EX-99.2 3 v361094_ex99-2.htm EXHIBIT 99.2

Exhibit 99.2

 

 

For More Information:

 

Jim McCubbin, EVP & CFO Brett Maas or Dave Fore
WidePoint Corporation Hayden IR
7926 Jones Branch Drive, Suite 520 (646) 536-7331
McLean, VA 22102 brett@haydenir.com
(703) 349-2577  
jmccubbin@widepoint.com  

 

WidePoint Corporation Announces Third Quarter 2013 Financial Results

 

--Federal Government Disruptions Delay Forecasted Revenue Growth--

 

WASHINGTON, November 14, 2013 /PRNewswire-FirstCall/ -- WidePoint Corporation (NYSE Mkt: WYY), a leading provider of Managed Mobility Solutions featuring enterprise-wide telecommunications management, identity and data assurance, and consulting solutions deliverable in a secured cloud environment; today announced financial results for the three and nine month periods ended September 30, 2013.

 

Nine Months 2013 Financial Highlights

 

·Net revenue decreased 14% to $35.5 million from $41.4 million in last year’s comparable period.

 

·Gross profit increased to 28% of revenue as compared to 24% in last year’s comparable period.

 

·Income from operations was approximately $8,000, as compared to income from operations of approximately $110,000 in last year’s comparable period.

 

·Net income was approximately $399,000, as compared to net loss of approximately $(1,000) in last year’s comparable period.

 

Three Months 2013 Financial Highlights

 

·Net revenue decreased 20% to approximately $12.2 million, as compared to approximately $15.2 million in last year’s comparable period.

 

·Gross margin was 24%, unchanged from last year’s comparable period.

 

·Loss from operations was approximately $(54,000) compared to income from operations of approximately $459,000 in last year’s comparable period.

 

 
 

 

·Net income was approximately $295,000 compared to a net income of approximately $244,000 in last year’s third quarter.

 

Business Highlights

 

oAwarded customized security solution purchase order from tier-one telecommunications carrier.
oAwarded additional option year under our GSA MVS contract.
oAwarded 2nd cybersecurity purchase order from major U.S. based federal contractor.
oAwarded major new federal government agency service agreement for MMS Services.
oWon 5 new account relationships with Forbes 500 clients.
oConsummated a software licensing award with new white label reseller resulting in the conversion of 14+ commercial clients to our telecommunications management service platform.
oAwarded 3 new reseller state and local telecommunications projects.
oConducted industry demonstrations of newly development ‘Cert on Chip’/Mobile Security Management capability.
oEntered into 3 new reseller/partnership agreements, enhancing our channel strategy both domestically and internationally.
oExpanded our current channel partnership with 7th largest accounting firm by adding two new trained offices in support of our managed mobility services offerings.

 

Steve Komar, CEO, WidePoint, commented, “During the third quarter, we faced some headwinds that impacted our revenue performance, including federal government sequester-related purchase delays, and slowed contracting pipeline and implementation attributed to the pending federal government shutdown. In addition, our forecasted revenue performance was affected by the delay through the end of the quarter of the presumed favorable resolution of the long- standing protest of our DHS multi-year telecommunications management award. That said, our sales and marketing efforts, featuring a deployed national direct sales force and re-positioned portfolio of services solutions, continue to accelerate with growing pipelines and new awards. We are also very pleased with the start of the selective demonstrations of our new ‘Cert on Chip’/Mobile Security Management capability, developed specifically to meet the identity protection needs of the mobile communications environment.”

 

James McCubbin, WidePoint CFO, added, “We continue to invest, manage, and balance our capital around our operating income, all while continuing to pay down debt. We’ve achieved this balance while also funding the reinvestment programs we launched in 2013 to competitively re-position the Company in future years.”

 

Conference Call Information

 

A conference call and live webcast will take place at 4:30 p.m. Eastern Time, on Thursday, November 14, 2013. Anyone interested in participating should call 1-877-941-8416 if calling within the United States or 1-480-629-9808 if calling internationally. There will be a playback available until November 28, 2013. 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 code 4647019 for the replay. The call will also be accompanied live by webcast over the Internet and accessible at http://public.viavid.com/index.php?id=106556.

 

 
 

 

About WidePoint

 

WidePoint is an IT specialist providing a suite of Managed Mobility Solutions, including specialized telecommunications management, cybersecurity, and consulting solutions utilizing its advanced information technology products and services. WidePoint has several wholly owned subsidiaries holding major government and commercial contracts. WidePoint enables enterprises and agencies to deploy fully compliant IT services in accordance with government-mandated regulations and advanced system requirements. For more information, visit 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-

 

 
 

 

WIDEPOINT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 

   SEPTEMBER 30,   DECEMBER 31, 
   2013   2012 
         
ASSETS        
CURRENT ASSETS          
Cash and cash equivalents  $2,409,230   $1,857,614 
Accounts receivable, net of allowance for doubtful accounts   6,950,553    6,932,366 
of $30,043 and $76,886 in 2013 and 2012, respectively          
Unbilled accounts receivable   1,187,498    2,969,450 
Inventories   268,803    286,920 
Prepaid expenses and other assets   341,918    482,389 
Income taxes receivable   -    138,575 
Deferred income taxes   473,430    473,430 
           
