900


24,000


Stock-based compensation expense

89,200


70,400


208,100


237,100












Adjusted EBITDA

$(1,076,673)


$    (404,200)


$  (2,697,300)


$   (1,982,111)

 

For More Information:


Jim McCubbin, EVP & CFO

Brett Maas or David 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




 

SOURCE WidePoint Corporation



RELATED LINKS

http://www.widepoint.com