WidePoint Corp (WYY) 2009 Q2 法說會逐字稿

Good afternoon, ladies and gentlemen. Thank you far standing by. Welcome to the WidePoint Corporation second quarter 2009 conference call.

During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. (Operator Instructions). At this time, I would like to go ahead and turn the conference over to Frank Hawkins, of Hawk Associates. Please go ahead, sir.

Thank you, Mary. Good afternoon. This is Frank Hawkins. I'm the CEO of Hawk Associates. We are WidePoint's Investor Relations firm.

I want to welcome you to the second quarter 2009 conference call. On the phone today are Steve Komar, the CEO of WidePoint, and Jim McCubbin, the Company's Chief Financial Officer. Also on the call this quarter is Jin Kang, President of the Company's Mobile Telecom Expense Management subsidiary, iSYS, and he will provide an update on his operations.

I would like to begin by reading the Company's Safe Harbor Statement, and then we will hear from Steve, Jim, and Jin before they take your questions. This afternoon's discussion contains forward-looking statements that involve known and unknown risks, uncertainties, and other factors not under the Company's control. Those risks may cause actual results, performance, or achievements of the Company to be materially different from the results, performance, or other expectations implied by these forward-looking statements. These factors include, but are not limited to, those detailed in the Company's periodic filings with the Securities and Exchange Commission.

And now here is Steve with his opening remarks.

Thank you, Frank. Appreciate the introduction. Good afternoon to everyone. On behalf of the WidePoint management team, I would like to welcome you all to the Company's second quarter 2009 investor call.

At our last call in mid May, we advised you that during the first quarter we had realized record revenues and achieved our second consecutive quarter of bottom line profitability. With that as a backdrop, I am pleased to be able to report today that WidePoint's second quarter 2009 revenues exceeded last quarter's results, and that the Company achieved bottom line net earnings of $250,000, over $425,000 better than the second quarter of last year, and almost double the earnings realized in our most recent first quarter of 2009. This represents our third consecutive quarter of profitable operations, and we believe confirms the trajectory that will lead to enhanced earnings performance levels in the near future.

On the revenue front, although performance was somewhat less than our internal target, second quarter revenues at $10.4 million were up 12% compared to a strong second quarter of 2008. Our comparison will be to look at the six months versus 2008 and there we see 25% year to year growth.

Another comparison would be to look at the six months of revenues for 2009 versus the same period of 2008, and there, we see 25% year to year growth. But the most compelling comparison to me is to look at the quarterly revenues at our Mobile Telecom and PKI Credentialing key business segments, where revenues increased from the same quarter last year, at 48% and 30% respectively.

On yet another front, during the first half of 2009, we continued to enhance our liquid and capital position, as we increased networking capital by $800,000, even as we pay down outstanding debt by almost $1 million.

Operationally, I would like to take a minute and review our segment activity over the past quarter. There are several highlights that are worthy of mention. At our Identity Assurance and PKI Credentialing segment, we have worked to build on the Department of Defense's acknowledgement that the FiXs Credential, provided by WidePoint's ORC unit, is the commercial equivalent of [its own] Common Access card, with FiXs being used for physical and virtual access by non-military personnel to US bases and secured data bases. Supplementing our key role within the FiXs capability, we have continued to grow our relationship with the [ALA] and AFCEA organizations, both being high volume distribution channels for FiXs and ORC and WidePoint capability.

In a related area, we are excited about the continuing success and trajectory of our role as a key player, supporting the Transportation Workers Port Access Program otherwise known as TWIC, within the Transportation Security Administration, and by acting as a contract to the Lockheed Martin Corporation. Most recently, this program has successfully enrolled over 1.1 million users, and is poised to reach the goal of over three million enrollees with recurring revenue streams to WidePoint, and this will encompass across all the nation's port facilities. During second quarter, Lockheed expanded its contractual relationship with WidePoint, and is providing substantial future funding in support of this relationship going forward.

At our Mobile Telecom Managed Services segment, MTEMS, as we refer to it, we were successfully awarded a new contract with the US Courts; it's a pilot program that adds another new customer and new service opportunity for us. This award will further showcase our capabilities and subject matter expertise to expand our MTEMS services to a large and diverse user base.

In addition, we were awarded a substantial contract extension by the Center for Disease Control and Prevention, CDC as it is known, that customer of ours, and witness continued robust expansive task order activity from our Transportation Security Administration and Washington Headquarter Service clients. I will limit my thoughts on this segment, as Jin Kang will address this area in more detail during his comments.

