WidePoint Corporation

WidePoint Corporation

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Information Technology Services

WidePoint Corporation (WYY) Q3 2016 Earnings Call Transcript

Published at 2016-11-09 20:25:17
Executives
David Fore – Hayden Investor Relations Steve Komar – Chairman and Chief Executive Officer Jim McCubbin – Chief Financial Officer
Analysts
Mike Crawford – B. Riley & Company Sam Donaldson – Private Investor
Operator
Good day, and welcome to the WidePoint Corporation Third Quarter 2016 Financial Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to David Fore with Hayden IR. Please go ahead, sir.
David Fore
Thank you, Operator. Good afternoon to all participants in WidePoint's third quarter 2016 financial results conference call. With me today are WidePoint's Chairman and CEO, Steve Komar; and Chief Financial Officer, Jim McCubbin. Steve will provide a brief overview of the quarter's developments and accomplishments and Jim will provide additional financial and operational review and outlook. We will open the call to questions from today's participants. Before I turn the call over to Steve, I would like to remind all participants that during this conference call any forward-looking statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Expressions of future goals, including financial guidance and similar expressions, including without limitation, expressions using the terminology may, will, believe, expects, plans, anticipates, predicts, forecast, expressions, which reflect something other than historical facts are intended to identify forward-looking statements. These forward-looking statements involve a number of risk factors and uncertainties, including those discussed in the Risk Factors sections of our WidePoint's Annual Report on Form 10-K, its quarterly reports on Form 10-Q and other SEC filings the Company releases. Actual results may differ materially from the forward-looking statements due to such risk factors and uncertainties. The company undertakes no obligation to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after this conference call, except as required by law. I would now like to turn the call over to WidePoint's Chairman and CEO, Steve Komar, for opening remarks. Steve?
Steve Komar
Thank you Dave, and good afternoon to all of you that have joined us for today's quarterly earnings and investor call. As always, I would like to express our appreciation to all of you for your continued interest and support of WidePoint Corporation. While I don't think I can talk some of the recent political surprises that occurred much earlier today, I'm pleased that you are giving us the opportunity to share with you some good news about our exciting recent successes, and several of the substantial opportunities we believe will make a continuing difference as we move toward achieving the year end goals and targets we set for 2016. We are confident that we will achieve and perhaps exceed the substantial financial goals that we set, and communicated to you earlier in this calendar year, and that many of the intangible non-financial goals we set will also be delivered and provide a base for continuing revenue growth and accelerating positive financial performance in 2017. So without further ado, let me say that our third quarter's financial results were very strong and serve to confirm our progress and trajectories. We grew our top line revenues by approximately 30% versus both the prior years and most recent 2016 quarters, generally meeting and exceeding our own informal internal expectations. We also established our goal of finally reaching and maintaining operational profitability on an adjusted EBITA basis at some point during the second half of this year, and we have achieved that goal in this third quarter, recording $340,000 positive EBITA performance, somewhat ahead of our own internal tracking and projections, but good news nonetheless. By the way we achieved that financial result in the face of some headwinds associated with the negative foreign exchange rate impact resulting from Britain's vote to -- excuse me; to leave the European community commonly referred to as Brexit, and related delays and expected new contract awards due to the loss in the value of the Pound Sterling and some decision paralysis among prospective U.K. customers. All of which primarily impacted our data analytics business in Ireland. And there were some headwinds in the U.S. as well due to DoD regulatory delay issues that impacted rolled out timetables associated with our next generation credential offerings, but let's stay on a positive focus. To summarize, some of the specifics, in the third quarter, we reported revenue of approximately $22.1 million compared to $17.0 million in the third quarter of 2015 and $17.4 million in the second quarter of 2016, our most recent quarter. Our gross profit of $4.0 million compared quite favorably to $3.1 million last year, and we dramatically improved our