WidePoint Reports First Quarter 2020 Financial Results
FAIRFAX, Va., May 14, 2020 (GLOBE NEWSWIRE) -- (NYSE American: ), 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: 844-407-9500
International 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 and via the investor relations section of the company’s .
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: 877-481-4010
International replay number: 919-882-2331
Replay 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 .
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 Relations
Matt Glover or Charlie Schumacher
949-574-3860
WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED 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 SUBSIDIARIES
CONDENSED 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 | |||||
