EX-99.2 3 wyy_ex992.htm PRESS RELEASE Blueprint
Exhibit 99.2
 
 
 
WidePoint Reports Second Quarter 2019 Financial Results
 
26% Increase in Revenues and 14% Increase in Gross Profit Drives Eighth Consecutive Quarter of Positive Adjusted EBITDA
 
Fairfax, VA – August 14, 2019 – 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 second quarter ended June 30, 2019.
 
Second Quarter 2019 and Recent Operational Highlights:
 
●
Awarded $5.3 million in federal government contract renewals and modifications
 
●
Soft-ex, a WidePoint subsidiary, awarded $6.0 million contract renewal with a global communications service provider to deliver both cloud and onsite telecom solutions to government and multinational corporations
 
●
Secured more than $1.3 million in Trusted Mobility Management (TM2) contracts, the majority of which are high-margin, commercial contracts
 
●
Received Authority to Operate (ATO) from a major customer to implement WidePoint’s Intelligent Telecommunications Management System (ITMS™), which represents the second significant step toward achieving a FedRAMP certification
 
Second Quarter 2019 Financial Highlights (results compared to the same year-ago period):
 
●
Revenues increased 26% to $22.1 million
 
●
Gross profit increased 14% to $4.1 million
 
●
Net loss totaled $(308,000)
 
●
Adjusted EBITDA, a non-GAAP financial measure, increased to $0.6 million, marking the company’s eighth consecutive quarter of positive adjusted EBITDA, and in line with forecast
 
Six Month 2019 Financial Highlights (results compared to the same year-ago period):
 
●
Revenues increased 17% to $44.0 million
 
●
Gross profit increased 17% to $8.3 million
 
●
Net income totaled $76,000
 
●
Adjusted EBITDA totaled $1.6 million
 
 
 
Second Quarter 2019 Financial Summary
 
(in millions, except per share amounts)
 
June 30, 2019
 
 
June 30, 2018
 
 
 
(Unaudited)
 
Revenues
 $22.1 
 $17.5 
Gross Profit
 $4.1 
 $3.5 
Gross Profit Margin
  18%
  20%
Operating Expenses
 $4.2 
 $4.0 
Income (Loss) from Operations
 $(0.2)
 $(0.4)
Net Income (Loss)
 $(0.3)
 $(0.5)
Basic and Diluted Earnings per Share (EPS)
 $0.00 
 $(0.01)
Adjusted EBITDA
 $0.6 
 $0.1 
 
 
Six Month 2019 Financial Summary
 
(in millions, except per share amounts)
 
June 30, 2019
 
 
June 30, 2018
 
 
 
(Unaudited)
 
Revenues
 $44.0 
 $37.6 
Gross Profit
 $8.3 
 $7.1 
Gross Profit Margin
  19%
  19%
Operating Expenses
 $8.0 
 $8.0 
Income (Loss) from Operations
 $0.3 
 $(0.9)
Net Income (Loss)
 $0.1 
 $(0.9)
Basic and Diluted Earnings per Share (EPS)
 $0.00 
 $(0.01)
Adjusted EBITDA
 $1.6 
 $0.2 
 
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.
 
Financial Outlook
For the fiscal year ending December 31, 2019, the company is reiterating its revenue guidance of $90.0 million to $93.0 million, representing growth of 8% to 12%. The company is also reiterating its adjusted EBITDA guidance of $2.75 million to $3.5 million, which represents an improvement compared to fiscal 2018. The increase in adjusted EBITDA reflects the company’s strategic investments in sales and marketing and product development to accelerate growth, as well as a $400,000 increase due to new Financial Accounting Standards Board (FASB) guidance regarding the treatment of capital lease. The company’s financial outlook is based on current expectations.
 
 
 
 
Management Commentary
“The second quarter was a continuation of the strong performance we established at the start of the year as we delivered another solid period of financial results, expanded several contracts with current customers, and continued to improve upon our already industry-leading credentials,” said WidePoint’s CEO, Jin Kang. “From a financial perspective, the quarter was highlighted by a 26% increase in revenues, a 14% increase in gross profit, and our eighth consecutive quarter of positive adjusted EBITDA.
 