adjusted EBITA from a loss of just under $1 million in last year's second quarter and a loss of $450,000 in our most recent 2016 second quarter, up to approximately $340,000 and positive adjusted EBITA in this current September quarter. It's also meaningful to note that each of our four core product and solution sets, identity management, telecommunications lifecycle management, data analytics and technical consulting services all achieved positive net operating income proponents in this September quarter. Even with the headwind challenges I referred to earlier, we substantially improved our fully diluted net loss materially from approximately a negative $1.8 million a year ago to a loss of just under $150,000 in this third quarter. It's difficult not to fantasize and note that if we had not experienced the negative impact Brexit related foreign exchange losses, we would have achieve a modest, but profitable bottom-line in this third quarter as well. Jim will take you through the Brexit impact in his comments, but to reemphasize we were more than a little bit pleased with the financial results improvements that we were able to deliver in this third quarter of 2016, and of course that we expect this positive performance trend to continue in the quarters and years ahead. On the new business opportunity fund, let me first address telecommunications lifecycle management. And say that during the quarter, we continue to penetrate and widen our relationships under the Department of Homeland Security, BPA. Today we have generated in excess of $150 million in revenue under the $600 million BPA umbrella. And we've recently begun to see the revenue mix starting to swing towards the higher margin, managed services, and technical refreshes that are increasingly required as these captive agency relationships mature. On the other hand and with some frustration, we are still awaiting our national task order from the largest remaining agency, the U.S. Coast Guard. Although their Phase I launch, I think that's an appropriate time, has taken longer than forecasted, we have been actively engaged with the Coast Guard contracting office in preparing for the past quarter release, and we are confident that it is only weeks away. We have been hesitant to provide an estimate on the total size and revenue potential of the Coast Guard engagement, but it is certainly a largest of the DHS component agencies and it appears that it has the breadth and funding to grow beyond just wireless mobile services to also include an additional basis, other critical mobile communications, devices and still other solutions and services, not contemplated in our earlier projection. However, we are excited by the progress we have made and it appears that if everything rolls out as has been planned by the Coast Guard, Phase I and itself could add in excess of $10 dollars and profitable revenues to wide point in 2017. And with additional phases, we could quickly see the U.S. Coast Guard become the largest client in our ever growing roster of federal agents. At the same time, we continue to target and penetrate other federal agencies such as Health and Human Services, Department of the Interior, and the Department of Justice with our proven mobile telecommunications managed services capability. And finally, the outlook for our commercial market TLM business building efforts is quite positive as well, with an enlist of existing clients such as McDonalds, Southwest Airlines, Broadcom, Avago, and Compass Corporation, amongst others. This year to-date, we have signed on an additional and are implementing an additional seven newly contracted enterprise customers to our comprehensive [indiscernible] solution platform. For prospective, we currently provide full TLM services to over 225,000 smartphone type devices in the U.S. and telecom analytics to over 1.1 million commercial endpoints originating from within the European community. Gartner Group estimates the global TLM marketed $2 billion in 2016, with a compounded growth rate of 16% taking it to $6.6 billion by 2024, plenty of room for continued growth and expansion. Looking beyond our TLM solution we have become more and more excited about the new opportunities we see with our identity management solutions. During the month of August and subsequent to the issuance of a long awaited memorandum of agreement between the Department of Defense and General Service Administration on joint technical requirements, specifications and processes WidePoint has now become the first service provider to receive an ATO or Authority to Operate, which constitutes the government's approval to now issue a new ECA PIV-I credentials. So what does that ATO mean to the users enter the target market? Well, if you are a government contractor doing business with the DoD, you have to have an ECA or CAG credential. If you want us to do business with any other federal agency or organization you needed other credentials, TIV, PIV-I, [indiscernible] or