At our Consulting Services business segment, we experienced mix results, predominantly caused by some timing issues that pushed certain second quarter purchases into the third quarter. This weakness in our Software Based Security Solutions Group was partially offset by contract renewals from our FBI and Abbott Laboratories clients, as well as a select strengthening of the base business at our Commercial Consulting unit.

From a strategic perspective, we remain committed to maximizing the organic growth opportunity before us, leading of course with our key Mobile Telecom and PKI Credentialing capabilities. In this regard, we are pursuing new opportunities to further integrate our products and services to meet the needs of airports, port facilities, forensic [and formatic] software and services, and emergency management and secured mass notification systems at the state and local government level. Looking to the next 12 months, we anticipate continued, re-invigorated revenue growth, and ongoing improvement in margins at our key segments, as well as continued growth in our bottom line earnings performance. As an indicator of this earnings potential I just would like to point out to you that we are currently realizing almost $700,000 per quarter in income from operations, which excludes noncash expenses, and we expect that to improve significantly as we leverage existing relationships and penetrate new contract wins, and business partner opportunities. With that, I would like to thank you all for your attention. I would like to now turn the microphone over to Jin Kang, CEO of iSYS LLC, and the driver of our MTEMS initiative. He will talk about activities and trends in our Mobile Telecom segment and related initiatives.

Thank you, Steve. Thank you all for the opportunity to brief you on the state of our Mobile Telecommunication Expense Management Services, or MTEM's, business segment. I will be covering the following topics in my brief, business segment summary, key developments, key customers, inter-Company activities, business segment outlook.

For our business summary, MTEM business unit is doing well and is experiencing steady growth. Jim will be covering detail financials, but I would like to let you all know that our gross revenues and net profit numbers have increased quarter after quarter since being offered as a core service of WidePoint. We are already enjoying a hide level of customer satisfaction, as shown by our win rate of 100% for all contract renewals. We have also experienced 100% rate for all work completed under the Federal Strategic Source Initiative, FSSI, a contract which is the primary TEMS contract vehicle for the federal government.

Some key developments for the second quarter of 2009, key development number one, iSYS was awarded the MTEM contracts for US Courts, as Steve pointed out earlier, with a potential user base of 15,000 units. Key development number two, our contract with Customs and Border Protection has grown from 16,000 units to 23,000 units under management. Key development number three, our Centers for Disease Control and Prevention customer is undergoing the implementation of MTEMS for their largest sub organization that will add approximately 5,000 additional units.

These three developments add approximately 25,000 additional units under management. This will bring the total number of units under management to 80,000 units.

Key development number four, our Washington Headquarter Services customer received a monetary award from the General Services Administration for cost effectiveness. They saved over $4.2 million in approximately two years. WHS, Washington Headquarter Service, was able to realize the savings by implementing our Mobil Telecom Expense Management Services.

Key development number five, the level of interest in MTEM has increased dramatically, as evidence by the attendance of MTEM training sessions hosted by the General Services Administration. We have noticed a steady increase in attendance at the training sessions over the past 18 months, to where the classrooms are completely filled for all training sessions offered.

Key development number six, Congress has become interested in the MTEMS and its ability to save the federal government a significant amount of money, and asked the General Services Administration for a briefing on the Hill. Policies may be developed mandating the implementation of MTEMS for all federal agencies; this is all very big news.

Moving on to our key customers, we count the following agencies as our key customers for MTEMS services, the Transportation Security Administration, Department of Homeland Security, Washington Headquarter Services, Customs and Border Protection, Centers for Disease Control and Prevention, and the US Court of Appeals, all the who's who of the federal government agencies, very, very important. These customers, they are not just our customers, but they are our proponents as we move forward to capture other agencies' business. They've been our best proponents and our best business development proponents.

As I said earlier, we have 100% win rate for contract renewals, and we enjoy a very high level of customer satisfaction. But we need to ensure that we do not get complacent. We foresee that will continue to enjoy the high level of customer satisfaction in the future, and hopefully we will keep it that way.

Moving on to our Inter-business segment activities, we have been working with our sister segment to implement the Public Key Solution for our Intelligence Telecommunication Management Systems, or it ITMS. ITMS is our web-enabled automated tool that we use to deliver our MTEMS services to our customers. The implementation of Public Key Solution is being done to address the growing customer desire to further secure their data and to meet federal government security requirements.

