WidePoint Reports Second Quarter 2019 Financial Results - WidePoint (AMEX:WYY)

FAIRFAX, Va., Aug. 14, 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 second quarter ended June 30, 2019.

Second Quarter 2019 and Recent Operational Highlights:

Awarded $5.3 million in federal government contract renewals and modifications
Soft-ex, a WidePoint subsidiary, awarded $6.0 million contract renewal with a global communications service provider to deliver both cloud and onsite telecom solutions to government and multinational corporations
Secured more than $1.3 million in Trusted Mobility Management (TM2) contracts, the majority of which are high-margin, commercial contracts
Received Authority to Operate (ATO) from a major customer to implement WidePoint's Intelligent Telecommunications Management System (ITMS™), which represents the second significant step toward achieving a FedRAMP certification

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

Revenues increased 26% to $22.1 million
Gross profit increased 14% to $4.1 million
Net loss totaled $(308,000)
Adjusted EBITDA, a non-GAAP financial measure, increased to $0.6 million, marking the company's eighth consecutive quarter of positive adjusted EBITDA, and in line with forecast

Six Month 2019 Financial Highlights (results compared to the same year-ago period):

Revenues increased 17% to $44.0 million
Gross profit increased 17% to $8.3 million
Net income totaled $76,000
Adjusted EBITDA totaled $1.6 million

Second Quarter 2019 Financial Summary


(in millions, except per share amounts)	June 30, 2019			June 30, 2018
	(Unaudited)
Revenues	$	22.1		$	17.5
Gross Profit	$	4.1		$	3.5
Gross Profit Margin	18		%	20		%
Operating Expenses	$	4.2		$	4.0
Income (Loss) from Operations	$	(0.2	)	$	(0.4	)
Net Income (Loss)	$	(0.3	)	$	(0.5	)
Basic and Diluted Earnings per Share (EPS)	$	0.00		$	(0.01	)
Adjusted EBITDA	$	0.6		$	0.1

Six Month 2019 Financial Summary


(in millions, except per share amounts)	June 30, 2019			June 30, 2018
	(Unaudited)
Revenues	$	44.0		$	37.6
Gross Profit	$	8.3		$	7.1
Gross Profit Margin	19		%	19		%
Operating Expenses	$	8.0		$	8.0
Income (Loss) from Operations	$	0.3		$	(0.9	)
Net Income (Loss)	$	0.1		$	(0.9	)
Basic and Diluted Earnings per Share (EPS)	$	0.00		$	(0.01	)
Adjusted EBITDA	$	1.6		$	0.2

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
"The second quarter was a continuation of the strong performance we established at the start of the year as we delivered another solid period of financial results, expanded several contracts with current customers, and continued to improve upon our already industry-leading credentials," said WidePoint's CEO, Jin Kang. "From a financial perspective, the quarter was highlighted by a 26% increase in revenues, a 14% increase in gross profit, and our eighth consecutive quarter of positive adjusted EBITDA.

"Operationally, we successfully re-secured and expanded several contracts with current customers in both the government and commercial sectors. These contract expansions and the positive effects they have on our financial results show that our cross-selling and upselling strategies continue to be an effective means of increasing our topline as we simultaneously remain conscientious of their effects on our bottom-line. Additionally, we received an ATO from a major customer to implement ITMS™, which is a major step toward ultimately receiving a FedRAMP certification.

"Overall, we remain confident that we will be able to continue to execute on our primary strategic initiatives throughout the course of the year to accelerate growth, improve margins, and drive higher profitability in the long-run."

Conference Call
WidePoint management will hold a conference call today (August 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: 844-369-8770
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 August 21, 2019.

Toll-free replay number: 877-481-4010
International replay number: 919-882-2331
Replay ID: 51160

About WidePoint
WidePoint Corporation 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						SIX MONTHS ENDED
		JUNE 30,						JUNE 30,
		2019			2018			2019			2018
		(Unaudited)						(Unaudited)
NET (LOSS) INCOME		$	(307,800	)	$	(472,200	)	$	76,300		$	(934,400	)
Adjustments to reconcile net (loss) income to EBITDA:
	Depreciation and amortization	477,100			368,600			949,800			762,000
	Amortization of deferred financing costs	1,200			7,000			2,500			14,800
	Income tax provision (benefit)	66,500			14,700			94,500			20,900
	Interest income	(200		)	(2,100		)	(4,700		)	(5,400		)
	Interest expense	74,200			23,900			152,900			49,900