ACIS for example, as well as agency specific credentials. So with the contract you have to pay for multiple credentials across multiple agencies under this long-awaited agreement between the Department of Defence and the General Services Administration. You can now have just one credential or digital ID that will work everywhere in the federal space i.e. ECA PIV-I credentials. WidePoint is now the sole authorized provider of that credential and we believe that we have upto a 12 month competitively advantage window to capture this market opportunity versus the two other potential, but non-accredited by ECA PIV-I providers. In addition, other less rigorous credential providers with existing customers and contracts have run afoul of the new requirements, and we are in discussions with some who are considering turning to us as an alternative credentialing solution to resolve their regulatory dilemmas is a very significant footnote between the DoD and any healthcare related HIPAA requirements alone we've already identified the need for approximately 40 million new ECA PIV-I service. That we expand that to cert on device and derive certificates for multiple mobile devices per user that overall need more than doubles to over 100 million credentials. Will this happen overnight? Based on historic adoption track record, probably no. On the other hand, the human cry of increased hacker activity, substantial economic losses, customer disaffection, and even foreign government-sponsored intrusions as this issue and in deed in the news each and every day with the obvious potential impact on adoption and implementation rates As a direct result of this phenomena and also beyond the Federal sector we are responding to multiple opportunities in commercial enterprise markets to provide identity management capabilities and protections, utilizing both our ECA PIV-I credentials, cert on device, device certs and our other next-generation secured solutions. As an example one area that we are particularly excited about for rollout and growth next year is our expanded relationship with AT&T as their Internet of Things, IOT industrial Internet partner. Under which AT&T will utilize our cert on device technology as their designated security solution for their multiple IOT offerings. To provide a bit of color AT&T has made IOT a major corporate directional focus in 2017. IOT is part of a small [indiscernible] of AT&T's new commercialization cross-sell efforts, and our company has been specifically selected to participate because of our existing relationship with AT&T, and more importantly the uniqueness of our secured credentialing solutions. It would be too primary to offer market size estimates at this point but both AT&T and Gartner Group believe the IOT market to be an immense opportunity over the years to have. Under the terms of our relationship AT&T is funding the integration of our security solution, as well as providing the marketing program dollars for inclusion with their go-to-market strategy in launch. What we bring to the table is our government certified next-generation credentialing technology. Most recently AT&T has accelerated its planned rollout of this program for mid-2017 to an April launch. Beyond AT&T we remain actively engaged with partners such as Samsung, HP, LG and others and we continue to jointly target primary verticals like financial services, healthcare, pharmaceuticals, education, energy and transportation and yes, government markets. On the other front, we continue our exploration of penetrating the North American marketplace with our proprietary EBPP or electronic Bill Presentment and Payment solution, which has been developed and deployed by our Soft-ex subsidiary in the U.K. and the European Community. Although now in a pre-launch U.S. product customization mode, we consider this an innovate cross sell opportunity for our existing core customers, as well as a potential new offering to North American Tier 2 communications providers, that do not possess an equivalent capability to meet their customers' demands. Before I pass the mic to Jim for his analysis of our financial results I'd like to emphasis that both I and our management team believe we have delivered substantial progress towards achieving most if not all or more of our 2016 goals. Opportunities and challenges remain of course but our focus now begins to carefully shift from continuing our positive progress throughout the fourth quarter for an increasing emphasis on the tacking the multiple strategic growth opportunities that have become available to us. Our Board, management and associates teams are fully committed to this pathway to success and to accelerating value creation for our stockholders and our stakeholders open the short and longer-term. I would now like to turn the call over to Jim McCubbin, WidePoint's Chief Financial Officer for an in-depth discussion of our quarterly financial results for the third quarter of 2016. Jim, it's yours.
