WidePoint Corp (WYY) 2009 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the WidePoint Corporation third quarter 2009 conference call. At this time all participants are in a listen only mode. Following today's presentation instructions will be given for the question-and-answer session. (Operator Instructions). I would now like to turn the conference over to Frank Hawkins, CEO of Hawk Associates.

Thank you, Josh. This is Frank Hawkins, I'm the CEO of Hawk Associates, WidePoint's Investor Relations firm. Welcome to the third quarter 2009 conference call. On the phone today we have our CEO Steve Komar, Jim McCubbin, WidePoint's Chief Financial Officer. Also on the phone with us is Ron Oxley, the Executive Vice President of Business Development.

I'd like to begin by reading the Company's Safe Harbor statement, then we will hear from Steve, Jim, and Ron before they take your questions. This afternoon's discussion contains forward-looking statements that involve known and unknown risks, uncertainties, or 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. Now here's Steve with his opening remarks.

Thank you, Frank. Good afternoon. I'm behalf of the WidePoint management team I would like to welcome you all to the Company's third quarter 2009 investor conference call.

During our last get-together in August we were pleased to report that during the second quarter we had realized steady state revenues with improving margins, and as a direct result, have recorded three consecutive quarters of positive net income. Today, I'm delighted to be able to tell that you the trend has not only continued, but has strengthened noticeably. WidePoint's third quarter 2009 revenues totaled $11.4 million. $1 million greater than the immediately preceding second quarter of 2009. And it also represents a 28% increase over the prior year's quarter. Certainly of equal or greater importance is the fact that the Company achieved bottom line net earnings of $515,000, more than doubling the earnings realized in our most recent second quarter of 2009, and $850,000 greater than the comparative third quarter 2008 net loss.

This result also represents our fourth consecutive fiscal quarter of increasing profitability. And we believe we are solidly on course for a positive result for the final quarter of this 2009 calendar year as well.

A few additional financial highlights worthy of mention include the ongoing improvement in our gross and net margins, which are a very important part of our business strategy. As well as the dramatic growth of our income from operations and our continuing cash flow improvement. And finally, even with the reduction in outstanding debt, our continuing ability to grow working capital and increase shareholders' equity. Jim McCubbin will provide more detail and perspective on these topics in the course of his financial management comments.

From an operational perspective, I'm heartened to be able to tell you that each of our business segments participated strongly in our favorable third quarter results. At our identity insurance and PKI credentialing segment revenues grew by 34% versus the prior year quarter. Similarly, our wireless mobile or M-tem segment contributed revenue of 28% versus the comparable quarter. The percentage increases at each segment are even greater when comparing the nine months year-to-date performance. At each of these segments new contract signings and expansion of existing relationship revenues have combined to not only grow our revenue base but also to migrate a growing portion of our revenue mix into the higher margin managed service category. Finally, not to be outdone, our consulting services segment contributed a revenue increase of 26% from the prior year quarter, recovering nicely from a somewhat soft second quarter 2009 result.

While we realized that there is some volatility in this segment's quarter to quarter performance, we're reasonably comfortable that existing pipeline opportunities speak well to this sector's ability to contribute to WidePoint's growth going forward. In terms of new business highlights during the quarter, our mobile telecom business unit realized major contract signings and expanded revenue streams from the Department of Homeland Security and the Transportation Security Administration, among others. And our identity insurance business unit launched new relationships with AT&T, service to US court system, then expansion of the existing relationship with Lockheed Martin Corporation to support the needs of the TSA's transportation worker identity program.

As the federal fiscal year drew to a close, both units received 100% across the board renewals and extensions of any existing contracts requiring such action by customer agencies. When we entered this 2009 calendar year we told our investors and stakeholders that we would be shamelessly focused on maximizing the organic growth capability before us and opportunity before us. We'll be leading with our managed services capabilities in the areas of identity insurance and mobile wireless. We believe this focus is now paying dividends, and will increasingly continue to do so. While we certainly will not abandon this emphasis, your management is acutely aware of the need to develop additional strategies to enable enhanced growth potential in the years to come. To that end, our sales and marketing and business development activities have been strengthened, and a number of new initiatives have started or are in the planning stage. We'll be looking for these activities which encompass each of our business segments to support additional areas of growth during 2010 and beyond.

