FAIRFAX, VA , a leading provider of information technology
assurance and identity management services, today announced
financial results for the third quarter ended September 30,
2007.
The company reported total revenue of $4,005,000 for the
quarter, an increase of 24.8% from revenue of $3,208,000 in the
third quarter of 2006. Revenue in the company's Public Key
Infrastructure (PKI) credentialing and managed services segment
increased 437% from $245,000 in Q3 '06 to $1,315,000 in Q3 '07. For
the nine months ending September 30, 2007, PKI and managed services
segment revenue increased 320% to $2,810,000 from $669,000 in the
year ago period primarily as a result of federal mandates to roll
out credential programs to various agencies and contractors.
Third quarter 2007 highlights include:
-- WidePoint recorded its first profitable quarter during the period,
earning $178,000 or $0.003 per diluted share, compared with a net loss of
$192,000 a year ago.
-- The 437% increase in PKI revenues represented an absolute increase of
$2,141,000 over the prior year period, driving an improvement in total
operating income from a loss of $221,000 in the third quarter of 2006 to an
operating gain of $159,000 in the current period. Excluding depreciation
and amortization expenses, operating income for the current quarter was
$294,000.
-- The company realized strong sequential growth from the second to third
quarter of 2007. Although the consulting services segment realized a
slight decline in the top line during the quarter on a year over year basis
due to delays in sourcing qualified personnel, revenues for the segment
increased 28% from the prior quarter. The PKI and managed services segment
realized 11% growth versus the prior quarter.
-- Potential backlog for the quarter increased by more than $28 million.
WidePoint was awarded a number of multi-year contracts during the quarter,
including agreements with Lockheed Martin and the Department of Commerce.
The company also began offering its identity management and information
assurance solutions to the State of California, won two federal follow-on
awards and secured seven contract extension options.
-- WidePoint ended the period with working capital of approximately $3.7
million and cash and equivalents of approximately $2.9 million.
Steve Komar, CEO of WidePoint, stated, "We continued to execute
well in our PKI and managed services business during the third
quarter. Our backlog expanded as we secured several new contracts,
including a contract with Lockheed Martin and its Transportation
Worker's team utilizing ORC's core technology. We continue to
pursue numerous high-profile identity management and information
assurance initiatives in the federal sector and we are laying the
strategic groundwork to expand our core capabilities into several
emerging state and commercial opportunities."
WidePoint CFO Jim McCubbin said, "We are pleased to report that
during the quarter we witnessed continuing growth in our PKI and
managed services business. This growth led to the improvements we
realized in increases in our gross margins and our profitability,
along with the expansion of our working capital and backlog. As we
continue to grow our operations, while making the necessary capital
investments in our business, we believe we can chart a course that
will both secure and expand a leadership role for WidePoint within
our early stage industry."
WidePoint will hold a conference call with CEO Steve Komar and
senior members of the management team today at 4:30 p.m. Eastern
Standard Time. The call will cover the company's third quarter
results. Komar will open the call and a question-and-answer session
will follow.
To participate, call (866) 225-8754 any time after 4:20 p.m.
Eastern Time on November 12. International callers should dial
(480) 629-9564. While in conference, if callers should experience
any difficulty or require operator assistance, they can press the
(*) followed by the (0) button. This will call an operator to the
line.
About WidePoint
WidePoint is a leading provider of information technology
assurance and identity management services to the government sector
and commercial markets. WidePoint specializes in providing systems
engineering, integration and information technology services.
WidePoint's wholly owned subsidiary, ORC, is at the forefront of
implementing government-compliant eAuthentication identity
management managed services and associated systems engineering and
integration. ORC has earned four major U.S. federal government
certifications offering the highest levels of assurance for
transactions over the Internet.
WidePoint's portfolio of customers encompasses U.S. Federal
Government agencies, including the Department of Defense, the
Department of Homeland Security and the Department of Justice as
well as major U.S. defense contractors and several major
pharmaceutical companies. For more information, visit
http://www.widepoint.com.
An investment profile about WidePoint may be found at
http://www.hawkassociates.com/wyyprofile.aspx.
For investor relations information regarding WidePoint, visit
http://www.hawkassociates.com and http://www.americanmicrocaps.com,
or contact Frank Hawkins or Cale Smith, Hawk Associates, at (305)
451-1888, e-mail: info@hawkassociates.com. To receive these
releases via e-mail, subscribe at
http://www.hawkassociates.com/email.aspx.
