WidePoint Corp. (WYY, Financial) filed Quarterly Report for the period ended 2009-03-31.
WidePoint is a technology-based provider of products and 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/integration. ORC has earned four major U.S. federal government certifications offering the highest levels of assurance for transactions over the Internet. WidePoint's profile 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. WidePoint Corp. has a market cap of $31.9 million; its shares were traded at around $0.5499 with and P/S ratio of 1.
Interest expense. Interest expense decreased from approximately $100,000 (or less than 1% of revenues) for the three month period ended March 31, 2008 to approximately $80,000 (or less than 1% of revenues) for the three month period ended March 31, 2009. The decrease in interest expense was primarily attributable to lesser expenses associated with lower debt levels. We anticipate our interest expense may fall as a result of the March 2009 payoff of the subordinated debt of approximately $2.1 million dollars which bore an interest rate of 10%.
Net cash provided by operating activities for the quarter ended March 31, 2009, was approximately $2.2 million, as compared to cash provided by operating activities of $2.3 million for the quarter ended March 31, 2008. The decrease in cash generated from operating activities for the quarter ended March 31, 2009, was primarily a result of decreases in accounts receivable, which were materially due to increased collections as a result of greater billed revenues as compared to the quarter ended March 31, 2008, and partially offset by increases in accounts payable and accruals. Increases in revenue growth were contributing factors to these changes. Net cash used in investing activities for the quarter ended March 31, 2009, was approximately $19,000, as compared to $4.9 million used in investing activities in the quarter ended March 31, 2008. The decrease in net cash used in investing activities primarily reflects the prior year acquisition of iSYS in January 2008 whereas there were no acquisitions in the first quarter of 2009. Net cash used in financing activities amounted to approximately $2.2 million in the quarter ended March 31, 2009, as compared to approximately $3.2 million of net cash provided by financing activities in the quarter ended March 31, 2008. The decrease in net cash provided by financing activities primarily reflects the repayment of a note payable issued by the seller in connection with the acquisition of iSYS, LLC in January 2008. As a result of the Companys capital raise in 2008, the Company had excess liquidity to absorb this paydown of short-term debt while still maintaining sufficient levels of capital resources to fund the operations.
As of March 31, 2009, the Company had a net working capital of approximately $3.0 million. The Companys primary source of liquidity consists of approximately $4.3 million in cash and cash equivalents and approximately $7.4 million of accounts receivable and unbilled accounts receivable. Current liabilities include approximately $6.7 million in accounts payable and accrued expenses. The growth in current liabilities during the quarter was materially associated with timing delays in reconciling certain vendors payments that increased our accounts payable and accrued expenses.
Effective May 11, 2009, fully-vested options to purchase 50,000 shares of WidePoint common stock previously issued to Ron Oxley on August 16, 2006 with an exercise price of $2.80 per share were cancelled and new options were issued to Mr. Oxley entitling Mr. Oxley to purchase 50,000 shares of WidePoint common stock at a price of $0.54 per share. All of the newly issued options vested fully as of the date of grant.
Effective May 11, 2009, unvested options to purchase 250,000 shares of WidePoint common stock previously issued to Mr. Oxley on July 25, 2008 with an exercise price of $0.81 per share were cancelled and new options were issued to Mr. Oxley entitling Mr. Oxley to purchase 250,000 shares of WidePoint common stock at a price of $0.83 per share. Such options shall vest fully on July 25, 2015; provided that the vesting of such options may be accelerated based on the achievement of certain performance objectives.
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WidePoint is a technology-based provider of products and 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/integration. ORC has earned four major U.S. federal government certifications offering the highest levels of assurance for transactions over the Internet. WidePoint's profile 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. WidePoint Corp. has a market cap of $31.9 million; its shares were traded at around $0.5499 with and P/S ratio of 1.
Highlight of Business Operations:
Depreciation. Depreciation expense increased from approximately $37,000 (or less than 1% of revenues) for the three month period ended March 31, 2008 to approximately $43,000 (or less than 1% of revenues) for the three month period ended March 31, 2009. The increase in depreciation expense was primarily attributable to greater amounts of depreciable assets.Interest expense. Interest expense decreased from approximately $100,000 (or less than 1% of revenues) for the three month period ended March 31, 2008 to approximately $80,000 (or less than 1% of revenues) for the three month period ended March 31, 2009. The decrease in interest expense was primarily attributable to lesser expenses associated with lower debt levels. We anticipate our interest expense may fall as a result of the March 2009 payoff of the subordinated debt of approximately $2.1 million dollars which bore an interest rate of 10%.
Net cash provided by operating activities for the quarter ended March 31, 2009, was approximately $2.2 million, as compared to cash provided by operating activities of $2.3 million for the quarter ended March 31, 2008. The decrease in cash generated from operating activities for the quarter ended March 31, 2009, was primarily a result of decreases in accounts receivable, which were materially due to increased collections as a result of greater billed revenues as compared to the quarter ended March 31, 2008, and partially offset by increases in accounts payable and accruals. Increases in revenue growth were contributing factors to these changes. Net cash used in investing activities for the quarter ended March 31, 2009, was approximately $19,000, as compared to $4.9 million used in investing activities in the quarter ended March 31, 2008. The decrease in net cash used in investing activities primarily reflects the prior year acquisition of iSYS in January 2008 whereas there were no acquisitions in the first quarter of 2009. Net cash used in financing activities amounted to approximately $2.2 million in the quarter ended March 31, 2009, as compared to approximately $3.2 million of net cash provided by financing activities in the quarter ended March 31, 2008. The decrease in net cash provided by financing activities primarily reflects the repayment of a note payable issued by the seller in connection with the acquisition of iSYS, LLC in January 2008. As a result of the Companys capital raise in 2008, the Company had excess liquidity to absorb this paydown of short-term debt while still maintaining sufficient levels of capital resources to fund the operations.
As of March 31, 2009, the Company had a net working capital of approximately $3.0 million. The Companys primary source of liquidity consists of approximately $4.3 million in cash and cash equivalents and approximately $7.4 million of accounts receivable and unbilled accounts receivable. Current liabilities include approximately $6.7 million in accounts payable and accrued expenses. The growth in current liabilities during the quarter was materially associated with timing delays in reconciling certain vendors payments that increased our accounts payable and accrued expenses.
Effective May 11, 2009, fully-vested options to purchase 50,000 shares of WidePoint common stock previously issued to Ron Oxley on August 16, 2006 with an exercise price of $2.80 per share were cancelled and new options were issued to Mr. Oxley entitling Mr. Oxley to purchase 50,000 shares of WidePoint common stock at a price of $0.54 per share. All of the newly issued options vested fully as of the date of grant.
Effective May 11, 2009, unvested options to purchase 250,000 shares of WidePoint common stock previously issued to Mr. Oxley on July 25, 2008 with an exercise price of $0.81 per share were cancelled and new options were issued to Mr. Oxley entitling Mr. Oxley to purchase 250,000 shares of WidePoint common stock at a price of $0.83 per share. Such options shall vest fully on July 25, 2015; provided that the vesting of such options may be accelerated based on the achievement of certain performance objectives.
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