Total current assets   11,631,432    13,140,744 
           
NONCURRENT ASSETS          
Property and equipment, net   1,428,489    1,428,323 
Intangibles, net   3,943,548    4,969,241 
Goodwill   16,618,467    16,618,467 
Deferred income tax asset, net of current   3,948,658    3,346,948 
Deposits and other assets   71,027    76,118 
           
TOTAL ASSETS  $37,641,621   $39,579,841 
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
           
CURRENT LIABILITIES          
Short term note payable  $34,001   $113,018 
Accounts payable   5,413,060    5,555,419 
Accrued expenses   3,210,284    3,539,710 
Deferred revenue   280,987    173,655 
Income taxes payable   73,520    - 
Current portion of long-term debt   199,033    1,102,741 
Current portion of deferred rent   9,023    51,196 
Current portion of capital lease obligations   10,552    42,878 
           
Total current liabilities   9,230,460    10,578,617 
           
NONCURRENT LIABILITIES          
Long-term debt, net of current portion   3,658,929    4,918,732 
Capital lease obligation, net of current portion   102,715    102,244 
Deferred rent, net of current portion   69,631    15,786 
Deferred revenue   21,105    25,231 
Deposits and other liabilities   1,964    1,964 
           
Total liabilities   13,084,804    15,642,574 
           
STOCKHOLDERS' EQUITY          
Common stock, $0.001 par value; 110,000,000 shares          
authorized; 63,857,357 and 63,751,857 shares issued          
and outstanding, respectively   63,857    63,752 
Additional paid-in capital   69,814,932    69,594,390 
Accumulated deficit   (45,321,972)   (45,720,875)
           
Total stockholders’ equity   24,556,817    23,937,267 
           
Total liabilities and stockholders’ equity  $37,641,621   $39,579,841 

 

 
 

 

WIDEPOINT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

   THREE MONTHS ENDED   NINE MONTHS ENDED 
   SEPTEMBER 30,   SEPTEMBER 30, 
   2013   2012   2013   2012 
REVENUES  $12,222,505   $15,210,896   $35,534,573   $41,423,281 
COST OF REVENUES (including amortization and depreciation of                    
$363,040, $419,658, $1,100,968 and $1,262,105, respectively)   9,243,536    11,637,696    25,754,110    31,645,847 
                     
GROSS PROFIT   2,978,969    3,573,200    9,780,463    9,777,434 
                     
OPERATING EXPENSES                    
Sales and Marketing   675,780    705,190    2,361,900    2,222,305 
General and Administrative Expenses (including share-based                    
compensation of $68,659, $55,593, $180,927 and $165,873,                    
respectively, and gain on change in fair value of contingent                    
obligation of  $661,000, $0, $1,250,000 and $0, respectively)   2,282,991    2,334,492    7,196,607    7,231,857 
Depreciation and Amortization   74,142    74,682    213,661    213,658 
                     
Total Operating Expenses   3,032,913    3,114,364    9,772,168    9,667,820 
                     
(LOSS) INCOME FROM OPERATIONS   (53,944)   458,836    8,295    109,614 
                     
OTHER INCOME (EXPENSE)                    
Interest Income   2,727    956    6,188    4,179 
Interest Expense   (15,414)   (85,366)   (130,933)   (264,570)
Other Income (Expense)   5,927    11,091    14,432    19,946 
                     
Total Other Income (Expense)   (6,760)   (73,319)   (110,313)   (240,445)
                     
(LOSS) INCOME BEFORE PROVISION FOR INCOME TAXES   (60,704)   385,517    (102,018)   (130,831)
INCOME TAX (BENEFIT) PROVISION   (355,525)   141,809    (500,921)   (129,880)
                     
NET INCOME (LOSS)  $294,821   $243,708   $398,903   $(951)
                     
BASIC EARNINGS PER SHARE  $0.005   $0.004   $0.006   $(0.000)
                     
BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING   63,824,647    63,651,857    63,776,387    63,427,681 
                     
DILUTED EARNINGS PER SHARE  $0.005   $0.004   $0.006   $(0.000)
                     
DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING   64,014,359    63,820,891    64,103,082    63,427,681 

 

 
 

 

WIDEPOINT CORPORATION AND SUBSIDIARIES

RECONCILIATION OF GAAP EARNINGS TO NON-GAAP ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA)

 

   THREE MONTHS ENDED   NINE MONTHS ENDED 
   SEPTEMBER 30,   SEPTEMBER 30, 
   2013   2012   2013   2012 
                 
NET INCOME (LOSS)  $295,000   $244,000   $399,000   $(1,000)
Adjustments to GAAP net income (loss):                    
Gain on change in fair value of contingent obligation   (661,000)   -    (1,250,000)   - 
Depreciation and amortization   437,000    494,000    1,315,000    1,476,000 
Amortization of deferred financing costs   5,000    -    9,000    - 
Income tax provision (benefit)   (356,000)   142,000    (501,000)   (130,000)
Interest income   (3,000)   (1,000)   (6,000)   (4,000)
Interest expense   15,000    85,000    131,000    265,000 
Other (expense) income   (6,000)   (11,000)   (14,000)   (20,000)
Stock-based compensation expense   69,000    56,000    181,000    166,000 
Avalon business combination transaction and related costs   -    -    -    12,000 
Avalon integration initiatives   400    20,000    20,000    81,000 
                     
Adjusted EBITDA  $(204,600)  $1,029,000   $284,000   $1,845,000