WidePoint Reports Fourth Quarter and Full Year 2019 Financial Results


FAIRFAX, Va., March 24, 2020 (GLOBE NEWSWIRE) -- 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 fourth quarter and full year ended December 31, 2019.

Fourth Quarter 2019 and Recent Operational Highlights:

  • Received a notice of intent from the Department of Homeland Security (DHS) to solicit and award a sole source IDIQ contract to WidePoint for Cellular Wireless Managed Services (CWMS)

  • Supported the address canvassing program, the first major field operation of the 2020 Census, by activating, deploying, tracking, and decommissioning over 60,000 devices and providing training and help desk support to over 60,000 enumerators

  • Appointed Kellie Kim, a finance and accounting professional with over 30 years of experience in telecom, technology, and professional services as the new chief financial officer

  • Partnered with KoolSpan to provide end-to-end encryption for phone calls and text messages

  • Repurchased 864,000 shares of common stock, equivalent to $366,000, as of December 31, 2019

Fourth Quarter 2019 Financial Highlights (results compared to the same year-ago period):

  • Revenues increased 13% to $28.1 million

  • Gross profit increased 6% to $4.8 million

  • Net loss totaled $34,000

  • Adjusted EBITDA, a non-GAAP financial measure, was $972,000, marking the company’s tenth consecutive quarter of positive adjusted EBITDA, and in line with forecast

Full Year 2019 Financial Highlights (results compared to the same year-ago period):

  • Revenues increased 22% to a record $101.7 million

  • Gross profit increased 14% to a record $17.4 million

  • Net income totaled $226,000

  • Adjusted EBITDA totaled $3.6 million


Fourth Quarter 2019 Financial Summary    
    
(in millions, except per share amounts)December 31, 2019 December 31, 2018
 (Unaudited)
Revenues$28.1  $24.8 
Gross Profit$4.8  $4.5 
Gross Profit Margin 16.9%  18.1%
Operating Expenses$4.5  $3.7 
Income (Loss) from Operations$0.3  $0.7 
Net Income (Loss)$(0.0) $(0.4)
Basic and Diluted Earnings per Share (EPS)$(0.00) $(0.01)
Adjusted EBITDA$1.0  $1.0 
    
Full Year 2019 Financial Summary   
    
(in millions, except per share amounts)December 31, 2019 December 31, 2018
 (Unaudited)
Revenues$101.7  $83.7 
Gross Profit$17.4  $15.3 
Gross Profit Margin 17.1%  18.2%
Operating Expenses$16.5  $15.5 
Income (Loss) from Operations$0.9  $(0.2)
Net Income (Loss)$0.2  $(1.5)
Basic and Diluted Earnings per Share (EPS)$0.0  $(0.02)
Adjusted EBITDA$3.6  $1.8 


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 first quarter ending March 31, 2020, the company currently expects revenues of $26.0 million to $31.0 million, representing year-over-year growth of 19% to 42%. The company also expects adjusted EBITDA of $0.8 million to $0.9 million. The company’s financial outlook is based on current expectations.

Management Commentary
“2019 concluded with a strong performance in the fourth quarter in large part due to the successful execution of our sales strategy and our ability to effectively scale along with the growing needs of our customers while maintaining an efficient and effectively operated organization,” said WidePoint’s CEO, Jin Kang. “From a financial perspective, the quarter was highlighted by a 13% increase in revenues to $28.1 million and positive adjusted EBITDA of $1.0 million, which marks our tenth consecutive quarter of positive adjusted EBITDA. Operationally, we continued to ramp up our work on the U.S. Census project, strengthened our relationships with our system integrator partners, and received an intent to award notice for a sole source interim contract from the U.S. Department of Homeland Security.

“For the full year, we either met or exceeded our financial expectations as we recognized record revenues of $101.7 million, while driving record adjusted EBITDA of $3.6 million, and GAAP net income profitability. These results, coupled with the fact that we generated $5.9 million in cash from operations, indicate that we continue to successfully achieve our primary goal of simultaneously improving the top and bottom lines as we help large enterprises navigate the complexities of the mobile landscape.

“Overall, 2019 was another successful year for WidePoint that gave us solid momentum going into 2020, in large part, due to the census and NASA NEST projects, which are now running at full speed. We’re fortunate to have a stable and profitable business, as well as a resilient customer base that should be able to weather the current dynamic market conditions relatively well. While no industry is immune to the effects of COVID-19, we serve predominantly large federal and commercial enterprises, for whom our solutions are a critical component to manage their mobile workforces. These characteristics coupled with our ongoing projects give us good visibility in the near-term and confidence in our ability to drive profitable growth over the long term.” 

Conference Call
WidePoint management will hold a conference call today (March 24, 2020) 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 Executive Vice President and CFO Kellie Kim 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 April 7, 2020.

Toll-free replay number: 877-481-4010
International replay number: 919-882-2331
Replay ID: 33479

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.               

