WidePoint Reports Fourth Consecutive Quarter of Net Income Driven by Continued Revenue Growth and Margin Improvement
WASHINGTON, Nov 16, 2009 (BUSINESS WIRE) --
Company: WidePoint Corp. (WYY)
WidePoint Corporation (NYSE AMEX:WYY), a leading provider of advanced information technology, identity assurance and protection and mobile telecom expense management services, announced today the financial results for the third quarter ended September 30, 2009.
Third Quarter 2009 Financial Highlights:
-- Net income was approximately $515,000, an improvement of $850,000, over the loss of $335,000 in Q3 '08. This was the fourth consecutive quarter of positive net income and the third consecutive quarter of strong net income growth.
-- Q3 revenue increased 28% to $11.4 million vs. $8.9 million in Q3 '08.
-- Gross profit was approximately $2.7 million representing a 24% gross margin as compared to a 17% gross margin on gross profit of $1.5 million in Q3 '08.
-- Income from operations (excluding amortization, depreciation and stock compensation expense) was $896,000, an improvement of $835,000, vs. $61,000 in Q3' 08.
First Nine Months 2009 Financial Highlights:
-- Net income was approximately $895,000, an improvement of $2.3 million over the net loss of $1.4 million in the first nine months of '08.
-- Revenue increased approximately 26% to $31.9 million vs. $25.3 million in the first nine months of '08.
-- Gross profit was approximately $6.9 million representing a 22% gross margin as compared to a 17% gross margin on a gross profit of $4.2 million during the comparable period in '08.
-- Income from operations (excluding amortization, depreciation and stock compensation expense) was $2.1 million, an improvement of $2.0 million, vs. the first nine months '08 of $0.1 million.
-- Working capital increased by $1.5 million, or approximately 55%, to $4.2 million in the first nine months of 2009.
-- Debt was reduced by approximately $2.6 million, or approximately 67%, to $1.3 million in the first nine months of 2009.
-- Equity increased approximately $1.0 million, or 8.1%, to approximately $13.7 million.
Management Comment
WidePoint CEO Steve Komar said, "We continue to see overall momentum improvement occurring throughout the enterprise, and our outlook for 2009 remains solidly positive. Double-digit growth in all three of our operating segments produced a fourth consecutive quarter of net income and three quarters of accelerating net income performance in 2009. The opportunities within our Mobile Telecom Managed Services segment continue to look promising in the federal sector and we are pleased with what we are witnessing in the early stage development of the state and local municipalities marketplace. The opportunities within our PKI Credentialing segment also look exciting, as we expect the programs and our affiliations with our partners to further support and widen our sales reach and long-term growth prospects in this segment."
WidePoint CFO Jim McCubbin said, "The quarter produced positive results in virtually all of our company's financial metrics. Revenue, operating income, net income and margins were all improved, as was our balance sheet, which showed gains in working capital, as well as debt reduction and improvement in shareholder equity. Our Mobile Telecom Managed Services segment was up 28% on revenue of nearly $6.8 million for the quarter. The PKI Credentialing and Managed Services segment recorded a 34% revenue increase to almost $1.6 million and our Consulting Services segment was up 26% to $3.0 million for the quarter. This was the result of both new contract awards and renewals along with expansion work. Our business model continues to benefit from the economies of scale we are realizing within our two managed services segments that are driving the growth in our margins and our net income."
WidePoint will hold its third quarter conference today, November 16 at 4:30 p.m. EST, with CEO Steve Komar, CFO Jim McCubbin and Executive Vice President -- Business Development Ron Oxley. The call will cover the company's quarterly financial results.
To participate, call 1-888-846-5003 any time after 4:20 p.m. EST on November 16, 2009. International callers should dial 1-480-629-9856. At any time during the conference, if callers should experience any difficulty or require operator assistance, they can press the star followed by the zero button. This will call an operator to the line. Approximately one hour after the call an MP3 file of the call will be available at http://hawkassociates.com for approximately 90 days after the call.