Jim McCubbin
Thank you, Steve. Hello everyone. Thank you again for joining our call today. Today in my remarks I'm going to discuss our third quarter results. For more specific details, please see our 10-Q filing which is being filed today with the SEC. Our third quarter revenue was approximately $22.1 million compared to $17 million in the third quarter of 2015 as a result of several factors some which Steve had already covered. Our carrier services grew to $13.5 million over third quarter 2015 revenue of $9.1 million due to an increase in carrier task orders that were issued as a result of additional agencies that came under our management during the nine months of 2016. Our third quarter 2016 carrier services revenue was also up from our second quarter 2016 as a result of increases in federal ERM spending. Our carrier services as we have seen to expanding quarter-to-quarter as a result of spending by the agencies that are not in our complete control especially if they are procuring additional products directly from the carriers that could time drive spend higher. This was partly would occurred in the third quarter with the end of the fiscal year. Looking out we could see our carrier services continue to expand as we have the U.S. Coast Guard in the near term as an additional agency under management. At this point in time and given our visibility we believe that the U.S. Coast Guard could become our largest agency under management. As Steve has discussed with you already, we continue to work diligently with them and are looking forward to reporting hopefully our first revenues in December. Our managed services also increased in the third quarter of 2016 to $8.6 million as compared to $7.9 million over our third quarter 2015 revenues and 7.4 million over our second quarter of 2015. We managed these increases in revenues in the third quarter of 2016 even with the challenges we experienced regulatory issues, that pushed off several opportunities in our consulting and identity management revenues lines as well as given the negative effects that we realized as a result of the United Kingdom's vote to exit the European common community commonly referred to as Brexit that we could not fully offset with the growth that we did realized in our higher margin products and services that we realized in our identity management and CLL revenues lines. The Brexit issue costs us approximately over $200,000 revenues in the quarter as a result the delays and/or currency declines in the pound sterling and all of these were very high margin services. We also experienced some regulatory delays that also pushed out some revenues from the third quarter and to fourth quarter rather results us in furloughs or delays determining some identity management matters that we experienced and also pushed about another 400,000, that would have also further bolstered our growth in our managed services in the third quarter 2016. Nonetheless, we were pleased with the progress we made even with the challenges that we faced. Gross profit in the third quarter of 2016 was approximately $4 million compared to $3.1 million in the third quarter of 2015, and approximately $3.4 million in the second quarter of 2016. The increases in the gross profit were largely related to increases in our credentialing and mobile services, which again were partially offset by decreases in consulting services, the new identity management services as a result of some regulatory issues and also as a result of the negative foreign currency fluctuations and delays as a result of Brexit. Overall, the positive performance given the basket of challenges that if they didn't happened would have improved our financial performance beyond what we witnessed in the third quarter of 2016. I would also like to note that we performed a new additional revenues without adding any material cost when you normalize the carrier services that were partially responsible for driving our financial model into the black when you look at our EBITDA performance as well as factoring-in and driving the improvements for our fully diluted GAAP basis results, and bringing this up to show that our financial model does demonstrate leverage that drives positive financial results, when you couple that with the expected growth we expect to achieve in 2017, you can how we believe that we will provide positive financial growth in our model in the future. So as we continue to attempt drive revenues and gross profit towards a higher mix of margin services that generate greater absolute amount gross profitability by changing our shift and how we are allocating our capital away from lower margin software reselling activities, we're also still shifting our allocation of capital within our SG&A activities to also better optimize our SG&A expenses. Given this in reviewing our SG&A expenses, SG&A was approximately was $4.1 million or approximately $300,000 improvement compared to approximately $4.4 million last year the same period. We witnessed the decline in our sales and marketing expenses that reflects the continued changes we've been making during the first half of 2016 to streamline our sales, labor resources and sales commission agreements in a matter that incentivizes our sales force to pursue and close more recurring higher margin business. Meanwhile, our G&A expenses declined due to changes we've made during the quarter to lower the rates charged by outside consultant, and other discretionary advisors along with other changes we continue to make that should our overhead and other general and administrative expenses and support the