Revenue up 15%, Fifth Consecutive Quarter of Positive Adjusted EBITDA
MCLEAN, Va., Nov. 14, 2018 (GLOBE NEWSWIRE) — WidePoint Corporation (NYSE American: WYY), the leading provider of Trusted Mobility Management (TM2) specializing in Telecommunications Lifecycle Management, Identity Management and Bill Presentment & Analytics solutions, today reported results for the third quarter and nine months ended September 30, 2018.
Third Quarter 2018 Operational Highlights: $33.9M in contract actions:
- Secured approximately $5.4 million in new contract awards, $2.8 million in expanded services with existing customers and $10.5 million in option year follow-on contracts with existing customers
- Secured new $12.0 million task order from the U.S. Coast Guard under the U.S. Department of Homeland Security (DHS) Cellular Wireless Management Services (CWMS) Blanket Purchase Agreement, of which up to 6% to 7% of the total task order consists of high margin managed services
- Awarded $1.67 million, five-year contract for mobile communications management services by the Centers for Disease Control and Prevention, of which the majority consists of high margin managed services
- Awarded new, one-year Blanket Purchase Agreement (BPA) task order by DHS Headquarters valued at $1.5 million, of which up to one-third of the task order consists of high margin managed services
Third Quarter 2018 Financial Highlights (results compared to the same year-ago period):
- Revenue increased 15% to $21.3 million
- Gross profit increased 9% to $3.7 million
- Net loss narrowed to $0.1 million
- Adjusted EBITDA, a non-GAAP financial measure, increased to $561,000, marking the company’s fifth consecutive quarter of positive adjusted EBITDA
Nine Month 2018 Financial Highlights (results compared to the same year-ago period):
- Revenue increased 5% to $58.9 million
- Gross profit increased 7% to $10.8 million
- Net loss narrowed to $1.0 million
- Adjusted EBITDA totaled $768,400
| Third Quarter 2018 Financial Summary | ||||
| (in millions, except per share amounts) | September 30, 2018 | September 30, 2017 | ||
| Revenues | $ | 21.29 | $ | 18.46 |
| Gross Profit | $ | 3.69 | $ | 3.38 |
| Gross Profit Margin | 17.3% | 18.3% | ||
| Operating Expenses | $ | 3.75 | $ | 3.66 |
| Loss from Operations | $ | (0.06) | $ | (0.28) |
| Net Loss | $ | (0.11) | $ | (0.31) |
| Basic and Diluted Earnings per Share (EPS) | $ | (0.00) | $ | (0.00) |
| Adjusted EBITDA | $ | 0.55 | $ | 0.03 |
| Cash and Cash Equivalents | $ | 3.95 | $ | 5.27 |
| Fiscal Nine Months 2018 Financial Summary | ||||
| (in millions, except per share amounts) | September 30, 2018 | September 30, 2017 | ||
| Revenues | $ | 58.92 | $ | 55.96 |
| Gross Profit | $ | 10.78 | $ | 10.10 |
| Gross Profit Margin | 18.3% | 18.0% | ||
| Operating Expenses | $ | 11.72 | $ | 12.81 |
| Loss from Operations | $ | (0.93) | $ | (2.71) |
| Net Loss | $ | (1.04) | $ | (2.77) |
| Basic and Diluted Earnings per Share (EPS) | $ | (0.01) | $ | (0.03) |
| Adjusted EBITDA | $ | 0.77 | $ | (1.10) |
Financial Outlook
For the fiscal year ending December 31, 2018, the company anticipates total revenue in the range of $82.0 million to $83.0 million, representing growth of roughly 9% year-over-year, and EBITDA of $1.6 million as compared to $900,000 in the prior year.
The company’s financial outlook statements are based on current expectations. 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
“The third quarter was another strong period for WidePoint. We now have five straight quarters of positive adjusted EBITDA and we are continuing to build momentum toward achieving GAAP profitability,” said company President and CEO, Jin Kang. “Our performance in Q3 was highlighted by solid topline growth as we successfully expanded relationships with key Federal and enterprise customers. In addition to our strong topline results, we also delivered another sequential improvement in adjusted EBITDA.
