EX-99.2 3 wyy_ex992.htm EARNINGS PRESS RELEASE DATED NOVEMBER 14, 2019 Blueprint
 
Exhibit 99.2
 
 
WidePoint Reports Third Quarter 2019 Financial Results
 
39% Increase in Revenues Drives Positive Net Income and Ninth Consecutive Quarter of Positive Adjusted EBITDA
 
Fairfax, VA – November 14, 2019 – WidePoint Corporation (NYSE American: WYY), the leading provider of Trusted Mobility Management (TM2) specializing in Telecommunications Lifecycle Management, Identity Management and Digital Billing & Analytics solutions, today reported results for the third quarter ended September 30, 2019.
 
Third Quarter 2019 and Recent Operational Highlights:
 
● Received $14.7 million in recent contract awards for Telecom Expense Management (TEM) and Mobility Managed Services (MMS)
 
● Successfully completed an address canvassing project with CDW-G for 2020 U.S. Census project
 
● Announced $2.5 million share repurchase program
 
Third Quarter 2019 Financial Highlights (results compared to the same year-ago period):
 
● Revenues increased 39% to $ 29.6 million
 
● Gross profit increased 17% to $4.3 million
 
● Net income totaled $184,000
 
● Adjusted EBITDA, a non-GAAP financial measure, increased to $949,000, marking the company’s ninth consecutive quarter of positive adjusted EBITDA, and in line with forecast
 
Nine Month 2019 Financial Highlights (results compared to the same year-ago period):
 
● Revenues increased 25% to $73.6 million
 
● Gross profit increased 17% to $12.6 million
 
● Net income totaled $260,000
 
● Adjusted EBITDA totaled $2.6 million
 
 
 
 
 
 
Third Quarter 2019 Financial Summary
 
(in millions, except per share amounts)
 
September 30,
2019
 
 
September 30,
2018
 
 
 
(Unaudited)
 
Revenues
 $29.6 
 $21.3 
Gross Profit
 $4.3 
 $3.7 
Gross Profit Margin
  15%
  17%
Operating Expenses
 $4.0 
 $3.7 
Income (Loss) from Operations
 $0.3 
 $(0.1)
Net Income (Loss)
 $0.2 
 $(0.1)
Basic and Diluted Earnings per Share (EPS)
 $0.00 
 $0.00 
Adjusted EBITDA
 $0.9 
 $0.6 
 
 
Nine Month 2019 Financial Summary
 
(in millions, except per share amounts)
 
September 30,
2019
 
 
September 30,
2018
 
 
 
(Unaudited)
 
Revenues
 $73.6 
 $58.9 
Gross Profit
 $12.6 
 $10.8 
Gross Profit Margin
  17%
  18%
Operating Expenses
 $12.0 
 $11.7 
Income (Loss) from Operations
 $0.6 
 $(0.9)
Net Income (Loss)
 $0.3 
 $(1.0)
Basic and Diluted Earnings per Share (EPS)
 $0.00 
 $(0.01)
Adjusted EBITDA
 $2.6 
 $0.8 
 
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
“In the third quarter of 2019, we continued building on the momentum we generated in the first half of the year by growing the topline to drive towards consistent bottom-line profitability,” said WidePoint’s CEO, Jin Kang. “From a financial perspective, the quarter was highlighted by a 39% increase in revenues, positive net income, and our ninth consecutive quarter of positive Adjusted EBITDA.
 
 
 
 
 
 
“Operationally, we secured $14.7 million in recent awards during the third quarter, which include contract expansions and renewals with current customers as well as new contract wins. The expansions indicate that our cross-selling and upselling initiatives continue to be effective; the new wins demonstrate our ability to expand our solutions into new markets with new partners; and the renewals prove that we continue to benefit from high-retention rates with our satisfied customers. We also successfully completed an address canvassing project with CDW-G for the 2020 U.S. Census, and we stand well positioned to effectively execute this program when it fully ramps up at the start of the new year.
 
“Overall, due to our ability to successfully execute on our strategic initiatives and the financial success we have reaped as a result, we believe that we are well positioned to finish the year in a position of strength and to continue accelerating growth and driving towards sustainable profitability over the long-run.”
 
Conference Call
WidePoint management will hold a conference call today (November 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: 844-407-9500
International number: 862-298-0850
 
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 November 21, 2019.
 
Toll-free replay number: 877-481-4010
International replay number: 919-882-2331
Replay ID: 56430
 
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 digital billing 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
 
 
 
SEPTEMBER 30,
 
 
 
2019
 
 
2018
 
 
2019
 
 
2018
 
 
 
(Unaudited)
 
 
(Unaudited)
 
NET INCOME (LOSS)
 $183,700 
 $(110,000)
 $260,100 
 $(1,044,400)
Adjustments to reconcile net (loss) income to EBITDA:
    
    
    
    
Depreciation and amortization
  479,300 
  353,100 
  1,429,100 
  1,114,900 
Amortization of deferred financing costs
  1,300 
  - 
  3,800 
  14,800 
Income tax provision (benefit)
  32,300 
  24,800 
  126,800 
  45,700 
Interest income
  (100)
  (900)
  (4,800)
  (6,300)
Interest expense
  76,800 
  21,600 
  227,200 
  56,700 
 
    
    
    
    
EBITDA
 $773,300 
 $288,600 
 $2,042,200 
 $181,400 
Other adjustments to reconcile net (loss) income to Adjusted EBITDA:
    
    
    
    
Provision for doubtful accounts
  12,300 
  (300)
  23,500 
  (6,100)
Gain on sale of assets held for sale
  - 
  - 
  - 
    
