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WidePoint Corporation Reports Record Third Quarter 2012 Results

Quarter Revenue Up 42% over Last Year with Growth in All Segments

WASHINGTON, Nov. 14, 2012 /PRNewswire/ -- WidePoint Corporation (NYSE Amex: WYY), a specialist in Telecommunications Management and Cybersecurity solutions, today announced financial results for the three months ended September 30, 2012.

Third Quarter 2012 Results and Highlights

  • Net revenue for the quarter ended September 30, 2012 increased 42% to $15.2 million from $10.7 million in last year's comparable period.  Segment highlights are summarized below:
    • Telecommunications Management segment revenue increased 15% to $7.1 million from $6.2 million in last year's comparable period predominantly as a result of commercial sector sales offset partially from lower revenues in billable reselling of minutes to our federal customers.
    • CyberSecurity Managed Solutions segment revenue increased 48% to $2.3 million from $1.6 million in last year's comparable period driven by credentialing managed service sales to government and commercial customers and continued expansion in support of the Transportation Workers Identification Credentialing (TWIC) program.
    • IT Consulting Services and Products revenues increased to $5.8 million from $2.9 million in last year's comparable period materially driven by growth in commercial consulting and government product resale of hardware, software, mobile device and accessory products and IT consulting services.
  • Gross profit for the third quarter of 2012 was approximately $3.6 million, or 23% of revenues, as compared to gross profit of $2.6 million, or 24% of revenues, for the third quarter of 2011.
  • Income from operations was approximately $459,000 compared to approximately $270,000 in last year's comparable period.
  • Net income was approximately $244,000, compared to $218,000 in last year's comparable period.
  • Non-GAAP adjusted EBITDA was approximately $1,035,000 as compared to $544,000 in last year's comparable third quarter.
  • WidePoint ended the period with $2.5 million in cash.

Steve Komar, CEO, WidePoint, commented, "Management is gratified by the strong revenue performance during the third quarter of 2012.  This 'across the board' improvement speaks well for several business development initiatives we've implemented over the past year. We are seeing recurring and accelerating revenue growth from several comprehensive multi-year programs in our market sectors.  In addition, this performance allows us the leeway that we need to channel continuing investment into the tools and development activities necessary to ensure the future growth and success of the enterprise."

WidePoint CFO Jim McCubbin commented, "We were pleased with the financial results in our third quarter of 2012.  Revenues increased 42% with growth in each segment and our adjusted EBITDA increased 90%, exceeding $1 million, while we continued to invest in our operations, pay down debt, and improve our stockholder equity." 

Conference Call Information

A conference call and live webcast will take place at 4:30 p.m. Eastern Time, on Wednesday, November 14, 2012. Anyone interested in participating should call 1-877-941-4775 if calling within the United States or 1-480-629-9761 if calling internationally. There will be a playback available until November 28, 2012. 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 4573618 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=102357.

About WidePoint

WidePoint is a specialist in providing wireless mobility 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 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


-tables follow-

 

WIDEPOINT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 


SEPTEMBER 30,


DECEMBER 31,


2012


2011


(Unaudited)