“From a business development standpoint, we continue to execute on our strategy to maintain our customer, upsell and pursue new business. This is evidenced by the substantial orders and large contracts we have recently secured, including the $12 million follow-on order from the U.S. Coast Guard as well as the $20 million in aggregate of new contract orders from various government agencies. These awards highlight WidePoint’s position as the premier provider of Trusted Mobility Management services solutions to the public and private sectors. Looking ahead, our building momentum in the new Federal fiscal year underscores a robust pipeline of significant opportunities.”
Conference Call
WidePoint management will hold a conference call today (November 14, 2018) at 4:30 p.m. Eastern time (1:30 p.m. local time) to discuss these results.
WidePoint President and CEO Jin Kang, Chief Sales and Marketing Officer Jason Holloway, and CFO Kito Mussa will host the conference call, followed by a question and answer period.
U.S. dial-in number: 877-451-6152
International number: 201-389-0879
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 Liolios 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 November 28, 2018.
Toll-free replay number: 844-512-2921
International replay number: 412-317-6671
Replay ID: 13684462
About WidePoint
WidePoint Corporation (NYSE American: WYY) is a leading provider of technology-based management solutions, including telecom management, mobile management, access management and identity management. 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 Adjusted 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 loss to Adjusted EBITDA is included on the schedules attached hereto.
| THREE MONTHS ENDED | NINE MONTHS ENDED | ||||||||||||||||
| SEPTEMBER 30, | SEPTEMBER 30, | ||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||||
| (Unaudited) | |||||||||||||||||
| NET LOSS | $ | (110,000 | ) | $ | (314,600 | ) | $ | (1,044,400 | ) | $ | (2,769,000 | ) | |||||
| Adjustments to reconcile net loss to adjusted EBITDA: | |||||||||||||||||
| Depreciation and amortization | 353,100 | 388,400 | 1,114,900 | 1,108,000 | |||||||||||||
| Income tax provision (benefit) | 24,800 | 17,200 | 45,700 | 32,700 | |||||||||||||
| Interest income | (900 | ) | (2,000 | ) | (6,300 | ) | (11,600 | ) | |||||||||
| Interest expense | 21,600 | 23,500 | 71,500 | 45,900 | |||||||||||||
| Other (expense) income | – | 1,500 | – | (1,800 | ) | ||||||||||||
| Provision for doubtful accounts | (300 | ) | – | (6,100 | ) | 31,200 | |||||||||||
| Gain on sale of assets held for sale | – | – | (66,700 | ) | |||||||||||||
| Loss on disposal of leasehold improvements | – | – | 172,500 | ||||||||||||||
| Severance and exit costs | – | – | 187,500 | ||||||||||||||
| Stock-based compensation expense | 272,800 | (81,400 | ) | 593,100 | 138,000 | ||||||||||||
| Adjusted EBITDA | $ | 561,100 | $ | 32,600 | $ | 768,400 | $ | (1,133,300 | ) | ||||||||
Safe Harbor Statement
The information contained in any materials that may be accessed above was, to the best of WidePoint Corporation’s 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.
WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| SEPTEMBER 30, | DECEMBER 31, | ||||||
| 2018 | 2017 | ||||||
| (Unaudited) | |||||||
| ASSETS | |||||||
| CURRENT ASSETS | |||||||
| Cash and cash equivalents | $ | 3,950,106 | $ | 5,272,457 | |||
| Accounts receivable, net of allowance for doubtful accounts | |||||||
| of $96,846 and $107,618 in 2018 and 2017, respectively | 8,022,377 | 8,131,025 | |||||
| Unbilled accounts receivable | 7,803,572 | 8,131,448 | |||||
| Other current assets | 963,649 | 767,944 | |||||
| Total current assets | 20,739,704 | 22,302,874 | |||||
| NONCURRENT ASSETS | |||||||
| Property and equipment, net | 1,058,786 | 1,318,420 | |||||
| Intangibles, net | 3,284,626 | 3,671,506 | |||||
