Attached files
| file | filename |
|---|---|
| 8-K - WIDEPOINT CORP | v194825_8k.htm |
| EX-99.2 - WIDEPOINT CORP | v194825_ex99-2.htm |
For
More Information:
|
Jim
McCubbin, EVP & CFO
|
Brett
Maas or Dave Fore
|
|
WidePoint
Corporation
|
Hayden
IR
|
|
7926
Jones Branch Drive, Suite 520
|
(646)
536-7331
|
|
McLean,
VA 22102
|
brett@haydenir.com
|
|
(703)
349-2577
|
|
|
jmccubbin@widepoint.com
|
WidePoint
Corporation Reports 20 Percent Year-over-Year Revenue Growth and Solid Margin
Expansion in Second Quarter of 2010
Q2
2010 Revenues Increase 20% Driven by CyberSecurity Solutions and
Consulting;
Gross
Margin Improves Over 200 basis points to 24%; Operating Margin Improves 100
basis points;
and
Net Income for Q2 2010 Up 65% vs. Prior Year
WASHINGTON,
August 16, 2010 /PRNewswire-FirstCall/ — WidePoint Corporation (NYSE Amex: WYY),
a specialist in wireless mobility management and cybersecurity solutions, today
announced financial results for the three months and six months ending June 30,
2010.
Second
Quarter 2010 Highlights
|
·
|
Net
revenue for the quarter ended June 30, 2010 increased approximately 20% to
$12.5 million from $10.4 million in last year's comparable
period.
|
|
·
|
Growth
was driven by an 86% year-over-year increase in CyberSecurity Solutions
segment revenue and a 59% increase in Consulting segment
revenue.
|
|
·
|
Gross
profit increased 33% to $2.9 million (24% gross margin), compared to $2.2
million (21% gross margin).
|
|
·
|
Operating
income was approximately $511,000, a 60% increase, compared to operating
income of approximately $319,000 in last year's comparable
period.
|
|
·
|
Net
income increased 65% to approximately $413,000, compared to net income of
approximately $251,000, in last year's comparable
period.
|
Steve
Komar, CEO, WidePoint commented, “WidePoint continues to benefit from a
diversified platform for growth, as our CyberSecurity Solutions and Consulting
segments produced strong sequential and year-over-year growth. Our Cyber
Security Solutions segment delivered robust growth in the second quarter, as we
expanded our reach into the state and local level and continued accelerating our
federal government efforts and presence. We possess proprietary
solutions that serve as the foundation for these initiatives, and we expect our
CyberSecurity Solutions segment to contribute meaningfully to our improved
results this year. Overall, this was a very successful quarter for
WidePoint that has set the stage for our continued success and further growth in
the second half of 2010.”
Second
Quarter 2010 Financial Results
Net
revenue for the three months ended June 30, 2010 increased $2.1 million, or 20%,
to $12.5 million from $10.4 million in last year's comparable period. The
increase in revenues was primarily attributable to increases in CyberSecurity
Solutions and Consulting segments, which increased 86% and 59%, to $2.5 million
and $3.1 million, respectively. The growth in CyberSecurity Solutions was
primarily a result of increases in credential sales associated with several
initiatives requiring the use of those credentials by government agencies and a
result of contract awards made during the quarter for our newly established
subsidiary Advanced Response Concepts. The overall growth in
Consulting primarily resulted from new contract awards and renewals and
expansion work from the current customer base.
Gross
profit for the three month period ended June 30, 2010 was approximately $2.9
million (or 24% of revenues), as compared to gross profit of approximately $2.2
million (or 21% of revenues), for the three month period ended June 30,
2009. Overall gross margin was higher in the second quarter of 2010
as the result of an improved mix of higher margin services associated with our
CyberSecurity Segment. Management anticipates this to continue, as
the CyberSecurity Solutions segment further expands its revenue base in the
second half of 2010.
Total
operating expenses increased 28% to $2.4 million for the quarter ended June 30,
2010 compared to $1.9 million for the year-ago period. Operating expenses as a
percentage of sales increased about 100 basis points to 19% from 18% in the
year-ago period, due to increases in both Sales and Marketing and in General and
Administrative expenses.
WidePoint
reported operating income of approximately $511,000 in the second quarter, up
approximately 60% from approximately $319,000 in the second quarter last year.
Net income was approximately $413,000, up approximately 65% compared to net
income of approximately $251,000, in the year-ago period. The Company
anticipates net income will continue to grow during the second half of 2010 as
it expands revenues and improves margins.
Year-To-Date
Financial Results
Net
revenue for the six months ended June 30, 2010 increased $3.1 million, or 15%,
to $23.6 million from $20.5 million in last year's comparable period. The
increase in revenues was primarily attributable to increases in CyberSecurity
Solutions and Consulting, which increased 43% and 37%, to $3.9 million and $5.9
million, respectively. Wireless Mobility Management segment revenue increased
marginally to $13.8 million.
