FAIRFAX, Va., Nov. 16, 2020 (GLOBE NEWSWIRE) -- WidePoint Corporation (NYSE American: WYY ) , the leading provider of Trusted Mobility Management (TM2) specializing in Telecommunications Lifecycle Management, Identity Management (IdM) and Digital Billing & Analytics solutions, today reported results for the third quarter September 30, 2020.
Third Quarter 2020 and Recent Operational Highlights:
- Secured more than $11 million in contract wins, exercised option periods, and contract extensions during the third quarter of 2020, approximately $10 million of which is comprised of new business and new extensions
- Successfully onboarded Virginia Alcoholic Beverage Control Authority (Virginia ABC) after being awarded a new contract for TEM services
- Number of U.S. Department of Defense digital certificates issued increased 14% sequentially from the second quarter of 2020 and 15% year-over-year from the third quarter of 2019, leading to an increase in high margin Identity Management revenue
- Responded to the request for proposal and provided oral presentation to the U.S. Department of Homeland Security regarding the Cellular Wireless Managed Services (CWMS) II contract re-compete
- Effectuated 1-for-10 reverse stock split on November 6, 2020 to better position the Company for long-term success
Third Quarter 2020 Financial Highlights ( results compared to the same year-ago period) :
- Revenues increased 94% to $57.5 million
- Managed Services revenue increased 38% to $12.5 million
- Gross profit increased 30% to $5.6 million
- Net income totaled $1.1 million
- EBITDA, a non-GAAP financial measure, increased 102% to $1.6 million
- Adjusted EBITDA, a non-GAAP financial measure, increased 82% to $1.7 million
Nine Month 2020 Financial Highlights (results compared to the same year-ago period):
- Revenues increased 106% to $152.0 million
- Managed Services revenue increased 37% to $33.8 million
- Gross profit increased 24% to $15.6 million
- Net income totaled $2.0 million
- EBITDA, a non-GAAP financial measure, increased 84% to $3.8 million
- Adjusted EBITDA, a non-GAAP financial measure, increased 69% to $4.4 million
| Third Quarter 2020 Financial Summary |
|
|
|
|
|
|
|
|
|
|
|
| (in millions, except per share amounts) |
September 30, 2020 |
|
September 30, 2019 |
|
(Unaudited) |
| Revenues |
$ |
57.5 |
|
|
$ |
29.6 |
|
| Gross Profit |
$ |
5.6 |
|
|
$ |
4.3 |
|
| Gross Profit Margin |
|
9.8 |
% |
|
|
14.6 |
% |
| Operating Expenses |
$ |
4.5 |
|
|
$ |
4.0 |
|
| Income (Loss) from Operations |
$ |
1.1 |
|
|
$ |
0.3 |
|
| Net Income (Loss) |
$ |
1.1 |
|
|
$ |
0.2 |
|
| Basic and Diluted Earnings per Share (EPS) |
$ |
0.13 |
|
|
$ |
0.02 |
|
| EBITDA |
$ |
1.6 |
|
|
$ |
0.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Nine Month 2020 Financial Summary |
|
|
|
|
|
|
|
|
|
|
|
| (in millions, except per share amounts) |
September 30, 2020 |
|
September 30, 2019 |
|
(Unaudited) |
| Revenues |
$ |
152.0 |
|
|
$ |
73.6 |
|
| Gross Profit |
$ |
15.6 |
|
|
$ |
12.6 |
|
| Gross Profit Margin |
|
10.3 |
% |
|
|
17.1 |
% |
| Operating Expenses |
$ |
13.1 |
|
|
$ |
12.0 |
|
| Income from Operations |
$ |
2.5 |
|
|
$ |
0.6 |
|
| Net Income |
$ |
2.0 |
|
|
$ |
0.3 |
|
| Basic and Diluted Earnings per Share (EPS) |
$ |
0.24 |
|
|
$ |
0.03 |
|
| EBITDA |
$ |
3.8 |
|
|
$ |
2.0 |
|
|
|
|
|
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, 2020, the Company is reiterating its revenue guidance of $185 million to $195 million, which at the midpoint of the range, would represent 87% growth year-over-year. The Company is also reiterating the EBITDA guidance it updated on October 26, 2020 of $4.7 million to $4.9 million, which at the midpoint, is 50% above the Company’s previously issued EBITDA guidance and represents a 69% year-over-year increase compared to fiscal 2019. For fiscal 2020, the Company also anticipates adjusted EBITDA, which excludes stock-based compensation expense, to range between $5.5 million to $5.7 million, which, at the midpoint, represents a 57% year-over-year increase compared to fiscal 2019. The EBITDA forecast takes into consideration the Company’s planned strategic investments in sales and marketing and product development. The Company’s financial outlook is based on current expectations.
