Actionable news
All posts from Actionable news

WidePoint: C O R P O R A T E P A R T I C I P A N T S David Fore, Hayden Investor Relations Steve L. Komar,

The following excerpt is from the company's SEC filing.

Chairman and Chief Executive Officer

James T. McCubbin,

Executive Vice President, Chief Financial Officer


Mike Crawford,

B. Riley and Company

Greg Hillman,

First Wilshire Securities Management



Good day and welcome to the WidePoint’s Third Quarter 2015 Financial Results Conference Call. Today’s conference is being recorded.

At this time, I’d like to turn the conference over to David Fore at Hayden IR. Please go ahead, sir.

David Fore:

Tha nk you, Operator. Good afternoon to all participants in WidePoint’s Third Quarter 2015 Financial Results Conference Call. With me today are WidePoint’s Chairman and CEO, Steve Komar; and Chief Financial Officer, Jim McCubbin. Steve will provide an overview of the quarter’s developments and accomplishments and Jim will provide additional financial and operational view and outlook. Then, we’ll open the call to questions from participants.

Before I turn the call over to Steve, I’d like to remind all participants that during this conference call, any forward-looking statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Expressions of future goals, including financial guidance and similar expressions including without limitation expressions using the terminology; may, will, believe, expects, plans, anticipates, predicts, forecast, and expressions which reflects something other than historical facts are intended to identify forward-looking statements. These forward-looking statements involve a number of risks factors and uncertainties, including those discussed in the Risk Factor sections of WidePoint’s Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q, and other SEC filings the Company releases. Actual results may differ materially from any forward-looking statements due to such risks factors and uncertainties. The Company undertakes no obligation to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after this conference call, except as required by law.

ViaVid has made considerable efforts to provide an accurate transcription, there may be material errors, omissions, or inaccuracies in the reporting of the substance of the conference call. This transcript is being made available for information purposes only.

1-888-562-0262 1-604-929-1352

I’d like to turn the call over to WidePoint’s Chairman and CEO, Steve Komar for opening remarks. Steve?

Steve L. Komar:

Thank you, David and good afternoon to all of you who have joined us here today. First, let me state that it has been a very busy quarter here at WidePoint. There are several recent developments and accomplishments that I would like to share with you today and of course, we’d like to express our appreciation to all of you for your continued interest and support of WidePoint Corporation.

But before I do that, let me open by saying that overall our third quarter financial performance did not meet Management’s expectations. While we continue to invest in our new partnerships, our next-generation Identity Management solutions, our platform consolidation and enhancement, and our sales and marketing efforts, all of which are key, medium and long-term strategies for our success. Our projections for an acceleration of revenue growth did not come to pass in this quarter with a predictable negative impact on our path to profitability.

There were several good reasons for this and the so called good news aspect of this shortfall is that each of the reasons for relating to timing and not to market or competitive deterioration, a hopeful indication of that is the almost $9 million of new contract value signings that were achieved during the quarter.

In quick summary, the three key factors behind this shortfall include first, slow adoption of Cert-on-Device and PIV-I capability by federal markets and second, an extended timeline and task order issuance under the DHS BPA by the three remaining target agencies; and finally, an underestimation of product lifecycle and go-to-market lead times involved with our mobile device provider partners such as Samsung, LG, and Kyocera.

I personally feel that we did everything we could do as a Management Team and an Organization to address the first two factors.

The third or lead time factor was honestly a Management miscalculation primarily resulting from our overly enthusiastic view about the time-to-market involved with these partner and market opportunities. To be completely clear, we still firmly believe that these mobile manufacturer—relationships will be fundamental to our meeting our future revenue growth goals and that they will retain a very high priority focus with us. Jim will discuss the third quarter’s financial performance and shortfall as well as an outlook for coming quarters in more specific detail in his prepared remarks.

Notwithstanding the short-term issues already mentioned, I’d like to focus for a moment on our progress and milestones achieved during the third quarter, all of which will contribute to our future success and achieving our growth targets.

During the quarter we completed the transition of the Immigration and Customs Enforcement Agency fully onboard to our ITMS Managed Service product under the DHS BPA. In addition to having a happy customer, we’ve recently seen an Office of the Inspector General report complimenting ICE for its compliance with Cybersprint mandates while panning other agencies that have not adopted the ITMS Managed Solution. Even more recently, we’ve now received the first task orders from the US Secret Service, another of the agencies on our target list. Essentially, that leaves the US Coast Guard and FEMA as our remaining targets.