| Goodwill | 18,555,578 | 18,555,578 | |||||
| Other long-term assets | 145,477 | 44,553 | |||||
| Total assets | $ | 43,784,171 | $ | 45,892,931 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
| CURRENT LIABILITIES | |||||||
| Accounts payable | $ | 6,080,686 | $ | 7,266,212 | |||
| Accrued expenses | 9,064,369 | 9,796,350 | |||||
| Deferred revenue | 2,689,038 | 2,348,578 | |||||
| Current portion of capital leases | 105,712 | 101,591 | |||||
| Current portion of other term obligations | 107,109 | 203,271 | |||||
| Total current liabilities | 18,046,914 | 19,716,002 | |||||
| NONCURRENT LIABILITIES | |||||||
| Capital leases, net of current portion | 151,037 | 232,109 | |||||
| Other term obligations, net of current portion | 64,006 | 78,336 | |||||
| Deferred revenue | 410,310 | 264,189 | |||||
| Deferred tax liability | 393,975 | 392,229 | |||||
| Total liabilities | 19,066,242 | 20,682,865 | |||||
| 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; 84,062,446 and 83,031,595 shares | |||||||
| issued; 83,762,446 and 83,031,595 shares | |||||||
| outstanding, respectively | 83,763 | 83,032 | |||||
| Additional paid-in capital | 94,814,580 | 94,200,237 | |||||
| Accumulated other comprehensive loss | (185,317 | ) | (122,461 | ) | |||
| Accumulated deficit | (69,995,097 | ) | (68,950,742 | ) | |||
| Total stockholders’ equity | 24,717,929 | 25,210,066 | |||||
| Total liabilities and stockholders’ equity | $ | 43,784,171 | $ | 45,892,931 | |||
WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| THREE MONTHS ENDED | NINE MONTHS ENDED | ||||||||||||||
| SEPTEMBER 30, | SEPTEMBER 30, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| (Unaudited) | |||||||||||||||
| REVENUES | $ | 21,294,360 | $ | 18,463,872 | $ | 58,918,317 | $ | 55,956,617 | |||||||
| COST OF REVENUES (including amortization and depreciation | |||||||||||||||
| of $248,009, $318,461, $802,174, and $895,088, respectively) | 17,609,287 | 15,087,567 | 48,134,084 | 45,859,532 | |||||||||||
| GROSS PROFIT | 3,685,073 | 3,376,305 | 10,784,233 | 10,097,085 | |||||||||||
| OPERATING EXPENSES | |||||||||||||||
| Sales and marketing | 387,407 | 532,714 | 1,366,989 | 1,709,892 | |||||||||||
| General and administrative expenses (including share-based | |||||||||||||||
| compensation of $272,737, ($81,043), $593,075 and | |||||||||||||||
| $138,036, respectively) | 3,257,262 | 3,046,148 | 10,037,904 | 10,668,368 | |||||||||||
| Product development | – | 11,342 | – | 219,141 | |||||||||||
| Depreciation and amortization | 104,914 | 69,935 | 312,763 | 212,874 | |||||||||||
| Total operating expenses | 3,749,583 | 3,660,139 | 11,717,656 | 12,810,275 | |||||||||||
| LOSS FROM OPERATIONS | (64,510 | ) | (283,834 | ) | (933,423 | ) | (2,713,190 | ) | |||||||
| OTHER (EXPENSE) INCOME | |||||||||||||||
| Interest income | 936 | 1,971 | 6,339 | 11,564 | |||||||||||
| Interest expense | (21,644 | ) | (13,985 | ) | (71,531 | ) | (36,402 | ) | |||||||
| Other income (expense) | 2 | (1,541 | ) | 3 | 1,758 | ||||||||||
| Total other expense | (20,706 | ) | (13,555 | ) | (65,189 | ) | (23,080 | ) | |||||||
| LOSS BEFORE INCOME TAX PROVISION | (85,216 | ) | (297,389 | ) | (998,612 | ) | (2,736,270 | ) | |||||||
| INCOME TAX PROVISION | 24,795 | 17,212 | 45,743 | 32,723 | |||||||||||
| NET LOSS | $ | (110,011 | ) | $ | (314,601 | ) | $ | (1,044,355 | ) | $ | (2,768,993 | ) | |||
| BASIC LOSS PER SHARE | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.03 | ) | |||
| BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING | 83,177,804 | 82,946,847 | 83,100,832 | 82,878,287 | |||||||||||
| DILUTED LOSS PER SHARE | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.03 | ) | |||
| DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING | 83,177,804 | 82,946,847 | 83,100,832 | 82,878,287 | |||||||||||
CONTACT: Investor Relations: Liolios Matt Glover or Tom Colton 949-574-3860 WYY@liolios.com