ASSETS

CURRENT ASSETS




Cash and cash equivalents

$         2,493,589


$       2,135,310

Accounts receivable, net of allowance of $35,684 and $35,684, respectively

6,329,418


7,884,802

Unbilled accounts receivable

1,877,686


2,715,406

Prepaid expenses and other assets

804,957


782,862

Deferred income taxes

473,430


473,430





Total current assets

11,979,080


13,991,810





NONCURRENT ASSETS




Property and equipment, net

1,508,895


1,336,134

Intangibles, net

4,251,143


5,421,655

Goodwill

18,150,172


18,193,561

Deferred income tax asset, net of current

3,407,760


3,265,125

Deposits and other assets

78,049


81,941





TOTAL ASSETS

$      39,375,099


$    42,290,226





LIABILITIES AND STOCKHOLDERS' DEFICIT





CURRENT LIABILITIES




Short term note payable

$               27,349


$           100,951

Accounts payable

5,423,310


8,418,854

Accrued expenses

2,441,118


1,851,678

Deferred revenue

53,055


390,506

Current portion of long-term debt

357,894


798,319

Current portion of deferred rent

48,412


36,508

Current portion of capital lease obligations

10,226


22,908





Total current liabilities

8,361,364


11,619,724





Long-term debt, net of current portion

7,769,143


7,769,143

Capital lease obligation, net of current portion

145,122


-

Deferred rent, net of current portion

29,318


65,207

Deferred revenue

27,516


-

Deposits and other liabilities

1,964


-





Total liabilities

16,334,427


19,454,074





STOCKHOLDERS' EQUITY




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

69,531,751


69,326,705

Accumulated deficit

(46,554,731)


(46,553,780)





Total stockholders' equity

23,040,672


22,836,152





Total liabilities and stockholders' equity

$      39,375,099


$    42,290,226





 

 

WIDEPOINT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 


THREE MONTHS ENDED


NINE MONTHS ENDED


SEPTEMBER 30,


SEPTEMBER 30,


2012


2011


2012


2011


(Unaudited)









REVENUES

$  15,210,896


$    10,681,817


$  41,423,281


$    31,176,820









COST OF SALES (including amortization and depreciation of 

$419,657, $155,630, $1,262,105, and $510,431, respectively)








11,637,696


$      8,115,658


31,645,847


$    24,066,355









GROSS PROFIT

3,573,200


2,566,159


9,777,434


7,110,465









OPERATING EXPENSES









Sales and marketing

705,190


362,654


2,222,305


1,177,937


General and administrative (including shared-based compensation 

expense of $55,593, $69,920, $165,873, and $109,857, respectively









2,334,492


1,885,001


7,231,857


5,628,952


Depreciation and amortization

74,682


48,536


213,658


154,907












Total operating expenses

3,114,364


2,296,191


9,667,820


6,961,796









INCOME FROM OPERATIONS

458,836


269,968


109,614


148,669









OTHER INCOME (EXPENSE)









Interest income

956


2,718


4,179


9,391


Interest expense

(85,366)


(14,949)


(264,570)


(54,808)


Other income (expense)

11,091


(944)


19,946


199












Total other expense, net

(73,319)


(13,175)


(240,445)


(45,218)









NET INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES

385,517


256,793


(130,831)


103,451

INCOME TAX PROVISION (BENEFIT)

141,809


38,854


(129,880)


(11,559)









NET INCOME (LOSS)

$        243,708


$         217,939


$               (951)


$         115,010









BASIC EARNINGS PER SHARE

$              0.004


$              0.003


$           (0.000)


$              0.002









BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING

63,651,857


62,930,873


63,427,681


62,882,100









DILUTED EARNINGS PER SHARE

$              0.004


$              0.003


$           (0.000)


$              0.002









DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING

63,820,891


63,968,039


63,427,681


64,230,693

 

 

WIDEPOINT CORPORATION AND SUBSIDIARIES

 

RECONCILIATION OF GAAP EARNINGS TO EARNINGS BEFORE INTEREST TAXES DEPRECIATION AND AMORTIZATION (EBITDA)

 


THREE MONTHS ENDED


NINE MONTHS ENDED


SEPTEMBER 30,


SEPTEMBER 30,


2012


2011


2012


2011









NET INCOME (LOSS)

$        244,000


$         218,000


$           (1,000)


$         115,000

Adjustments to GAAP net income (loss):








     Depreciation and amortization

494,000


204,000


1,475,763


665,000

     Income tax provision (benefit)

142,000


39,000


(130,000)


(12,000)

     Interest income

(1,000)


(3,000)


(4,200)


(9,000)

     Interest expense

85,000


15,000


265,000


55,000

     Other (expense) income

(11,000)


1,000


(20,000)


-

     Stock-based compensation expense

56,000


70,000


166,000


87,000

     Avalon business combination transaction

     and related costs

-


-


12,000


-

     Avalon integration initiatives 

26,000


-


107,000


-

Adjusted EBITDA

$     1,035,000


$         544,000


$     1,870,563


$         901,000

SOURCE WidePoint Corporation

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