WidePoint Corp (WYY) 2010 Q2 法說會逐字稿

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the WidePoint Corporation second-quarter 2010 earnings conference call. (Operator Instructions). I would now like to turn the conference over to our host, Mr. Brett Maas of Hayden Investor Relations. Please go ahead, sir.

Thank you, operator. With me today are WidePoint's Chairman and CEO, Steve Komar; Chief Financial Officer, Jim McCubbin, and Dan Turissini, WidePoint's Chief Technology Officer. Steve will be providing an overview of the second-quarter results, Jim will be providing additional financial details, and Daniel will be discussing opportunities in the CyberSecurity segment. Then we will open the call to questions from participants.

I will begin by reminding you that this conference call contains forward-looking statements that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks, uncertainties and assumptions as described from time to time in registration statements and reports from other periodic reports filed with the Securities and Exchange Commission. All statements other than statements of historical facts, which address the Company's expectations for its future with respect to financial performance or operating strategy, can be identified as forward-looking statements. These statements are based on the current beliefs and expectations of the Company's management and are subject to significant risks and uncertainties. Actual results may differ from those described in the forward-looking statements. Those forward-looking statements involve certain risks and uncertainties that are subject to change and based on various factors, many of which are beyond the Company's control. To caution investors that these forward-looking statements speak only as to the date hereof, the Company hereby expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in the Company's expectations or any particular events, conditions or circumstances in which our statements were based.

I would now like to turn the call over to WidePoint's Chairman and Chief Executive Officer, Steve Komar, for opening remarks. Steve, the floor is yours.

Thank you and good day to everyone who has joined us today. On behalf of the WidePoint management team, I would like to welcome you all to the Company's second-quarter 2010 investor call and to thank you for your commitment and continued interest in our business building efforts.

For those of you who may be new to our quarterly calls, WidePoint is an information technology solutions provider featuring products and services targeted primarily to the government sector with a strategic emphasis on CyberSecurity and wireless mobility solutions offered to government agencies and the organizations and individuals that must interact with those various arms of government.

With that as background, today it is my distinct pleasure to report the second quarter of 2010 was our seventh consecutive quarter of positive bottom line net income results, reflecting steadily improving gross margins, and a refreshed revenue growth trajectory. Our revenues grew over 20% versus the year ago second quarter led by strong improvement in our CyberSecurity and Consulting segments.

Our second-quarter revenues total $12.5 million, an anticipated but satisfying jump, sequentially up from our first-quarter 2010 result of $11.2 million, lending credence, we believe, to our car projections for even stronger revenue and profitability performance during the second half of 2010.

Also, during the second quarter, we continued to demonstrate our ability to leverage our fixed infrastructure so that more of each additional dollar of revenue passes through to gross profit and ultimately to net income. This is evidence that our year-over-year increase in gross margin now up to 24% from the year ago 21%. Also, a 33% increase in operating margin and a 65% increase in net income. We remain confident that we can continue to grow our revenue as we have already been awarded or have bid on projects, which will enable us to grow in the 20% to 30% range on the top line for the full-year 2010.

As we move forward, we expect this to translate into accelerating profitability and net income as a result of the fixed cost leveraging that is a key feature of our managed services business models. I will keep my usual business overview discussion brief today as we have invited Dan Turissini to join us to provide an important analysis and assessment of developments and opportunities in the CyberSecurity market and to help you better understand why we feel so strongly about this business segment's importance to the future of WidePoint. And, of course, as always, I will leave the more detailed discussion and analysis of the financial metrics to Jim McCubbin, realizing full well the importance of that information to many of you.

Summarizing the business's outlook and potential, we believe we are very well positioned and competitively differentiated in two growth sectors characterized by government initiatives to secure and protect the nation's communications and high-risk infrastructure on one hand and the across-the-board search for efficiency and cost reduction on the other. Importantly, we do not believe that our growth initiatives are in areas that the government is targeting for budget reductions or insourcing efforts, and we do not expect any meaningful impact from those efforts on our business direction and goals.

On the contrary, the federal government is increasingly recognizing the imperative need to secure its IT infrastructure and better control access to government networks and facilities. Based on the long-term relationships and support of many of our customers, we believe our successful track record, as well as our technical expertise, gives us credibility with our current client base and positions us well to successfully bid on follow-on contracts and to compete for new programs and new customers effectively diversifying our revenue base.

