EX-99.2 3 v446441_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 Second Quarter 2016
Financial Results

 

Highlighting New Product Roll-outs and Reduced Operating Losses

 

McLean, VA, August 8, 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 second quarter ended June 30, 2016.

 

Recent Business Highlights

 

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

 

·Continued marketing and pipeline building activities with Samsung and other key industry partners for Certificate-on-Device™ person, derived, and device credentials, and other “Internet of Things” (IoT) components

 

·Selected by AT&T for commercial roll-out of Certificate-on-DeviceTM for AT&T’s IoT product offering in 2017

 

·Selected by Voya Financial as a strategic partner in the “One Voya” initiative to pursue expanded identity management opportunities

 

·Renewed expanded services contracts with Compass Group PLC and the DOJ’s Bureau of Alcohol, Tobacco, Firearms and Explosives, securing over $10 million in new contract wins and option year extensions. Successes included awards for identity assurance, mobile telecomm, analytics, and consulting services, spanning both Government and Commercial markets.

 

·Appointed Jason Holloway as Chief Sales and Marketing Officer

 

 

 

 

Second Quarter 2016 Financial Highlights

 

·Net revenue was approximately $17.5 million compared to $17.4 million in the second quarter of 2015

 

·Gross profit was approximately $3.4 million compared to $3.3 million in the second quarter of 2015

 

·Net Loss improved approximately $500,000 to ($897,000) compared to net loss of approximately ($1.4 million) in the second quarter of 2015, or basic and diluted loss per share of $0.011 per share compared to $0.017 in the second quarter of 2015

 

·Adjusted EBITDA Loss improved approximately $510,000 to ($448,000) from ($958,000) in the second quarter of 2015

 

First Half 2016 Financial Highlights

 

·Net revenue was approximately $38.0 million compared to $35.1 million in the first six months of 2015

 

·Gross profit was approximately $7.5 million compared to $6.9 million in the first six months of 2015

 

·Net Loss improved approximately $1.0 million to ($1.6 million) compared to net loss of approximately ($2.6 million) in the first six months of 2015, or basic and diluted loss per share of $0.019 per share compared to $0.031 in the first six months of 2015

 

·Adjusted EBITDA Loss improved approximately $0.9 million to ($0.7 million) from ($1.6 million) in the first six months of 2015

 

“Our second quarter was marked by substantial improvements in our progress toward profitability,” stated Steve L. Komar, WidePoint’s chief executive officer. “We continue to selectively invest in our next-generation solutions and to expand our partnerships with leading technology Channel Partners, including Samsung and AT&T. We are driving fundamental changes to our business model to push our new business building efforts to a focus on higher margin services including mobility telecommunications and cybersecurity, and de-emphasizing lower margin reselling and administrative services activities, and continue to take steps to optimize our costs of operations and delivery. We fully expect to see the financial impact of this prioritization throughout the remainder of 2016, and increasingly in the years to come.”

 

James McCubbin, WidePoint’s chief financial officer, added, “Our improvements in both our net operating losses and adjusted EBITDA loss in the second quarter and in the first half were largely driven by our ongoing business rationalization efforts to improve our operating model. We believe we are on track to reach operational profitability in the second half of 2016.”

 

Conference Call Information

 

A conference call and live webcast will take place at 4:05 p.m. Eastern Time, on Monday, August 8, 2016. Anyone interested in listening to our analyst call should call 1-877-723-9522 if calling within the United States or 1-719-325-4842 if calling internationally. There will be a playback available until August 22, 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 4730874for the replay. The call will also be accompanied live by webcast over the Internet and accessible at http://public.viavid.com/index.php?id=120493.

 

 

 

 

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-

 

 

 

 

 

WIDEPOINT CORPORATION

CONSOLIDATED BALANCE SHEETS

 

 

   JUNE 30,   DECEMBER 31, 
   2016   2015 
         
ASSETS          
CURRENT ASSETS          
Cash and cash equivalents  $8,327,621   $7,930,303 
Accounts receivable, net of allowance for doubtful accounts          
of $81,345 and $73,378 in 2016 and 2015, respectively   7,967,307    10,565,113 
Unbilled accounts receivable   5,819,539    6,637,587 
Inventories   65,248    28,400 
Prepaid expenses and other assets   400,768    435,300 
Deferred income taxes   39,467    30,889 
           
Total current assets   22,619,950    25,627,592 
           
NONCURRENT ASSETS          
Property and equipment, net   1,342,692    1,513,307 
Intangibles, net   4,801,164    5,101,523 
Goodwill   18,555,578    18,555,578 
Deposits and other assets   61,791    60,471 
           
