Q1 2020 Earnings Call
Ladies and gentlemen, thank you for your patience. Please continue to stand by while we gather additional participate again, we do appreciate your patience. Please continue to standby Oh, we gather additional participants thank you.
[music].
Good afternoon welcomed two Widepoints first quarter Twentytwenty earnings Conference call. My name is Christie and I will be your operator for today's call.
Joining us today's presentation is widepoints, president and CEO, Jim Carrey, exactly executive Vice President and Chief sales and marketing Officer, Jason Hollaway, and executive Vice President and CFO, Oh Kelly cap.
Following their remarks, we will open up the call for questions from Widepoints publishing analysts and major investors.
If your questions were not taken today and you would like additional information. Please contact Widepoints Investor Relations team I W. Why why at Gateway <unk>, our dot com.
Before we begin the call I would like to provide Widepoint safe Harbor statement that includes cautions regarding forward looking statements made during this call.
The matters discussed in this conference call May include forward looking statements regarding future events and the future performance out of Widepoint Corporation that involve risks and uncertainties that could cause actual results to differ materially from those anticipated.
These risks and uncertainties are described in the Companys form 10-K filed with the Securities and Exchange Commission.
Finally, I would like to remind everyone that this call will be made available for replay via a link in the Investor Relations section of the company's website at Www Dot Widepoint Dot com.
Now I would like to turn the call over to Widepoints, President and CEO Mr. Gen Cat.
Sir. Please proceed thank you operator and good afternoon to everyone. Thank you for joining us today to review our financial results for the first quarter ended March 31 2020.
I first want to recognize all who are suffering hardships or loss as we deal with a cold in 19 pandemic.
As well as recognize her first responders, our healthcare workers and so many others who are on the phone line battling this crisis.
I want to take our dedicated staff there have been working through the adverse conditions to continue to deliver for our customers.
Now during our last call. We spent a good deal of time outlining why we were optimistic about or ability to build upon our momentum from last year. Despite the enormity of the changes to the economy to the workplace and to all of our personal lives caused by the global pandemic.
I'm very pleased to report today that are optimism has been corroborated in fact, the first quarter was 2020 in many ways exceeded our expectations.
During Q1 revenues increased by 81% year over year to a record 39.7 million.
Which is substantially above the guidance, we provided on our last call up 26 to 31 million.
It's worth noting that the record revenues were driven predominantly by carrier services, which nearly doubled from 14.3 million into first quarter of last year to 28 point Threemillion This year.
This increase was mainly a result of our ongoing work alongside the U.S. Department of Commerce to support the 2020 census, which we will discuss in a moment.
As a reminder.
Carrier services are extremely low margin revenues.
They help our topline but.
But they do depress our margin profile.
As a result, when evaluating our performance we tend to focus more on our managed services revenue.
So while the record revenues are high point once more encouraging is that our managed services also increased 52% to 11.5 million from 7.6 million last year.
We also earned approximately 484000 and 384000 net income in Q1, 2020, and Q1 2019, respectively.
An increase of 26% year over year.
As many of you know the primary financial objectives of this management team or to grow the topline and to drive profitability.
Not only is that we achieved both of those goals during the first quarter. We also increase our cash position by 2.4 million, which exceeded our expectation and was incredibly encouraging given the current macro environment.
Going into the quarter, we had anticipated using working capital to manage the uniquely large volume of work associated with a 2020 decennial census.
However, because our customers are relatively unimpaired by the effects of Kogan 19. During the first quarter, we were able to process, our receivables efficiently and manage our task quite effectively.
We have not seen any indication so far.
Slide we may see some deviation from this tend to see during the second quarter and beyond.
But the sound nature of our federal government customers combined with some additional trends will discuss today do give us confidence that our business remains relatively well insulated from the broader effects in the market.
Although our ability to predict when events occur has diminished.
Now before I go into too many financial details and steal all of Kelly's Thunder, Let's review some of the operational highlights for the quarter.
The project that is perhaps most paramount to our business this quarter and the rest of the year, it's the U.S. census.
At the start of the year, all deployments were running smoothly and work was progressing as planned.
However, as a stay at home order and social distancing policies were instituted across the U.S.
Our operating model has evolved to address the changing environment.
I know there have been some questions about how the new normal has impacted the census.
So let me address some of those concerns.
The U.S. census is constitutionally mandated.
It would literally take an act of Congress for this project to be delayed.
So far we haven't seen any indication of that and all signs point to the project being completed before the years and.
However, the timeline has shifted.
Originally and Numerators was supposed to be in the field from May to July going door to door has become slightly more challenging as I'm sure you can imagine so that timeline has now extended until October.
Because of the challenges. The census Bureau has increased their forecast for the number of devices needed in the field by approximately 20%.
The department of Commerce must ensure that there are enough people to complete the survey on what may become a compressed timeline.