Ron Oxley will take you through a few of these initiatives in his upcoming comments. I would like to thank you all for your attention. I'd like to now turn the microphone over to Ron Oxley, WidePoint's Executive Vice President of Business Development, who guides our new business program initiatives. As mentioned a moment ago Ron will talk to you about our recent activities and accomplishments in support of management's internal goals for WidePoint's ongoing growth and expansion. Ron.

Thank you, Steve, and good afternoon, everyone. We've been very active this year in establishing and solidifying our distribution channels through our current contract base, our relationships with large systems integrators and key associations in the marketplace. As you will hear today, this is and will remain a high priority. In addition to that we are actively pursuing additional channels. Therefore, our main business development focus is to continue to organically maximize our base business while pushing for higher profits. We will continue to capture opportunities from the federal strategic sourcing initiative contract and the GSA schedules.

We are increasing our current affiliations with the federation for identity and cross-credentialing systems association, the American Logistics Association, the Armed Forces Communications and Electronics Association, the Transportation Workers Identity Credential Group, Lockheed Martin, AT&T, American system, and others, and, of course, the Department of Defense, Department of Homeland Security, the General Services Administration and state and local governments. Secondly, we're focused on establishing additional distribution channels by penetrating agencies such as the U.S. Postal Service, and untapped areas within the Department of Defense, Army, Navy, and Air Force, as well as DoD presence within Europe, NATO, and combatant commands. We also are penetrating additional user populations to expand our distribution channels. These include first responders, registered travelers, the American Transportation Association, the contracting services association of America, the National Defense Industrial Association, the Transatlantic Security Cooperative Partnership and the Vietnam Veterans Association, along with fortune 500 companies in need of our telecommunication expense management.

Again, in both cases, we're expanding current affiliation alliances and partnerships and developing new ones. We are concentrating on growing our distribution channels while keeping within the boundaries of our key products and services. To help accelerate the adoption of our key technologies, we're working with various Senate and House committees on both the authorization and appropriation side. We're also providing white papers and case studies to the marketplace to demonstrate the value of our capabilities, as well as actively participating in major conferences sponsored or heavily attended by our current and potential customers.

We have identified a few major upcoming contracts that we he will team with major systems integrators. These will provide WidePoint with sufficient contract vehicles to reach all of our government customers. We've also identified a few potential opportunities that we may be able to prime as WidePoint during 2010. Once again, our approach is simple and disciplined. Maximize the output of our current channels, establish new channels, and leverage our influence throughout the establishment. We will continue to pursue this formula in meeting the results, oriented goals and objectives of WidePoint to achieve future success. That concludes my remarks and I will turn it back to Steve Komar.

Thanks, Ron, for your report on these critical initiatives for the Company. And now over to Jim McCubbin for his comments on our financial metrics and a little about our Investor Relations practice. Jim.

Hello, everyone. Thank you for joining us today. And Ron, that was a lot of things you've been working on this last year and a lot of things to tell everybody about. We're very excited, everyone, about all these activities and what they will lead to for the future for WidePoint. Well, looking at the financials for the Company, it was a pleasure to be able to report to you that our third quarter met our goals, and expectations. After successfully meeting last year's goal of achieving profitability on an operating basis after excluding amortization, depreciation, and stock compensation expense, this year we set upon a different goal. The goal of achieving a profitable fully diluted bottom-line result while still investing in our strategy that Steve and Ron have just discussed. A goal that we believe we're on the cusp of achieving as we look forward into the fourth quarter. A fourth quarter that presently looks to be stronger than our third quarter producing what we hope will be a record top line and bottom-line result for WidePoint.

Examining our year to date so far this year we have witnessed top-line growth in revenues for each of the past three-quarters and for the three and nine months ending September 30, 2009, as compared to those respective periods in 2008. For the quarter ending September 30, , we realized revenues of approximately $11.4 million as compared to $8.9 million in the same period in 2008. And for the nine months ending September 30, 2009, we realized revenues of approximately $32 million as compared to $25 million again for the same period in 2008. Given the consecutive quarterly revenue growth of approximately $10.1 million, $10.4 million, and $11.4 million for each of the past three-quarters of this year we're clearly trending toward achieving a year-over-year growth rate for our fiscal year in 2009 of somewhere between 25 and 30%. All in all, a respectable growth rate, and in line with our goals for this year. This revenue growth and expansion has also led to margin growth, as we have realized economies of scale within our two managed service offerings.