Management Commentary
“Thanks to the work of our dedicated personnel and the flexibility we built into our organization, we continued to build on the momentum established in the first half of the year and produced record financial results for the third quarter of 2020,” said WidePoint’s CEO, Jin Kang. “For the third quarter, our total revenues increased to $57.5 million, largely driven by our increased work on the U.S. Census 2020 as well as expansions with other federal government customers, and perhaps more importantly, our high margin managed services revenues increased 38% year-over-year. That increase helped drive $1.1 million in net income for the third quarter, which is almost five times greater than our net income in all of fiscal 2019, and our adjusted EBITDA for the quarter increased 82% to $1.7 million. We also strengthened our balance sheet by increasing our cash position by $3.9 million sequentially to $11.4 million.
“The financial success of the quarter is a clear indication of the value WidePoint can generate because of our excellent staff, our flexible organizational structure, and the market’s growing demand for our products that function as a solution for many of the problems faced by large government and commercial enterprises in today’s environment. With 2020 lining up to be a banner year for WidePoint, we believe our company has never been better positioned than it is today, and we look forward to capitalizing on this momentum as we close out the year and move into 2021.”
Conference Call
WidePoint management will hold a conference call today (November 16, 2020) at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss these results.
WidePoint’s President and CEO Jin Kang, Executive Vice President and 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: 844-407-9500
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 30, 2020.
Toll-free replay number: 877-481-4010
International replay number: 919-882-2331
Replay ID: 38150
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 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 income to EBITDA is included on the schedules attached hereto.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED |
|
NINE MONTHS ENDED |
|
|
|
|
|
SEPTEMBER 30, |
|
SEPTEMBER 30, |
|
|
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
| NET INCOME |
$ |
1,067,000 |
|
|
$ |
183,700 |
|
|
$ |
2,039,500 |
|
|
$ |
260,100 |
|
|
| Adjustments to reconcile net (loss) income to EBITDA: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
415,700 |
|
|
|
479,300 |
|
|
|
1,247,100 |
|
|
|
1,429,100 |
|
|
|
Amortization of deferred financing costs |
|
- |
|
|
|
1,300 |
|
|
|
1,700 |
|
|
|
3,800 |
|
|
|
Income tax provision (benefit) |
|
12,500 |
|
|
|
32,300 |
|
|
|
242,800 |
|
|
|
126,800 |
|
|
|
Interest income |
|
(100 |
) |
|
|
(100 |
) |
|
|
(3,100 |
) |
|
|
(4,800 |
) |
|
|
Interest expense |
|
69,600 |
|
|
|
76,800 |
|
|
|
226,200 |
|
|
|
227,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| EBITDA |
|
$ |
1,564,700 |
|
|
$ |
773,300 |
|
|
$ |
3,754,200 |
|
|
$ |
2,042,200 |
|
|
| Other adjustments to reconcile net (loss) income to Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
(Recovery) Provision for doubtful accounts |
|
|
|
12,300 |
|
|
|
600 |
|
|
|
23,500 |
|
|
|
Gain on sale of assets held for sale |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
Loss on disposal of leasehold improvements |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