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
Sep 30, Dec 31,
2007 2006
------------ ------------
Assets (unaudited)
Current assets:
Cash and cash equivalents $ 2,861,982 $ 2,774,813
Accounts receivable 3,682,709 6,220,444
Prepaid expenses and other assets 323,591 463,369
------------ ------------
Total current assets 6,868,282 9,458,626
------------ ------------
Property and equipment, net 267,728 205,231
Goodwill 2,526,110 2,526,110
Intangibles, net 1,118,699 1,358,212
Other assets 106,947 56,192
------------ ------------
Total assets $ 10,887,766 $ 13,604,371
============ ============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 1,987,008 $ 4,364,747
Accrued expenses 909,348 786,842
Deferred revenue 175,730 564,594
Short-term portion of deferred rent - 3,057
Short-term portion of capital lease
obligation 52,725 45,020
------------ ------------
Total current liabilities 3,124,811 5,764,260
------------ ------------
Long-term portion of deferred
rent - -
Capital lease obligation, net of current
portion 38,360 67,851
------------ ------------
Total liabilities 3,163,171 5,832,111
Stockholders' equity:
Preferred stock, $0.001 par value;
10,000,000 shares authorized; 0 and
195,214 shares issued and outstanding,
respectively - 195
Common stock, $0.001 par value; 110,000,000
shares authorized; 52,558,699 and
50,494,759 shares issued and outstanding,
respectively 52,559 50,495
Stock warrants 38,666 38,666
Additional paid-in capital 60,816,310 60,667,229
Accumulated deficit (53,182,940) (52,984,325)
------------ ------------
Total stockholders' equity 7,724,595 7,772,260
------------ ------------
Total liabilities and stockholders'
equity $ 10,887,766 $ 13,604,371
============ ============
WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- --------------------------
2007 2006 2007 2006
------------ ------------ ------------ ------------
(unaudited)
Revenues, net $ 4,005,463 $ 3,208,261 $ 10,146,942 $ 10,734,027
Cost of sales
(including
amortization and
depreciation of
$112,749,
$102,127,
$332,867, and
$306,090,
respectively) 2,873,643 2,327,930 7,262,276 8,322,886
------------ ------------ ------------ ------------
Gross profit 1,131,820 880,331 2,884,666 2,411,141
Sales and marketing 239,248 248,730 685,857 662,121
General &
administrative 710,956 845,311 2,413,017 2,473,663
Depreciation
expense 22,599 7,202 59,773 20,927
------------ ------------ ------------ ------------
Gain (Loss) from
operations 159,017 (220,912) (273,981) (745,570)
Interest income 21,944 29,122 83,942 67,887
Interest expense (2,704) (573) (8,576) (2,544)
------------ ------------ ------------ ------------
Net gain (loss)
before income tax $ 178,257 $ (192,363) $ (198,615) $ (680,227)
Income tax benefit,
net - - - 83
------------ ------------ ------------ ------------
Net gain (loss) $ 178,257 $ (192,363) $ (198,615) $ (680,144)
============ ============ ============ ============
Basic net gain
(loss) per share $ 0.003 $ (0.004) $ (0.004) $ (0.015)
============ ============ ============ ============
Basic weighted
average shares
outstanding 52,558,699 47,442,123 52,348,799 44,089,874
============ ============ ============ ============
Diluted net gain
(loss) per share $ 0.003 $ (0.004) $ (0.004) $ (0.015)
============ ============ ============ ============
Diluted weighted
average shares
outstanding 57,470,064 47,442,123 52,348,799 44,089,874
============ ============ ============ ============
WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ----------------------
2007 2006 2007 2006
---------- ---------- ---------- ----------
(unaudited)
Cash flows from operating
activities:
Net gain (loss) $ 178,257 $ (192,363) $ (198,615) $ (680,144)
Adjustments to
reconcile net loss to
net cash provided by
operating activities:
Depreciation expense 34,241 8,221 89,318 23,695
Amortization expense 101,107 101,108 303,322 303,322
Stock compensation
expense - 5,625 - 29,094
Stock options expense 31,090 112,236 117,753 265,628
Changes in assets and
liabilities
Accounts receivable (869,338) 1,732,571 2,537,735 1,016,516
Prepaid expenses
and other current
assets 136,795 67,966 139,778 (10,467)
Other assets (49,536) 2,274 (50,755) 38,027
Accounts payable and
accrued expenses 24,488 (1,649,235) (2,618,947) (667,464)
---------- ---------- ---------- ----------
Net cash provided by
operating activities $ (412,896) $ 188,403 $ 319,589 $ 318,207
---------- ---------- ---------- ----------
Cashflows from investing
activities:
Purchase of property
and equipment (6,799) (20,665) (135,429) (35,862)
Software development
costs - - (63,809) -
---------- ---------- ---------- ----------
Net cash used in
investing activities $ (6,799) $ (20,665) $ (199,238) $ (35,862)
---------- ---------- ---------- ----------
Cashflows from financing
activities:
Principal payments
under capital lease
obligation (13,019) - (38,172) -
Costs related to
registration statement - (40,786) (29,720) (372,533)
Proceeds from exercise
of stock options - 36,288 34,710 180,331
Proceeds from exercise
of warrants - 160,000 - 204,571
Costs related to
warrant exercise - - - (166,600)
---------- ---------- ---------- ----------
Net cash (used
in) provided by
financing
activities $ (13,019) $ 155,502 $ (33,182) $ (154,231)
---------- ---------- ---------- ----------
Net increase (decrease)
in cash $ (432,714) $ 323,240 $ 87,169 $ 128,114
---------- ---------- ---------- ----------
Cash and cash
equivalents, beginning
of period $3,294,696 $2,331,509 $2,774,813 $2,526,635
---------- ---------- ---------- ----------
Cash and cash
equivalents, end of
period $2,861,982 $2,654,749 $2,861,982 $2,654,749
========== ========== ========== ==========
Supplementary Information:
Liabilities incurred
but not yet paid
relating to Registration
statement $ - $ 15,570 $ - $ 59,222
Noncash investing and
financing activity -
capital leases for
acquisition of property
and equipment - - 16,386 -
Cash paid for interest $ 2,704 $ - $ 8,576 $ -
Investor Relations Contact: Hawk Associates, Inc. Frank Hawkins
and Cale Smith Phone: (305) 451-1888 E-mail: Email Contact
http://www.hawkassociates.com WidePoint Corporation One Lincoln
Centre 18 W 140 Butterfield Rd., Suite 1100 Oakbrook Terrace, IL
60181 (630) 629-0003 Phone (630) 629-7559 Fax
http://www.widepoint.com