Attached files
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| EX-99.1 - TRANSCRIPT - WIDEPOINT CORP | wyy_ex991.htm |
| 8-K - CURRENT REPORT - WIDEPOINT CORP | wyy_8k.htm |
Exhibit 99.2
WidePoint Reports First Quarter 2021 Financial Results
Sequential Growth in Managed Services Revenues Helps Drive Gross
Margins to 22.8%
FAIRFAX, VA / ACCESSWIRE / May 14, 2021 / 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 first quarter
ended March 31, 2021.
First Quarter 2021 and Recent Operational Highlights
●
Received the first
task orders under the Department of Homeland Security Cellular
Wireless Management Services 2.0 contract, which were valued at $86
million in aggregate
●
Successfully
on-boarded the DHS Cybersecurity and Infrastructure Security Agency
(CISA)
●
Recognized by the
International Organization for Standardization (ISO) for quality,
environmental, and occupational health and safety
●
Awarded three new
Identity Management contracts, including a deployment with a
Fortune Global 500 corporation, increasing WidePoint's commercial
footprint as well as the Company's secure digital certificates into
a new U.S. federal agency
●
Number of U.S.
Department of Defense secure digital certificates issued increased
8% sequentially from the fourth quarter of 2020
●
Recognized as
honorable mention vendor in the 2021 Gartner Magic Quadrant for
Managed Mobility Services, Global
First Quarter 2021 Financial Highlights:
●
Revenues were $20.7
million
●
Managed Services
revenue increased sequentially to $9.3 million
●
Gross margin
improved to 22.8%
●
Net income improved
to $585,000, or $0.06 per diluted share
●
EBITDA, a non-GAAP
financial measure, was $1.0 million
●
Adjusted EBITDA, a
non-GAAP financial measure, was $1.2 million
●
As of March 31,
2021, cash increased to $17.1 million
Management Commentary
"After
completing what was, by many metrics, the most successful year in
WidePoint's history, we entered 2021 with solid momentum and with
an intense focus on maintaining and ultimately growing our
profitability," said WidePoint's CEO, Jin Kang. "In the first
quarter, we grew our high margin Managed Services revenues
sequentially to $9.3 million, while our low margin Carrier Services
revenues decreased due to our work on the 2020 Census winding down
as well as the residual effects of a carrier credit from last
quarter. Carrier credits occur frequently in the normal course of
our business as we occasionally find that a carrier has overcharged
one of our clients. In this instance, we found the miscalculation
and were able to save one of our prominent clients $2.6 million in
expenses, which is reflected in our results as a decrease in
Carrier Services, but which has no impact on our profitability.
With Carrier Services revenues decreasing and gross profit staying
fairly stable at $4.7 million, we improved our gross margins to
22.8%. We also increased our cash position to $17.1 million as we
generated positive cash flows from operations and leveraged our
at-the-market offering in January to better prepare WidePoint for
growth opportunities.
"The
financial results of the first quarter demonstrate that WidePoint
has a solid base from which we can continue to build and expand our
profitability. With tailwinds from the increasing complex mobile
landscape, the growing need to secure mobile devices, and the
return to more in person work expanding our pipeline, we are
optimistic that we are in a healthy and strong position to continue
driving the business's profitable growth over the
long-run."
First Quarter 2021 Financial Summary
|
(In millions, except per share amounts)
|
March 31,
2021
|
March 31,
2020
|
|
|
(Unaudited)
|
|
|
|
|
|
|
Revenue
|
$20.7
|
$39.7
|
|
Gross
Profit
|
$4.7
|
$5.0
|
|
Gross
Profit Margin
|
22.8%
|
12.5%
|
|
Operating
Expenses
|
$4.0
|
$4.2
|
|
Income
from Operations
|
$0.7
|
$0.7
|
|
Net
Income
|
$0.6
|
$0.5
|
|
Basic
Earnings per Share (EPS)
|
$0.07
|
$0.06
|
|
Diluted
Earnings per Share (EPS)
|
$0.06
|
$0.06
|
|
Adjusted
EBITDA
|
$1.2
|
$1.4
|
Financial Outlook
Due to
the large, short-term changes in WidePoint's financial performance
from the 2020 Census project, the Company believes comparing 2021
expectations to 2020 results, excluding the 2020 Census project,
may provide a more objective analysis of the Company's anticipated
performance. For the fiscal year 2021, the Company currently
expects revenues of approximately $103 million, adjusted EBITDA of
$4.3 million, and EPS of $0.12 per diluted share, based on
9,128,000 shares outstanding. Excluding WidePoint's work on the
2020 Census project, the Company's expectations reflect revenue
growth of approximately 16% year-over-year and adjusted EBITDA
consistent with fiscal year 2020. The Company's financial outlook
is based on current expectations and actual results could differ
materially depending on market conditions and the factors set forth
under the "Safe Harbor Statement" below.
