WidePoint Corporation Reports 2Q17 Financial Results
MCLEAN, Va., Aug. 14, 2017 /PRNewswire/ -- WidePoint Corporation (NYSE Mkt: WYY), a leading provider of Managed Mobility Services (MMS) specializing in Cybersecurity and Telecommunications Lifecycle Management (TLM) solutions, today announced financial results for the second quarter ended June 30, 2017.
Recent Highlights
-- Appointed Jin Kang as new CEO and President of WidePoint Corporation on
July 1(st), 2017
-- Implemented major costs reductions during July, adding to reductions
taken in the second quarter of 2017, to improve operational
profitability outlook for the second half of 2017, stabilizing the
financial condition of the business
-- Extinguished all remaining long-term debt and established a new $5
million dollar credit facility with zero borrowings outstanding
-- Launched Trusted Mobility Management offering, or TM2, consolidating
platforms, improving operational efficiency, and creating a unique and
improved value proposition for customers
-- Reorganized credentialing operations and initiated several new sales and
marketing campaigns, including search engine optimization, to improve
revenue growth and financial performance
-- Added, re-negotiated, and eliminated several channel partners as part of
a repositioning of the Company's new TM2 value proposition to the
marketplace
-- Secured several new contracts and successfully expanded wallet-share
with several current customers that provides additional services
-- Entered into standstill agreement with Nokomis Capital and added two new
independent directors
Second Quarter 2017 Financial Highlights
-- Net revenue was approximately $18.9 million compared to $17.5 million in
the second quarter of 2016
-- Gross profit was approximately $3.3 million compared to $3.4 million in
the second quarter of 2016
-- Operating expenses were approximately $4.5 million compared to $4.2
million in the second quarter of 2016
-- Operating loss was approximately $(1.3 million) compared to $(0.9
million) in the second quarter of 2016
-- Net loss was approximately $(1.3 million), or $(0.02) per basic and
diluted share, compared to a loss of $(0.9 million), or $(0.01) per
basic and diluted share
-- Adjusted EBITDA loss was approximately $(0.4 million) compared to
approximately $(0.5 million) in the second quarter of 2016.
Six Months 2017 Financial Highlights
-- Net revenue was approximately $37.5 million compared to $38.0 million in
the six months of 2016
-- Gross profit was approximately $6.7 million compared to $7.6 million in
the six months of 2016
-- Operating expenses were approximately $9.2 million compared to $9.1
million in the six months of 2016
-- Operating loss was approximately $(2.4 million) compared to $(1.5
million) in the six months of 2016
-- Net loss was approximately $(2.5 million), or $(0.03) per basic and
diluted share, compared to a loss of $(1.6 million), or $(0.02) per
basic and diluted share
-- Adjusted EBITDA loss was approximately $(1.2 million) compared to
approximately $(0.6 million) in the six months of 2016
-- Cash and cash equivalents was approximately $5.5 million as of June 30,
2017.
-- Long-term debt was zero and a new credit facility for $5.0 million was
established with no borrowings.
"In the second quarter of 2017 we refocused our efforts on optimizing operations, reducing expenses, and growing our pipeline of business," stated CEO and President Jin Kang. "We also launched our TM2 vision with a new focus on improving current, high margin, high probability revenue opportunities while expanding overall cross utilization of operational personnel to drive economies of scale and reduce operational costs. We remain focused on improving our finance performance and our return to profitability."
James McCubbin, WidePoint's Chief Financial Officer, added, "The recent reductions in expenses should create a leaner and more nimble organization, driving improved financial performance in the second half of 2017. Coupling that with the payoff of our remaining long-term debt and our new untouched credit facility for up to $5 million provides us with the financial room to navigate our way through and support our growth plans that we have recently put into place."
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 Net loss to Adjusted EBITDA is included on the schedules attached hereto.
Conference Call Information
A conference call and live webcast will take place at 4:30 p.m. Eastern Time, on Tuesday, August 15, 2017. Anyone interested in listening to our earnings call should call 1-888-724-9516 if calling within the United States or 1-719-457-2627 if calling internationally. There will be a playback available until August 29, 2017. To listen to the playback, please call 1?844-512-2921 if calling within the United States or 1-412-317-6671 if calling internationally. Please use PIN code 9187516 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=125768.
About WidePoint
WidePoint is a leading provider of secure, cloud-delivered, enterprise-wide information technology-based solutions that can enable enterprises and agencies to deploy fully compliant IT services in accordance with government mandated regulations and advanced system requirements. WidePoint has several major government and commercial contracts. For more information, visit 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 Company's ability to achieve profitability and positive cash flows; (v) the Company's ability to raise additional capital on favorable terms or at all; (vii) the Company's ability to gain market acceptance for its products and (viii) 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 Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on March 30, 2017.
