WidePoint Reports Fourth Quarter and Full Year 2018 Financial Results

Revenue up 24% in the Fourth Quarter; Sixth Consecutive Quarter of Positive Adjusted EBITDA


FAIRFAX, Va., March 21, 2019 (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 fourth quarter and full year ended December 31, 2018.

Fourth Quarter 2018 and Recent Operational Highlights:

  • Secured $1.6 million contract expansion with the U.S. Customs and Border Protection (CBP) agency, increasing the number of devices managed by 50% from 30,000 to 45,000
  • Teamed with Leidos on the NASA Nest contract to provide Managed Mobility Services in support of the agency’s mission
  • Added two new members to the Board of Directors, expanding the total number of directors to seven, including six independent directors and one inside director
  • Relocated company headquarters to Fairfax, VA as part of consolidation strategy

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

  • Revenues increased 24% to $24.8 million
  • Gross profit increased 25% to $4.5 million
  • Net loss narrowed to $0.4 million
  • Adjusted EBITDA, a non-GAAP financial measure, increased to $1.0 million, marking the company’s sixth consecutive quarter of positive adjusted EBITDA

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

  • Revenues increased 10% to a record $83.7 million
  • Gross profit increased 12% to $15.3 million
  • Net loss narrowed to $1.5 million
  • Adjusted EBITDA totaled $1.8 million

Fourth Quarter 2018 Financial Summary

    
(in millions, except per share amounts)December 31, 2018 December 31, 2017
  
 (Unaudited)
Revenues$24.8  $19.9 
Gross Profit$4.5  $3.6 
Gross Profit Margin 18%  18%
Operating Expenses$3.7  $4.3 
Loss from Operations$0.7  $(0.7)
Net Loss$(0.4) $(0.8)
Basic and Diluted Earnings per Share (EPS)$(0.00) $(0.01)
Adjusted EBITDA$1.0  $0.3 
    

Fiscal Year 2018 Financial Summary

    
(in millions, except per share amounts)December 31, 2018 December 31, 2017
  
 (Unaudited)
Revenues$83.7  $75.9 
Gross Profit$15.3  $13.7 
Gross Profit Margin 18%  18%
Operating Expenses$15.5  $17.2 
Loss from Operations$(0.2) $(3.5)
Net Loss$(1.5) $(3.5)
Basic and Diluted Earnings per Share (EPS)$(0.02) $(0.04)
Adjusted EBITDA$1.8  $(0.9)
        

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 anticipates revenues in the range of $90.0 million to $93.0 million, and adjusted EBITDA of $1.9 million to $2.0 million. The company’s financial outlook statements are based on current expectations.

Management Commentary
“The fourth quarter was a strong finish to what was a pivotal year for WidePoint as we delivered strong financial performance, expanded key customer relationships, as well as secured and implemented several contracts with new customers,” said WidePoint’s CEO, Jin Kang. “All of these initiatives enabled us to achieve our primary goals in 2018 of not only stabilizing the business but beginning the process of driving strong, sustainable, and profitable growth.

“Our financial performance in the fourth quarter was highlighted by a 24% increase in revenues, a 25% increase in gross profit, and positive adjusted EBITDA of $1.0 million; marking our sixth consecutive quarter of positive adjusted EBITDA. From a business development standpoint, we continue to execute on our strategy of maintaining solid relationships with our systems integrator partners and customers to upsell and pursue new business. This is evidenced by our recent contracts with Leidos and CBP. Over the course of the past year, we made significant progress in bolstering our credentials and improving our compliance with various government organizations to increase our competitive advantage.

“Due to the success we’ve had stabilizing the business and the momentum we’ve generated, we’re excited and optimistic about 2019. We look forward to continuing with our strategy to profitably grow the business and return greater value to our shareholders.”

Conference Call
WidePoint management will hold a conference call today (March 21, 2019) 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: 877-407-9210
International number: 201-689-8049

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 April 21, 2019.

Toll-free replay number: 877-481-4010
International replay number: 919-882-2331
Replay ID: 45084

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 FISCAL YEAR ENDED
    DECEMBER 31, DECEMBER 31,
     2018   2017   2018   2017 
     
    (Unaudited)
NET LOSS$   (412,100) $  (764,900) $   (1,456,500) $  (3,533,900)
Adjustments to reconcile net loss to EBITDA:       
 Depreciation and amortization   192,800      385,200     1,307,700      1,493,200 
 Income tax provision (benefit)   1,147,600      5,300     1,193,300      38,000 
 Interest income   (500)    (3,800)    (6,800)    (15,400)
 Interest expense   8,000      15,800     79,500      52,200 
           