As a case in point, we increased absolute revenues at two of our top three customers, the Transportation Safety Administration and the Washington headquarters service of the Department of Defense, even while the overall revenue concentration of these top three customers declined to 44% of our total revenue in the second quarter of 2010 from a much higher level of 68% in the year ago.

With that, I would like to turn the call over to Dan Turissini, WidePoint's Chief Technology Officer and the executive who drives our CyberSecurity initiatives, for an assessment of activity and developments in that strategic segment and, of course, the Company's positioning to take advantage of those growth opportunities.

Dan, the floor is yours.

Thank you, Steve. Good afternoon. For those of you who do not know me, my name is Dan Turissini, WidePoint's Chief Technology Officer. I would like to take a few minutes of your time to provide a general overview of WidePoint's CyberSecurity business segment.

Since I last addressed our investor community, we have enhanced our unique position in this space, so I would like to bring you up to speed on what we have accomplished and how the accomplishments have positioned us within this growth market.

The term CyberSecurity is increasingly highlighted in the news, not surprising as our daily lives have been changed by the growth of the Internet, Wiki leaks and the growing threat to privacy and our nation's infrastructure. CyberSecurity involves protecting our nation's electronic infrastructure and the information transactions on that infrastructure by preventing, detecting, responding to attacks on the network that tie them all together.

In addition to the billions of dollars moving over the Internet each day, an exponentially growing number of other forms of transactions are occurring that include as examples the monitoring and management of communications, electrical grids and water supplies; medical and other privacy-related transactions; as well as business transactions sensitive not only to industry but also to national security.

Over the last two years, an increasing number of sophisticated cyber attacks have occurred worldwide. We have begun to witness nonstate nations using cyber attacks for political warfare. These persistent threats are evolving and changing, in many ways to fast for traditional threat detection and remediation efforts to keep pace.

At WidePoint we have been collaborating with various federal agencies to ensure that our solutions adequately address cyber threat prevention with a keen focus in identity management, electronic transaction protection and trusted privilege management. I'm proud to show that our unique posture in these areas has poised us for a major contributor in the CyberSecurity efforts in this country and worldwide.

WidePoint's trusted suite of services provides authoritative verification and validation of entities and identities of various transactions and attributes. We have maintained full compliance with all government regulatory requirements, allowing both government and commercial customers the highest levels of assurance of the identities of the persons and devices they are transacting with, as well as the attributes that those entities possess, permitting them to participate in those activities.

Strong identity in attribute management, which has been our vision and focus for over 15 years, has resulted in WidePoint becoming one of the leading providers of the preventive CyberSecurity solutions. We offer a wide range of solutions from fully managed end-to-end solutions based on our certified and accredited environment to turnkey solutions in which we support an organization's existing infrastructure with our backend services.

The key to our success has been our diligence and subject matter expertise surrounding highly scalable secure environments based on federally approved crypto graphic and biometric infrastructures that allows organizations to identify and trust persons and endpoints on the net. Presently an increasing number of federal agencies, businesses, associations and individuals who wish to conduct electronic business and services with the federal government, the Department of Defense and each other are using our certified digital credentials. In fact, WidePoint is the only trusted third party who has successfully demonstrated the convergence of physical and logical security across various domains.

Today WidePoint has developed and delivered more than 2.5 million digital credentials that currently support trusted transactions and citizen to government, citizen to business, business to business, business to government, and government to government transactions that contain sensitive information needed to contract for goods or services, to verify the identity of electronic mail correspondence, verify the identity of web-based application servers, and to verify the integrity of software and documents to name a few. As today's instant access world matures, increased ubiquity in these types of activities will continually result in increasing demand for the WidePoint solution set.

This year we have witnessed a significant expansion in the adoption of our services, as well as interest in how we can mature our capabilities to the next level. We are adding additional trusted authoritative source capability, allowing us to provide more trusted attribute information to our existing customer base, while attracting customers in other markets who are tackling similar issues. These include healthcare, first responder, and energy markets. These enhancements are market-driven to meet diverse business scenarios with common cyber threat concerns. This is an exciting time providing me with the opportunity to share with you some of the recent successes and the potential they hold for the future.