Looking at our gross margins, we were pleased to see improvements in our gross profitability again in each of the past three-quarters, and for the three and nine months ending September 30, 2009, as compared to those respective periods in 2008. For the quarter ending September 30, we realized gross profitability of approximately $2.7 million, or 24%, as compared to 17% on gross profits of approximately $1.5 million in the same period in 2008. For the nine nine-month period ending September 30, 2009, gross profit was approximately $6.9 million, or 22%, as compared to 17% on gross profit of $4.2 million in the same period in 2008. Looking back at 2009, we have also witnessed our gross margin expand sequentially from 20% to 21%, and to 24% respectively for each quarter in 2009. All strong indicators that the optimization of our business model is delivering on the results of our build once use many model, that is allowing us to optimize our costs and build our margins as we expand our revenues in each of our managed service offerings.

Looking at our operational profitability, excluding amortization, depreciation expense, and stock compensation expense, we also witnessed good results. Income from operations excluding those costs for the third quarter delivered approximately $896,000 in operational profitability, an improvement of $835,000, versus $61,000 that we realized in the third quarter 2008. Income from operations excluding those costs for the nine months of 2009 delivered $2.1 million in operational profitability, an improvement of $2 million versus the first nine months of 2008, of $0.1 million, or approximately $100,000. These operating profitability results clearly demonstrate a clear and measurable benefit to our balance sheet, with working capital for the nine months growing 55% to $4.2 million from $2.7 million, debt falling approximately 67% to $1.3 million from $2.6 million, and equity increasing $1 million, or 8.1% to $13.7 million. As a result of these increasing revenues improving gross margins and a leveling of our SG&A expenses, we witnessed bottom line profitability.

Net income for the three-month period ended September 30, 2009, was approximately $515,000, as compared to the net loss of $335,000 for the three months ended September 30, 2008. Net income for the nine-month period ended September 30, 2009, was approximately $895,000, as compared to the net loss of approximately $1.4 million for the nine months ended September 30, 2008. Looking at 2009, we also witnessed net income and growth in this metric as a result of our strategy and business model. Consecutively in each of the past three-quarters net income grew from $129,000 in the first quarter to $251,000 in the second quarter to $515,000 in this last quarter. Approximately 100% revenue growth in each of the -- income growth in each of the past three-quarters. All in all. What we believe are good results and within our goals.

Given these results, and with the leveling off of our SG&A expenses as a percentage of revenues, our business model is driving bottom line results. Goals that we believe will deliver a positive result for our fiscal year end 2009 in terms of strong revenue growth, margin growth, and a positive net income result, goals that should position us to look at 2010 with a stronger customer base, new and exciting opportunities that will allow us to expand our business, and ultimately one that will drive a business model that allows recurring revenue streams that pushes both net income growth and equity growth for WidePoint.

Recognizing our achievements to date we still have only started the job at hand though. We also want you to know that we realize that we need to express these achievements to a larger number of investors. On the past call, in August, we discussed this with you, and we did start an expanded outreach program that tangibly had started to provide some good results with increased awareness, stock volume and a rising stock price over the past few months. A good start, but only a start. We realize we need to continue to expand. In this regard, and looking forward, we're continuing this program with three conferences we'll be attending in December and January. The LD micro conference in Los Angeles, the SMID West conference in Chicago, and the Sidoti conference in New York.

It is our hope and desire as we showcase some of our past achievements and future plans that we'll continue to raise the awareness of WidePoint to those who to date are not yet aware of us and what we are building. With that I would like to thank you all for your support, and hand it back to Steve.

Thank you, Jim and Ron, for your comments. Before we open the lines for our listeners' comments and questions, which I'm sure you all want to get to quickly, I just wanted to summarize and reemphasize the key points that are at the forefront of our management point as we move forward.

One, WidePoint will continue to enhance its presence as a stable, growing provider of value-added IT-based solutions to the Federal Government sector.. Two, WidePoint will continue to stimulate aggressive revenue growth at the mobile telecommunications and PKI credentialing segments. Emphasizing its manic services offerings to the marketplace. Three, wide point will work to develop and launch ancillary strategies to expand and diversify its growth potential over the coming years. And finally, WidePoint will continue to generate increases in bottom line profitability and equity with the goal of building substantial incremental enterprise value to the benefit of the Company's investors and stakeholders.

