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WidePoint Corporation Announces Full Year 2013 Financial Results

March 31, 2014

Strategic Investments in 2013, End of Year Compass and DHS Awards, Cert on Device Launch, and Capital Raise Position Company for Growth

WASHINGTON, March 31, 2014 /PRNewswire/ — WidePoint Corporation (NYSE Mkt: WYY), a leading provider of enterprise-wide Managed Mobility Solutions featuring mobile telecommunications management, cybersecurity, identity and data assurance, and consulting solutions deliverable in a secured environment, today announced financial results for the full-year ended December 31, 2013.

Business Highlights

— Awarded $600 Million Blanket Purchase Agreement by the Department of
Homeland Security (DHS)
— Entered into a Global Master Services Agreement with Compass Group
PLC
— Developed and launched secured, cloud-based, Identity Service (IDS)
‘Certificate-on-Device’ for all types of mobile devices
— Developed and launched ePassport Verification Services
— Developed and launched Federally-Compliant Credentialed Healthcare
IT Solution
— Developed and launched Secure Cloud Service for Privileged User
Access across hybrid cloud environments in January 2014
— Awarded wireless managed service contracts by the Centers for
Disease Control and Prevention (CDC) and the Federal Communications
Commission (FCC)
— Partnered with Truphone, a global mobile network, to provide for
international coverage
— Expanded Channel Partnership with National Professional Services
Company
— Provided SaaS-based, Customized Mobile TEM Platform for Regional TEM
Company
— Selected by Gartner Inc. for inclusion in its Magic Quadrant for
Managed Mobility Services
— Completed $12.5 million public offering of common stock

Full year 2013 Financial Highlights

    --  Net revenue decreased 16% to $46.8 million from $55.8 million in in
        2012.
    --  Gross margin increased to 26% of revenue as compared to 25% in 2012.
    --  Loss from operations was approximately $1.2 million compared to income
        from operations of approximately $1.0 million in 2012.
    --  Net loss for the year was approximately $1.7 million as compared to net
        income of approximately $0.8 million in 2012.

“In addition to the many recent key accomplishments realized by the Company, we consciously invested in our business and made several key sales and marketing hires during 2013 to broaden our skills and expertise and to improve our reach into new target markets,” Steve Komar, CEO, WidePoint, commented. Mr. Komar further stated, “With our recent product launches, new partnerships, and our successful capital raise, we believe we have repositioned the Company in 2014 for accelerating growth and profitability.”

James McCubbin, WidePoint CFO, added, “2013 was a challenging year in many respects as we managed through a range of business issues, particularly federal government sequester and debt ceiling-related purchase delays. This led to a slowly contracting pipeline of new business as well as implementation holds on business awards. We also faced a major delay on our $600 million, multi-year telecommunications management award from DHS. However, during the year we continued to make key investments into the business and pay down debt. As we move into 2014, we currently see an expanding pipeline of business that should drive increased revenue in the 2(nd) and 3(rd) quarters of this year.”

Conference Call Information

A conference call and live webcast will take place at 4:30 p.m. Eastern Time, on Monday, March 31, 2014. Anyone interested in participating should call 1- 877-941-2068 if calling within the United States or 1-480-629-9712 if calling internationally. There will be a playback available until April 14, 2014. 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 4674898 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=108326.

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 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.


    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

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                  WIDEPOINT CORPORATION AND SUBSIDIARIES

                   CONDENSED CONSOLIDATED BALANCE SHEETS

                                                                DECEMBER 31,
                                                                ------------

                                                                2013                2012
                                                                ----                ----

                                  ASSETS

    CURRENT ASSETS

    Cash and
     cash
     equivalents                              $                    -          $1,857,614

    Accounts
     receivable,
     net of
     allowance
     for
     doubtful
     accounts                                              7,612,400           6,932,366

    of $30,038 and $76,886 in 2013 and 2012,
     respectively

    Unbilled
     accounts
     receivable                                            1,561,030           2,969,450

    Inventories                                               61,338             286,920

    Prepaid
     expenses
     and other
     assets                                                  533,944             482,389

    Income
     taxes
     receivable                                                  763             138,575

    Deferred
     income
     taxes                                                         -             473,430

    Total
     current
     assets                                                9,769,475          13,140,744

    NONCURRENT ASSETS

    Property
     and
     equipment,
     net                                                   1,545,951           1,428,323

     Intangibles,
     net                                                   3,613,271           4,969,241

    Goodwill                                              16,618,467          16,618,467

    Deferred
     income tax
     asset, net
     of current                                            4,407,630           3,346,948

    Deposits
     and other
     assets                                                  120,046              76,118

    TOTAL
     ASSETS                                              $36,074,840         $39,579,841
                                                         ===========         ===========

                   LIABILITIES AND STOCKHOLDERS' EQUITY

    CURRENT LIABILITIES

    Line of
     credit
     advance                                                $916,663     $             -

    Short term
     note
     payable                                                 119,336             113,018

    Accounts
     payable                                               3,228,586           5,555,419

    Accrued
     expenses                                              4,407,286           3,539,710

    Deferred
     revenue                                                  40,911             173,655

    Income
     taxes
     payable                                                 217,982                   -

    Deferred
     income
     taxes                                                   700,743                   -

    Current
     portion of
     long-term
     debt                                                  1,150,455           1,102,741

    Current
     portion of
     deferred
     rent                                                     78,525              51,196

