Revenue up 15%, Fifth Consecutive Quarter of Positive Adjusted EBITDA

MCLEAN, Va., Nov. 14, 2018 (GLOBE NEWSWIRE) -- 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 third quarter and nine months ended September 30, 2018.

Third Quarter 2018 Operational Highlights: $33.9M in contract actions:

  • Secured approximately $5.4 million in new contract awards, $2.8 million in expanded services with existing customers and $10.5 million in option year follow-on contracts with existing customers
  • Secured new $12.0 million task order from the U.S. Coast Guard under the U.S. Department of Homeland Security (DHS) Cellular Wireless Management Services (CWMS) Blanket Purchase Agreement, of which up to 6% to 7% of the total task order consists of high margin managed services
  • Awarded $1.67 million, five-year contract for mobile communications management services by the Centers for Disease Control and Prevention, of which the majority consists of high margin managed services
  • Awarded new, one-year Blanket Purchase Agreement (BPA) task order by DHS Headquarters valued at $1.5 million, of which up to one-third of the task order consists of high margin managed services

Third Quarter 2018 Financial Highlights (results compared to the same year-ago period):

  • Revenue increased 15% to $21.3 million
  • Gross profit increased 9% to $3.7 million
  • Net loss narrowed to $0.1 million
  • Adjusted EBITDA, a non-GAAP financial measure, increased to $561,000, marking the company’s fifth consecutive quarter of positive adjusted EBITDA

Nine Month 2018 Financial Highlights (results compared to the same year-ago period):

  • Revenue increased 5% to $58.9 million
  • Gross profit increased 7% to $10.8 million
  • Net loss narrowed to $1.0 million
  • Adjusted EBITDA totaled $768,400
 
Third Quarter 2018 Financial Summary
 
 (in millions, except per share amounts)September 30, 2018September 30, 2017
 Revenues$   21.29 $18.46 
 Gross Profit$   3.69 $3.38 
 Gross Profit Margin 17.3 18.3% 
 Operating Expenses$   3.75 $3.66 
 Loss from Operations$   (0.06$(0.28) 
 Net Loss$   (0.11$(0.31) 
 Basic and Diluted Earnings per Share (EPS)$   (0.00$(0.00) 
 Adjusted EBITDA$   0.55 $0.03 
 Cash and Cash Equivalents$   3.95 $5.27 
 
Fiscal Nine Months 2018 Financial Summary
 
 (in millions, except per share amounts)September 30, 2018September 30, 2017
 Revenues$   58.92 $55.96 
 Gross Profit$   10.78 $10.10 
 Gross Profit Margin 18.3 18.0% 
 Operating Expenses$   11.72 $12.81 
 Loss from Operations$   (0.93$(2.71) 
 Net Loss$   (1.04$(2.77) 
 Basic and Diluted Earnings per Share (EPS)$   (0.01$(0.03) 
 Adjusted EBITDA$   0.77 $(1.10) 
     

Financial Outlook
For the fiscal year ending December 31, 2018, the company anticipates total revenue in the range of $82.0 million to $83.0 million, representing growth of roughly 9% year-over-year, and EBITDA of $1.6 million as compared to $900,000 in the prior year.

The company’s financial outlook statements are based on current expectations. 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. 

Management Commentary
“The third quarter was another strong period for WidePoint. We now have five straight quarters of positive adjusted EBITDA and we are continuing to build momentum toward achieving GAAP profitability,” said company President and CEO, Jin Kang. “Our performance in Q3 was highlighted by solid topline growth as we successfully expanded relationships with key Federal and enterprise customers. In addition to our strong topline results, we also delivered another sequential improvement in adjusted EBITDA.  

“From a business development standpoint, we continue to execute on our strategy to maintain our customer, upsell and pursue new business. This is evidenced by the substantial orders and large contracts we have recently secured, including the $12 million follow-on order from the U.S. Coast Guard as well as the $20 million in aggregate of new contract orders from various government agencies. These awards highlight WidePoint’s position as the premier provider of Trusted Mobility Management services solutions to the public and private sectors. Looking ahead, our building momentum in the new Federal fiscal year underscores a robust pipeline of significant opportunities.”

Conference Call
WidePoint management will hold a conference call today (November 14, 2018) at 4:30 p.m. Eastern time (1:30 p.m. local time) to discuss these results.

WidePoint President and CEO Jin Kang, Chief Sales and Marketing Officer Jason Holloway, and CFO Kito Mussa will host the conference call, followed by a question and answer period.

U.S. dial-in number: 877-451-6152
International number: 201-389-0879

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 Liolios 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 28, 2018.

