EX-99.2 3 v439852_ex99-2.htm EXHIBIT 99.2

 

Exhibit 99.2

 

 

 

For More Information:

 

Brett Maas or David Fore

Hayden IR

(646) 536-7331

brett@haydenir.com    

 

WidePoint Corporation Reports First Quarter 2016 Financial Results

 

Announces Record First Quarter Revenue of $20.5 Million with 18% Increase in Gross

Profit Driving Improvements to Net Operating and Adjusted EBITDA Losses

 

McLean, VA, May 10, 2016 – WidePoint Corporation (NYSE Mkt: WYY), a leading provider of Managed Mobility Services (MMS) specializing in Cybersecurity and Telecommunications Lifecycle Management (TLM) solutions, today announced financial results for the first quarter ended March 31, 2016.

 

Recent Business Highlights

 

·Continued demonstration of capabilities efforts with Department of Defense (DoD) and Department of Homeland Security (DHS) component/agencies for Certificate-on-DeviceTM derived credentialing and other next-generation identity management services

 

·Continued marketing and pipeline building activities with Samsung and AT&T partners for Certificate-on-Device™ person, derived, and device credentials, and other “Internet of Things” components

 

·Partnered with HP Inc. as an HPI Mobility Independent Software Vendor (ISV) Partner to provide secure digital identity assurance on HPI’s full mobility lineup, including its recently announced HP Elite x3

 

·Partnered with Spikes Security to integrate WidePoint’s Certificate-on-Device™ digital certificates offering with Spikes’ Isla Malware Isolation System

 

·Renewed credit facility with Cardinal Bank through April 30, 2017

 

First Quarter 2016 Financial Highlights

 

·Net revenue increased approximately $2.8 million or 16% to $20.5 million from $17.7 million in the first quarter of 2015, materially driven by increases in DHS BPA task orders and other identity management awards that were partially offset by decreases in software reselling activities

 

·Gross profit increased approximately $600,000 or 18% to $4.2 million from $3.6 million in the first quarter of 2015, materially driven by a greater mix of higher margin identity management and telecom services, which partially offset a reduction in lower margin software reselling revenues

 

·Adjusted EBITDA Loss improved approximately $496,000 to ($169,000) from ($665,000) in the first quarter of 2015, notwithstanding an increase of approximately $189,000 in product development investments made in support of our next-generation identity management services

 

·Net Loss improved approximately $500,000 to ($660,000) compared to net loss of approximately ($1.2 million) in the first quarter of 2015, or basic and diluted loss per share of $0.008 per share compared to $0.014 in the first quarter of 2015

  

“We reported a strong and improving quarter driven by double-digit revenue growth and improved gross profit, demonstrating significant progress and bolstering our optimism for achieving our stated full-year goals,” stated Steve L. Komar, WidePoint’s chief executive officer. “We have invested in our next-generation solutions, including securing leading technology partners, and we continue to expand these relationships. We believe we are reaching a maturation point with several of our larger partners, which should help us drive additional revenue growth.”

 

James McCubbin, WidePoint’s chief financial officer, added, “Our strong revenue and gross profit growth led to substantial improvements in both our operating losses and adjusted EBITDA loss in the first quarter. This progress does not yet reflect cost reduction efforts we have recently initiated, involving rationalization of our sales, marketing, general, and administrative expenses, and we expect this initiative to benefit the remainder of 2016.”

 

 

 

 

Conference Call Information

 

A conference call and live webcast will take place at 4:30 p.m. Eastern Time, on Tuesday, May 10, 2016. Anyone interested in listening to our analyst call should call 1-877-795-3610 if calling within the United States or 1-719-325-4785 if calling internationally. There will be a playback available until May 24, 2016. 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 4337611 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=119513.

 

About WidePoint

 

WidePoint is a leading provider of secure, cloud-delivered, enterprise-wide information technology-based solutions that can enable enterprises and agencies to deploy fully compliant IT services in accordance with government mandated regulations and advanced system requirements. WidePoint has several major government and commercial contracts. 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 Company’s ability to achieve profitability and positive cash flows; (v) the Company’s ability to raise additional capital on favorable terms or at all; (vii) the Company’s ability to gain market acceptance for its products and (viii) 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 Annual Report on Form 10-K for the year ended December 31, 2015 filed with the SEC on March 15, 2016.