    Current
     portion of
     capital
     lease
     obligations                                              45,125              42,878

    Total
     current
     liabilities                                          10,905,612          10,578,617

    NONCURRENT LIABILITIES

    Long-term
     debt, net
     of current
     portion                                               2,509,492           4,918,732

    Capital
     lease
     obligation,
     net of
     current
     portion                                                  57,119             102,244

    Deferred
     rent, net
     of current
     portion                                                   2,421              15,786

    Deferred
     revenue                                                  82,494              25,231

    Deposits
     and other
     liabilities                                               1,964               1,964

    Total
     liabilities                                          13,559,102          15,642,574

    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; 63,907,357 and 63,751,857
     shares issued

    and
     outstanding,
     respectively                                             63,907              63,752

    Additional
     paid-in
     capital                                              69,867,491          69,594,390

    Accumulated
     deficit                                             (47,415,660)        (45,720,875)

    Total
     stockholders'
     equity                                               22,515,738          23,937,267

    Total
     liabilities
     and
     stockholders'
     equity                                              $36,074,840         $39,579,841
                                                         ===========         ===========


                                       WIDEPOINT CORPORATION AND SUBSIDIARIES

                                  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                                           YEAR ENDED

                                                          DECEMBER 31,
                                                          ------------

                                                                           2013                              2012
                                                                           ----                              ----

    REVENUES                                                        $46,825,032                       $55,782,742

    COST OF REVENUES (including
     amortization and depreciation
     of

       $1,462,995 and $1,511,267, respectively)                      34,713,471                        41,920,161
                                                                     ----------                        ----------

    GROSS PROFIT                                                     12,111,561                        13,862,581
                                                                     ----------                        ----------

    OPERATING EXPENSES

      Sales and
       Marketing                                                      3,125,867                         2,741,799

      General and
       Administrative
       Expenses
       (including
       share-
       based

        compensation
         of $227,035
         and
         $217,611,
         respectively,

         and gain on
          change in
          fair value
          of
          contingent
          obligation
          of

         $1,250,000 and $900,000, respectively)                       9,872,655                         9,820,695

      Depreciation
       and
       Amortization                                                     288,333                           281,310
                                                                        -------                           -------

          Total Operating Expenses                                   13,286,855                        12,843,804
                                                                     ----------                        ----------

    (LOSS) INCOME FROM OPERATIONS                                    (1,175,294)                        1,018,777

    OTHER INCOME (EXPENSE)

      Interest
       Income                                                             7,364                             4,881

      Interest
       Expense                                                         (175,358)                         (294,244)

      Other Income
       (Expense)                                                         11,267                             3,200
                                                                         ------                             -----

          Total Other Income (Expense)                                 (156,727)                         (286,163)
                                                                       --------                          --------

    (LOSS) INCOME BEFORE PROVISION
     FOR INCOME TAXES                                                (1,332,021)                          732,614

    INCOME TAX PROVISION (BENEFIT)                                      362,764                           (99,687)
                                                                        -------                           -------

    NET (LOSS) INCOME                                               $(1,694,785)                         $832,301
                                                                    ===========                          ========

    BASIC EARNINGS PER SHARE                                            $(0.027)                           $0.013
                                                                        =======                            ======

    BASIC WEIGHTED-AVERAGE SHARES
     OUTSTANDING                                                     63,802,275                        63,474,871
                                                                     ==========                        ==========

    DILUTED EARNINGS PER SHARE                                          $(0.027)                           $0.013
                                                                        =======                            ======

    DILUTED WEIGHTED-AVERAGE
     SHARES OUTSTANDING                                              63,802,275                        63,758,632
                                                                     ==========                        ==========


                            WIDEPOINT CORPORATION AND SUBSIDIARIES

                RECONCILIATION OF GAAP EARNINGS TO NON-GAAP ADJUSTED EARNINGS

               BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA)

                                                                                   YEAR ENDED

                                                                                  DECEMBER 31,
                                                                                  ------------

                                                                                2013                 2012
                                                                                ----                 ----

    NET (LOSS) INCOME                         $(1,694,800)                  $832,300

    Adjustments to GAAP net income (loss):

                                             Gain on
                                             change in
                                             fair value
                                             of
                                             contingent
                                             obligation    (1,250,000)                           (900,000)

                                             Depreciation
                                             and
                                             amortization    1,751,300                          1,792,600

                                             Amortization
                                             of
                                             deferred
                                             financing
                                             costs               8,700                              3,100

                                             Income tax
                                             provision
                                             (benefit)         362,800                            (99,700)

                                             Interest
                                             income             (7,400)                            (4,900)

                                             Interest
                                             expense           175,400                            294,200

                                             Other
                                             (expense)
                                             income            (11,300)                            (3,200)

                                             Provision
                                             for
                                             doubtful
                                             accounts           75,400                             25,100

                                             Inventory
                                             write-
                                             downs             200,000                             52,100

                                             Stock-
                                             based
                                             compensation
                                             expense           227,000                            217,600

                                             Avalon
                                             business
                                             combination
                                             transaction
                                             and
                                             related
                                             costs                   -                12,000

                                             Avalon
                                             integration
                                             initiatives        21,000                            121,600
                                            ------------

    Adjusted EBITDA                             $(141,900)                $2,342,800
                                                =========                 ==========

SOURCE WidePoint Corporation


Source: PR Newswire



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