We are leveraging our sister segment's Capability and Identity Assurance area to implement the Public Key Solution quickly and cost effectively. Implementing the Public Key Solution will be a great selling point to our Department of Defense and civilian federal agencies, as we continue to capture more federal government customers.

The other inter-business segment activities is we have been working with our consulting segment out of Chicago, Illinois, and have identified several potential customers, commercial customers, for our TEM services. We have been working actively to sell our TEM services to commercial customers, and I hope to have some results to show for it in the near future.

Finally, moving on to the MTEM business segment outlook, looking forward, I see that MTEMS will continue to experience organic growth similar to that experience in the last several quarters. I also foresee that we will capture new customers that will add meaningful numbers, in terms of wireless units, within our MTEM business segment.

It is our intent to continue to invest in business development efforts by, A, engaging with sales generation entities and to supplement the current capabilities; B, continuing to work with policy writers within the federal government to drive the adoption of MTEM solutions within the government; and C, attending and presenting at government and industry sponsored conferences, to get the word out about the MTEM services. I foresee that these business development efforts will provide additional growth opportunities for WidePoint within MTEM segments.

I would like to close with this statement, the state of the business segment is very strong, and now for hard financial and the real state of the MTEM business segment, I will turn the meeting over to Jim McCubbin, our CFO.

Thanks Jin. Nice job.

Thank you.

It is always fun the first time you are doing a call.

Well, hello everyone and thank you for the time for joining us for our 2009 second quarter earnings call. It has been a robust, interesting last six months, and we have made some headway as you can see, and I am very happy that Jin had the opportunity to expand a little bit on MTEMS for you. Today I am going to discuss our overall financial performance from our recently reported second quarter, and provide you with an update on our plans to also raise the awareness of WidePoint to a larger audience of investors in the coming months as we continue to demonstrate positive performance within our marketplace.

Looking at our financial performance for the second quarter and six months of 2009, we were pleased overall. Revenues increased approximately $1.1 million, from $9.3 million in the second quarter of 2008 to $10.4 million in the second quarter of 2009, and $4 million from approximately $16.4 million for the six months ended June 30, 2008, to $20.5 million for the six months ended June 30, 2009.

The increase in revenues was primarily attributable to increases in our Mobile Telecom Managed Services and PKI Credential and Managed Services segments; segments that we have been investing a great amount of effort and time on; segments that we believe offers the potential to provide a recurring revenue base that is built upon recurring revenue streams with long-term contract time frames, and margins that can be optimized through a managed service offering that allows margin growth as we add customers. A business model that we have been working several years to break out and develop, and that we believe can bring strong revenue margin and income growth to this Company on a recurring basis.

In fact our Mobile Telecom Managed Services segment experienced revenue growth of approximately 48% from $4.8 million for the quarter ended June 30, 2008, to approximately $7.1 million for the quarter ended June 30, 2009, and revenue growth of approximately 45%, from approximately $9.3 million for the six months ended June 30, 2008, to $13.5 million for the six months ended June 30, 2009. Not a bad result, that is further bolstered by the fact that we have also during this period added two new customers; that should also offer us the opportunity to add another 40,000 units to our base, over this next year without winning any new business. Given this and the fact that we are presently competing for up to another 200,000 users in the short term, and our present 100% win rate, we have reason to feel optimistic that this segment should continue to prosper over the next coming year.

Looking at our PKI Credentialing and Managed Services segment, we also witnessed positive revenue results, as we experienced revenue growth of approximately 30%, with revenues increasing approximately $300,000 from $1 million for the three month period ended June 30, 2008, to $1.3 million for the three month period ending June 30, 2009, and 54% revenue growth in the the six month period, with revenues increasing approximately $960,000, from $1.8 million for the six month period ending June 30, 2008, to $2.7 million for the six month period ending June 30, 2009. We look forward to this segment continuing to expand, as we grow our affiliations with partners such as ALA, AFCEA, and others that are starting to provide our services to a broader base of customers, either as private labels, or as part of an overall strategy that we have just recently moved upon.

Our current efforts have expanded this segment into providing a broader base of solutions, with wins to support several new clients that will be disclosed in the near term, opportunities that should also offer our services into a commercial channel for small businesses through a major web portal, and the award of a new pilot, that during the second half has the opportunity to expand into a major project further supporting the prospect and growth for this segment in the future. Overall both of these segments have a lot going for them, as we shepherd them into the growth stage of their respective product life cycle.

