WASHINGTON, Aug. 14, 2012 /PRNewswire/ -- WidePoint
Corporation (NYSE Mkt: WYY), a specialist in cloud-based
telecommunications life-cycle and trusted cybersecurity management
solutions, today announced financial results for the three and six
months ending June 30, 2012.
Second Quarter and Six Months 2012 Highlights
- Consolidated net revenue increased approximately 26% to
$12.5 million from $10.0 million in last year's comparable second
quarter and 28% to $26.2 million from
$20.5 million in last year's
comparable six month period.
- Telecommunications life-cycle management segment revenue
increased approximately 22.0% to $7.5
million from $6.2 million in
last year's comparable second quarter and 26% to $14.8 million from $11.8
million in last years comparable six month period.
- Cybersecurity's trusted identity solutions revenue decreased
approximately 51% to $1.1 million
from $2.3 million in last year's
comparable second quarter and 7% to $3.3
million from $3.6 million in
last years comparable six month period.
- IT consulting services and products revenues increased
approximately 156% to $3.9 million
from $1.5 million in last year's
comparable second quarter and 56% to $8.1
million from $5.2 million in
last year's comparable six month period.
- Non-GAAP adjusted EBITDA was approximately $22,000 as compared to $625,000 in last year's comparable second quarter
and also $834,000 as compared to
$380,000 last year's comparable six
month period.
- Loss from operations was approximately ($477,000) compared to income from operations of
approximately $384,000 in last year's
comparable second quarter, and loss from operations was
approximately ($349,000) as compared
to a loss from operations of ($121,000) in last year's comparable six month
period.
- Net loss was approximately ($302,000) compared to net income of
approximately $214,000 in last year's
comparable second quarter and net loss was approximately
($245,000) as compared to a net loss
of ($103,000) in last year's
comparable six month period.
Steve Komar, CEO of WidePoint,
commented, "In the second quarter of 2012, we continued to expand
the reach of our telecommunications life-cycle management
capabilities beyond the federal marketplace using the personnel and
resources we acquired through the year end purchase of the
businesses of Avalon Global Solutions (AGS). Deployments to support
new contracts with the State of
Nevada, the Western States Contracting Alliance,
State of Utah, and several new
commercial clients also bolstered our IT consulting business during
the second quarter. As expected, revenue from our Cybersecurity
business was down compared to last year and compared to the
previous quarter due to a substantial credentialing award that was
recognized in the first quarter of 2012. For the full year we
continue to expect to witness growth in all three of our segments."
Komar further added, "We continue to focus on expanding our
commercial market footprint, enhancing our cloud-based trusted
device and identity assurance solutions, providing expanded
security and mobile device management offerings to our mobile
telecommunications life-cycle management customers, and expanding
our geographic reach in support of our international client
demands. We also see rising demand for our credentialing services
for access to certain federal government sites and for continued
expansion of current programs underway at the federal and state
level such as the Transportation Workers Identification
Credentialing (TWIC) program. We believe that these key initiatives
will increasingly differentiate our capabilities from those of our
competitors and we expect to report progress on these fronts in our
third and fourth quarter 2012 results."
Second Quarter 2012 Financial Results
Consolidated net revenue for the three months ended June 30, 2012 increased $2.5 million, or 26%, to $12.5 million from $10.0
million in last year's comparable period. This increase was
materially a result of revenue growth in our Telecommunications
Management and our IT Consulting Services and Product segments
which were largely driven by additional revenues generated by the
acquired customers of AGS, which now operates as Widepoint
Solutions Corp.
- Telecommunications life-cycle management segment revenue
increased approximately 22% to $7.5
million, an increase of $1.3
million for second quarter of 2012 compared to $6.2 million for the second quarter of 2011. The
increase was primarily due to additional revenues generated from
customers from the asset acquisition of AGS, partially offset by
lower amounts of revenue generated from billable reselling of
minutes to federal customers as we consciously shift away from
lower margin services.