goal of producing a positive financial operating environment. To keep it simple, we are attempting to match or exceed our higher gross profitability with the lower SG&A and optimizing it to effectively drive a positive financial operating environment and we achieved that this quarter. So, all-in-all given these changes in our allocation of capital and SG&A optimization efforts that focused on achieving operational profitability, we're pleased with the progress that we made and the improvements we witnessed in our adjusted EBITDA, operating losses and debt losses in the third quarter of 2016 as compared to the third quarter of 2015 and the second quarter and first half of 2016. In fact, in the third quarter we realized an adjusted EBITDA of approximately $340.000 and saw major declines in fully diluted GAAP losses, we have been experiencing over the past several years, but we still have challenges ahead. We believe we are in the cost with some of the new awards we're anticipating that finally demonstrate positive financial leverage our model can achieve as we bring an additional revenue stream in 2017. Now for a quick comment also on liquidity, we ended the period with cash and securities of approximately $5.6 million and with net working capital of approximately $7 million. We continue to manage our liquidity to cash and securities can swing from quarter-to-quarter as we have seen occur over the past nine months. We continued to believe that still long as we are successful in achieving our financial goals, we should have sufficient liquidities to manage the business with successful outcome that we all desire as we build a profitable enterprise. We would also like to note that Cardinal Bank continues to work with us and did wave one of the covenants that we did not meet in the third quarter and in fact, reduced fourth quarter covenant. We will also like to note that as of December 31 -- I mean, September 31, 2016 or as of December 31, 2016 that we're waiting on, all of our debt under note with Cardinal Bank should be extinguished. And the own material remaining debt besides any potential borrowing that could remain will be the mortgage that we believe we're quite on the positive side of the property that we own in Ohio and of course, any possible drawls on the line of credit we maintain for timing differences for operating the business that are tied to accounts receivable that currently have balances as of the end of September 31, 2016 of an excess of $12 million. So, all-in-all we made great progress. We still have a long way to go to fully realize all the goals that we set in front of us but we are pleased with the progress we've made to date and we believe that we can handle the challenges ahead as we navigate our path into 2017. So with that, I'd like to turn it back to you Steve.
Steve Komar
Thank you, Jim, and I appreciate that nice balanced approach. I think probably we'll provide some comforts to our investors. We are not about to go out of business. We are moving our business model and we've got what I consider substantial future revenue opportunities there in this space. Having said that, I would like to now open the call to our listener's questions. Operator, if you can assist us by opening the line for questions and comments that would be appreciated.
Operator
Thank you. [Operator Instructions] And we'll take our first question from Mike Crawford with B. Riley & Company.
Mike Crawford
Thanks. Nice to hear the Coast Guard is finally coming on board next month?
Steve Komar
Yes. Mike, we appreciate that comment, believe me, it's one of our highest near-term focal points right now.
Mike Crawford
And driven that agency, which has been the slow mover within the DHS, it has taken some while, what gives you the confidence that that is the agency that's likely to move beyond just the lower margin wireless services component of service into more managed services that have been much higher by those customer in margin to what point stakeholders versus other DHS component agencies that were more quicker movers?
Steve Komar
Mike, more than fair question. I would say that as frustrating as trying to bring the Coast Guard on in the early days was, what we're dealing with now is an energized focus management team within the Coast Guard that has moved this forward from the starting point to where we are today and of course over the last three to four months, still frustrating of course, but when we talk to them, we see a management team, a project implementation team, and a set of criteria that they want to now try and achieve. And that is obviously coming on board Phase 1 with 30 plus thousands units immediately coming on board. They have a number of additional management information type requirements that they want, some of it pushing into the data analytics capability. They are talking to us in addition about Phases 2 and 3 all part of their project plan for this effort that further expanses beyond and allows us to bring in new capabilities that are in essence outside the base pricing criteria of the BPA program. We have been assured that they have the funds and if that is the case I think we are going to have a really excellent growing relationship with the Coast Guard over the next 12 to 18 months and if all goes as planned, I think it will probably be one of the more profitable agency relationships we have under the BPA.
Mike Crawford
Okay, thank you, Steve, and just to clarify the potential 10 million in revenue from the Coast Guard next year is just in phase one or is that also favoring in these other phases you just mentioned?