In July we announced the success of the first comprehensive demonstration of a common authentication and validation of our federated credentials and the military common access card at any location. This real-time online demonstration showcased the system that significantly reduces cost and increases security, positioning WidePoint to roll out its credentials and services to individuals and organizations needing physical or virtual access to military basis and other secure resources worldwide. WidePoint offers the only enterprise-wide capability of this kind that potentially includes over 40 million persons. Although in the early stages of rollout, this opportunity holds great promise as we negotiate the implementation of this capability around the globe.

We have enjoyed continued growth in the Transportation Worker Identification Credentialing program, TWIC, which supports the identification and verification of maritime workers around the United States. Launched a little over two years ago, our digital certificates have been injected into the identity credentials of over 1.5 million maritime workers and is being considered for expansion into other critical transportation worker communities. In fact, while visiting ports in Florida, New York and Maryland this year, I was happy to see everybody supporting a shiny new TWIC.

We have also witnessed a continued acceleration of the adoption of our software-based credentials as the Department of Defense and other federal agencies have recommitted to their requirement for the use of digital signatures. The widest adoptions have been in the contract management area where user name and password access is being replaced by digital signatures to protect and assure the validity of contract actions. Both the General Services Administration and the Defense Logistics Agency have primed this adoption by offering digital signature print certificates to small businesses and individual consultants paid for by the government. I invite you to visit eoffers.orc.com and follow the green arrows.

Digital signature will ultimately provide an addressable market opportunity of millions of persons utilizing our credentials to do business with the government and beyond.

We have also rolled out a new project that supports a deployed CyberSecurity solution in a mobile environment for a major DoD program. Our solution will be used to manage endpoints that are not fixed to a single IP address and are able to roam across various networks, providing secure remote access to mission-critical applications to a mobile workforce. While we are not in a position to discuss details, we have recently secured a multimillion dollar award for this that will further broaden our CyberSecurity portfolio and bolster second-half revenues with growing recurring revenue opportunities for years to come.

WidePoint has strengthened our position in the nation's first responder marketplace. In addition to the emergency response, disaster management, law enforcement, attribute management and accountability offerings, a $2 million Q2 award for the rollout of a crime scene information system from Delaware State University has resulted in a significant addition to our revenue base and cyber portfolio. Built around our core CyberSecurity infrastructure, this new WidePoint solution set allows first responders the ability to protect crime information with non-reputable digital signature at the crime scene, providing a trusted chain of custody of the evidential information process, all leveraging our federally compliant credentials.

With a potential market focus of every first responder organization in the country, the successful demonstration of this unique offering provides WidePoint the cornerstone for what we believe will be widespread adoption.

Finally, we have recently expanded our CyberSecurity expertise into two private sector markets. Within the social networking market, WidePoint now offers a secure community portal option. Initially focused protecting data in motion or collaboration with a global provider offers encryption, digital signature and non-repudiation capability for users that desire a protected social network experience.

We have also entered into the mortgage banking market in collaboration with a group of industry users that will leverage our digital signature and encryption solution to address a significant growing mortgage fraud. Together these opportunities demonstrate our ability to scale our federally compliant capabilities into a widespread commercial marketplace, getting us closer to our vision of citizen-focused electronic commerce protected by WidePoint solution sets.

Federal- and media-increased CyberSecurity awareness has resulted in a busy six months for WidePoint. With the establishment of a presidential Cyber Czar and the newly formed cyber command within the Department of Defense, all evidence suggests that business will continue to grow.

We also expect that the recent government direction to treat cyber as a new warfare domain will accelerate attention in this serious threat as it will be treated with the same emphasis as land, sea, air and space warfare. As CTO I will continue to focus WidePoint towards building upon strengths we have developed in our tools, people and solutions. WidePoint will continue to leverage our expertise into new and expanding markets, as well as enhance our capabilities in response to the ever growing opportunities addressable within our CyberSecurity segment.

Thank you and now I turn you back over to Steve.

Thanks, Dan. I'm hopeful that the perspectives and visions that you have offered are as intriguing and exciting to our investors and analysts as they are to us. We asked Dan to join us today because, as we have mentioned on this call, we are seeing tremendous growth and real demand for our CyberSecurity Solutions.

You have seen some of the announcements regarding this segment, and I assure you there are several more to come, as we move to capture new incremental and wraparound opportunities.