The census Bureau also need to ensure that they have enough personnel shouldn't Numerators fall Hill.
Well my purely business perspective, these trends benefit why point.
We are managing more devices than before and potentially for a longer period.
While we cannot numerically quantify how the changes will impact our business yet it's fair to say that we may have potentially more revenues for longer than we originally anticipated.
Obviously, we're excited to play our part continuing to support this important project, but please bear in mind that we will likely only continued to receive meaningful revenues from this contract into the start of 2021.
At that time, we will see a decline in revenues and potentially declining margins starting with the third quarter 2020.
However.
We as a management team will manage the associated cost is to ensure that we do not see our overall margins profile erode as a result.
During our last call I mentioned that we expected to have a 12 month I'd like to contract in place for the cellular wireless managed services BP a contract by the end of April for those of you outside of our industry. This is a large contract we have with the U.S. department of Homeland security or DHS as you may.
I have seen in your search and the federal procurement database system or S.P.D.S. Dot Gov.
We fully executed the sole source contract on April Thirtyth.
As a result, I work with DHS will officially be continuing under this contract until the end of April 2021.
This sole source contract can be extended beyond April of next year for a total duration of 2.5 years, if all options are exercised.
As a reminder, we received the sole source contract in part to ensure that DHS is wireless services would be uninterrupted while they continue to conduct a recompete for the longer term contract.
That recompete is still underway.
Currently we expect the draft solicitation material to be released in May of this year, but the full contract to be awarded by October 2020.
We remain confident in our chances of securing this longer term contract for all of the same reasons, we've outlined in our prior calls.
We are the incumbents.
We have a history of excellent performance with this customer and we are highly integrated into their organization.
We will continue to keep our investors apprised of updates on this contract as they are released.
But for now I'd like to turn the call over to Jason to provide you with an overview of the major news, we announced in the press release on May 4th.
And that is our work with Synnex Corporation.
Afterwards, Kelly will guide you through the financial results for the quarter and then I'll come back on for closing remarks before we open the call to questions Jason.
Thank you Jim.
During our last call I mentioned that we had been working on a new partnership with a major American multinational corporation that provides b to B I T services. Some of you may have been able to read the tea leaves, but all made before we publicly announced that the name of the partner Synnex Corporation.
This relationship it's still in its early days, so I won't be able to share any metrics on our progress.
But I do want to provide a little bit of color. So that hopefully there's more context for the potential significance of this partnership and why it excites us.
Your next is a fortune 200 company and is one of the largest I T distributors of Oems products and services through a large network of resellers.
Currently we have a vendor agreement what's out in place, which allows them to distribute our identity management solution through the Synnex reseller network a.
Additionally, we're currently working with them to develop product sub offerings that may be attractive to their network.
There was a great deal of potential for this relationship to be a driver for widepoint.
So many other things in the world right now the timing of when this may ramp up is uncertain.
We have been discussing the parameters that the vendor relationship and educating cynics on our identity management Credentialing offerings since December of 2019.
And ultimately came to fruition and the first quarter.
However that was before the U.S. was materially affected by cobot lighting.
As a result.
While we are very excited about the partnership we do not have a great deal of insight into when this relationship may start to bear fruit.
And then tell them and until we have tangible data points in case studies.
Got it as well as competitive sensitivity.
Dictate that we remain relatively conservative with our expectations and with what we disclose.
As the relationship develops we'll be sure to update our investors accordingly.
While were somewhat constrained on what we can share today regarding sevenx I can share that the sales team had another successful quarter in Q1.
During the quarter, we secured 20 million, a trusted mobility management or Tam to contract awards.
Which included new wins extensions and exercise the option periods.
This is due to the quality of our solutions and the excellent relationships, we've maintained with our customers.
Well, we did receive an extra boost this quarter from some macro tailwinds.
As we've discussed before the core of team too is helping large enterprise navigate the complexity of the mobile landscape.
We help organizations understand where their mobile assets are and how they are being secure and used.
That landscape has only become more complex and more challenging to navigate in the past two months.
For many suddenly transition to work from home was downtick.
Fortunately for our customers our products and services facilitating more flexible workforce.
Our services provide the infrastructure that allows the workforce to work remotely.
And our I'd solutions provide the secure communications for these remote sites.
And I'm pleased to report that out the ended the quarter and certainly subsequent to it said, we've been able to help our clients through the transition and aid at many who are involved in cobot 19 relief efforts.
On the federal side, we've actually seen expansions with many of our customers, especially with those who are at the forefront of the fight against coping 19.
One of the best case studies from the quarter is the work that we had done with U.S. Army Corps of engineers or you say.
You say has been a widepoint customer since 2011.
