WidePoint Reports First Quarter 2021 Financial Results
WidePoint Corporation (NYSE American: WYY) reported a strong first quarter for 2021, achieving revenues of $20.7 million and a gross margin of 22.8%. The company saw an increase in Managed Services revenue to $9.3 million and a net income of $585,000 or $0.06 per diluted share. Significant contracts, including an $86 million DHS contract, bolster their market position. WidePoint expects revenues of $103 million for fiscal 2021, reflecting a 16% growth rate, excluding the effects of the 2020 Census project.
- Managed Services revenue increased to $9.3 million.
- Gross margin improved to 22.8% from 12.5%.
- Net income improved to $585,000, or $0.06 per diluted share.
- Cash position increased to $17.1 million.
- Received $86 million in task orders from DHS.
- Total revenue decreased from $39.7 million in Q1 2020 to $20.7 million in Q1 2021.
- Carrier Services revenues decreased due to the end of the 2020 Census project.
Sequential Growth in Managed Services Revenues Helps Drive Gross Margins to
FAIRFAX, VA / ACCESSWIRE / May 14, 2021 / WidePoint Corporation (NYSE American:WYY), the leading provider of Trusted Mobility Management (TM2) specializing in Telecommunications Lifecycle Management, Identity Management (IdM) and Digital Billing & Analytics solutions, today reported results for the first quarter ended March 31, 2021.
First Quarter 2021 and Recent Operational Highlights
- Received the first task orders under the Department of Homeland Security Cellular Wireless Management Services 2.0 contract, which were valued at
$86 million in aggregate - Successfully on-boarded the DHS Cybersecurity and Infrastructure Security Agency (CISA)
- Recognized by the International Organization for Standardization (ISO) for quality, environmental, and occupational health and safety
- Awarded three new Identity Management contracts, including a deployment with a Fortune Global 500 corporation, increasing WidePoint's commercial footprint as well as the Company's secure digital certificates into a new U.S. federal agency
- Number of U.S. Department of Defense secure digital certificates issued increased
8% sequentially from the fourth quarter of 2020 - Recognized as honorable mention vendor in the 2021 Gartner Magic Quadrant for Managed Mobility Services, Global
First Quarter 2021 Financial Highlights:
- Revenues were
$20.7 million - Managed Services revenue increased sequentially to
$9.3 million - Gross margin improved to
22.8% - Net income improved to
$585,000 , or$0.06 per diluted share - EBITDA, a non-GAAP financial measure, was
$1.0 million - Adjusted EBITDA, a non-GAAP financial measure, was
$1.2 million - As of March 31, 2021, cash increased to
$17.1 million
Management Commentary
"After completing what was, by many metrics, the most successful year in WidePoint's history, we entered 2021 with solid momentum and with an intense focus on maintaining and ultimately growing our profitability," said WidePoint's CEO, Jin Kang. "In the first quarter, we grew our high margin Managed Services revenues sequentially to
"The financial results of the first quarter demonstrate that WidePoint has a solid base from which we can continue to build and expand our profitability. With tailwinds from the increasing complex mobile landscape, the growing need to secure mobile devices, and the return to more in person work expanding our pipeline, we are optimistic that we are in a healthy and strong position to continue driving the business's profitable growth over the long-run."
First Quarter 2021 Financial Summary
(In millions, except per share amounts) | March 31, 2021 | March 31, 2020 | |||||||
| (Unaudited) | |||||||||
Revenue | $ | 20.7 | $ | 39.7 | |||||
Gross Profit | $ | 4.7 | $ | 5.0 | |||||
Gross Profit Margin | 22.8 | % | 12.5 | % | |||||
Operating Expenses | $ | 4.0 | $ | 4.2 | |||||
Income from Operations | $ | 0.7 | $ | 0.7 | |||||
Net Income | $ | 0.6 | $ | 0.5 | |||||
Basic Earnings per Share (EPS) | $ | 0.07 | $ | 0.06 | |||||
Diluted Earnings per Share (EPS) | $ | 0.06 | $ | 0.06 | |||||
Adjusted EBITDA | $ | 1.2 | $ | 1.4 | |||||
Financial Outlook
Due to the large, short-term changes in WidePoint's financial performance from the 2020 Census project, the Company believes comparing 2021 expectations to 2020 results, excluding the 2020 Census project, may provide a more objective analysis of the Company's anticipated performance. For the fiscal year 2021, the Company currently expects revenues of approximately
Conference Call
WidePoint management will hold a conference call today (May 14, 2021) at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss these results.
WidePoint's President and CEO Jin Kang, Executive Vice President and Chief Sales and Marketing Officer Jason Holloway, and Executive Vice President and CFO Kellie Kim will host the conference call, followed by a question and answer period.
U.S. dial-in number: 888-506-0062
International number: 973-528-0011
Passcode: 862059
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at 949-574-3860.
The conference call will be broadcast live and available for replay here and via the investor relations section of the Company's website.
A replay of the conference call will be available after 7:30 p.m. Eastern time on the same day through May 28, 2021.
Toll-free replay number: 877-481-4010
International replay number: 919-882-2331
Replay ID: 40863
About WidePoint
WidePoint Corporation (NYSE American:WYY) is a leading provider of trusted mobility management (TM2) solutions, including telecom management, mobile management, identity management, and digital billing and analytics. For more information, visit widepoint.com.