And now I would like to turn it over to Jim McCubbin for a more detailed run-through of our financial performance. Jim, the mike is yours.

Hello, everyone, and thanks for listening in. We had a nice second quarter, and we are actually anticipating a better third quarter. Most of our financial metrics continued to improve in the second quarter of 2010, demonstrating that the growth and profitability strategy that we have been pursuing since the end of 2008 is developing the momentum that we had expected.

Net revenue for the three months ended June 30, 2010, increased approximately 20% to $12.5 million from $10.4 million in last year's comparable period. This was primarily due to growth in our CyberSecurity Solutions and Consulting segments.

In our CyberSecurity Solutions segment, revenue grew 86% to $2.5 million in the second quarter of 2010 as a result of expanding credential sales driven by the DoD's push requiring contractors to have credentials to access their systems, a contract award by the Delaware State University to our Advanced Response Concepts subsidiary, and continuing support for work under the TSA's TWIC program.

Looking at the third quarter and second half, we anticipate this segment will continue to grow as a result of a multimillion dollar award we recently were awarded by an agency within the Department of Defense, as well as our ongoing belief that we will continue to see a growing trend in the issuance of the credentials to DoD contractors.

Consulting revenues grew 59% to $3.1 million materially as a result of growth in awards by federal agencies in support of various efforts we have ongoing in several IT-based initiatives. While this area has always been a bit variable, we are looking forward to continued growth in the government sector, somewhat mitigated by weakness in our commercial sector but overall still supporting an upward bias.

The Wireless Mobility segment revenue decreased 3% to $6.9 million, but this decline was predominantly the result of a one-time equipment sale of about $500,000 that occurred in the second quarter of 2009, of which we were able to make up approximately half of that in new higher-margin recurring services. Excluding that one-time equipment item in the year ago period, Wireless Mobility Management segment revenue grew about 5%. Unfortunately awards for this segment came late in the second quarter, and most of the billing did not occur until July of 2010.

Looking forward into the second half for this segment, we believe we have a change in the mix that emphasizes less billable calling minutes and more fees associated with higher-margin services that our software provides in regards to optimization, inventory management and the other related services that we provide on a fee basis. While we believe that this may retard or reduce revenues slightly in the second half for this segment, we would like to point out it should show greater margins and we believe will continue to post positive growth to the bottom line.

As a result of our revenue growth, our gross profit for the three months was $2.9 million or 24% gross margin as compared to a gross profit of $2.2 million or 21% gross margin a year ago. Overall our gross margin was higher in the second quarter of 2010, predominantly due to higher margins associated with the greater mix of CyberSecurity segment solutions. We see this continuing in the second half of 2010.

In looking at our total operating expenses, we saw an increase of 28% to $2.4 million for the quarter ended June 30, 2010, compared to $1.9 million for the year ago period. Operating expenses as a percentage of sales increased about 100 basis points to 19% from 18% in the year ago period due to increases in both sales and marketing and in G&A expenses. These costs increased as a result of investments we made in sales and marketing, as well as the results of some one-time expenses related to personnel on the bench waiting for security clearances and some bonus income attributable to 2009 performance that were paid out in the second quarter of the year. These represented approximately $200,000 that will not recur in the third quarter and bringing the percentage bias or basis of our SG&A cost in line, and we're anticipating improving in the future.

As a result of the positive performance in our financial model, which I have just described, we posted approximate operating income of $511,000 in the second quarter, up approximately 60% compared to operating income of approximately $319,000 in the second quarter last year. Net income was approximately $413,000, up 65% compared to net income of approximately $251,000 in the year ago period. We anticipate our earnings shall continue to improve in the second half of the year, and we are looking for improved performance in the third quarter.

Looking forward to the balance of the year, we reiterate our goal to increase consolidated revenues by approximately 20% or more for the calendar year 2010, to expand gross margins and operating margins, generate gross margins in the range of 22% to 26% with the upward bias we believe being able to be met, and operating margins in the range of 6% to 8%, and to maintain or decrease selling and SG&A costs as a percentage of total revenue, which has the net effect to grow our net income.

As an aside, I would law also like everyone to know that we will be attending the [ROTH] conference in September and the Craig-Hallum conference in October, and we are working on setting up a couple of non-deal roadshows during the same timeframe to expand the awareness of what we're doing at WidePoint, especially given the positive operational performance we believe we can continue to demonstrate.