TOTAL ASSETS  $47,381,175   $50,858,471 
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
           
CURRENT LIABILITIES          
Line of credit advance  $137,861   $- 
Short term note payable   35,063    131,953 
Accounts payable   7,433,642    7,812,226 
Accrued expenses   6,349,221    6,687,054 
Deferred revenue   1,132,983    2,007,970 
Income taxes payable   56,510    37,684 
Current portion of long-term debt   462,067    893,706 
Current portion of capital lease obligations   13,772    28,752 
           
Total current liabilities   15,621,119    17,599,345 
           
NONCURRENT LIABILITIES          
Long-term debt, net of current portion   422,117    431,756 
Capital lease obligation, net of current portion   2,840    11,962 
Deferred rent, net of current portion   137,452    151,994 
Deferred revenue   -    24,937 
Deferred income taxes   447,811    447,811 
           
Total liabilities   16,631,339    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   93,745,431    93,661,178 
Accumulated other comprehensive loss   (238,989)   (270,140)
Accumulated deficit   (62,839,336)   (61,282,893)
           
Total stockholders’ equity   30,749,836    32,190,666 
           
Total liabilities and stockholders’ equity  $47,381,175   $50,858,471 

 

  

 

 

  

WIDEPOINT CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

 

    THREE MONTHS ENDED     SIX MONTHS ENDED  
    JUNE 30,      JUNE 30,   
    2016     2015     2016     2015  
REVENUES   $ 17,539,666     $ 17,432,745     $ 38,048,306     $ 35,128,313  
COST OF REVENUES (including amortization and depreciation of $288,187, $288,277, $580,635, and $583,713, respectively)     14,179,119       14,126,516       30,482,781       28,252,116  
GROSS PROFIT     3,360,547       3,306,229       7,565,525       6,876,197  
                                 
OPERATING EXPENSES                                
Sales and Marketing     702,465       797,683       1,441,514       1,568,194  
General and Administrative Expenses (including share-based compensation of $48,447, $81,311, $136,326 and $118,862, respectively     3,441,984       3,675,891       7,199,930       7,402,936  
Product Development     1,000       142,173       258,383       211,025  
Depreciation and Amortization     89,719       91,946       184,197       190,243  
Total Operating Expenses     4,235,168       4,707,693       9,084,024       9,372,398  
                                 
LOSS FROM OPERATIONS     (874,621 )     (1,401,464 )     (1,518,499 )     (2,496,201 )
                                 
OTHER INCOME (EXPENSE)                                
Interest Income     3,433       4,978       7,606       10,904  
Interest Expense     (19,828 )     (36,145 )     (40,158 )     (80,385 )
Other Income     5,377       68,207       7,345       75,640  
Total Other Income (Expense)     (11,018 )     37,040       (25,207 )     6,159  
                                 
LOSS BEFORE PROVISION FOR INCOME TAXES     (885,639 )     (1,364,424 )     (1,543,706 )     (2,490,042 )
INCOME TAX PROVISION     11,291       45,204       12,734       77,345  
                                 
NET LOSS   $ (896,930 )   $ (1,409,628 )   $ (1,556,440 )   $ (2,567,387 )
                                 
BASIC EARNINGS PER SHARE   $ (0.011 )   $ (0.017 )   $ (0.019 )   $ (0.031 )
                                 
BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING     82,730,134       82,124,603       82,644,978       81,935,259  
                                 
DILUTED EARNINGS PER SHARE   $ (0.011 )   $ (0.017 )   $ (0.019 )   $ (0.031 )
                                 
DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING     82,730,134       82,124,603       82,644,978       81,935,259  

 

 

 

 

 

WIDEPOINT CORPORATION

ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION

 

   THREE MONTHS ENDED   SIX MONTHS ENDED 
   JUNE 30,   JUNE 30, 
   2016   2015   2016   2015 
                 
NET LOSS      $(896,900)  $(1,409,600)  $(1,556,400)  $(2,567,400)
Adjustments to GAAP net income (loss):                    
Depreciation and amortization   377,900    380,200    764,800    774,000 
Amortization of deferred financing costs   -    2,900    -    5,800 
Income tax provision (benefit)   11,300    45,200    12,700    77,300 
Interest income   (3,400)   (5,000)   (7,600)   (10,900)
Interest expense   19,900    36,100    40,200    80,400 
Other (expense) income   (5,300)   (68,200)   (7,300)   (75,600)
Provision for doubtful accounts   -    (21,500)   (13,400)   (23,100)
Stock-based compensation expense   48,400    81,400    81,300    118,900 
                     
Adjusted EBITDA  $(448,100)  $(958,500)  $(685,700)  $(1,620,600)