Another area that we are pleased with was our gross profit. For the three month period ended June 30, 2009, our gross profit was approximately $2.2 million or 21% of revenues, as compared to gross profit of approximately $1.6 million or 17% of revenues for the three month period ended June 30, 2008. And for the six month period ended June 30, 2009, our gross profit was approximately $4.2 million or 21% of revenues, as compared to gross profit of approximately $2.7 or 17% of revenues for the six month period ending June 30, 2008.

This improvement was material to the result of higher margins associated with improved economies of scale in our MTEM and PKI segments, where an inflection point, where we are witnessing, as we cover our costs for our base level business, that new incremental revenues are going to actually start raising this margin, which is what we've been working for as well. It strongly suggests that we are entering a phase whereas we add revenues, these segments should see incremental benefits to our gross profit, and we should see a percentage growth relative to revenues occur.

This event is also showing up in our operating income line for these segments as well. And for the three months and six months ending June 30, 2009 versus the respective periods in 2008, we have witnessed operating income improvements going from approximately $300,000 to $600,000 for the quarter for MTEMS, and $400,000 to $1.2 million for the six months for MTEMs; very strong results moving straight to the operational income line.

For the PKI segment, we have also seen the same growth in the quarter, for operating income going from $505,000 to $300,000 in the quarter, and growing from negative $300,000 to a positive $500,000 or an $800,000 swing for six months for PKI for the same respective period. These factors demonstrate how we are in this inflection point in our financial model and gross profit.

Looking at our SG&A expenses, it should also note we have continued to keep tight controls over our SG&A base. Given this, we have not noted any material increases and a slight negative percentage [bias] in comparing SG&A to revenue growth.

Given the growth in revenues, our improvements to margins and gross profits, and our controls over SG&A, you can see how we witnessed quarter to quarter revenue growth of approximately $1 million that showed net income improvement of approximately $400,000, a nice demonstration to show how, as we add revenues in the future, we should witness bottom line income growth. In fact as a result of everything we have done to date, we have witnessed our bottom line grow from a loss of approximately $178,000 last year on $9.3 million, to a gain of $251,000 for the respective quarter, and $10.4 million. Given this, it shows how this swing in revenues or this incremental million dollar swing in revenue actually generated a bottom line impact of greater than $400,000.

Again, something demonstrating how our financial model is starting to come on line and grow margins, and these margins finding their way incrementally to the bottom line. Supporting this, and the fact this occurred in the last six months, we can see that our working capital improved $800,000 approximately, and this also allowed us to reduce our debt load $2.3 million.

Net net in review, our revenues increased, our gross profit increased, our operating income improved, our bottom line improved, our balance sheet improved. Given the growth in our two key segments that we anticipate, our financial model appears poised to continue to maintain this improvement on a going forward basis. It is a nice place that we have worked several years to get to. Now the goal is taking it forward, adding these revenues, stepping it up, and realizing this great percentage income possibility that we have [drop into] the bottom line.

Now given all of this positive momentum that we are making, or we are poised to make, we also understand that it is important for us now to get out and talk to some people, to raise some investor awareness in WidePoint. Many people have asked me about this recently, saying Jim, Steve, as you have built the Company and are starting to build it out, are you going to finally get this story out there. Well over the summer we have been working with that.

In fact we have made many strides to set up several opportunities to present at conferences in the second half. We're also working with an investment bank to take us on a non-deal road show to raise awareness in our business model and in the Company and what we are doing, and we are working with several other knowledgeable individuals and putting together an additional awareness campaign that would include further kind of non-deal road shows to spread the word about what we are doing here at WidePoint.

We understand it is one thing to operationally grow the business, but from an investor base and being public, we are also working towards this second half at trying to raise this awareness so we can all realize the benefit and spread the word for WidePoint. That's my financial review in a nutshell, as well as some of the forward prospects we are looking at for investor relations. So back to you, Steve. Thank you.

Thank you Jin, and thank you Jim for your comprehensive comments.

Before we open the lines for our investor and analyst discussion, I just wanted to take a moment to summarize and emphasize the key points that are at the forefront of our management focus as we move forward. WidePoint must continue to enhance its position as a growing, stable, cash generating business, leveraging its competencies into an an attractive marketplace.

WidePoint must stimulate aggressive revenue growth at the Mobile Telecom and PKI Credentialing segments. WidePoint must deliver net margin improvement in accelerating profitability of the Enterprise to support increased value for our investors and stakeholders.