With that, I will ask our operator Josh to open the lines for any questions or comments that you may have.

(Operator Instructions). Our first question comes from the line of Sam Donaldson, private investor.

Congratulations. This team that you have has produced outstanding results. Not just this year, but in building toward this year. And, Jim, when you talk about almost doubling net from the second to the third quarter, and more than doubling net, I mean, from first to second to second to third, my question, of course, comes about next year. I appreciate the fact that you're going to try to go to investor conferences and spread the word about WidePoint, but I think that if you continue to build it, as you have now, they will come. So let's look at next year. Is it realistic, to believe that the kind of quotient that I've just talked about that you've produced can be sustained next year quarter to quarter to quarter, or should we expect that as you continue to build this may level off from the standpoint of not doubling every time? Just give us a look. I understand the cautions of the Safe Harbor statement. But just tell us what you think.

Well, thank you, Sam, and as always we really appreciate not only your comments but your support. They're greatly appreciated. Yes, we do have some limitations on what we can talk about in terms of next year, but I will say to you that -- and Jim referenced the business model. And I have referenced, and Ron has referenced the longstanding relationships we have with several of our key customers. We have every reason to believe that the recurring revenues will be a big factor in our success next years and we do look to build and increase both our revenues and our earnings next year. As to how much, I don't know that I'm honestly in a position to say. Maybe Jim has something that he would like to comment on that.

Well, one--?

It's a setup, by the way.

Thank you, Steve. Thank you, Sam, as well. We're not in a position to give guidance for next year, number one. But the business model has been built that as we expand revenues, our margins should continue to grow. And as we continue to invest in the Company, we should have a dynamic setup where we'll continue to see bottom line profitability grow. Can it be 100%, less, more, it really depends on how the contracts really fall out. I mean, we're bidding on a number of things that could dramatically improve the bottom line overnight, but it's, at the same time, kind of a wait and kind of go. The Federal Government does everything big, but they do it slow. So as you've seen, sometimes we have a stepping stone approach, where we'll level off for a couple quarters, then jump big for a couple quarters. I can see that, because of that variability, we just can't really give you absolute guidance yet. We're just not there. But the business model is positioned to reward us greatly, just on us building the business and making sure that we focus on our knitting.

I understand your limitations and I appreciate it very much. I guess I can ask the question another way, although you've sort of answered it, and that is what you're saying is you do not see any intrinsic barrier, any top-line level there that can't be breached, that within whatever is below that you just work hard. You're really sort of saying, depending on sales, depending on the Federal Government, depending on all these factors, we're still looking at almost the sky is the limit for the potential of this Company.

Sam, we really are. We have a lot of good opportunities. We're early in the product lifecycle in both the managed services segments, so for us, it's more of a matter of time. So on one hand, we have to be a good steward of the customer relationships that we have, and the contracts that we have, and what we're managing. The other side is managing a pipeline and expanding on that pipeline. As you can see, Ron touched upon so many opportunities, affiliations, associations that we're trying to expand upon, it's a matter of time on being successful, and the success really can scale very nicely with the business model that we do have in place.

I'll relinquish the microphone now. Something I'm loathe to do.

Thanks, Sam.

Go ahead, sir.

We may have been a little limited in the way we responded to you, but let me tell that you we're going to have a strong fourth quarter, and we're going to have a very solid 2010.

Well, congratulations again, and for my money, whatever you need to do to take some off the table to expand your sales staff, in other words, whatever you need to invest now to continue this push rather than say, well, maybe we can double if we don't spend 200,000 or $300,000, spend the money now. I'll wait.

Got it. Thank you, Sam.

Next question comes from the line of Mark Jordan with Noble Financial Group. Please go ahead.

Good afternoon, gentlemen. A question relative to gross margin, obviously very commendable trends over the last three or four quarters expanding gross margin to 23.5% in the most recent quarter. Do you see, or can you quantify where you might look at kind of a target gross margin for the various three pieces of the business? Then kind of what might be reasonable for kind of the 2010 time frame, and what might be a reasonable kind of longer term goal for you to aspire towards?