-tables follow-

 

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WIDEPOINT CORPORATION

CONSOLIDATED BALANCE SHEETS

 

   MARCH 31,   DECEMBER 31, 
   2016   2015 
           
ASSETS          
CURRENT ASSETS          
Cash and cash equivalents  $6,251,464   $7,930,303 
Accounts receivable, net of allowance for doubtful accounts          
of $76,486 and $73,378 in 2016 and 2015, respectively   7,122,892    10,565,113 
Unbilled accounts receivable   9,057,696    6,637,587 
Inventories   40,993    28,400 
Prepaid expenses and other assets   510,533    435,300 
Deferred income taxes   36,243    30,889 
           
Total current assets   23,019,821    25,627,592 
           
NONCURRENT ASSETS          
Property and equipment, net   1,439,692    1,513,307 
Intangibles, net   4,834,602    5,101,523 
Goodwill   18,555,578    18,555,578 
Deposits and other assets   56,190    60,471 
           
TOTAL ASSETS  $47,905,883   $50,858,471 
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
           
CURRENT LIABILITIES          
Line of credit advance  $585,712   $- 
Short term note payable   76,761    131,953 
Accounts payable   2,886,931    7,812,226 
Accrued expenses   9,679,060    6,687,054 
Deferred revenue   1,253,896    2,007,970 
Income taxes payable   59,645    37,684 
Current portion of long-term debt   679,074    893,706 
Current portion of capital lease obligations   18,716    28,752 
           
Total current liabilities   15,239,795    17,599,345 
           
NONCURRENT LIABILITIES          
Long-term debt, net of current portion   426,937    431,756 
Capital lease obligation, net of current portion   5,111    11,962 
Deferred rent, net of current portion   144,724    151,994 
Deferred revenue   6,132    24,937 
Deferred income taxes   447,811    447,811 
           
Total liabilities   16,270,510    18,667,805 
           
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; 82,730,134 and 82,520,696 shares issued          
and outstanding, respectively   82,730    82,521 
Additional paid-in capital   93,699,300    93,661,178 
Accumulated other comprehensive loss   (204,254)   (270,140)
Accumulated deficit   (61,942,403)   (61,282,893)
           
Total stockholders’ equity   31,635,373    32,190,666 
           
Total liabilities and stockholders’ equity  $47,905,883   $50,858,471 

 

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WIDEPOINT CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

 

   THREE MONTHS ENDED 
   MARCH 31, 
   2016   2015 
REVENUES  $20,508,640   $17,695,568 
COST OF REVENUES (including amortization and depreciation of          
$292,241 and $295,436, respectively)   16,303,662    14,125,600 
           
GROSS PROFIT   4,204,978    3,569,968 
           
OPERATING EXPENSES          
Sales and Marketing   739,049    770,511 
General and Administrative Expenses (including share-based          
compensation of $87,879 and $37,551, respectively   3,757,946    3,727,045 
Product Development   257,383    68,852 
Depreciation and Amortization   94,478    98,297 
Total Operating Expenses   4,848,856    4,664,705 
           
LOSS FROM OPERATIONS   (643,878)   (1,094,737)
           
OTHER INCOME (EXPENSE)          
Interest Income   4,173    5,926 
Interest Expense   (20,330)   (44,240)
Other Income   1,968    7,433 
Total Other Income (Expense)   (14,189)   (30,881)
           
LOSS BEFORE PROVISION FOR INCOME TAXES   (658,067)   (1,125,618)
INCOME TAX PROVISION   1,443    32,141 
           
NET LOSS  $(659,510)  $(1,157,759)
           
BASIC EARNINGS PER SHARE  $(0.008)  $(0.014)
           
BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING   82,559,822    81,743,812 
           
DILUTED EARNINGS PER SHARE  $(0.008)  $(0.014)
           
DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING   82,559,822    81,743,812 

 

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WIDEPOINT CORPORATION

ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION

 

   THREE MONTHS ENDED 
   MARCH 31, 
   2016   2015 
           
NET LOSS  $(659,500)  $(1,157,800)
Adjustments to GAAP net income (loss):          
Depreciation and amortization   386,700    393,700 
Income tax provision (benefit)   1,400    32,100 
Interest income   (4,200)   (5,900)
Interest expense   20,300    44,200 
Other (expense) income   (2,000)   (7,400)
Provision for doubtful accounts   -    (1,600)
Stock-based compensation expense   87,900    37,600 
           
Adjusted EBITDA  $(169,400)  $(665,100)

 

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