About WidePoint
WidePoint is a leading provider of advanced information technology products and services including identity assurance and information management and protection services, forensic informatics and wireless technology services. WidePoint has several wholly owned subsidiaries holding major contracts, Operational Research Consultants, Inc. (ORC), iSYS, LLC, Protexx, 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.
An investment profile about WidePoint may be found at http://www.hawkassociates.com/profile/wyy.cfm.
For investor relations information regarding WidePoint, visit http://www.hawkassociates.com and http://www.americanmicrocaps.com, or contact Frank Hawkins, Hawk Associates, at 305-451-1888, e-mail: widepoint@hawkassociates.com. To receive notification of future releases via e-mail, subscribe at http://www.hawkassociates.com/about/alert/.
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.
WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2009 2008
Assets (unaudited)
Current assets:
Cash and cash equivalents $ 3,300,508 $ 4,375,426
Accounts receivable, net of allowance of $52,650 and $0, respectively 6,590,753 5,282,192
Unbilled accounts receivable 1,339,235 2,301,893
Prepaid expenses and other assets 367,238 267,666
Total current assets 11,597,734 12,227,177
Property and equipment, net 444,375 431,189
Goodwill 8,562,254 8,575,881
Intangibles, net 1,576,439 2,236,563
Other assets 103,609 110,808
Total assets $ 22,284,411 $ 23,581,618
Liabilities and stockholders' equity
Current liabilities:
Related party note payable $ -- $ 2,140,000
Short term note payable 29,176 97,158
Accounts payable 4,468,584 2,465,394
Accrued expenses 1,293,214 2,548,106
Deferred revenue 963,607 1,667,969
Short-term portion of long-term debt 512,077 486,707
Short-term portion of capital lease obligation 118,899 107,141
Total current liabilities 7,385,557 9,512,475
Deferred income tax liability 274,559 156,891
Long-term debt, net of current portion 735,735 1,117,230
Deferred rent, net of current portion 71,596 --
Capital lease obligation, net of current portion 91,772 95,248
Total liabilities $ 8,559,219 $ 10,881,844
Stockholders' equity:
Common stock, $0.001 par value; 110,000,000 shares authorized; 60,685 58,276
60,684,823 and 58,275,514 shares issued and outstanding, respectively
Stock warrants 38,666 38,666
Additional paid-in capital 67,322,809 67,194,788
Accumulated deficit (53,696,968 ) (54,591,956 )
Total stockholders' equity 13,725,192 12,699,774
Total liabilities and stockholders' equity $ 22,284,411 $ 23,581,618
WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Nine Months
Ended September 30, Ended September 30,
2009 2008 2009 2008
(unaudited)
Revenues, net $ 11,378,793 $ 8,878,431 $ 31,906,457 $ 25,293,069
Cost of sales (including amortization and depreciation of $245,876, 8,704,275 7,381,674 24,986,779 21,075,234
$ 261,134, $731,767, and $ 701,739, respectively)
Gross profit 2,674,518 1,496,757 6,919,678 4,217,835
Sales and marketing 333,130 262,970 827,913 675,501
General and administrative (including share-based compensation 1,711,688 1,484,878 4,824,670 4,642,526
expense of $20,093, $51,253, $126,680, and $527,333, respectively)
Depreciation expense 46,887 41,171 130,999 117,204
Income (loss) from operations 582,813 (292,262 ) 1,136,096 (1,217,396 )
Interest income 3,548 33,713 22,287 105,773
Interest expense (31,678 ) (76,019 ) (145,678 ) (262,146 )
Other expense (49 ) - (49 ) (1,698 )
Net income (loss) before income tax expense 554,634 (334,568 ) 1,012,656 (1,375,467 )