Conference Call
WidePoint
management will hold a conference call today (May 14, 2021) 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: 888-506-0062
International
number: 973-528-0011
Passcode:
862059
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 May 28, 2021.
Toll-free
replay number: 877-481-4010
International
replay number: 919-882-2331
Replay
ID: 40863
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 and 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 income to EBITDA and Adjusted
EBITDA is provided below:
|
|
THREE MONTHS
ENDED
|
|
|
|
MARCH
31,
|
|
|
|
2021
|
2020
|
|
|
|
|
|
NET INCOME
(LOSS)
|
$585,400
|
$483,900
|
|
Adjustments to
reconcile net (loss) income to EBITDA:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
370,000
|
422,800
|
|
Amortization of
deferred financing costs
|
-
|
1,300
|
|
Income tax
provision (benefit)
|
23,500
|
177,200
|
|
Interest
income
|
(2,400)
|
(3,100)
|
|
Interest
expense
|
71,000
|
80,800
|
|
|
|
|
|
EBITDA
|
$1,047,500
|
$1,162,900
|
|
Other adjustments
to reconcile net (loss) income to Adjusted EBITDA:
|
|
|
|
|
|
|
|
Provision for
doubtful accounts
|
(200)
|
-
|
|
Stock-based
compensation expense
|
182,800
|
281,400
|
|
|
|
|
|
Adjusted
EBITDA
|
$1,230,100
|
$1,444,300
|
Safe Harbor Statement
This press release contains forward-looking statements concerning
our business, operations and financial performance and condition as
well as our plans, objectives and expectations for our business
operations and financial performance and condition that are subject
to risks and uncertainties. All statements other than statements of
historical fact included herein are forward-looking statements. You
can identify these statements by words such as "aim," "anticipate,"
"assume," "believe," "could," "due," "estimate," "expect," "goal,"
"intend," "may," "objective," "plan," "potential," "positioned,"
"predict," "should," "target," "will," "would" and other similar
expressions that are predictions of or indicate future events and
future trends. These forward-looking statements are based on
current expectations, estimates, forecasts and projections about
our business and the industry in which we operate and our
management's beliefs and assumptions. These statements are not
guarantees of future performance or development and involve known
and unknown risks, uncertainties and other factors that are in some
cases beyond our control. All forward-looking statements are
subject to risks and uncertainties that may cause actual results to
differ materially from those that we expected, including, the
impact of the COVID-19 pandemic on our business and operations; our
ability to successfully execute our strategy; our ability to
sustain profitability and positive cash flows; our ability to gain
market acceptance for our products; our ability to win new
contracts, execute contract extensions and expansion of services of
existing contracts; our ability to compete with companies that have
greater resources than us; our ability to penetrate the commercial
sector to expand our business; our ability to retain key personnel;
and the risk factors set forth in our Annual Report on Form 10-K
for the year ended December 31, 2020 filed with the SEC on March
24, 2021. The forward-looking statements included herein are made
only as of the date hereof. We undertake no obligation to publicly
update or revise any forward-looking statement as a result of new
information, future events or otherwise, except as otherwise
required by law.