“Operationally, we successfully re-secured and expanded several contracts with current customers in both the government and commercial sectors. These contract expansions and the positive effects they have on our financial results show that our cross-selling and upselling strategies continue to be an effective means of increasing our topline as we simultaneously remain conscientious of their effects on our bottom-line. Additionally, we received an ATO from a major customer to implement ITMS™, which is a major step toward ultimately receiving a FedRAMP certification.
 
“Overall, we remain confident that we will be able to continue to execute on our primary strategic initiatives throughout the course of the year to accelerate growth, improve margins, and drive higher profitability in the long-run.”
 
Conference Call
WidePoint management will hold a conference call today (August 14, 2019) at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss these results.
 
WidePoint President and CEO Jin Kang, Chief Sales and Marketing Officer Jason Holloway, and President and CEO of Soft-ex Communications and WidePoint Interim CFO Ian Sparling will host the conference call, followed by a question and answer period.
 
U.S. dial-in number: 844-369-8770
International number: 862-298-0840
 
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 August 21, 2019.
 
Toll-free replay number: 877-481-4010
International replay number: 919-882-2331
Replay ID: 51160
 
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 bill presentment 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 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
 
 
SIX MONTHS ENDED
 
 
 
JUNE 30,
 
 
JUNE 30,
 
 
 
2019
 
 
2018
 
 
2019
 
 
2018
 
 
 
(Unaudited)    
 
 
(Unaudited)    
 
NET (LOSS) INCOME
 $(307,800)
 $(472,200)
 $76,300 
 $(934,400)
Adjustments to reconcile net (loss) income to EBITDA:
    
    
    
    
Depreciation and amortization
  477,100 
  368,600 
  949,800 
  762,000 
Amortization of deferred financing costs
  1,200 
  7,000 
  2,500 
  14,800 
Income tax provision (benefit)
  66,500 
  14,700 
  94,500 
  20,900 
Interest income
  (200)
  (2,100)
  (4,700)
  (5,400)
Interest expense
  74,200 
  23,900 
  152,900 
  49,900 
 
    
    
    
    
EBITDA
 $311,000 
 $(60,100)
 $1,271,300 
 $(92,200)
Other adjustments to reconcile net (loss) income to Adjusted EBITDA:
    
    
    
    
Provision for doubtful accounts
  3,600 
  - 
  11,200 
  (5,800)
Stock-based compensation expense
  284,100 
  195,900 
  320,300 
  320,300 
 
    
    
    
    
Adjusted EBITDA
 $598,700 
 $135,800 
 $1,602,800 
 $222,300 
 
    
    
    
    
 
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
 
 
 
JUNE 30,
 
 
DECEMBER 31,
 
 
 
2019
 
 
2018
 
 
 
 
 
 
ASSETS
 
CURRENT ASSETS
 
 
 
 
 
 
Cash and cash equivalents
 $5,422,065 
 $2,431,892 
Accounts receivable, net of allowance for doubtful accounts
    
    
of $117,120 and $106,733 in 2019 and 2018, respectively
  7,868,097 
  11,089,315 
Unbilled accounts receivable
  11,259,905 
  9,566,170 
Other current assets
  1,254,269 
  1,086,686 
 
    
    
Total current assets
  25,804,336 
  24,174,063 
 
    
    
NONCURRENT ASSETS
    
    
Property and equipment, net
  658,074 
  1,012,684 
Operating lease right of use asset, net
  5,827,822 
  - 
Intangibles, net
  2,826,141 
  3,103,753 
Goodwill
  18,555,578 
  18,555,578 
Other long-term assets
  142,952 
  209,099 
 
    
    
Total assets
 $53,814,903 
 $47,055,177 
 
    
    
