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WidePoint Reports First Quarter 2020 Financial Results
[May 14, 2020]

WidePoint Reports First Quarter 2020 Financial Results


FAIRFAX, Va., May 14, 2020 (GLOBE NEWSWIRE) -- WidePoint Corporation (NYSE American: WYY), 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 here and via the investor relations section of the company’s website.

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 widepoint.com.

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
WYY@gatewayir.com

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 

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