EBITDA $   935,800   $  (362,400) $   1,117,200   $  (1,965,900)
Other adjustments to reconcile net loss to Adjusted EBITDA:       
 Other (expense) income   -      (2,000)    -      (3,800)
 Provision for doubtful accounts   10,900      31,300     4,800      62,500 
 Gain on sale of assets held for sale   -      -     -      (66,700)
 Loss on disposal of leasehold improvements   -      -     -      172,800 
 Severance and exit costs   -      353,100     -      540,600 
 Stock-based compensation expense   90,300      249,200     683,400      387,200 
           
Adjusted EBITDA$   1,037,000   $  269,200  $   1,805,400   $  (873,300)
           

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:

Liolios
Matt Glover or Charlie Schumacher
949-574-3860
WYY@liolios.com


WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

     
 DECEMBER 31, 
  2018   2017  
   
 (Unaudited) 
ASSETS 
CURRENT ASSETS    
Cash and cash equivalents$   2,431,892   $5,272,457  
Accounts receivable, net of allowance for doubtful accounts    
of $106,733 and $107,618 in 2018 and 2017, respectively   11,089,315    8,131,025  
Unbilled accounts receivable   9,566,170    8,131,448  
Other current assets   1,086,686    767,944  
     
Total current assets   24,174,063    22,302,874  
     
NONCURRENT ASSETS    
Property and equipment, net   1,012,684    1,318,420  
Intangibles, net   3,103,753    3,671,506  
Goodwill   18,555,578    18,555,578  
Other long-term assets   209,099    44,553  
     
Total assets$   47,055,177   $45,892,931  
     
LIABILITIES AND STOCKHOLDERS' EQUITY 
     
CURRENT LIABILITIES    
Accounts payable$   7,363,621   $7,266,212  
Accrued expenses   10,716,438    9,796,350  
Deferred revenue   2,072,344    2,348,578  
Current portion of capital leases   107,325    101,591  
Current portion of other term obligations   192,263    203,271  
     
Total current liabilities   20,451,991    19,716,002  
     
NONCURRENT LIABILITIES    
Capital leases, net of current portion   122,040    232,109  
Other term obligations, net of current portion   73,952    78,336  
Deferred revenue   466,714    264,189  
Deferred tax liability   1,523,510    392,229  
     
Total liabilities   22,638,207    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; 84,112,446 and 83,031,595 shares    
issued and oustanding, respectively   84,113    83,032  
Additional paid-in capital   94,926,560    94,200,237  
Accumulated other comprehensive loss   (186,485)  (122,461) 
Accumulated deficit   (70,407,218)  (68,950,742) 
     
Total stockholders’ equity   24,416,970    25,210,066  
     
Total liabilities and stockholders’ equity$   47,055,177   $45,892,931  
     


WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

            
    THREE MONTHS ENDED YEARS ENDED 
    DECEMBER 31, DECEMBER 31, 
     2018   2017   2018   2017  
      
    (Unaudited) 
REVENUES$   24,760,579   $  19,927,629  $   83,678,896   $  75,884,246  
COST OF REVENUES (including amortization and depreciation        
 of $892,314, and $1,154,901, respectively)   20,275,135      16,334,655     68,409,219      62,194,187  
            
GROSS PROFIT   4,485,444      3,592,974     15,269,677      13,690,059  
            
OPERATING EXPENSES        
 Sales and marketing   376,704      493,021     1,743,693      2,202,913  
 General and administrative expenses (including share-based        
  compensation of $683,404, and $387,210, respectively)   3,263,148      3,724,292     13,301,052      14,392,660  
 Product development   -      -     -      219,141  
 Depreciation and amortization   102,574      125,440     415,337      338,314  
            
   Total operating expenses   3,742,426      4,342,753     15,460,082      17,153,028  
            
LOSS FROM OPERATIONS   743,018      (749,779)    (190,405)    (3,462,969) 
            
OTHER (EXPENSE) INCOME        
 Interest income   458      3,788     6,797      15,352  
 Interest expense   (8,009)    (15,756)    (79,540)    (52,158) 
 Other income   (5)    2,047     (2)    3,805  
            
   Total other expense   (7,556)    (9,921)    (72,745)    (33,001) 
            
LOSS BEFORE INCOME TAX PROVISION   735,462      (759,700)    (263,150)    (3,495,970) 
INCOME TAX PROVISION   1,147,583      5,244     1,193,326      37,967  
            
NET LOSS$   (412,121) $  (764,944) $   (1,456,476) $  (3,533,937) 
            
BASIC LOSS PER SHARE$   (0.00) $  (0.01) $   (0.02) $  (0.04) 
            
BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING   83,788,535      83,011,331     83,274,171      82,911,730  
            
DILUTED LOSS PER SHARE$   (0.00) $  (0.01) $   (0.02) $  (0.04) 
            
DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING   83,788,535      83,011,331     83,274,171      82,911,730