Lease account impact on EBITDA |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
Stock-based compensation expense |
|
160,000 |
|
|
|
163,400 |
|
|
|
650,900 |
|
|
|
536,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA |
$ |
1,724,700 |
|
|
$ |
949,000 |
|
|
$ |
4,405,700 |
|
|
$ |
2,602,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
(Unaudited) |
|
| ASSETS |
|
| CURRENT ASSETS |
|
|
|
|
| Cash and cash equivalents |
$ |
11,372,902 |
|
|
$ |
6,879,627 |
|
|
| Accounts receivable, net of allowance for doubtful accounts |
|
|
|
|
| of $119,248 and $126,235 in 2020 and 2019, respectively |
|
31,469,534 |
|
|
|
14,580,928 |
|
|
| Unbilled accounts receivable |
|
15,041,634 |
|
|
|
13,976,958 |
|
|
| Other current assets |
|
1,099,773 |
|
|
|
1,094,847 |
|
|
|
|
|
|
|
| Total current assets |
|
58,983,843 |
|
|
|
36,532,360 |
|
|
|
|
|
|
|
| NONCURRENT ASSETS |
|
|
|
|
| Property and equipment, net |
|
619,773 |
|
|
|
681,575 |
|
|
| Operating lease right of use asset, net |
|
6,299,131 |
|
|
|
5,932,769 |
|
|
| Intangibles, net |
|
2,076,320 |
|
|
|
2,450,770 |
|
|
| Goodwill |
|
18,555,578 |
|
|
|
18,555,578 |
|
|
| Other long-term assets |
|
874,906 |
|
|
|
140,403 |
|
|
|
|
|
|
|
| Total assets |
$ |
87,409,551 |
|
|
$ |
64,293,455 |
|
|
|
|
|
|
|
| LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
| CURRENT LIABILITIES |
|
|
|
|
| Accounts payable |
$ |
30,954,163 |
|
|
$ |
13,581,822 |
|
|
| Accrued expenses |
|
17,348,047 |
|
|
|
14,947,981 |
|
|
| Deferred revenue |
|
2,270,783 |
|
|
|
2,265,067 |
|
|
| Current portion of operating lease liabilities |
|
580,483 |
|
|
|
599,619 |
|
|
| Current portion of other term obligations |
|
- |
|
|
|
133,777 |
|
|
|
|
|
|
|
| Total current liabilities |
|
51,153,476 |
|
|
|
31,528,266 |
|
|
|
|
|
|
|
| NONCURRENT LIABILITIES |
|
|
|
|
| Operating lease liabilities, net of current portion |
|
6,097,949 |
|
|
|
5,593,649 |
|
|
| Deferred revenue, net of current portion |
|
382,814 |
|
|
|
363,560 |
|
|
| Deferred tax liability |
|
2,100,446 |
|
|
|
1,868,562 |
|
|
|
|
|
|
|
| Total liabilities |
|
59,734,685 |
|
|
|
39,354,037 |
|
|
|
|
|
|
|
| Commitments and contingencies |
|
- |
|
|
|
- |
|
|
|
|
|
|
|
| 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; 30,000,000 shares |
|
|
|
|
| authorized; 8,458,734 and 8,386,145 shares |
|
|
|
|
| issued and outstanding, respectively |
|
84,587 |
|
|
|
83,861 |
|
|
| Additional paid-in capital |
|
95,919,199 |
|
|
|
95,279,114 |
|
|
| Accumulated other comprehensive loss |
|
(187,435 |
) |
|
|
(242,594 |
) |
|
| Accumulated deficit |
|
(68,141,485 |
) |
|
|
(70,180,963 |
) |
|
|
|
|
|
|
| Total stockholders’ equity |
|
27,674,866 |
|
|
|
24,939,418 |
|
|
|
|
|
|
|
| Total liabilities and stockholders’ equity |
$ |
87,409,551 |
|
|
$ |
64,293,455 |
|
|
|
|
|
|
|
WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED |
|
NINE MONTHS ENDED |
|
|
|
|
|
SEPTEMBER 30, |
|
SEPTEMBER 30, |
|
|
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
| REVENUES |
$ |
57,506,561 |
|
|
$ |
29,616,940 |
|
|
$ |
151,955,707 |
|
|
$ |
73,626,995 |
|
|
| COST OF REVENUES (including amortization and depreciation of |
|
|
|
|
|
|
|
|
|
$130,559, $233,033, $432,327, and $698,192, respectively) |
|
51,888,205 |
|
|
|
25,302,919 |
|
|
|
136,314,439 |
|
|
|
61,002,387 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GROSS PROFIT |
|
5,618,356 |
|
|
|
4,314,021 |
|
|
|
15,641,268 |
|
|
|