Steve Komar
That is just phase one. It quickly translates up into the range of a million dollars a month as quickly as we put on that first [indiscernible] of mobile devices.
Mike Crawford
Great, thank you. And then switching gears slightly, what makes you think that you have a 12 month lead on the two other potential, but not accredited PIV-1 providers and who are those providers again?
Steve Komar
It's an internal assessment, so let's go with that and it's based on our own track record and experience of what it takes to move timelines that it takes to move through the government authority to operate process. It can take longer than 12 months. It is conceivable, it could be done in a somewhat more truncated timeframe by our competitors but our estimate is 12 months and when we talk to the authorities and within a GSA and a DOD, the general response we get is yep, 12 months. It's just the reality of the government process. Our competitors, I think you asked for [indiscernible], now Symantec, I lost the old name but it's Symantec.
Mike Crawford
Okay, great, thanks. And then third question is regarding AT&T accelerating to April launch, what's moving fast forward and what does that mean in terms of potential revenue opportunity for what point?
Steve Komar
Well, I think the acceleration forward is simply reflective of the priority that AT&T management is giving to that initiative. It's kind of a development program at this stage of the same that is run out of what AT&T calls the boundary, which seems to be the chrysalis for a lot of these new initiatives going forward. And the fact that they have been able to and have committed to accelerate their process to essentially bring this new capability to new market, I think indicates nothing more than the priority that they are giving to it. So, our reaction is fantastic, that's great, we love it, we are prepared to support the integration and whatever else from our side to keep it on that track. Mike, going forwards in terms of opportunity I do not know, I just know that we think we are in with the right partner, right partner has got the focus on rolling out these capabilities, it would be foolhardy for me to give you a number I just don't know, but I think maybe five to six months from now we might very well be able to start answering that question for you.
Mike Crawford
Okay, last question in that regard, would the revenue opportunity be one where you are getting some kind of monthly returning service fee or is that model at the window?
Steve Komar
No, no, I think what we are talking about is a recurring license model basically if you think in terms of a software subscription scenario that's what we are looking at, at this point.
Mike Crawford
Okay, great, thank you. And then for Jim, if you could roughly breakout services next from the quarter in terms of at a lower margin career services but you said we are up, the management services, the managed services and then the resale of other managed services, I would appreciate it.
Jim McCubbin
Well, I think we are sitting with like, the cue is out by the way but I think it's 13.5 million on the carrier services and then it's about 8.6 million on the managed services component, as I recall for the total of that 22.1 million.
Mike Crawford
Great. Thank you very much.
Jim McCubbin
Thank you, Mike.
Steve Komar
Thank you, Mike.
Operator
[Operator Instructions] We will take our next question from Sam Donaldson, a private investor. Mr. Donaldson, your line is open. If you are on a speaker phone, please press your mute button, we are not hearing you at this time. Are you still there, sir?
Jim McCubbin
I think he must have got cut off.
Operator
And we are not able to hear him at this time. [Operator instructions] And we will go back to Sam Donaldson, a Private Investor.
Sam Donaldson
Gentlemen, can you hear me now?
Jim McCubbin
Yes.
Steve Komar
Yes, we can, Sam.
Sam Donaldson
Well, I was cut off, I was just about to say congratulations, I mean the critics said you couldn't do it and oh, yes and as the [indiscernible] responded saying I think this is amazing, I mean a bigly achievement, good for you. [Indiscernible] I am overcome, you see, with joy as someone who has been with this company for 15 years as though through good and bad, I am just pleased. And as you expect, you have not only achieved but perhaps exceed financial goals you setup and all of us like that means that you expect that you will I mean net bottom line of profitability in the fourth quarter. Never mind that, I am greedy. Tell me, is it too early for you to look at next year 2017 and give us some rough estimate of what you might think your yearly income is going to be, growth?
Steve Komar
Sam, I will refer to Jim on that one but I will give him a little pre guidance, I do think it's a little early for us to talk about that.