With that as a comment, I think I'll ask our operator, Mary, to rejoin us and to open the lines for any questions or comments that you may have.

Thank you, sir. (Operator Instructions). Our first question comes from the line of Mark Jordan with Noble Financial. Please go ahead.

Good afternoon, Jim and Steve. A question for Jim. You have noted the improvement in gross margin, do you have a sense of what would be a reasonable target for gross margin, say three years out?

Well, Mark actually not exactly, just to be poignant. We do recognize that we are going to see improvements. That improvement, if our model holds true, and depending on the profitability and contracts that we are awarded, has the opportunity to significantly increase into the 30's if not in the 40% basis for the MTEMS and PKI segments.

Some of this does have to do, though, with some of the product that is put through those contract vehicles. On the PKI side, the margin increases could be greater, because there's less low margin product that's sometimes is attached to those contract vehicles.

On MTEMS side, the issue that we have to deal with is, if they want to put any pass through revenues associated with the actual phone costs, we could get some watering down on cost of sales. So we are trying to get them not to do that, so the margins can just grow, and that gives us the greatest opportunity.

But at this point, we are just looking at these 2% and 3% increases as the model develops over where it is as a business segment right now.

Okay.

Does that help a little bit?

Yes, a question on capital. Do you have any meaningful CapEx needs to support the growth that you see, and should we look at this business just as a service business that the capital you need to grow is really just a funding of accounts receivable? And if that is the case, how quickly do those receivable turns turn with your typical MTEMS customer?

On the MTEMs side, we really don't have any CapEx that is involved. Most of the software has already been developed, paid for, and has either been capitalized or expensed.

There's certain ongoing small expenses, but they're not anything material. On the MTEMs revenue, you see the turn going anywhere from 60 to 90 days for the federal customer base, which is predominantly normal.

A footnote you might want to make there is that, over on the PKI Credentialing side, is that every couple of years, we have a re-certification process with the federal government that requires a little bit of capital outlay.

That's a couple of hundred thousand. So on the PKI segment, there is at times some capitalizable item for the certification processes, which on average will run $200,000 to $300,000.

Okay. Simplistically, when you look at adding 1,000 customers under MTEMS, what type of annualized revenue stream per one thousand customers would you estimate?

Well, kind of a thumbprint that we are looking at on our pricing, excluding any pass through for phones or anything like that, is probably $80,000 to $100,000 per month, per thousand.

Okay.

And Mark, we have some pricing on the GSA schedule, that in the future I can point you to, that shows you the different parameters. Some of our pricing is done at per device, per month.

The MTEM business is literally a monthly recurring billable event. And then there are just certain other bolt-on parts to it.

Okay. Finally, could you just size, do have a sense as to the size of the relevant federal market that you have the opportunity to address, in terms of units?

Actually, right now we are going after specific identifiable contracts, and contract opportunities that show the immediate desire or need demand at around 300,000 to 350,000. We believe that the marketplace, for the next step up on some of the departments and agencies, the larger ones, will take us to a million units.

Beyond that, there are some studies that we are putting together for Congress, that are showing much larger unit volumes as they reach out to the contractor base for the federal agencies, the states and everything else. There's about 300 million users or potential devices out there. It is really us estimating the percentage of what we think our reach can be, through the federal agencies and the state governments, which should be in the millions.

Okay. Thank you very much.

Thank you, Mark.

Thank you. (Operator Instructions). Our next question comes from the line of Sam Donaldson, private investor. Please go ahead.

Gentlemen, again, congratulations on another excellent effort. I am very pleased; and I trust everybody else who has WidePoint stock is as well.

I have a question about the Obama administration as to whether its people, who are now coming into place, are making some sort of difference one way or the other, how are you finding working with them, or in fact are all contracting officers really embedded, Defense Department or otherwise, in ways that it really doesn't matter who's at the White House?

Sam, this is Jim. Actually, we are not seeing a whole lot of change. There were some delays as we saw all the new executive teams come into the various agencies and just getting in place, as I mean, I am sure you have seen some of that chaos as well which is normal, in kind of a changeover for administration.

A positive result that we have seen though, is we have had some interest from the Hill, in which case we have gone up in front of a sub-committee. And we are getting a lot of questions from the Hill on the benefits of taking this program and mandating it, possibly federal-wide, and they are talking to OMB and GSA as well, and we are pushing on that, because as you know, all that would do would be to speed up the implementation and our opportunity to gain a large market very, very quickly.