-tables follow-
WIDEPOINT CORPORATION
CONSOLIDATED BALANCE SHEETS
JUNE 30, DECEMBER 31,
2017 2016
---- ----
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $5,472,363 $9,123,498
Accounts receivable, net of allowance for doubtful accounts
of $75,521 and $344,411 in
2017 and 2016, respectively 8,648,612 5,153,093
Unbilled accounts receivable 6,048,130 8,112,690
Inventories 142,587 123,287
Prepaid expenses and other
assets 587,091 385,388
Income taxes receivable - 42,896
Total current assets 20,898,783 22,940,852
NONCURRENT ASSETS
Land and building held for
sale - 594,376
Property and equipment, net 976,552 736,678
Intangibles, net 3,988,662 4,298,902
Goodwill 18,555,578 18,555,578
Deposits and other assets 93,911 52,456
TOTAL ASSETS $44,513,486 $47,178,842
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Short term note payable $34,975 $131,761
Accounts payable 7,066,408 8,665,449
Accrued expenses 9,379,319 7,872,557
Deferred revenue 1,261,880 1,190,558
Income taxes payable 51,856 5,141
Current portion of long-term
debt - 94,868
Current portion of deferred
rent 26,207 40,397
Current portion of capital
lease obligations 18,027 4,097
Total current liabilities 17,838,672 18,004,828
NONCURRENT LIABILITIES
Long-term debt related to
assets held for sale, net of
current portion - 412,180
Capital lease obligation, net
of current portion 61,119 -
Deferred rent, net of current
portion 100,380 86,198
Deferred revenue 13,333 -
Deferred income taxes 386,360 398,985
Total liabilities 18,399,864 18,902,191
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; 82,946,847 and 82,730,134 shares issued
and outstanding, respectively 82,947 82,730
Additional paid-in capital 94,083,209 93,920,095
Accumulated other
comprehensive loss (181,337) (309,369)
Accumulated deficit (67,871,197) (65,416,805)
Total stockholders' equity 26,113,622 28,276,651
Total liabilities and
stockholders' equity $44,513,486 $47,178,842
=========== ===========
WIDEPOINT CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------- --------
2017 2016 2017 2016
---- ---- ---- ----
(Unaudited)
REVENUES $18,880,506 $17,539,666 $37,492,745 $38,048,306
15,589,330 14,179,119 30,771,965 30,482,781
COST OF REVENUES (including
amortization and depreciation of
$294,803, $288,277, $576,627, and
$580,635, respectively)
GROSS PROFIT 3,291,176 3,360,547 6,720,780 7,565,525
--------- --------- --------- ---------
OPERATING EXPENSES
Sales and
Marketing 628,319 702,465 1,177,178 1,441,514
3,789,980 3,441,984 7,622,220 7,199,930
General and
Administrative
Expenses
(including
share-based
compensation of
$134,062,
$48,447,
$219,079 and
$136,326,
respectively)
Product
Development 56,426 1,000 207,799 258,383
Depreciation and
Amortization 71,189 89,719 142,939 184,197
------
Total Operating Expenses 4,545,914 4,235,168 9,150,136 9,084,024
--------- --------- --------- ---------
LOSS FROM OPERATIONS (1,254,738) (874,621) (2,429,356) (1,518,499)
OTHER INCOME (EXPENSE)
Interest Income 2,566 3,433 9,593 7,606
Interest Expense (12,849) (19,828) (22,417) (40,158)
Other (Expense)
Income (875) 5,377 3,299 7,345
-----
Total Other Income
(Expense) (11,158) (11,018) (9,525) (25,207)
------- ------- ------ -------
LOSS BEFORE INCOME TAX PROVISION (1,265,896) (885,639) (2,438,881) (1,543,706)
INCOME TAX PROVISION 34,279 11,291 15,511 12,734
------ ------ ------ ------
NET LOSS $(1,300,175) $(896,930) $(2,454,392) $(1,556,440)
=========== ========= =========== ===========
BASIC EARNINGS PER SHARE $(0.02) $(0.01) $(0.03) $(0.02)
====== ====== ====== ======
BASIC WEIGHTED-AVERAGE SHARES
OUTSTANDING 82,845,449 82,730,134 82,843,631 82,644,978
========== ========== ========== ==========
DILUTED EARNINGS PER SHARE $(0.02) $(0.01) $(0.03) $(0.02)
====== ====== ====== ======
DILUTED WEIGHTED-AVERAGE SHARES
OUTSTANDING 82,845,449 82,730,134 82,843,631 82,644,978
========== ========== ========== ==========
WIDEPOINT CORPORATION
ADJUSTED EARNINGS BEFORE INTEREST, TAXES,
DEPRECIATION AND AMORTIZATION
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------- --------
2017 2016 2017 2016
---- ---- ---- ----
NET LOSS $(1,300,200) $(896,900) $(2,454,400) $(1,556,400)
Adjustments to GAAP net income (loss):
Depreciation
and
amortization 366,200 377,900 719,800 764,600
Income tax
provision
(benefit) 34,300 11,300 15,500 12,700
Interest
income (2,600) (3,400) (9,600) (7,600)
Interest
expense 12,800 19,900 22,400 40,200
Other
(expense)
income 900 (5,300) (3,300) (7,300)
Provision for
doubtful
accounts 17,100 (6,800) 31,200 (13,400)
Gain on sale
of assets
held for sale (66,700) - (66,700)
Loss on
disposal of
leasehold
improvements 176,700 - 172,800 -
Severance and
exit costs 187,500 - 187,500
Stock-based
compensation
expense 134,100 48,400 136,300 136,300
------------
Adjusted EBITDA $(439,900) $(454,900) $(1,248,500) $(630,900)
========= ========= =========== =========
For More Information:
Brett Maas or David Fore
Hayden IR
(646) 536-7331
brett@haydenir.com
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SOURCE WidePoint Corporation