12,624,608 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
500,015 |
|
|
|
406,683 |
|
|
|
1,431,930 |
|
|
|
1,215,556 |
|
|
|
General and administrative expenses (including share-based |
|
|
|
|
|
|
|
|
|
|
compensation of $160,056, $163,451, $650,924 and $536,828, respectively) |
|
|
3,684,344 |
|
|
|
3,372,269 |
|
|
|
10,887,952 |
|
|
|
10,070,383 |
|
|
|
Depreciation and amortization |
|
285,181 |
|
|
|
246,293 |
|
|
|
814,813 |
|
|
|
730,905 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
|
4,469,540 |
|
|
|
4,025,245 |
|
|
|
13,134,695 |
|
|
|
12,016,844 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| INCOME FROM OPERATIONS |
|
1,148,816 |
|
|
|
288,776 |
|
|
|
2,506,573 |
|
|
|
607,764 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| OTHER (EXPENSE) INCOME |
|
|
|
|
|
|
|
|
|
Interest income |
|
94 |
|
|
|
40 |
|
|
|
3,119 |
|
|
|
4,761 |
|
|
|
Interest expense |
|
(69,582 |
) |
|
|
(78,066 |
) |
|
|
(227,889 |
) |
|
|
(230,983 |
) |
|
|
Other income |
|
118 |
|
|
|
5,324 |
|
|
|
458 |
|
|
|
5,324 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other expense |
|
|
(69,370 |
) |
|
|
(72,702 |
) |
|
|
(224,312 |
) |
|
|
(220,898 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| INCOME BEFORE INCOME TAX PROVISION |
|
1,079,446 |
|
|
|
216,074 |
|
|
|
2,282,261 |
|
|
|
386,866 |
|
|
| INCOME TAX PROVISION |
|
12,483 |
|
|
|
32,364 |
|
|
|
242,783 |
|
|
|
126,816 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| NET INCOME |
$ |
1,066,963 |
|
|
$ |
183,710 |
|
|
$ |
2,039,478 |
|
|
$ |
260,050 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| BASIC EARNINGS PER SHARE |
$ |
0.13 |
|
|
$ |
0.02 |
|
|
$ |
0.24 |
|
|
$ |
0.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING |
|
8,450,843 |
|
|
|
8,423,435 |
|
|
|
8,409,114 |
|
|
|
8,401,405 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| DILUTED EARNINGS PER SHARE |
$ |
0.13 |
|
|
$ |
0.02 |
|
|
$ |
0.24 |
|
|
$ |
0.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING |
|
8,527,309 |
|
|
|
8,427,183 |
|
|
|
8,463,561 |
|
|
|
8,405,152 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED |
|
NINE MONTHS ENDED |
|
|
|
|
|
SEPTEMBER 30, |
|
SEPTEMBER 30, |
|
|
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
| NET INCOME |
$ |
1,067,000 |
|
|
$ |
183,700 |
|
|
$ |
2,039,500 |
|
|
$ |
260,100 |
|
|
| Adjustments to reconcile net (loss) income to EBITDA: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
415,700 |
|
|
|
479,300 |
|
|
|
1,247,100 |
|
|
|
1,429,100 |
|
|
|
Amortization of deferred financing costs |
|
- |
|
|
|
1,300 |
|
|
|
1,700 |
|
|
|
3,800 |
|
|
|
Income tax provision (benefit) |
|
12,500 |
|
|
|
32,300 |
|
|
|
242,800 |
|
|
|
126,800 |
|
|
|
Interest income |
|
(100 |
) |
|
|
(100 |
) |
|
|
(3,100 |
) |
|
|
(4,800 |
) |
|
|
Interest expense |
|
69,600 |
|
|
|
76,800 |
|
|
|
226,200 |
|
|
|
227,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| EBITDA |
|
$ |
1,564,700 |
|
|
$ |
773,300 |
|
|
$ |
3,754,200 |
|
|
$ |
2,042,200 |
|
|
| Other adjustments to reconcile net (loss) income to Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
(Recovery) Provision for doubtful accounts |
|
|
|
12,300 |
|
|
|
600 |
|
|
|
23,500 |
|
|
|
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 |
|
160,000 |
|
|
|
163,400 |
|
|
|
650,900 |
|
|
|
536,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA |
$ |
1,724,700 |
|
|
$ |
949,000 |
|
|
$ |
4,405,700 |
|
|
$ |
2,602,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