- Cybersecurity managed solutions segment revenue decreased 51%
to $1.1 million, a decrease of
$1.2 million for the second quarter
of 2012 compared to $2.3 million for
the second quarter of 2011. This decrease was materially due to the
earlier award of a periodic credentialing sale associated with the
Transportation Workers Identification Credentialing (TWIC) program
that was recognized in the three months ended March 31, 2012.
- IT Consulting Services and Products segment increased 156% to
approximately $3.9 million, an
increase of $2.4 million for the
second quarter of 2012 compared to $1.5
million for the second quarter of 2011. The increase was
materially due to growth in both commercial and government
operations further augmented from reselling of mobile devices and
accessories to customers added from the asset acquisition of
AGS.
Gross profit in the second quarter of 2012 increased
approximately 6% to $2.9 million as
compared to gross profit of $2.7
million in the second quarter of 2011. As a percentage of
revenue, gross margin was 23% in the second quarter of 2012, down
from 27% in the second quarter of 2011, driven largely by a lower
contribution of Cybersecurity managed solutions segment revenue and
a higher contribution of IT Consulting Services and Products
segment revenue in the second quarter of 2012. In future periods,
management anticipates gross profit as a percentage of revenues to
increase as cost of sales as a percentage of revenues decreases due
to a greater mix of higher margin services.
WidePoint reported a loss from operations of approximately
($477,000) in the second quarter of
2012 compared to income from operations of approximately
$384,000 in the second quarter of
2011. Net loss was approximately ($302,000) in the second quarter of 2012,
compared to net income of approximately $214,000, in the second quarter of 2011.
WidePoint CFO Jim McCubbin
commented, "In the second quarter we witnessed growth driven
materially from revenues associated with customers we acquired from
the asset acquisition of AGS at the end of last year and from
revenue generated from our continuing expansion into state and
local government markets, both which benefited our
telecommunications life-cycle management business. Due to an
earlier-than-expected credentialing sale in the first quarter of
this year and a follow-on award delayed into July of 2012, our
Cybersecurity business was down sequentially and down compared to
last year; hence our recurring caution that our revenues and
operating results may vary significantly from quarter-to-quarter.
We believe that our results are best viewed on an annual basis.
That said, we continue to believe that our third quarter of 2012
will be stronger then our second quarter of 2012 with both greater
revenues, higher margins, and better bottom line performance as we
recognize awards we have already achieved in July and August of our
third quarter of 2012."
Conference Call Information
A conference call and live webcast will take place at
4:30 p.m. Eastern Time, on
Tuesday, August 14, 2012. Anyone
interested in participating should call 877-941-8418 if calling
within the United States or
480-629-9761 if calling internationally. There will be a playback
available until August 28, 2012. To
listen to the playback, please call 877-870-5176 if calling within
the United States or 858-384-5517
if calling internationally. Please use pin number 4558998 for the
replay. The call will also be accompanied live by webcast over the
Internet and accessible at
http://public.viavid.com/index.php?id=101415.
About WidePoint
WidePoint is a specialist in providing telecommunications
management and cybersecurity solutions utilizing its advanced
information technology products and services. WidePoint has
several wholly owned subsidiaries holding major government and
commercial contracts. 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 Form
10-K filed with the SEC.