Gross
profit for the six month period ended June 30, 2010 was approximately $5.5
million (or 23% of revenues), as compared to gross profit of approximately $4.2
million (or 21% of revenues), for the six month period ended June 30,
2009.
Total
operating expenses increased 26% to $4.6 million for the six months ended June
30, 2010 compared to $3.7 million for the year-ago period. Operating expenses as
a percentage of sales increased about 160 basis points to 20% from 18% in the
year-ago period, due to increases in both Sales and Marketing and in General and
Administrative expenses.
WidePoint
reported operating income of approximately $811,000 in the six months ended June
30, 2010, up approximately 47% from approximately $553,000 in the same period
last year. Net income was approximately $652,000, up approximately 72% compared
to net income of approximately $380,000, in the year-ago
period.
WidePoint
CFO Jim McCubbin added, “The growth in CyberSecurity and Consulting revenues
helped drive incremental profitability in the June quarter, as we expanded our
operating margin by 100 basis points and grew net income by 65% year-over-year
on 20% top-line growth. We believe we can continue to effectively leverage our
business model, driving a higher portion of each incremental revenue dollar to
the bottom line as we continue to scale our services and as our CyberSecurity
Solutions Segment sales mix increases as compared to our overall revenue
mix. We continue to look for a stronger 2nd half of
2010 with improvements to both the top and bottom line.”
Outlook
WidePoint
reiterated its 2010 full-year outlook. Management expects to:
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·
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Increase
consolidated revenues by 20-30%
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·
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Expand
gross margins and operating margins. Management has targeted gross margins
in the range of 22-26% and operating margins in the range of
6-8%
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|
·
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Maintain
or decrease selling, general and administrative costs as a percent of
total revenue
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|
·
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Accelerate
the growth rate of net income.
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Conference
Call Information
A
conference call and live webcast will take place at 4:30 p.m. Eastern Time, on
Monday, August 16, 2010. Anyone interested in participating should call
1-888-846-5003 if calling within the United States or 1-480-629-9856 if calling
internationally. There will be a playback available until August 23, 2010. To
listen to the playback, please call 1-877-870-5176 if calling within the United
States or 1-858-384-5517 if calling internationally. Please use pin number
4344988 for the replay.
The call
will also be accompanied live by webcast over the Internet and accessible at
http://viavid.net/dce.aspx?sid=0000794A.
About
WidePoint
WidePoint
is a specialist in providing wireless mobility management and cybersecurity
solutions utilizing its advanced information technology products and
services. WidePoint has several wholly owned subsidiaries holding major
government and commercial contracts including, Operational Research Consultants,
Inc., iSYS, LLC, Protexx, Advanced Response Concepts, Inc., and WidePoint IL.
WidePoint enables organizations to deploy fully compliant IT services in
accordance with government-mandated regulations and advanced system
requirements. For more information, visit http://www.widepoint.com.
Safe-Harbor
Statement under the Private Securities Litigation Reform Act of 1995: This press
release may contain forward-looking information within the meaning of Section
21E of the Securities Exchange Act of 1934, as amended (the Exchange Act),
including all statements that are not statements of historical fact regarding
the intent, belief or current expectations of the company, its directors or its
officers with respect to, among other things: (i) the company's financing plans;
(ii) trends affecting the company's financial condition or results of
operations; (iii) the company's growth strategy and operating strategy; (iv) the
declaration and payment of dividends; and (v) the risk factors disclosed in the
Company's periodic reports filed with the SEC. The words "may," "would," "will,"
"expect," "estimate," "anticipate," "believe," "intend" and similar expressions
and variations thereof are intended to identify forward-looking statements.
Investors are cautioned that any such forward-looking statements are not
guarantees of future performance and involve risks and uncertainties, many of
which are beyond the company's ability to control, and that actual results may
differ materially from those projected in the forward-looking statements as a
result of various factors including the risk factors disclosed in the company's
Forms 10-K and 10-Q filed with the SEC.
