WYY WidePoint Corp.

WidePoint Reports Second Quarter 2020 Financial Results

WidePoint Reports Second Quarter 2020 Financial Results

FAIRFAX, Va., Aug. 13, 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 second quarter ended June 30, 2020.

Second Quarter 2020 and Recent Operational Highlights:

  • Secured $42 million in federal contract wins, exercised option periods, and contract extensions during the second quarter of 2020
  • Awarded a new contract from the Virginia Alcoholic Beverage Control Authority (Virginia ABC) for telecom expense management (TEM) services
  • Secured $1.5 million in commercial TM2 contracts during the second quarter of 2020
  • Increased the number of devices managed for the United States Census 2020 by over 50% to approximately 680,000 devices
  • Announced a strategic vendor agreement with SYNNEX Corporation (NYSE: SNX), potentially expanding channels for reselling credentials

Second Quarter 2020 Financial Highlights (results compared to the same year-ago period):

  • Revenues increased 148% to $54.8 million
  • Managed Services revenue increased 22% to $9.8 million
  • Gross profit increased 25% to $5.1 million
  • Net income totaled $489,000
  • EBITDA, a non-GAAP financial measure, increased 230% to $1.0 million
  • Adjusted EBITDA, a non-GAAP financial measure, increased 107% to $1.2 million

Six Month 2020 Financial Highlights (results compared to the same year-ago period):

  • Revenues increased 115% to $94.4 million
  • Managed Services revenue increased 37% to $21.4 million
  • Gross profit increased 21% to $10.0 million
  • Net income totaled $973,000
  • EBITDA, a non-GAAP financial measure, increased 73% to $2.2 million
  • Adjusted EBITDA, a non-GAAP financial measure, increased 62% to $2.7 million

Second Quarter 2020 Financial Summary

    
(in millions, except per share amounts)June 30, 2020 June 30, 2019
    
 (Unaudited)
Revenues$54.8  $22.1 
Gross Profit$5.1  $4.1 
Gross Profit Margin 9.2%  18.4%
Operating Expenses$4.4  $4.2 
Income (Loss) from Operations$0.6  $(0.2)
Net Income (Loss)$0.5  $(0.3)
Basic and Diluted Earnings per Share (EPS)$0.01  $0.00 
EBITDA$1.0  $0.3 
Adjusted EBITDA$1.2  $0.6 
    
Six Month 2020 Financial Summary   
    
    
(in millions, except per share amounts)June 30, 2020 June 30, 2019
    
 (Unaudited)
Revenues$94.4  $44.0 
Gross Profit$10.0  $8.3 
Gross Profit Margin 10.6%  18.9%
Operating Expenses$8.7  $8.0 
Income from Operations$1.4  $0.3 
Net Income$1.0  $0.1 
Basic and Diluted Earnings per Share (EPS)$0.01  $0.00 
EBITDA$2.2  $1.3 
Adjusted EBITDA$2.7  $1.7 

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.

Financial Outlook

For the fiscal year ending December 31, 2020, the company is reiterating its revenue guidance of $185 million to $195 million, which at the midpoint of the range, would represent 87% growth. The company is also reiterating its EBITDA guidance of $3.0 million to $3.4 million, which at the midpoint, represents a 13% increase relative to fiscal 2019.The EBITDA forecast takes into consideration the company’s planned strategic investments in sales and marketing and product development in the second half of 2020. The company’s financial outlook is based on current expectations.

Management Commentary

“Despite the challenging operating environment that persisted through the second quarter of 2020, we continued to build on the positive trends we established at the start of the year and produced one of the most successful quarter’s in our company’s history,” said WidePoint’s CEO, Jin Kang. “Our revenues increased considerably to $54.8 million, largely driven by our increased work on the U.S. Census 2020 as well as expansions with other federal government customers who rely on our services to help them navigate the increasing complexities of the mobile landscape. Although the Census project contains a large amount of Carrier Services revenues, which negatively impact our margin profile, we still earned $489,000 in net income and approximately $1.0 million in EBITDA as our high margin Managed Services revenues increased 22% to $9.8 million in the second quarter.

“As the number of mobile and IoT devices continues to expand, the need for effective management and top-tier security, which simplifies complexity and generates cost savings, is only increasing. Given those trends and our strong financial position, we remain optimistic about our prospects for the second half of the year and our ability to continue profitably growing the business over the long term.”

Conference Call

WidePoint management will hold a conference call today (August 13, 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 August 27, 2020.