Toll-free replay number: 844-512-2921
International replay number: 412-317-6671
Replay ID: 13684462

About WidePoint

WidePoint Corporation (NYSE American: WYY) is a leading provider of technology-based management solutions, including telecom management, mobile management, access management and identity management. 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 NINE MONTHS ENDED
   SEPTEMBER 30, SEPTEMBER 30,
   2018 2017 2018 2017
          
   (Unaudited)
NET LOSS$   (110,000) $(314,600) $   (1,044,400) $(2,769,000)
Adjustments to reconcile net loss to adjusted EBITDA:       
Depreciation and amortization   353,100    388,400     1,114,900    1,108,000 
Income tax provision (benefit)   24,800    17,200     45,700    32,700 
Interest income   (900)  (2,000)    (6,300)  (11,600)
Interest expense   21,600    23,500     71,500    45,900 
Other (expense) income   -    1,500     -    (1,800)
Provision for doubtful accounts   (300)  -     (6,100)  31,200 
Gain on sale of assets held for sale   -    -     (66,700)
Loss on disposal of leasehold improvements   -    -     172,500 
Severance and exit costs   -    -     187,500 
Stock-based compensation expense   272,800    (81,400)    593,100    138,000 
          
Adjusted EBITDA$   561,100   $32,600  $   768,400   $(1,133,300)
          

Safe Harbor Statement
The information contained in any materials that may be accessed above was, to the best of WidePoint Corporation’s 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.


WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

    
 SEPTEMBER 30, DECEMBER 31,
 2018 2017
    
 (Unaudited)
ASSETS
CURRENT ASSETS   
Cash and cash equivalents$   3,950,106   $5,272,457 
Accounts receivable, net of allowance for doubtful accounts   
of $96,846 and $107,618 in 2018 and 2017, respectively   8,022,377    8,131,025 
Unbilled accounts receivable   7,803,572    8,131,448 
Other current assets   963,649    767,944 
    
Total current assets   20,739,704    22,302,874 
    
NONCURRENT ASSETS   
Property and equipment, net   1,058,786    1,318,420 
Intangibles, net   3,284,626    3,671,506 
Goodwill   18,555,578    18,555,578 
Other long-term assets   145,477    44,553 
    
Total assets$   43,784,171   $45,892,931 
    
LIABILITIES AND STOCKHOLDERS' EQUITY
    
CURRENT LIABILITIES   
Accounts payable$   6,080,686   $7,266,212 
Accrued expenses   9,064,369    9,796,350 
Deferred revenue   2,689,038    2,348,578 
Current portion of capital leases   105,712    101,591 
Current portion of other term obligations   107,109    203,271 
    
Total current liabilities   18,046,914    19,716,002 
    
NONCURRENT LIABILITIES   
Capital leases, net of current portion   151,037    232,109 
Other term obligations, net of current portion   64,006    78,336 
Deferred revenue   410,310    264,189 
Deferred tax liability   393,975    392,229 
    
Total liabilities   19,066,242    20,682,865 
    
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; 84,062,446 and 83,031,595 shares   
issued; 83,762,446 and 83,031,595 shares   
outstanding, respectively   83,763    83,032 
Additional paid-in capital   94,814,580    94,200,237 
Accumulated other comprehensive loss   (185,317)  (122,461)
Accumulated deficit   (69,995,097)  (68,950,742)
    
Total stockholders’ equity   24,717,929    25,210,066 
    
Total liabilities and stockholders’ equity$   43,784,171   $45,892,931 
    
    

WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 

        
 THREE MONTHS ENDED NINE MONTHS ENDED
 SEPTEMBER 30, SEPTEMBER 30,
  2018   2017   2018   2017 
        
 (Unaudited)
REVENUES$   21,294,360   $18,463,872  $   58,918,317   $55,956,617 
COST OF REVENUES (including amortization and depreciation       
of $248,009, $318,461, $802,174, and $895,088, respectively)   17,609,287    15,087,567     48,134,084    45,859,532 
        
GROSS PROFIT   3,685,073    3,376,305     10,784,233    10,097,085 
        
OPERATING EXPENSES       
Sales and marketing   387,407    532,714     1,366,989    1,709,892 
General and administrative expenses (including share-based       
compensation of $272,737, ($81,043), $593,075 and       
$138,036, respectively)   3,257,262    3,046,148     10,037,904    10,668,368 
Product development   -    11,342     -    219,141 
Depreciation and amortization   104,914    69,935     312,763    212,874 
Total operating expenses   3,749,583    3,660,139     11,717,656    12,810,275 
        
LOSS FROM OPERATIONS   (64,510)  (283,834)    (933,423)  (2,713,190)
        
OTHER (EXPENSE) INCOME       
Interest income   936    1,971     6,339    11,564 
Interest expense   (21,644)  (13,985)    (71,531)  (36,402)
Other income (expense)   2    (1,541)    3    1,758 
Total other expense   (20,706)  (13,555)    (65,189)  (23,080)
        
LOSS BEFORE INCOME TAX PROVISION   (85,216)  (297,389)    (998,612)  (2,736,270)
INCOME TAX PROVISION   24,795    17,212     45,743    32,723 
        
NET LOSS$   (110,011) $(314,601) $   (1,044,355) $(2,768,993)
        
BASIC LOSS PER SHARE$   (0.00) $(0.00) $   (0.01) $(0.03)
        
BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING   83,177,804    82,946,847     83,100,832    82,878,287 
        
DILUTED LOSS PER SHARE$   (0.00) $(0.00) $   (0.01) $(0.03)
        
DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING   83,177,804    82,946,847     83,100,832    82,878,287 
        
Investor Relations:
Liolios
Matt Glover or Tom Colton
949-574-3860