WidePoint Corporation Reports Third Quarter 2011 Results

WASHINGTON, Nov. 14, 2011 /PRNewswire/ -- WidePoint Corporation (NYSE Amex: WYY), a specialist in wireless mobility management and cybersecurity solutions, today announced financial results for the three months ending September 30, 2011.

Third Quarter 2011 Highlights

• Net revenue for the quarter ended September 30, 2011 increased 7.2% sequentially to $10.7 million from $10.0 million at June 30, 2011 driven by growth in our IT Consulting Services and Products segment that increased sequentially 92.4% to $2.9 million from $1.5 million in the second quarter of 2011.  Separately we anticipate our Wireless Management and Cybersecurity segments will witness revenue expansion in 2012 as a result of growth in our sales opportunities pipeline along with recent contract awards and the implementation of federal security mandates that have expanded the required use of approved credentialing services.
• Gross margin decreased quarterly on a sequential basis, to 24% compared to 27% in the second quarter 2011 as a result of revenue mix among our three business segments.  We anticipate our gross margins will increase as our Cybersecurity segment expands as a percentage of our total revenues.    
• Net income for the quarter was approximately flat at $218,000 when compared sequentially to net income of $214,000 in the second quarter of 2011 as a result of improvements in the alignment of our general and administrative costs in respect to our current revenue run rate.

Steve Komar, CEO, WidePoint, commented, "WidePoint maintained profitability in the third quarter, despite the lingering short-term hurdles that impacted our business through August of 2011. The timing of contracted new Revenue opportunities, primarily due to the political gridlock in the Nation's Capitol, negatively impacted our revenue growth during this time. We did see a number of contracts awarded in late September, including extended commitments with the Department of the Navy, Department of Homeland Security, and new work with the Veterans Administration; but for the most part, it was too late for the revenue to be recognized in the third quarter. We continue to believe our fourth quarter will be better than the third, and the second half of this year will be better than the first half, and we are increasingly confident that we are strategically well-positioned for an acceleration of Revenue and Earnings growth in 2012 and beyond."

James McCubbin, WidePoint CFO added, "We expect to see unit growth in our Wireless Management business in the fourth quarter of 2011 as we continue to add new clients to our current customer roster and commence work on contract awards made in the third quarter, including two additional Federal contracts and three municipality awards. We also expect the Cybersecurity segment to demonstrate accelerating revenue growth in the future as various federal agency mandates from OMB 11.11 and the Federal Cloud Computing Initiative continue to be implemented. In fact, some platforms like the Defense Security Service's JPAS system will now require approved digital certificates for access. We have significant initiatives and RFPs in our pipeline, and we have contracts that have been awarded recently that we are enthusiastic to implement. However, based on the delays we have experienced year-to-date, we remain cautious about the remainder of 2011 with our 2012 outlook improving."

Mr. Komar continued, "We remain committed to growing both revenue and earnings during coming quarters, notwithstanding some of the short-term risks associated with governmental budgeting impasses and spending cuts. With significant mission-critical, cost-reducing initiatives in both our Wireless Management and Cybersecurity segments that serve as catalysts for expansion in our Federal, State, and commercial markets; we should be on a trajectory to maximize incremental, higher margin revenue growth going forward in 2012. Governments of all jurisdictions around the world are looking for ways to better secure systems and infrastructures while simultaneously reducing costs, and these goals align perfectly with the strong points of our differentiated offerings."

Conference Call Information

A conference call and live webcast will take place at 4:30 p.m. Eastern Time, on Monday, November 14, 2011. Anyone interested in participating should call 1-877-941-4774 if calling within the United States or 1-480-629-9760 if calling internationally. There will be a playback available until November 21, 2011. 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 number 4484487 for the replay.

The call will also be accompanied live by webcast over the Internet and accessible at http://viavid.net/dce.aspx?sid=00008F0A.

About WidePoint

WidePoint is a specialist in providing wireless mobility management and CyberSecurity Solutions utilizing its advanced information technology products and services. WidePoint has several wholly owned subsidiaries holding major government and commercial contracts including, Operational Research Consultants, Inc., iSYS, LLC, Protexx Technology Corporation, Advanced Response Concepts Corporation, and WidePoint IL, Inc. WidePoint enables organizations to deploy fully compliant IT services in accordance with government-mandated regulations and advanced system requirements. For more information, visit http://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-

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