Toll-free replay number: 877-481-4010

International replay number: 919-882-2331

Replay ID: 36035

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 SIX MONTHS ENDED
    JUNE 30, JUNE 30,
     2020  2019   2020   2019 
                  
    (Unaudited) (Unaudited)
NET INCOME (LOSS) $ 488,600 $(307,800) $ 972,500  $76,300 
Adjustments to reconcile net (loss) income to EBITDA:     
 Depreciation and amortization   408,600  477,100   831,400   949,800 
 Amortization of deferred financing costs   400  1,200   1,700   2,500 
 Income tax provision (benefit)   53,100  66,500   230,300   94,500 
 Interest income  100  (200)  (3,000)  (4,700)
 Interest expense 75,800  74,200   156,600   150,400 
           
EBITDA  $ 1,026,600 $311,000  $ 2,189,500  $1,268,800 
Other adjustments to reconcile net (loss) income to Adjusted EBITDA:    
 (Recovery) Provision for doubtful accounts   3,600  3,600   600   11,200 
 Stock-based compensation expense   209,500  284,100   490,900   373,400 
           
Adjusted EBITDA $ 1,239,700 $598,700  $ 2,681,000  $1,653,400 
           

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

    
     JUNE 30, DECEMBER 31,
  2020   2019 
        
 (Unaudited)
ASSETS
CURRENT ASSETS   
Cash and cash equivalents$ 7,520,725  $6,879,627 
Accounts receivable, net of allowance for doubtful accounts  
of $116,898 and $126,235 in 2020 and 2019, respectively 22,092,308   14,580,928 
Unbilled accounts receivable 26,698,793   13,976,958 
Other current assets 1,397,958   1,094,847 
    
Total current assets 57,709,784   36,532,360 
    
NONCURRENT ASSETS   
Property and equipment, net 589,664   681,575 
Operating lease right of use asset, net 5,606,082   5,932,769 
Intangibles, net 2,196,878   2,450,770 
Goodwill 18,555,578   18,555,578 
Other long-term assets 641,381   140,403 
    
Total assets$ 85,299,367  $64,293,455 
    
LIABILITIES AND STOCKHOLDERS' EQUITY
    
CURRENT LIABILITIES   
Accounts payable$ 20,107,933  $13,581,822 
Accrued expenses 28,534,306   14,947,981 
Deferred revenue 1,892,243   2,265,067 
Current portion of operating lease liabilities 566,881   599,619 
Current portion of other term obligations 31,887   133,777 
    
Total current liabilities 51,133,250   31,528,266 
    
NONCURRENT LIABILITIES   
Operating lease liabilities, net of current portion 5,332,139   5,593,649 
Other term obligations, net of current portion -   - 
Deferred revenue, net of current portion 354,385   363,560 
Deferred tax liability 2,096,636   1,868,562 
    
Total liabilities 58,916,410   39,354,037 
    
Commitments and contingencies -   - 
    
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; 84,418,523 and 83,861,453 shares   
issued and outstanding, respectively 84,418   83,861 
Additional paid-in capital 95,759,312   95,279,114 
Accumulated other comprehensive loss (252,325)  (242,594)
Accumulated deficit (69,208,448)  (70,180,963)
    
Total stockholders’ equity 26,382,957   24,939,418 
    
Total liabilities and stockholders’ equity$ 85,299,367  $64,293,455 
    

 

WIDEPOINT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 THREE MONTHS ENDED SIX MONTHS ENDED
 JUNE 30, JUNE 30,
  2020   2019   2020   2019 
 (Unaudited) (Unaudited)
REVENUES$  54,783,790   $22,093,153  $  94,449,146   $44,010,055 
COST OF REVENUES (including amortization and depreciation of $142,150, $232,968, $301,768, and $465,159, respectively)   49,726,210    18,036,409     84,426,234    35,699,468 
        
GROSS PROFIT   5,057,580    4,056,744     10,022,912    8,310,587 
        
OPERATING EXPENSES       
Sales and marketing   439,684    415,462     931,915    808,873 
General and administrative expenses (including share-based compensation of $209,427, $284,111, $490,868 and $373,377, respectively)   3,733,516    3,563,405     7,203,608    6,698,114 
Product development   -    -     -    - 
Depreciation and amortization   266,404    244,064     529,632    484,612 
        
Total operating expenses   4,439,604    4,222,931     8,665,155    7,991,599 
        
INCOME (LOSS) FROM OPERATIONS   617,976    (166,187)    1,357,757    318,988 
        
OTHER (EXPENSE) INCOME       
Interest income   (68)  259     3,025    4,721 
Interest expense   (76,190)  (75,372)    (158,307)  (152,917)
Other income   9    (9)    340    - 
        
Total other expense   (76,249)  (75,122)    (154,942)  (148,196)
        
INCOME (LOSS) BEFORE INCOME TAX PROVISION   541,727    (241,309)    1,202,815    170,792 
INCOME TAX PROVISION   53,100    66,452     230,300    94,452 
        
NET INCOME (LOSS)$  488,627   $(307,761) $  972,515   $76,340 
        
BASIC EARNINGS PER SHARE$  0.01   $0.00  $  0.01   $0.00 
        
BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING   83,920,314    83,990,722     83,880,197    83,902,077 
        
DILUTED EARNINGS PER SHARE$  0.01   $0.00  $  0.01   $0.00 
        
DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING   84,964,261    83,990,722     84,664,395    83,965,994 
        
EN
13/08/2020

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