A related question, regarding the Hill. At the time a few years ago we were having a problem, because both the Democrats and Republicans refused to fund the government, except on continuing resolutions. And to some extent that has been the case, although it's been improved the last cycle, but what do you see there, as any impact on our revenue stream?

Hey Sam, this is Jin Kang. I think in terms of the government's capability to make decisions, I think there are a lot of key positions that haven't been filled yet, and so a lot of these Governments are sort of in a continuing resolution mode. But because the MTEM business is more of an operation and maintenance, they will continue to pay for those kinds of services, so I don't think that there's going to have a whole lot on impact on the MTEMS side. Also, getting back to the PKI stuff and the Security stuff, I think it is one of the Obama administration's key initiatives to get everything secured and make sure that all of these organizations are HSPD-12 compliant and so forth. So, I think we're in the two good areas where it really doesn't affect us very much in terms of the change in administration.

Okay. That's all for me. And again, congratulations, and keep going.

Thank you, Sam. Appreciate it.

Thank you. Our next question comes from the line of David Clark with GSB Holdings. Please go ahead.

Thanks very much. Steve, Jin, and Jim, I will reiterate what Sam said, congratulations on what was clearly another great quarter. And I am very pleased to hear that you're going to be getting out and telling the story, because I think now that you've got traction in earnings, and traction in sales growth, you are right, it is time to get out and tell the story, because it is now really a very interesting situation.

I just have one question, and that's for Jin Kang. You spoke about the Federal Government. Clearly you are getting a lot of those agencies, et cetera, and hopefully that will continue and expand as time goes on. And you also spoke about looking at commercial opportunities.

What about states, I mean, these states and municipals are in terrible financial shape. Look at California, it is just a mess. Aren't these guys looking to save money, and can't you get in there?

Well, I am glad you mentioned that, because we are actually at the city of San Diego, and we are going to parlay that to capture additional business at the state level in California.

One of the key initiatives that we have taken so far is to engage with a business development entity out in California to pursue that market. And we actually started that about two weeks ago, and we've got some key meetings set up with some of the key players out in state and local governments there.

We are also looking at other local governments. We've been working with the city of Dublin, Ohio, and we also work with the Ohio State University.

So, we are looking at state and local Governments, and we know that that's a very large market ,and just like the federal government and all of these state and local governments, their budgets are being cut so they need to find places where they can find money, so that they can fund other programs that they want to fund. So that is a very good question, and we are definitely looking into capturing those pieces of business.

David, we have wanted to wait to see California get a budget first, since we've really pushed there, and we are also doing a little bit more underwriting on the states and municipalities to make sure that we can actually get paid.

Good idea.

Yes, so we don't need to get paid in vouchers. In fact, that was a big discussion before we started this, and we didn't want to move on California until such time as they had reconciled some of their issues.

We also are working with somebody who can take this out to a large corporate environment as well, and we are just in negotiations and discussions with those parties as well and scaling it. So we are starting the scaling efforts at trying to get other people in both segments to start selling these services, either private label with us as a back end, or with our label on the front end, because there's a large opportunity in many different places for this.

Well I am glad to hear that. I mean it is a big opportunity. There's a vacuum there, and if you don't fill it somebody else will. But I also know that people, we're all copycats, so if you can get something big corporate-wise and something big state or municipal-wise, other ones will jump in, I would think.

We agree with you David; that's what we are working on.

We are also hoping to get other people to kind of take the front and lead. We don't have the working capital or the size to field a sales force to do that, nor the time. So that's why we are looking at channel strategies.

Well, that's terrific, and good luck to you, and I'll just follow it quarter by quarter as you develop the Company.

Super. Thank you.

Thank you.

Thank you. (Operator Instructions). One moment, please. Management, it looks like there are no further questions. I will turn the call back to you for any closing comments you might have.

Thank you, Mary. I appreciate that and appreciate all of your help.

In closing, I guess I'd just say that, as always, I wanted to thank everyone for their time, attention, and commitment to our efforts to build WidePoint, and to an exemplary organization and enterprise. We are all committed to that goal, and I look forward to our next quarterly opportunity to report to you on our progress. Until then, thank you, and have a pleasant evening.

Thank you. Ladies and gentlemen, that will conclude today's teleconference. We do thank you again for your participation. At this time, you may disconnect.