Mark, this is Jim. Thank you for joining us again, by the way. We really are providing guidance on margin, but we can make some comments on it. Presently we've seen us grow out of the high teens into the 20s and the mid-20s over the past year. Our business model would suggest to us that we could see that same kind of relative improvement over this next year, but it really depends on the contracts that we win and the size and time. We could see gross margins getting into the 30s and 40s in the longer term, but it's a question of timing right now, and that's what we haven't really wrapped our hands around. In fact, we're a little bit at the mercy of when those awards happen and the size of those awards. But prospectively looking at it from a modeling perspective take a look at this past year. Push it for the next year, then understand that clearly there's the legs on this thing for margins in the 30s and potentially depending on how much work, the 40s. Does that help?

Yes, thank you. Next question, just looking at your business base sequentially you've obviously seen a good jump here in the third quarter, expecting a stronger fourth quarter. Looking out, again, sequentially, you do have your business is lumpy in terms of net new wins. Should we look at the fourth quarter exiting run rate as somewhat of a generic floor until you win some other big pieces of business, which will allow it to take another step up? In other words, there should be -- you shouldn't drop off moving into the new years then building, but more consistent floor sequentially?

From a modeling perspective, Mark, is what we have tended to see is usually a step up twice a year with a second half always being a little bit stronger than the first half, that's proven itself over several years. We would expect that to continue, in which case our third and fourth quarter will be our strongest quarters. Our first quarter being our weakest quarter. On a sequential basis, there's opportunity, depending on how strong the fourth quarter is for the first quarter to be either a little bit lower or in line with. In the past two years, we've seen the first quarter dip a little bit from the fourth quarter or be in line with. And then level out for the first and second quarter with, as you go into year end awards, bump up in the third quarter and fourth quarter being a little stronger. That's how we've seen the so-called seasonality. Does that help?

Yes, thank you. And one last question, kind of a little bit of a strategy standpoint, relative to the Street. Many institutions cannot look at sub-$1 stock. Now that you have obtained a solid level of profitability in the third quarter looking for better in the fourth that would lead to you to believe that you, as a corporation, could look to 2010 and say we will be, whatever the number is, solidly profitable. Have you considered the potential for reverse split, which would put your stock price into a range that more institutional investors could potentially look at, and how might that play into your strategy? Again, that only works, as we know, when you're solidly profitable, which it seems like you've now achieved that level.

Mark, it's actually a very good question. And we've had a number of discussions about it, and the timing on doing something like. That so it's almost you cap trade up to a stronger institutional and retail investor base. We're discussing it right now. We haven't made any decisions on it. We can tell it's something that we're not doing over the next month or two but it's something that will be on the table for next year depending on how things play out.

Again, as you are aware, that only works when you have solid predictability of profits, and it seems like you're moving in that direction, so conceivably could be an appropriate thing to address aus move into 2010.

We don't disagree with you, and we've worked hard for a long time at building this model so we can have those kind of solid profitability numbers and that continuing trend. So with that it's a very good corks and we'll get back to you on it it.

Have a good day.

Thank you, Mark.

Thank you. Our next question comes from the line of [Mitch Ratner] with TR Winston and Company.

Great job. Quick question for you. Back in the summer I saw a couple of Form 4s go by. Can you shed just a little bit of light on what that was all about?

Well, Mitch, yes, I can. I actually got a lot of questions and comments from people on that. They couldn't figure out if we were buying stock, selling stock, and sometimes the form 4s can be rather confusing.

Indeed.

What happened was we were put in a position where we had to exercise warrants that we had in the Company. We couldn't push it off because of some of the new rules in any way easily. Which we would have preferred to do. So we were forced to exercise those options. In doing that, we had to use a cashless exercise in which case we took less shares to be able to get the shares that we did. And we would have preferred not to do that, either, but we just didn't have the means, financial means to do it any other way. So where you look like we had a 1.3 million share exercise, we also had an exchange that looked like a sale of around 500,000, 600,000 shares, reducing the amount we received 800,000 shares.

The other negative to all this was that for next year, we've got to pay the taxes as ordinary income on the shares that we received. And that's going to create a little bit of a hardship as well for Steve and I, so at some time we will probably have to sell a small amount of shares under a 10b5-1 to be able to pay those taxes. But clearly that is not a desire we want. We prefer building this Company, building our positions in this Company. But there is a reality of what the IRS wants and doesn't want. Does that kind of clear up what happened?