In that regard, I’m pleased to announce our recent partnership with Rear Admiral Bob Day, US Coast Guard (Retired) who will help us pursue new and expanded business opportunities within the Homeland Security and Cyber Technology markets. Admiral Day is a former CIO of the Coast Guard and he was front and center in managing multiple enhancing changes in technology during his deck tenure at Coast Guard. We look forward to working closely with Bob to aggressively exploit our addressable markets for our next-generation IT solutions.

In addition, we are engaged with other technology partners to bring higher margin, expanded mobile telecommunications products and services to the DSH agencies under our existing BPA. Also of note, our growing pipelines and backlogs on the commercial, and state and local government side of the Telecom Managed Services business.

In addition to new relationships realized in that market during 2015, we’ve expanded several new revenue generating engagements with existing key customers such as Southwest Airlines, Compass Corporation, and WellCare. The DHS BPA clearly represented a large portion of our growth over the prior year and we expect it to drive continued growth in the future. However, this is just one opportunity, although a large one that we are investing in to reach our targeted growth rates in the quarters and years ahead.

Meanwhile on another critically important front, we believe we are making good progress with our Cyber Security initiatives, particularly for Certificate-on-Device for individuals, devices, and the Internet of Things. We are completing our strategic multi-year product roadmap for the future of our product set and our derived credentialing capability continues to be well received. Our ability to integrate with a wide variety of devices has expanded from smartphones and tablets to other machine devices that need the security that our multi-factor offerings can provide.

From a partner perspective, we have been very actively involved with Samsung. With our search now available as part of Samsung’s KNOX security container and with joint reseller agreements in place and having conducted joint live demos of our combined security capabilities, just in the course of the past few months to DHS, The Department of Defense, The Department of Education, and The Department of Interior, and feedback has been positive and interest levels quite high. We’re also engaged with Kyocera on hardened devices for first responders and with LG for commercial market enterprise penetration strategies even as we conservatively reassess the time-to-market for these respective opportunity.

On other partner fronts, our relationship and market potential with AT&T continues to expand and grow. As of today, we have four specific opportunities we are working jointly, encompassing both, financial and health related verticals, and we expect to announce some if not all of these initiatives in the coming few months.

On yet another solutions front, we are particularly excited about our new online bill presentment and analytics solution offerings. During the last quarter our UK team successfully launched the new online bill presentment and analytics solution with Three Ireland, and were selected by Telefonica UK for their provisioning of cloud digital Services. Most recently our Dublin Team showcased these solutions at the BroadSoft Connections Event in Arizona to better target the North American Communication Service Provider, or CSP, consumer market.

Our strategy is to further expand our data analytics offerings into the North American market and concurrently via our landed presence in the European community supporting the expansion of our US based services into European and Middle Eastern markets. Most importantly, our outlook for the fourth quarter and the first half of 2016 anticipates incremental revenue growth from our core cyber and telecommunications managed solutions, both as the government’s Cybersprint fully kicks-in and as we penetrate the remaining DHS agency components with our TLM and Cyber Solutions.

Additionally, we expect our consulting and data analytics units to continue their proven growth performance while expanding the geographic markets that they are currently serving. We remain very confident that the investments in technology, marketing, and personnel, that we’ve made to-date will support our planned growth in the years ahead. Our target markets are large and growing and we expect them to be very rewarding for us as we look to the future.

As we’ve stated on past calls, our efforts are focused on defined key initiatives, including the executing our plan to scale and in leveraging our DHS BPA relationship in marketing and selling our Cert-on-Device and next-generation Identity Management offerings, and growing our higher margin businesses and revenue streams, and growing our state, local, and commercial markets’ penetration both here and abroad, and then aggressively controlling our spending to preserve corporate liquidity.

With that, I’d like to thank you all for your continued interest and commitment. I would now like to turn the call over to Jim McCubbin, WidePoint’s CFO for an in-depth discussion of our quarterly financial results, and his outlook for the remainder of the year.

Jim, the floor is yours.

James T. McCubbin:

Thank you, Steve. Hello everyone. Thank you again for joining our call today. Today in my remarks, I’m going to discuss some and review our third quarter 2015 financial results and provide an update on our financial expectations for the remainder of the year.

In the third quarter, revenue grew approximately 17% to $17 million from $14.5 million in the same period last year. Within our managed mobile services revenue, which consists of carrier services and managed services, we saw carrier services more than double to $9.1 million this quarter from $4.4...