Deferred income tax expense 39,223 - 117,668 -
Net income (loss) $ 515,411 $ (334,568 ) $ 894,988 $ (1,375,467 )
Basic earnings (loss) per share $ 0.009 $ (0.006 ) $ 0.015 $ (0.024 )
Basic weighted average shares outstanding 60,348,616 58,090,697 58,990,406 56,197,675
Diluted earnings (loss) per share $ 0.008 $ (0.006 ) $ 0.015 $ (0.024 )
Diluted weighted average shares outstanding 62,063,726 58,090,697 61,440,208 56,197,675
WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Nine Months
Ended September 30, Ended September 30,
2009 2008 2009 2008
(unaudited)
Cash flows from operating activities:
Net income (loss) $ 515,411 $ (334,568 ) $ 894,988 $ (1,375,467 )
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Deferred income tax expense 39,223 - 117,668 -
Depreciation expense 63,879 55,421 176,112 158,085
Amortization 228,884 246,884 686,654 660,859
Amortization of deferred financing costs 2,912 2,143 6,665 6,429
Share-based compensation expense 20,093 51,253 126,680 527,333
Loss (gain) on disposal of equipment 49 - 49 (2,378 )
Changes in assets and liabilities (net of business combinations):
Accounts receivable and unbilled accounts receivable (477,688 ) 1,198,275 (345,903 ) 3,262,334
Prepaid expenses and other current assets (89,692 ) 259,656 (99,572 ) 74,553
Other assets (2,948 ) 6,885 12,534 (43,838 )
Accounts payable and accrued expenses 618,603 (946,744 ) 817,045 (398,515 )
Deferred revenue (277,411 ) 1,817,380 (704,362 ) 1,791,265
Net cash (used in) provided by operating activities 641,315 2,356,585 1,688,558 4,660,660
Cash flows from investing activities:
Purchase of asset/subsidiary, net of cash acquired 17,109 (5,878 ) 13,627 (4,907,623 )
Purchase of property and equipment (111,549 ) (9,948 ) (189,347 ) (73,534 )
Software development costs (14,078 ) - (26,530 ) -
Net cash used in investing activities (108,518 ) (15,826 ) (202,250 ) (4,981,157 )
Cashflows from financing activities:
Borrowings on notes payable - - 400,737 3,800,000
Principal payments on notes payable (156,290 ) (123,358 ) (2,867,593 ) (2,168,298 )
Principal payments under capital lease Obligation (29,410 ) (29,842 ) (86,120 ) (87,823 )
Proceeds from exercise of stock options - - 3,750 14,400
Proceeds from issuance of stock - - - 4,080,000
Costs related to issuance of stock - - - (140,298 )
Costs related to renewal fee for line of credit - - (12,000 ) -
Costs related to financing purchase of Subsidiary - - - (13,713 )
Net cash (used in) provided by financing activities (185,700 ) (153,200 ) (2,561,226 ) 5,484,268
Net increase (decrease) in cash and cash equivalents 347,097 2,187,559 (1,074,918 ) 5,163,771
Cash and cash equivalents, beginning of period 2,953,411 4,808,203 4,375,426 1,831,991
Cash and cash equivalents, end of period $ 3,300,508 $ 6,995,762 $ 3,300,508 $ 6,995,762
Non-cash investing activities:
Capital leases for acquisition of property and Equipment $ 94, 402 $ - $ 94, 402 $ -
Non-cash financing activities:
Promissory Note issued for iSYS acquisition $ - $ - $ - $ 2,000,000
Liabilities incurred but not yet paid relating to stock issuance - - - 41,949
Value of 1.5 million common shares issued as consideration in the - - - 1,800,000
acquisition of iSYS
Supplemental cash flow information:
Cash paid for interest $ 29,523 $ 28,529 $ 293,498 $ 110,322
SOURCE: WidePoint Corporation
For WidePoint Corporation Hawk Associates Frank Hawkins, 305-451-1888 widepoint@hawkassociates.com
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Company: WidePoint Corp. (WYY)
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