Investor Relations:
Gateway
Investor Relations
Matt
Glover or Charlie Schumacher
949-574-3860
WYY@gatewayir.com
WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
MARCH
31,
|
DECEMBER
31,
|
|
|
2021
|
2020
|
|
|
|
|
|
ASSETS
|
||
|
CURRENT
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$17,058,363
|
$15,996,749
|
|
Accounts
receivable, net of allowance for doubtful accounts
|
|
|
|
of $111,054 and
$114,169 in 2021 and 2020, respectively
|
19,214,216
|
35,882,661
|
|
Unbilled accounts
receivable
|
10,017,255
|
13,848,726
|
|
Other current
assets
|
1,692,695
|
1,763,633
|
|
|
|
|
|
Total current
assets
|
47,982,529
|
67,491,769
|
|
|
|
|
|
NONCURRENT
ASSETS
|
|
|
|
Property and
equipment, net
|
565,535
|
573,039
|
|
Operating lease
right of use asset, net
|
5,917,435
|
6,095,376
|
|
Intangibles,
net
|
2,134,193
|
2,187,503
|
|
Goodwill
|
18,555,578
|
18,555,578
|
|
Deferred tax
asset
|
5,621,373
|
5,606,079
|
|
Other long-term
assets
|
1,312,402
|
815,007
|
|
|
|
|
|
Total
assets
|
$82,089,045
|
$101,324,351
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
Accounts
payable
|
$19,586,553
|
$36,221,981
|
|
Accrued
expenses
|
11,354,080
|
15,626,313
|
|
Deferred
revenue
|
1,875,353
|
2,016,282
|
|
Current portion of
operating lease liabilities
|
582,058
|
577,855
|
|
Current portion of
other term obligations
|
|
-
|
|
|
|
|
|
Total current
liabilities
|
33,398,044
|
54,442,431
|
|
|
|
|
|
NONCURRENT
LIABILITIES
|
|
|
|
Operating lease
liabilities, net of current portion
|
5,784,592
|
5,931,788
|
|
Other
liabilities
|
246,037
|
-
|
|
Deferred revenue,
net of current portion
|
437,578
|
398,409
|
|
|
|
|
|
Total
liabilities
|
39,866,251
|
60,772,628
|
|
|
|
|
|
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;
9,071,352 and 8,876,515
|
|
|
|
shares issued
outstanding, respectively
|
9,071
|
8,876
|
|
Additional paid-in
capital
|
101,645,142
|
100,504,741
|
|
Accumulated other
comprehensive loss
|
(159,564)
|
(104,615)
|
|
Accumulated
deficit
|
(59,271,855)
|
(59,857,279)
|
|
|
|
|
|
Total stockholders'
equity
|
42,222,794
|
40,551,723
|
|
|
|
|
|
Total liabilities
and stockholders' equity
|
$82,089,045
|
$101,324,351
|
|
|
|
|
WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
THREE MONTHS
ENDED
|
|
|
|
MARCH
31,
|
|
|
|
2021
|
2020
|
|
|
|
|
|
REVENUES
|
$20,650,843
|
$39,665,356
|
|
COST OF REVENUES
(including amortization and depreciation of
|
|
|
|
$119,083 and
$159,618, respectively)
|
15,934,964
|
34,700,024
|
|
|
|
|
|
GROSS
PROFIT
|
4,715,879
|
4,965,332
|
|
|
22.8%
|
12.5%
|
|
OPERATING
EXPENSES
|
|
|
|
Sales and
marketing
|
482,299
|
492,231
|
|
General and
administrative expenses (including share-based
|
|
|
|
compensation of
$182,842 and $281,441, respectively)
|
3,307,662
|
3,470,092
|
|
Depreciation and
amortization
|
250,891
|
263,228
|
|
|
|
|
|
Total operating
expenses
|
4,040,852
|
4,225,551
|
|
|
|
|
|
INCOME (LOSS) FROM
OPERATIONS
|
675,027
|
739,781
|
|
|
|
|
|
OTHER (EXPENSE)
INCOME
|
|
|
|
Interest
income
|
2,375
|
3,093
|
|
Interest
expense
|
(71,016)
|
(82,117)
|
|
Other
income
|
2,496
|
331
|
|
|
|
|
|
Total other
expense
|
(66,145)
|
(78,693)
|
|
|
|
|
|
INCOME (LOSS)
BEFORE INCOME TAX PROVISION
|
608,882
|
661,088
|
|
INCOME TAX
PROVISION
|
23,458
|
177,200
|
|
|
|
|
|
NET
INCOME
|
$585,424
|
$483,888
|
|
|
|
|
|
BASIC EARNINGS PER
SHARE
|
$0.07
|
$0.06
|
|
|
|
|
|
BASIC
WEIGHTED-AVERAGE SHARES OUTSTANDING
|
8,995,103
|
8,384,008
|
|
|
|
|
|
DILUTED EARNINGS
PER SHARE
|
$0.06
|
$0.06
|
|
|
|
|
|
DILUTED
WEIGHTED-AVERAGE SHARES OUTSTANDING
|
9,103,160
|
8,442,807
|