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
|
|
-tables follow-
WIDEPOINT CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
|
|
|
|
|
|
|
JUNE
30,
|
|
DECEMBER
31,
|
|
2012
|
|
2011
|
|
(Unaudited)
|
ASSETS
|
CURRENT
ASSETS
|
|
|
|
Cash and
cash equivalents
|
$
280,601
|
|
$
2,135,310
|
Accounts
receivable, net of allowance of $35,684 and $35,684,
respectively
|
8,290,257
|
|
7,884,802
|
Unbilled
accounts receivable
|
1,416,281
|
|
2,715,406
|
Prepaid
expenses and other assets
|
751,270
|
|
782,862
|
Deferred
income taxes
|
473,430
|
|
473,430
|
|
|
|
|
Total
current assets
|
11,211,839
|
|
13,991,810
|
|
|
|
|
NONCURRENT
ASSETS
|
|
|
|
Property
and equipment, net
|
1,549,047
|
|
1,336,134
|
Intangibles, net
|
4,641,314
|
|
5,421,655
|
Goodwill
|
18,150,172
|
|
18,193,561
|
Deferred
income tax asset, net of current
|
3,556,814
|
|
3,265,125
|
Deposits
and other assets
|
83,406
|
|
81,941
|
|
|
|
|
TOTAL
ASSETS
|
$
39,192,592
|
|
$
42,290,226
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
DEFICIT
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
Short term
note payable
|
$
74,084
|
|
$
100,951
|
Accounts
payable
|
6,279,096
|
|
8,418,854
|
Accrued
expenses
|
1,466,408
|
|
1,851,678
|
Deferred
revenue
|
101,044
|
|
390,506
|
Current
portion of long-term debt
|
2,158,032
|
|
798,319
|
Current
portion of deferred rent
|
45,627
|
|
36,508
|
Current
portion of capital lease obligations
|
47,137
|
|
22,908
|
|
|
|
|
Total
current liabilities
|
10,171,428
|
|
11,619,724
|
|
|
|
|
Long-term
debt, net of current portion
|
6,050,608
|
|
7,769,143
|
Capital
lease obligation, net of current portion
|
124,086
|
|
-
|
Deferred
rent, net of current portion
|
42,849
|
|
65,207
|
Deferred
revenue
|
70,134
|
|
-
|
Deposits
and other liabilities
|
1,964
|
|
-
|
|
|
|
|
Total
liabilities
|
16,461,069
|
|
19,454,074
|
|
|
|
|
STOCKHOLDERS' DEFICIT
|
|
|
|
Common
stock, $0.001 par value; 110,000,000 shares authorized; 63,651,857
and 63,226,857 shares issued and outstanding,
respectively
|
63,652
|
|
63,227
|
Additional
paid-in capital
|
69,466,310
|
|
69,326,705
|
Accumulated deficit
|
(46,798,439)
|
|
(46,553,780)
|
|
|
|
|
Total
stockholders' equity
|
22,731,523
|
|
22,836,152
|
|
|
|
|
Total
liabilities and stockholders' equity
|
$
39,192,592
|
|
$
42,290,226
|
WIDEPOINT CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE
MONTHS ENDED
|
|
SIX MONTHS
ENDED
|
|
|
|
|
JUNE
30,
|
JUNE
30,
|
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
$
12,510,644
|
|
$
9,965,878
|
|
$
26,212,385
|
|
$
20,495,003
|
|
|
|
|
|
|
|
|
|
|
|
COST OF
SALES (including amortization and depreciation
of $343,731, $171,161, $842,448, and $354,801,
respectively)
|
|
|
|
|
|
|
|
9,631,761
|
|
$
7,261,227
|
|
20,008,151
|
|
$
15,950,697
|
|
|
|
|
|
|
|
|
|
|
|
GROSS
PROFIT
|
2,878,883
|
|
2,704,651
|
|
6,204,234
|
|
4,544,306
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