Absolutely. Absolutely. I do understand it now, and again, great quarter, guys. All right, that's it.

Thanks very much.

(Operator Instructions). And our next question comes from the line of David Clark, a private investor. Please go ahead.

Thanks very much, and, Steve and Jim and Ron, you had -- congratulations on what is clearly a great quarter. You could see it coming. You talked about it in previous conference calls, and I just wanted to let you know that it's greatly appreciated by me as a shareholder. You're doing great.

Thank you, David.

I just have -- by the way, on the subject of the options you exercised and all that because I just listened to the previous question, that's -- that's a high-class problem for you guys and a high-class problem for your shareholders. We're delighted to see you do stuff like that. It means you're shareholders and you've been successful. If you were unsuccessful you wouldn't be doing that. Right?

That's true.

So it's really a great thing so see you guys do that and I hope you can hold on to as many shares as you can, given the tax situation. I've been in that boat myself a couple of time, and you don't want to do it, but you have to do it. So anyway there it is.

Yes, but the upside potential for this Company is so great I just hate being forced into liquidating anything.

You are forced though. It's the nature of the beast, Jim. You can't get around it.

I know.

Anyway, we appreciate your sensitivity. Speaking for myself, it was a little bit of a painful transaction. But your point is well taken. It does--.

You have less shares, you have less shares to play with. But, on the other hand, they're all yours, so you just move ahead, and hopefully the Board will see light to grant you more options in the future. And if you build a proper Company, you should make sizable up-lift in your own net worth as you build the Company. That's what you're doing it for. Anyway, I just -- other than congratulating you on a great quarter, I just wanted to go back over this -- what started with Sam, and his comments about the future and all of that, then, Jim, you were talk about contracts and everything. And it's a fact that they're lumpy, but if I look at some of the releases you've had had, you got this renewal on a much larger contract with Department of Homeland Security and other things. I mean, there's no reason to believe we can't expect these things to continue to come through. That adds to your sales. I haven't done the math on it, but it's quite substantial -- and I kind of got the impression you were being -- to be honest, overly negative on what it is. Yyou've had a history of getting these contracts. Is there any reason to believe you're not going to keep on getting them?

A dear friend of mine once told me to underpromise and overdeliver.

Did I say that?

I think you may know who that person was. We are being innately a bit conservative, but we do -- we like to deliver decent returns going forward, but we don't want to overpromise, but we do want to overdeliver.

I think that's right, Jim. But I think by the same token, you have a history of these, you have no reason to believe you're going to lose any existing contracts, do you?

No.

I was going to add the contract, our track record shows pretty substantial hit rate, and we have probably even trumpeted a couple of times that we have 100% renewals, and that does remain to be the fact. So I think, David, to answer your question directly, we're hopeful that our conservatism will be exceeded by our actual delivery, on these contracts.

Well, I tell you, Steve, I've been with this Company for a fair bit of time, and you have a tremendous track record, and I think -- I don't see any reason why it doesn't -- I will speak. I know you have to be conservative, but I would have thought, from my own vantage point as a shareholder, we're going to see continuing growth of a sizable amount into 2010, 2011.

We hope so. And it's all about the contracts. It's all about the customers. And we're very optimistic, you know that.

Don't forget, you're in an area that the government and security and things like this, this is a hot button with the government, and should be. So, anyway, that's all I have. I don't want to rabbit on here, but good luck. Sounds like you've got a great quarter going on now. We'll talk to you next quarter.

Tank you, David, so much.

Thanks, David, really appreciate that. Appreciate your comments and analysis, and that's where we're heading.

Good luck to you. Thanks a lot.

Thank you. (Operator Instructions). Management, I show no further questions at this time. Please go ahead with any closing remarks.

Oh, fine. Thank you. Well, if everyone has joined us on the call today, as always, I just want to thank you for your time, your attention, and your commitment to our efforts to build WidePoint into an industry recognized and differentiated enterprise. We're all committed to that goal. And I look forward to our next quarterly opportunity to to report to you on our progress and our full year 2009 results. Thank you, all, and have a pleasant evening.

Ladies and gentlemen, this concludes the WidePoint Corporation third quarter 2009 conference call. Thank you for your participation. You may now disconnect.