With that, I would like to turn it back to Steve.

Thank you, Jim. Overall we remain on solid ground and on track to achieve our goals for 2010. I would like to reiterate where we see our revenue growth and how we will achieve continued and accelerating profitability.

We are strategically focused on growing our government sector and commercial market businesses in the Wireless Mobility Management and CyberSecurity services segments. We intend to do that by expanding our customer base, targeting high-growth segments of the market, solidifying our infrastructure to support this growth and attracting, training and retaining highly skilled professionals. We have built solid long-term relationships with our customers and an outstanding reputation within the federal government. This is helping us to expand our market share with other agencies and also with vendors, contractors and increasingly with state and city municipalities. As we add the additional features and offerings that were summarized by Dan, we should be in a unique position to cross-sell our array of solutions to our existing customers and to meet new market demand. We continue to expect steady growth in government-budgeted IT spending and the outsourcing of key components of various processes such as identity management services and mobile telecom expense management services.

In addition, we will selectively pursue strategic acquisition of businesses that can cost-effectively broaden our expertise and service offerings. As a team, their management remains committed to continuing with the execution of our strategy throughout the remainder of 2010 and beyond.

I thank you again for your attention and continued interest. If I can get the operator, I would like to now open the call to questions.

(Operator Instructions). Stan Donaldson.

Gentlemen, congratulations again on a very solid quarter, a really good quarter. I'm particularly heartened to hear that with government cutback in spending not where we are involved because, of course, that is a big concern. And Dan's presentation about the future of CyberSecurity was, again, particularly upbeat as far as I was concerned. Jim, I noticed under the asset sheet, we have lost what some assets, gross assets, particularly the cash and cash equivalents. What was driving that?

We just had a lot of investments we made in deferred revenue and revenues. Actually, in the third quarter, you are going to see the inverse of that happen, and all of a sudden let's collect all that cash, and you will see the cash swing up. Just the normal process of investing in your business as you grow your revenues. It just pressured cash a little bit, but we had more than enough cash, and now you will just see the swing back in September.

Alright. Well, that is good. And again, congratulations, gentlemen. I think this is a winning course, but, again, I've always sort of felt that.

Thank you. We really appreciate your support, and we have been waiting for a long time for breakout kind of news as well. We are seeing it now, and we are really quite excited about it. So thank you.

Mark Jordan, Noble Financial.

I would like to ask two questions in the cyber area. The first one relates to, could you give us an overview of the customer base last contract base you have in the cyber business?

And then secondly, talk a little bit about the terms of revenue? How are revenues realized? Is this a licensing or a service model, and therefore, with the services models, is it tied to credentials issued/used, or just how do you build that revenue base?

In your first question, there is a mix of contracts that we have in place, some of them straight with vendors and government entities, as well as just with individuals. So it is not tied to just specifically government contracts.

With that, I can give you an example of we have a software contract, which is with Delaware State University, and that is just straight software revenue recognition on a percent completion, plus delivering it over a timeframe.

At the same time, on the credentialing, under the ECA program or ACES programs, we are recognizing those credentials as we deliver them on the revenue mix. So they are very different -- two different animals. We are not just providing one solution or one solution set. We are providing, as Dan went into, a myriad of different solutions to a myriad of different people. Does that help you understand a little bit of the mix, though, or do you want to -- (multiple speakers)

Well, just carry it one step further. If you were to look at the revenue mix, what percent of it would be tied to software development/licensing, and what percent would be derived from call it production, credential production activity?

Less than 10% of this at this time probably would be really related to the software at this time. You're going to see that mix change over time. Right now a lot of the mix is going to supporting the credential issuance. Just so you also understand, under like the TWIC program, we are providing something different than just credentials. We are providing a back room infrastructure for the use of the rollout of those credentials and those TWIC cards through Lockheed Martin. Where on the ECA and ACES side, we are providing them directly to contractors.

So, again, it is really dependent -- one of the things that Dan has been so successful in building this out is offering solutions that fit almost anybody's profile of their needs. So flexibility has really helped us position ourselves through either resellers, through partners and/or directly performing the whole ball of wax.

Okay. One last question related to this and I will pass off the phone. So if you have on a credentialing individual to the extent you have that 1.5 million maritime people, do you get paid every time that identity is authenticated, or do you get paid as you establish the initial credentialing of the individual?