876,399
|
|
385,100
|
|
1,517,115
|
|
815,283
|
|
General
and administrative (including shared-based
compensation expense of
$55,227, $11,747, $110,280,
and
$39,937, respectively
|
|
|
|
|
|
|
|
|
2,400,037
|
|
1,877,145
|
|
4,897,365
|
|
3,743,951
|
|
Depreciation and amortization
|
79,200
|
|
58,777
|
|
138,976
|
|
106,371
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
operating expenses
|
3,355,636
|
|
2,321,022
|
|
6,553,456
|
|
4,665,605
|
|
|
|
|
|
|
|
|
|
|
|
(LOSS)
INCOME FROM OPERATIONS
|
(476,753)
|
|
383,629
|
|
(349,222)
|
|
(121,299)
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
Interest
income
|
1,354
|
|
2,481
|
|
3,223
|
|
6,673
|
|
Interest
expense
|
(117,753)
|
|
(19,304)
|
|
(179,204)
|
|
(39,859)
|
|
Other
(expense) income
|
(9,290)
|
|
-
|
|
8,855
|
|
1,143
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
other (expense) income
|
(125,689)
|
|
(16,823)
|
|
(167,126)
|
|
(32,043)
|
|
|
|
|
|
|
|
|
|
|
|
NET (LOSS)
INCOME BEFORE PROVISION FOR INCOME TAXES
|
(602,442)
|
|
366,806
|
|
(516,348)
|
|
(153,342)
|
INCOME TAX
PROVISION (BENEFIT)
|
(300,380)
|
|
152,375
|
|
(271,689)
|
|
(50,413)
|
|
|
|
|
|
|
|
|
|
|
|
NET (LOSS)
INCOME
|
$
(302,062)
|
|
$
214,431
|
|
$
(244,659)
|
|
$
(102,929)
|
|
|
|
|
|
|
|
|
|
|
|
BASIC
EARNINGS PER SHARE
|
$
(0.005)
|
|
$
0.003
|
|
$
(0.004)
|
|
$
(0.002)
|
|
|
|
|
|
|
|
|
|
|
|
BASIC
WEIGHTED-AVERAGE SHARES OUTSTANDING
|
63,226,857
|
|
62,916,422
|
|
63,427,681
|
|
62,857,309
|
|
|
|
|
|
|
|
|
|
|
|
DILUTED
EARNINGS PER SHARE
|
$
(0.005)
|
|
$
0.003
|
|
$
(0.004)
|
|
$
(0.002)
|
|
|
|
|
|
|
|
|
|
|
|
DILUTED
WEIGHTED-AVERAGE SHARES OUTSTANDING
|
63,226,857
|
|
64,142,707
|
|
63,427,681
|
|
62,857,309
|
WIDEPOINT CORPORATION AND
SUBSIDIARIES
RECONCILIATION OF GAAP EARNINGS TO
NON-GAAP
ADJUSTED EARNINGS BEFORE INTEREST TAXES
DEPRECIATION AND AMORTIZATION (EBITDA) - ROUNDED
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE
MONTHS ENDED
|
|
SIX MONTHS
ENDED
|
|
|
|
|
JUNE
30,
|
JUNE
30,
|
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
NET (LOSS)
INCOME
|
$
(302,000)
|
|
$
214,000
|
|
$
(245,000)
|
|
$
(103,000)
|
Adjustments to GAAP net income (loss):
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
423,000
|
|
230,000
|
|
981,000
|
|
461,000
|
|
Income tax
provision (benefit)
|
(300,000)
|
|
152,000
|
|
(272,000)
|
|
(50,000)
|
|
Interest
income
|
(1,000)
|
|
(2,000)
|
|
(3,000)
|
|
(7,000)
|
|
Interest
expense
|
118,000
|
|
19,000
|
|
179,000
|
|
40,000
|
|
Other
(expense) income
|
9,000
|
|
-
|
|
(9,000)
|
|
(1,000)
|
|
Stock-based compensation expense
|
55,000
|
|
12,000
|
|
110,000
|
|
40,000
|
|
Avalon
business combination transaction and related costs
|
-
|
|
-
|
|
12,000
|
|
-
|
|
Avalon
integration initiatives
|
20,000
|
|
-
|
|
81,000
|
|
-
|
Adjusted
EBITDA
|
$
22,000
|
|
$
625,000
|
|
$
834,000
|
|
$
380,000
|
SOURCE WidePoint Corporation