EBITDA		$	311,000		$	(60,100	)	$	1,271,300		$	(92,200	)
Other adjustments to reconcile net (loss) income to Adjusted EBITDA:
	Provision for doubtful accounts	3,600			-			11,200			(5,800		)
	Stock-based compensation expense	284,100			195,900			320,300			320,300

Adjusted EBITDA		$	598,700		$	135,800		$	1,602,800		$	222,300

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:
Gateway Investor Relations
Matt Glover or Charlie Schumacher
949-574-3860
WYY@gatewayir.com

WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

	JUNE 30,			DECEMBER 31,
	2019			2018

ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	5,422,065		$	2,431,892
Accounts receivable, net of allowance for doubtful accounts
of $117,120 and $106,733 in 2019 and 2018, respectively	7,868,097			11,089,315
Unbilled accounts receivable	11,259,905			9,566,170
Other current assets	1,254,269			1,086,686

Total current assets	25,804,336			24,174,063

NONCURRENT ASSETS
Property and equipment, net	658,074			1,012,684
Operating lease right of use asset, net	5,827,822			-
Intangibles, net	2,826,141			3,103,753
Goodwill	18,555,578			18,555,578
Other long-term assets	142,952			209,099

Total assets	$	53,814,903		$	47,055,177

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable	$	6,575,453		$	7,363,621
Accrued expenses	12,369,314			10,716,438
Deferred revenue	2,065,446			2,072,344
Current portion of operating lease liabilities	420,932			107,325
Current portion of other term obligations	36,049			192,263

Total current liabilities	21,467,194			20,451,991

NONCURRENT LIABILITIES
Operating lease liabilities, net of current portion	5,534,028			122,040
Other term obligations, net of current portion	-			73,952
Deferred revenue	381,261			466,714
Deferred tax liability	1,581,020			1,523,510

Total liabilities	28,963,503			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 outsanding, respectively	84,776			84,113
Additional paid-in capital	95,299,274			94,926,560
Accumulated other comprehensive loss	(201,772		)	(186,485		)
Accumulated deficit	(70,330,878		)	(70,407,218		)

Total stockholders' equity	24,851,400			24,416,970

Total liabilities and stockholders' equity	$	53,814,903		$	47,055,177

WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

				THREE MONTHS ENDED						SIX MONTHS ENDED
				JUNE 30,						JUNE 30,
					2019			2018			2019			2018
				(Unaudited)
REVENUES				$	22,093,153		$	17,544,338		$	44,010,055		$	37,623,957
COST OF REVENUES (including amortization and depreciation of
	$232,968, $258,201, $465,159, and $554,165, respectively)			18,036,409			13,997,185			35,699,468			30,524,797

GROSS PROFIT				4,056,744			3,547,153			8,310,587			7,099,160

OPERATING EXPENSES
	Sales and marketing			415,462			444,945			808,873			979,582
	General and administrative expenses (including share-based
		compensation of $284,111, $195,934, $373,377 and $320,338, respectively)		3,563,405			3,427,301			6,698,114			6,780,642
	Depreciation and amortization			244,064			110,463			484,612			207,849

			Total operating expenses	4,222,931			3,982,709			7,991,599			7,968,073

(LOSS) INCOME FROM OPERATIONS				(166,187		)	(435,556		)	318,988			(868,913		)

OTHER (EXPENSE) INCOME
	Interest income			259			2,077			4,721			5,403
	Interest expense			(75,372		)	(23,937		)	(152,917		)	(49,887		)
	Other income			(9		)	3			-			1

			Total other expense	(75,122		)	(21,857		)	(148,196		)	(44,483		)

(LOSS) INCOME BEFORE INCOME TAX PROVISION				(241,309		)	(457,413		)	170,792			(913,396		)
INCOME TAX PROVISION				66,452			14,758			94,452			20,948

NET (LOSS) INCOME				$	(307,761	)	$	(472,171	)	$	76,340		$	(934,344	)

BASIC EARNINGS (LOSS) PER SHARE				$	(0.00	)	$	(0.01	)	$	0.00		$	(0.01	)

BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING				83,990,722			83,081,597			83,902,077			83,061,707

DILUTED EARNINGS (LOSS) PER SHARE				$	(0.00	)	$	(0.01	)	$	0.00		$	(0.01	)

DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING				83,990,722			83,081,597			83,965,994			83,061,707

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