    FISCAL YEAR ENDED THREE MONTHS ENDED
    DECEMBER 31, DECEMBER 31,
     2019   2018   2019   2018 
         
NET INCOME (LOSS)$ 226,300  $(1,456,500)  $(33,800) $(412,100)
Adjustments to reconcile net (loss) income to EBITDA:       
 Depreciation and amortization 1,910,600   1,307,900   481,500   192,800 
 Amortization of deferred financing costs 5,000   17,000   1,200   1,200 
 Income tax provision (benefit) 392,700   1,193,300   265,900   1,147,600 
 Interest income (5,400)  (6,800)  (600)  (500)
 Interest expense 305,600   62,300   78,400   5,600 
           
EBITDA $ 2,834,800  $1,117,200  $792,600  $934,600 
Other adjustments to reconcile net (loss) income to Adjusted EBITDA:       
 Provision for doubtful accounts 22,000   4,800   (1,500)  10,900 
 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 718,000   683,400   181,200   90,300 
           
Adjusted EBITDA$ 3,574,800  $1,805,400  $972,300  $1,035,800 
     3.5%  2.2%    



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

     
 DECEMBER 31, DECEMBER 31, 
  2019   2018  
   
ASSETS    
CURRENT ASSETS    
Cash and cash equivalents$ 6,879,627  $2,431,892  
Accounts receivable, net of allowance for doubtful accounts    
of $126,235 and $106,733 in 2019 and 2018, respectively 14,580,928   11,089,315  
Unbilled accounts receivable 13,976,958   9,566,170  
Other current assets 1,094,847   1,086,686  
     
Total current assets 36,532,360   24,174,063  
     
NONCURRENT ASSETS    
Property and equipment, net 681,575   1,012,684  
Operating lease right of use asset, net 5,932,769   -  
Intangibles, net 2,450,770   3,103,753  
Goodwill 18,555,578   18,555,578  
Other long-term assets 140,403   209,099  
     
Total assets$ 64,293,455  $47,055,177  
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
     
CURRENT LIABILITIES    
Accounts payable$ 13,581,822  $7,363,621  
Accrued expenses 14,947,981   10,716,438  
Deferred revenue 2,265,067   2,072,344  
Current portion of operating lease liabilities 599,619   107,325  
Current portion of other term obligations 133,777   192,263  
     
Total current liabilities 31,528,266   20,451,991  
     
NONCURRENT LIABILITIES    
Operating lease liabilities, net of current portion 5,593,649   122,040  
Other term obligations, net of current portion -   73,952  
Deferred revenue, net of current portion 363,560   466,714  
Deferred tax liability 1,868,562   1,523,510  
     
Total liabilities 39,354,037   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; 83,861,453 and 84,112,446 shares    
issued and outstanding, respectively 83,861   84,113  
Additional paid-in capital 95,279,114   94,926,560  
Accumulated other comprehensive loss (242,594)  (186,485) 
Accumulated deficit (70,180,963)  (70,407,218) 
     
Total stockholders’ equity 24,939,418   24,416,970  
     
Total liabilities and stockholders’ equity$ 64,293,455  $47,055,177  
     


WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

           
    YEARS ENDED THREE MONTHS ENDED
    DECEMBER 31, DECEMBER 31,
     2019   2018   2019   2018 
           
REVENUES$ 101,720,247  $83,678,896   $28,093,252  $24,760,579 
COST OF REVENUES (including amortization and depreciation of       
 $922,455 and $892,314, respectively) 84,342,282   68,409,219   23,339,895   20,275,135 
           
GROSS PROFIT 17,377,965   15,269,677   4,753,357   4,485,444 
     17%  18%  17%  18%
OPERATING EXPENSES       
 Sales and marketing 1,659,875   1,743,693   444,319   376,704 
 General and administrative expenses (including share-based       
  compensation of $717,987 and $683,404, respectively) 13,844,689   13,301,052   3,774,306   3,263,148 
 Depreciation and amortization 988,146   415,337   257,241   102,574 
           
   Total operating expenses 16,492,710   15,460,082   4,475,866   3,742,426 
           
INCOME (LOSS) FROM OPERATIONS 885,255   (190,405)  277,491   743,018 
           
OTHER (EXPENSE) INCOME       
 Interest income 5,355   6,797   594   458 
 Interest expense (310,582)  (79,540)  (79,599)  (8,009)
 Other income 38,877   (2)  33,553   (5)
           
   Total other expense (266,350)  (72,745)  (45,452)  (7,556)
           
INCOME (LOSS) BEFORE INCOME TAX PROVISION 618,905   (263,150)  232,039   735,462 
INCOME TAX PROVISION 392,650   1,193,326   265,834   1,147,583 
           
NET INCOME (LOSS)$ 226,255  $(1,456,476)  $(33,795) $(412,121)
           
BASIC EARNINGS (LOSS) PER SHARE$ 0.003  $(0.017) $ (0.000) $ (0.005)
           
BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING 83,974,536   83,274,171   83,940,968   83,788,535 
           
DILUTED EARNINGS (LOSS) PER SHARE$ 0.003  $(0.017) $ (0.000) $ (0.005)
           
DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING 84,010,285   83,274,171   83,976,717   83,788,535