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WidePoint Corporation Reports 21% Revenue Growth and More Than Doubles Net Income for the Third Quarter of 2010
Nov 10, 2010 (03:11 PM EST)
Q3 2010 Revenue Growth Driven by CyberSecurity Solutions; Gross Margin Improves 500 basis points to 29%; Operating Margin Improves 350 basis points; and Net Income for Q3 2010 up 115% vs. Prior Year
WASHINGTON, Nov. 10, 2010 /PRNewswire-FirstCall/ -- WidePoint Corporation (NYSE Amex: WYY), a specialist in wireless mobility management and CyberSecurity Solutions, today announced financial results for the three months and nine months ending September 30, 2010.
Third Quarter 2010 Highlights
Steve Komar, CEO, WidePoint commented, "We are very pleased to be able to report continuing positive operating results as we strengthen our positioning in key growth markets. WidePoint continues to benefit from its diversified platform for growth, characterized by our CyberSecurity Solutions segment leading the way in the current quarter with strong sequential and year-over-year growth. Solid performance from our IT Consulting Services and Wireless Mobility segments augmented the CyberSecurity achievement (which was highlighted by a very substantial initial order from the Department of the Navy) during the quarter just ended. Overall, this was a strong, robust quarter for WidePoint Corporation and has set the stage for continued positive performance for the remainder of 2010 and into 2011."
Third Quarter 2010 Financial Results
Net revenue for the three months ended September 30, 2010 increased $2.4 million, or 21%, to $13.8 million from $11.4 million in last year's comparable period. The increase in revenues was primarily attributable to increases in the CyberSecurity Solutions segment, which increased 158% to $4.0 million from $1.6 million in the year-ago period. The growth in CyberSecurity Solutions was primarily the result of a purchase by the Department of the Navy, the continued rollout for the State of Delaware under an award issued during the second quarter of 2010 by Delaware State University, and continued increases in credential sales associated with several initiatives requiring the use of those credentials by government agencies.
Gross profit for the three month period ended September 30, 2010 was approximately $3.9 million (or 29% of revenues), as compared to gross profit of approximately $2.7 million (or 24% of revenues), for the three month period ended September 30, 2009. Overall gross margin was higher in the third quarter of 2010 as a result of greater revenues and higher margins associated with improved economies of scale in the CyberSecurity Solutions segment. Gross profit as a percentage of revenues is expected to increase as cost of sales as a percentage of revenues decreases due to a greater mix of higher margin services although there may be periods of variability in margin growth associated with changes in product mix.
Total operating expenses increased 32% to $2.8 million for the quarter ended September 30, 2010 compared to $2.1 million for the year-ago period. Operating expenses as a percentage of sales increased to 20% from 18% in the year-ago period, due to increases in both Sales and Marketing and in General and Administrative expenses.
WidePoint reported income from operations of approximately $1.2 million in the third quarter, up approximately 102% from approximately $583,000 in the third quarter last year. Net income was approximately $1.1 million, up approximately 115% compared to net income of approximately $515,000, in the year-ago period. Earnings per share for the third quarter of 2010 were $0.02 per diluted share, compared to $0.01 in the year-ago period.
Year-To-Date Financial Results
Net revenue for the nine months ended September 30, 2010 increased $5.5 million, or 17%, to $37.4 million from $31.9 million in last year's comparable period. The increase in revenues was primarily attributable to increases in CyberSecurity Solutions and IT Consulting Services and Products segments, which increased from $7.9 million to $8.8 million (or 19%), respectively. Wireless Mobility Management segment revenue increased marginally to $20.7 million.
Gross profit for the nine month period ended September 30, 2010 was approximately $9.4 million (or 25% of revenues), as compared to gross profit of approximately $6.9 million (or 22% of revenues), for the nine month period ended September 30, 2009.
Total operating expenses increased 28% to $7.4 million for the nine months ended September 30, 2010 compared to $5.8 million for the year-ago period. Operating expenses as a percentage of sales increased about 200 basis points to 20% from 18% in the year-ago period, due to increases in both sales and marketing and in general and administrative expenses.
WidePoint reported income from operations of approximately $2.0 million in the nine months ended September 30, 2010, up approximately 75% from approximately $1.1 million in the same period last year. Net income was approximately $1.8 million, up approximately 97% compared to net income of approximately $895,000, in the year-ago period.
WidePoint CFO Jim McCubbin added, "We were pleased with the continued acceleration in our organic growth that we witnessed in the third quarter along with the expansion of our operating margins and profitability. The positive performance from our CyberSecurity Solutions segment, in particular demonstrates the impact this segment has on driving positive operating results to our margins and bottom line. The increasing revenues generated from higher margin areas such as our CyberSecurity Solutions segment shows the leverage we can have in our business model in driving a higher and higher portion of each incremental revenue dollar to our bottom line."
Management expects FYE 2010 to:
Conference Call Information
A conference call and live webcast will take place at 4:30 p.m. Eastern Time, on Wednesday, November 10, 2010. Anyone interested in participating should call 1-877-941-8602 if calling within the United States or 1-480-629-9809 if calling internationally. There will be a playback available until November 17, 2010. 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 4384218 for the replay.
The call will also be accompanied live by webcast over the Internet and accessible at http://viavid.net/dce.aspx?sid=00007DC2 (if necessary, please copy and paste link into browser).
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 including, Operational Research Consultants, Inc., iSYS, LLC, Protexx Technology Corporation, Advanced Response Concepts Corporation, and WidePoint IL, Inc. 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.
SOURCE WidePoint Corporation