-tables
follow-
WIDEPOINT
CORPORATION AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
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June 30,
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December 31,
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|||||||
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2010
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2009
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|||||||
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(unaudited)
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|||||||
| Assets | ||||||||
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Current
assets:
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||||||||
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Cash
and cash equivalents
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$ | 2,565,082 | $ | 6,238,788 | ||||
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Accounts
receivable, net of allowance of $0 and $52,650,
respectively
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7,681,993 | 7,055,525 | ||||||
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Unbilled
accounts receivable
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2,412,841 | 1,334,455 | ||||||
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Prepaid
expenses and other assets
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364,123 | 359,563 | ||||||
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Total
current assets
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13,024,039 | 14,988,331 | ||||||
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Property
and equipment, net
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456,934 | 538,811 | ||||||
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Goodwill
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10,475,513 | 9,770,647 | ||||||
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Other
Intangibles, net
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1,375,197 | 1,381,580 | ||||||
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Other
assets
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62,806 | 75,718 | ||||||
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Total
assets
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$ | 25,394,489 | $ | 26,755,087 | ||||
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Liabilities
and stockholders’ equity
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||||||||
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Current
liabilities:
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||||||||
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Short
term note payable
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$ | 55,837 | $ | 102,074 | ||||
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Accounts
payable
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6,129,977 | 7,120,168 | ||||||
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Accrued
expenses
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1,677,166 | 2,304,995 | ||||||
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Deferred
revenue
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263,487 | 768,504 | ||||||
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Short-term
portion of long-term debt
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538,911 | 520,855 | ||||||
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Short-term
portion of deferred rent
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12,627 | 54,497 | ||||||
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Short-term
portion of capital lease obligation
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77,394 | 112,576 | ||||||
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Total
current liabilities
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8,755,399 | 10,983,669 | ||||||
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Deferred
income tax liability
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392,227 | 313,782 | ||||||
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Long-term
debt, net of current portion
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332,217 | 604,048 | ||||||
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Fair
value of earnout liability
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300,000 | — | ||||||
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Deferred
rent, net of current portion
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82,849 | 7,312 | ||||||
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Capital
lease obligation, net of current portion
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44,428 | 67,632 | ||||||
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Total
liabilities
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$ | 9,907,120 | $ | 11,976,443 | ||||
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Stockholders’
equity:
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||||||||
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Common
stock, $0.001 par value; 110,000,000 shares authorized; 61,375,333 shares
issued and outstanding, respectively
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61,375 | 61,375 | ||||||
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Stock
warrants
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24,375 | 24,375 | ||||||
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Additional
paid-in capital
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67,931,139 | 67,874,394 | ||||||
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Accumulated
deficit
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(52,529,520 | ) | (53,181,500 | ) | ||||
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Total
stockholders’ equity
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15,487,369 | 14,778,644 | ||||||
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Total
liabilities and stockholders’ equity
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$ | 25,394,489 | $ | 26,755,087 | ||||
WIDEPOINT
CORPORATION AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
Three Months
Ended June 30,
|
Six Months
Ended June 30,
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|||||||||||||||
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2010
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2009
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2010
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2009
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|||||||||||||
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(unaudited)
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||||||||||||||||
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Revenues,
net
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$ | 12,452,120 | $ | 10,392,282 | $ | 23,615,176 | $ | 20,527,664 | ||||||||
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Cost
of sales (including amortization and depreciation of $243,277, $242,755,
$469,562, and $485,891, respectively)
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9,521,361 | 8,190,224 | 18,160,582 | 16,282,504 | ||||||||||||
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Gross
profit
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2,930,759 | 2,202,058 | 5,454,594 | 4,245,160 | ||||||||||||
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Sales
and marketing
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487,996 | 265,317 | 831,003 | 494,783 | ||||||||||||
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General
and administrative (including shared-based compensation expense of
$27,565, $75,857, $56,745, and $106,587, respectively)
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1,882,721 | 1,576,711 | 3,714,532 | 3,112,982 | ||||||||||||
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Depreciation
expense
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48,743 | 41,105 | 98,477 | 84,112 | ||||||||||||
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Income
from operations
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511,299 | 318,925 | 810,582 | 553,283 | ||||||||||||
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Interest
income
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2,231 | 4,651 | 8,845 | 18,739 | ||||||||||||
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Interest
expense
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(22,793 | ) | (33,701 | ) | (50,170 | ) | (114,000 | ) | ||||||||
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Other
expense
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- | - | - | - | ||||||||||||
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Net
income before income tax expense
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$ | 490,737 | $ | 289,875 | $ | 769,257 | $ | 458,022 | ||||||||
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Income
tax expense
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38,832 | - | 38,832 | - | ||||||||||||
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Deferred
income tax expense
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39,223 | 39,223 | 78,445 | 78,445 | ||||||||||||
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Income
tax expense
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78,055 | 39,223 | 117,277 | 78,455 | ||||||||||||
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Net
income
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$ | 412,682 | $ | 250,652 | $ | 651,980 | $ | 379,577 | ||||||||
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Basic
earnings per share
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$ | 0.01 | $ | 0.00 | $ | 0.01 | $ | 0.01 | ||||||||
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Basic
weighted average shares outstanding
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61,375,333 | 58,305,514 | 61,375,333 | 58,300,044 | ||||||||||||
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Diluted
earnings per share
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$ | 0.01 | $ | 0.00 | $ | 0.01 | $ | 0.01 | ||||||||
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Diluted
weighted average shares outstanding
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63,299,155 | 61,562,251 | 63,163,824 | 60,788,081 | ||||||||||||