Non-GAAP Financial Measures
WidePoint uses a variety of operational and financial metrics, including non-GAAP financial measures such as EBITDA and 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 GAAP Net income to EBITDA and Adjusted EBITDA is provided below:
| THREE MONTHS ENDED | ||||||||
| MARCH 31, | ||||||||
| 2021 | 2020 | |||||||
NET INCOME (LOSS) | $ | 585,400 | $ | 483,900 | ||||
Adjustments to reconcile net (loss) income to EBITDA: | ||||||||
Depreciation and amortization | 370,000 | 422,800 | ||||||
Amortization of deferred financing costs | - | 1,300 | ||||||
Income tax provision (benefit) | 23,500 | 177,200 | ||||||
Interest income | (2,400 | ) | (3,100 | ) | ||||
Interest expense | 71,000 | 80,800 | ||||||
EBITDA | $ | 1,047,500 | $ | 1,162,900 | ||||
Other adjustments to reconcile net (loss) income to Adjusted EBITDA: | ||||||||
Provision for doubtful accounts | (200 | ) | - | |||||
Stock-based compensation expense | 182,800 | 281,400 | ||||||
Adjusted EBITDA | $ | 1,230,100 | $ | 1,444,300 | ||||
Safe Harbor Statement
This press release contains forward-looking statements concerning our business, operations and financial performance and condition as well as our plans, objectives and expectations for our business operations and financial performance and condition that are subject to risks and uncertainties. All statements other than statements of historical fact included herein are forward-looking statements. You can identify these statements by words such as "aim," "anticipate," "assume," "believe," "could," "due," "estimate," "expect," "goal," "intend," "may," "objective," "plan," "potential," "positioned," "predict," "should," "target," "will," "would" and other similar expressions that are predictions of or indicate future events and future trends. These forward-looking statements are based on current expectations, estimates, forecasts and projections about our business and the industry in which we operate and our management's beliefs and assumptions. These statements are not guarantees of future performance or development and involve known and unknown risks, uncertainties and other factors that are in some cases beyond our control. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected, including, the impact of the COVID-19 pandemic on our business and operations; our ability to successfully execute our strategy; our ability to sustain profitability and positive cash flows; our ability to gain market acceptance for our products; our ability to win new contracts, execute contract extensions and expansion of services of existing contracts; our ability to compete with companies that have greater resources than us; our ability to penetrate the commercial sector to expand our business; our ability to retain key personnel; and the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 24, 2021. The forward-looking statements included herein are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.
Investor Relations:
Gateway Investor Relations
Matt Glover or Charlie Schumacher
949-574-3860
WYY@gatewayir.com
WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| MARCH 31, | DECEMBER 31, | ||||||||||
| 2021 | 2020 | ||||||||||
| ASSETS | |||||||||||
CURRENT ASSETS | |||||||||||
Cash and cash equivalents | $ | 17,058,363 | $ | 15,996,749 | |||||||
Accounts receivable, net of allowance for doubtful accounts | |||||||||||
of | 19,214,216 | 35,882,661 | |||||||||
Unbilled accounts receivable | 10,017,255 | 13,848,726 | |||||||||
Other current assets | 1,692,695 | 1,763,633 | |||||||||
Total current assets | 47,982,529 | 67,491,769 | |||||||||
NONCURRENT ASSETS | |||||||||||
Property and equipment, net | 565,535 | 573,039 | |||||||||
Operating lease right of use asset, net | 5,917,435 | 6,095,376 | |||||||||
Intangibles, net | 2,134,193 | 2,187,503 | |||||||||
Goodwill | 18,555,578 | 18,555,578 | |||||||||
Deferred tax asset | 5,621,373 | 5,606,079 | |||||||||
Other long-term assets | 1,312,402 | 815,007 | |||||||||
Total assets | $ | 82,089,045 | $ | 101,324,351 | |||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
CURRENT LIABILITIES | |||||||||||
Accounts payable | $ | 19,586,553 | $ | 36,221,981 | |||||||
Accrued expenses | 11,354,080 | 15,626,313 | |||||||||
Deferred revenue | 1,875,353 | 2,016,282 | |||||||||
Current portion of operating lease liabilities | 582,058 | 577,855 | |||||||||
Current portion of other term obligations | - | ||||||||||
Total current liabilities | 33,398,044 | 54,442,431 | |||||||||
NONCURRENT LIABILITIES | |||||||||||
Operating lease liabilities, net of current portion | 5,784,592 | 5,931,788 | |||||||||
Other liabilities | 246,037 | - | |||||||||
Deferred revenue, net of current portion | 437,578 | 398,409 | |||||||||
Total liabilities | 39,866,251 | 60,772,628 | |||||||||
STOCKHOLDERS' EQUITY | |||||||||||
Preferred stock, | |||||||||||
authorized; 2,045,714 shares issued and none outstanding | - | - | |||||||||
Common stock, | |||||||||||
authorized; 9,071,352 and 8,876,515 | |||||||||||
shares issued outstanding, respectively | 9,071 | 8,876 | |||||||||
Additional paid-in capital | 101,645,142 | 100,504,741 | |||||||||
Accumulated other comprehensive loss | (159,564) | (104,615 | ) | ||||||||
Accumulated deficit | (59,271,855) | (59,857,279 | ) | ||||||||
Total stockholders' equity | 42,222,794 | 40,551,723 | |||||||||
Total liabilities and stockholders' equity | $ | 82,089,045 | $ | 101,324,351 | |||||||
WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| THREE MONTHS ENDED | ||||||||
FAQ
What were WidePoint's earnings for Q1 2021?
What is WidePoint's revenue outlook for 2021?
How did WidePoint's gross margin perform in Q1 2021?
What major contracts did WidePoint secure recently?