Well, Dan is going to answer this one.

Actually we have both models. Right now, on the primary contract with Lockheed Martin, we get paid as the credentials are issued. On the other end, we are working with some of the ports and some of the other relying parties, people that use the card, and we are getting paid on the validation of that credential every time it is used. So it is set up so that we can get revenues split between the user groups, distribute across the user groups, but for each individual type of use.

Okay. Thank you very much.

(Operator Instructions). Fred Milligan, Sanders Morris Harris.

The wireless business, my impression is that this is to grow by adding new agencies or departments of the government on to it rather than just organic growth in terms of the current business. Is that the case, and what is happening there?

Well, on the wireless, that is the case, one, is to grow it within by adding agencies that. But we are also positioning ourselves to add state and local municipalities which we recently added, as well as we are starting to dabble in the commercial segment. What we have not released yet is that we have added a commercial client, as well as we are in the pilot phase with several agencies or departments of some of the states.

On the federal side, things got delays a little bit as awards came out at the end of July. So some of that really did not hit the second quarter, but we will see some of it hitting in the third quarter. More importantly, though, is one of our contracts expired on the resale of the minutes while we can still continued with handling all the optimization and all the higher-margin cost. This is a little bit of a shift for us as we tried to shift away our model into some of the higher-margin work. Because that has tended to water down the true picture of what the Company performs its margin and modeling as. So that had a little impact on the second-half topline, but not on the bottom line because we're going to see margins improve, and our bottom line improve actually on lesser revenues. It is just us tweaking our model as we look forward to where we want to see that revenue and as we try to shift our margins to a much higher level.

And the only thing I would add to that and I would add to that is that there is a timing factor here in terms of the fact that we do have some organic growth, but we are dependent on the penetration of new agencies. And I think that when there is a delay, be it three months or four months, we see a little flattening in the revenue stream. But, as Jim mentioned, we also think that from a modeling perspective, we are moving into the higher-margin future business and that we are pretty pleased about.

I have read several articles about security of wireless phones. Are you fellows involved in any of this, and if so, can you detail what it might be?

I don't know that I can detail it for you. There are some very exciting things happening in the industry, and we are -- (multiple speakers)

How about in the Company?

And we are looking at -- we are collaborating with a couple of groups. We are still in the negotiation phases, but we are looking at using our credentials within secure smart phones. There are a couple of brand-new chips out there that we are going to try to leverage. As a matter of fact, I have a meeting next week with one of the vendors. And it is one of our focuses and one of our goals to move towards that credential, that smart credential being embedded in your smartphone or smart device.

Okay. So you are growing -- you have some commercial business. And is there any state business at this point?

Yes, we do have some state business, and we are in the process of adding some new pilots as part of our penetration strategy as well.

Would it be fair to ask about growth in the second half sequentially over the first half quarter by quarter being somewhere around 4% to 5%?

I'm sorry. Are you talking about on a segment basis or are you talking about total company?

Total company.

Total company in the first quarter we had forecast that we are going to be in the $11 million range, which we were. Coming into the second quarter, we forecast we were going to be somewhere in the $12 million range. Right now things look promising for us to be somewhere in the third quarter in the $13 million plus range, especially given the contract award we have had by an agency within the DoD for some work that we have already commenced that we will be going through last year, and then with the remainder flowing into the fourth quarter.

We are trying to build the business around that 20% revenue growth run-rate. We believe right now based on everything that we have, we are on track for that $48 million to $52 million revenue range, but, more importantly, with hitting the targets that both Sidoti and Craig-Hallum put out on the bottom line. What is really nice is in the third quarter, you will see this demonstrated. You are going to see some really nice positive bottom-line performance.

Okay. Thank you very much and congratulations.

(Operator Instructions). I'm showing no further questions in queue at this time. Please continue.

In that case, a couple of final comments, if you will. We would like to let you know that we appreciate your questions and your ongoing interest in WidePoint. We look forward to the opportunity to update everyone after our third-quarter 2010 results probably released in mid-November, and I think that it will be a pleasant experience for all of us. Until then, thank you and have a pleasant evening.

Ladies and gentlemen, this concludes the WidePoint Corp. second-quarter 2010 earnings conference call. Thank you for your participation. You may now disconnect.