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
    
    
CURRENT LIABILITIES
    
    
Accounts payable
 $6,575,453 
 $7,363,621 
Accrued expenses
  12,369,314 
  10,716,438 
Deferred revenue
  2,065,446 
  2,072,344 
Current portion of operating lease liabilities
  420,932 
  107,325 
Current portion of other term obligations
  36,049 
  192,263 
 
    
    
Total current liabilities
  21,467,194 
  20,451,991 
 
    
    
NONCURRENT LIABILITIES
    
    
Operating lease liabilities, net of current portion
  5,534,028 
  122,040 
Other term obligations, net of current portion
  - 
  73,952 
Deferred revenue
  381,261 
  466,714 
Deferred tax liability
  1,581,020 
  1,523,510 
 
    
    
Total liabilities
  28,963,503 
  22,638,207 
 
    
    
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; 84,775,186 and 84,112,446 shares
    
    
issued and oustanding, respectively
  84,776 
  84,113 
Additional paid-in capital
  95,299,274 
  94,926,560 
Accumulated other comprehensive loss
  (201,772)
  (186,485)
Accumulated deficit
  (70,330,878)
  (70,407,218)
 
    
    
Total stockholders’ equity
  24,851,400 
  24,416,970 
 
    
    
Total liabilities and stockholders’ equity
 $53,814,903 
 $47,055,177 
 
 
 
 
 
WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
 
 
THREE MONTHS ENDED
 
 
SIX MONTHS ENDED
 
 
 
JUNE 30,
 
 
JUNE 30,
 
 
 
2019
 
 
2018
 
 
2019
 
 
2018
 
 
 
(Unaudited)
 
REVENUES
 $22,093,153 
 $17,544,338 
 $44,010,055 
 $37,623,957 
COST OF REVENUES (including amortization and depreciation of
    
    
    
    
$232,968, $258,201, $465,159, and $554,165, respectively)
  18,036,409 
  13,997,185 
  35,699,468 
  30,524,797 
 
    
    
    
    
GROSS PROFIT
  4,056,744 
  3,547,153 
  8,310,587 
  7,099,160 
 
    
    
    
    
OPERATING EXPENSES
    
    
    
    
Sales and marketing
  415,462 
  444,945 
  808,873 
  979,582 
General and administrative expenses (including share-based
    
    
    
    
compensation of $284,111, $195,934, $373,377 and $320,338, respectively)
  3,563,405 
  3,427,301 
  6,698,114 
  6,780,642 
Depreciation and amortization
  244,064 
  110,463 
  484,612 
  207,849 
 
    
    
    
    
Total operating expenses
  4,222,931 
  3,982,709 
  7,991,599 
  7,968,073 
 
    
    
    
    
(LOSS) INCOME FROM OPERATIONS
  (166,187)
  (435,556)
  318,988 
  (868,913)
 
    
    
    
    
OTHER (EXPENSE) INCOME
    
    
    
    
Interest income
  259 
  2,077 
  4,721 
  5,403 
Interest expense
  (75,372)
  (23,937)
  (152,917)
  (49,887)
Other income
  (9)
  3 
  - 
  1 
 
    
    
    
    
Total other expense
  (75,122)
  (21,857)
  (148,196)
  (44,483)
 
    
    
    
    
(LOSS) INCOME BEFORE INCOME TAX PROVISION
  (241,309)
  (457,413)
  170,792 
  (913,396)
INCOME TAX PROVISION
  66,452 
  14,758 
  94,452 
  20,948 
 
    
    
    
    
NET (LOSS) INCOME
 $(307,761)
 $(472,171)
 $76,340 
 $(934,344)
 
    
    
    
    
BASIC EARNINGS (LOSS) PER SHARE
 $(0.00)
 $(0.01)
 $0.00 
 $(0.01)
 
    
    
    
    
BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING
  83,990,722 
  83,081,597 
  83,902,077 
  83,061,707 
 
    
    
    
    
DILUTED EARNINGS (LOSS) PER SHARE
 $(0.00)
 $(0.01)
 $0.00 
 $(0.01)
 
    
    
    
    
DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING
  83,990,722 
  83,081,597 
  83,965,994 
  83,061,707