Loss on disposal of leasehold improvements
  - 
  - 
  - 
    
Severance and exit costs
  - 
  - 
  - 
    
Lease account impact on EBITDA
    
  - 
  - 
    
Stock-based compensation expense
  163,400 
  272,800 
  536,800 
  593,100 
 
    
    
    
    
Adjusted EBITDA
 $949,000 
 $561,100 
 $2,602,500 
 $768,400 
 
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
 
 
 
SEPTEMBER 30,
 
 
DECEMBER 31,
 
 
 
2019
 
 
2018
 
 
 
(Unaudited)
 
 
ASSETS
 
CURRENT ASSETS
 
 
 
 
 
 
Cash and cash equivalents
 $7,099,617 
 $2,431,892 
Accounts receivable, net of allowance for doubtful accounts
    
    
of $125,496 and $106,733 in 2019 and 2018, respectively
  6,952,068 
  11,089,315 
Unbilled accounts receivable
  13,265,684 
  9,566,170 
Other current assets
  856,274 
  1,086,686 
 
    
    
Total current assets
  28,173,643 
  24,174,063 
 
    
    
NONCURRENT ASSETS
    
    
Property and equipment, net
  581,667 
  1,012,684 
Operating lease right of use asset, net
  5,690,692 
  - 
Intangibles, net
  2,640,164 
  3,103,753 
Goodwill
  18,555,578 
  18,555,578 
Other long-term assets
  141,702 
  209,099 
 
    
    
Total assets
 $55,783,446 
 $47,055,177 
 
    
    
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
    
    
CURRENT LIABILITIES
    
    
Accounts payable
 $6,108,178 
 $7,363,621 
Accrued expenses
  14,465,322 
  10,716,438 
Deferred revenue
  2,185,581 
  2,072,344 
Current portion of operating lease liabilities
  499,739 
  107,325 
Current portion of other term obligations
  62,402 
  192,263 
 
    
    
Total current liabilities
  23,321,222 
  20,451,991 
 
    
    
NONCURRENT LIABILITIES
    
    
Operating lease liabilities, net of current portion
  5,339,380 
  122,040 
Other term obligations, net of current portion
  - 
  73,952 
Deferred revenue, net of current portion
  367,065 
  466,714 
Deferred tax liability
  1,607,629 
  1,523,510 
 
    
    
Total liabilities
  30,635,296 
  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
  95,462,725 
  94,926,560 
Accumulated other comprehensive loss
  (252,183)
  (186,485)
Accumulated deficit
  (70,147,168)
  (70,407,218)
 
    
    
Total stockholders’ equity
  25,148,150 
  24,416,970 
 
    
    
Total liabilities and stockholders’ equity
 $55,783,446 
 $47,055,177 
 
 
 
 
WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
 
 
THREE MONTHS ENDED
 
 
 
SEPTEMBER 30,
 
 
 
2019
 
 
2018
 
 
2019
 
 
2018
 
 
 
(Unaudited)
 
REVENUES
 $29,616,940 
 $21,294,360 
 $73,626,995 
 $58,918,317 
COST OF REVENUES (including amortization and depreciation of
    
    
    
    
$233,033, $248,009, $698,192, and $802,174, respectively)
  25,302,919 
  17,609,287 
  61,002,387 
  48,134,084 
 
    
    
    
    
GROSS PROFIT
  4,314,021 
  3,685,073 
  12,624,608 
  10,784,233 
 
    
    
    
    
OPERATING EXPENSES
    
    
    
    
Sales and marketing
  406,683 
  387,407 
  1,215,556 
  1,366,989 
General and administrative expenses (including share-based
    
    
    
    
compensation of $163,451, $272,737, $536,828 and $593,075, respectively)
  3,372,269 
  3,257,262 
  10,070,383 
  10,037,904 
Depreciation and amortization
  246,293 
  104,914 
  730,905 
  312,763 
 
    
    
    
    
Total operating expenses
  4,025,245 
  3,749,583 
  12,016,844 
  11,717,656 
 
    
    
    
    
INCOME (LOSS) FROM OPERATIONS
  288,776 
  (64,510)
  607,764 
  (933,423)
 
    
    
    
    
OTHER (EXPENSE) INCOME
    
    
    
    
Interest income
  40 
  936 
  4,761 
  6,339 
Interest expense
  (78,066)
  (21,644)
  (230,983)
  (71,531)
Other income
  5,324 
  2 
  5,324 
  3 
 
    
    
    
    
Total other expense
  (72,702)
  (20,706)
  (220,898)
  (65,189)
 
    
    
    
    
INCOME BEFORE INCOME TAX PROVISION
  216,074 
  (85,216)
  386,866 
  (998,612)
INCOME TAX PROVISION
  32,364 
  24,795 
  126,816 
  45,743 
 
    
    
    
    
NET INCOME (LOSS)
 $183,710 
 $(110,011)
 $260,050 
 $(1,044,355)
 
    
    
    
    
BASIC EARNINGS (LOSS) PER SHARE
 $0.00 
 $(0.00)
 $0.00 
 $(0.01)
 
    
    
    
    
BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING
  84,234,354 
  83,177,804 
  84,014,053 
  83,100,832 
 
    
    
    
    
DILUTED EARNINGS (LOSS) PER SHARE
 $0.00 
 $(0.00)
 $0.00 
 $(0.01)
 
    
    
    
    
DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING
  84,271,825 
  83,177,804 
  84,051,524 
  83,100,832