Sam Donaldson
I know, but go ahead anyway.
Steve Komar
Let's see if you can get Jim to give you an answer there.
Sam Donaldson
Yes.
Jim McCubbin
Hey Sam, it's just one of those days I guess for President Elect Trump and us to get some pride. So everybody should look out for that third surprise in their lives. It's not easy and it hasn't been the easy, we had challenges and we continue to have challenges. So we are doing everything to meet or exceed our goals, but we are balancing them also with the investments and the requirements that these are the parties are asking for. So 2017, one of the reasons that we have a hard time quantifying this is because we know with Coast Guard coming on and with us controlling our SG&A and our operating basis, so there is a high likelihood of course that we are going to clearly be EBITDA profitable and if not profitable, but what really will drive the amount of that will be some of the things that we are working on and as they come on line there is seasonality; our first quarter tends to be weak. So before we can really kind of guess how it's going to roll out, we really have to get a little bit further along into the fourth quarter. That's going to determine how much and how fast some of these things will come along. And then the upside surprise, AT&T and the team is working very closely with them to see how they launch in February and in April this whole IOT initiative. So depending on how that's perceived, a lot can happen. I just think it's too hard right now to quantify it but I do believe we are in the right direction with our financial model.
Sam Donaldson
Okay
Jim McCubbin
I have showed our way through.
Sam Donaldson
Not an answer but I thought it was going to be little early. Finally, can you tell us why Mr. Johnson left the board?
Steve Komar
Well, that's a pretty direct question, Sam. I will take a shot at it and my only hesitation is because that decision was taken by our nominating and governance committee which is comprised of all our independent directors of which I am not one, and did participate. But I can tell you that from some informal follow on conversations that it was a very open and above board discussions amongst the independent directors and Paul, and my gut tells me that the underlying issue was that there was a combination of modified roles and assignments that Paul had changed during the year. He had then, and I think we disposed the member of the executive committee associated with working on the CEO transition, and then of course the CEO transition got delayed and pushed out into the future. And I think some of Paul's responsibilities in essence went away, I think perhaps, I can't speak for him but I think perhaps he felt that it was more productive then to move on and spend his time in other areas. I know that the decision that came out was a mutual one and it was unanimous and I think at some point in time we all move on. We have had two board changes in the course of 2016. So these things happen, we will be looking to the future to both build director slots and anything else that we think is appropriate. And let me head you up on your next question about CEO succession.
Sam Donaldson
Exactly, how long you are going to stay.
Steve Komar
I will attack that one. As you know, this has been dragging out a while. I think my commitment stays in place, the board has… I have been working with the board pretty proactively in terms of the fact that we want to have an orderly transition process at the right time. And obviously I am fine with that too, but I think, the board has asked me to stay on until we achieve our 2016 goals and that we can demonstrate some stable profitability, so called riding of the ship and with that point in time we will trigger the plan and we will move on to bigger and better things.
Sam Donaldson
Well, for my money you are doing a very fine job and there is an old saying, if it ain't broke don't fix it, so stay as long as you can. Thanks gentlemen, and goodbye.
Steve Komar
Thank you very much Sam, appreciate it. Have a good day.
Operator
And that concludes our question and answer session. I'd like to turn things back over to management for any closing comments.
Steve Komar
Thank you, Operator. It appears we've addressed all the questions, and Operator, thank you for your assistance. As a quick closing comment we believe that we are well on track to beat and surpass the goals we have communicated to our investors during 2016. Perhaps more importantly we have been putting in place the strategies that will enable continuation and acceleration of our current revenue and earnings projections. As a footnote for those of you who have interest or who will be attending, WidePoint will be presenting at the L.D. Micro Investor Conference to be held in Los Angeles in early December and we will be webcasting our presentation as well. Again, thank you for your time and interest today and we wish you all a very pleasant evening.
Operator
Thanks everyone. That does conclude today's conference. Thank you for your participation.