When the Corona virus began impacting the U.S. and Ernest you space was on the front lines trying to build additional hospital capacity to meet the increase needs of their personnel you say its expanded their work with us by adding an additional 5000 lines of service.
This particular expansion actually won't show up in our financials until the second quarter.
It's an example of a trend we've seen with many of our federal customers, who had been working around the clock to help all of us stay healthy and return to normal.
On the commercial side the story is slightly different.
I already said changed communication is perhaps more important than ever.
Because the world is more mobile and more distributed than ever.
Mobile devices are being used more frequently and as a result telecom costs are increasing.
It may not be the most exciting component to what we do.
But one of the most important parts of our business is how we save customers money on their mobile and telecom expenses.
And then a world.
It has suddenly become highly price sensitive as powerful.
Helping our customers avoid large cost increases from overage fees is particularly partner during this challenging time.
And we're very proud to be able to provide that support.
During the first quarter alone, we had saved our commercial clients approximately $740000.
The start of this year has been anything but conventional.
And we're very fortunate to be position to continue pushing forward and building upon the momentum of last year.
There remains a great deal of uncertainty in the world, but we're proud to play a part no matter how small it may be.
In the solution going forward, we plan to continue investing in the sales team and working with systems integrators to ensure that more organizations are aware of the benefits of working with Widepoint.
Especially in the current environment.
We're looking forward to continuing to help our customers and others navigate the uncertainty as best as we can and ensure that they have the necessary means to continue operating effectively with that I will hand, the call over to Kelly.
Thank you Jason as noted in our earnings release, we finished the year with record revenue produced positive EBITDA are positive net income and improve our cash position.
Turning to our results when first quarter ended March 31st 2021st quarter revenue was 39.7 million.
81% from the 21.9 million before he last year year over year group was primarily driven by increases in revenue from carrier services.
Looking at the revenues in more detail carrier services increased 98% to 20.3 million from 14.3 million in the first quarter of last year. The U.S. census project contributed the majority of the carrier revenue growth in 2020 as a reminder, we consider revenue from carrier.
Your services to be very low margin revenue it into first quarter of 2028 accounted for 71% of revenue compared to 65% into first quarter of 2019.
Went to highlight that managed services also increased by 52% to 11.5 million from 7.6 million into first quarter last year. The increase in managed services was primarily due to expansion of managed services for existing government and commercial customers as well.
Well as increases in sales of accessories to our government customers as compared to last year.
Does that does project contributed to 12% of growth in managed services. The increase in managed services was also better than expected in the second half of March we had an unexpected increase of customer demand for devices and accessory some portion of the equipment sale in March.
It is likely attributable to a pull forward future demand, but it's difficult to quantify at this point.
Gross profit for the first quarter increased 17% to 5 million from 4.3 million first quarter of 2019 gross margin was 12.5% into first quarter compared to 19.4% in the first quarter of 2019. The decrease in gross margin was driven by.
The increase in carrier services revenues previously discussed.
In the first quarter of 2020 operating expenses increased by 11% to 4.2 million from 3.8 million into first quarter of last year as a percentage of revenue operating expenses amounted to 10.7% revenue as compared to 17.2%.
In the first quarter of 2019.
The increase in FDIC expense reflects higher payroll costs, consistent with higher employee count and higher stock based compensation.
For the first quarter of 2020, GAAP net income was $484000 an improvement of 26% from income of $384000 into first quarter of 2019 on a non-GAAP basis EBITDA for the first quarter of 2020 was 1.2 million coming.
Fair to $958000 into same period last year.
To clarify this is similar to adjusted EBITDA, which we have a 40 historically, but it excludes stock based compensation at this point, we believe easy Guy is a more objective measure of evaluating our financial performance. So it is our intention to report this figure going forward.
Shifting to the balance sheet, we exited the quarter with 9.3 million in cash net working capital of 5.9 million and approximately 5 million available to draw down on our credit facility.
This completes my financial summary for a more detailed analysis over financial results. Please reference our form 10-Q, which was filed prior to this call. So with that I would like to turn it back to Jan.
Thank you Kelly and thank you Jason Theres no doubt that the started the year has been volatile.
And in large part we benefited from that volatility.
As we discussed today, we believe that there are many reasons to suspect those positive drivers will continue.
But at the same time, the uncertainty has clouded what visibility we had into the rest of the year.
We're confident or prospects over the long run.
But not in our ability to predict when they will come to fruition in the short term.
For those reasons, we're not yet prepared to reinstitute full year guidance, nor do we believe it would be constructive at this time to provide a projection for the second quarter. Our last call was on March 24th.
And with the inside we had into the quarter at that time, we provided an estimated range of Q1 results.
But even at such a leap day in the quarter, our expectations were still far removed from our actual results.
As we've discussed much of the discrepancy stem from how quickly things can change given the current volatility.
From our perspective that volatility has not been eradicated.
There are many changes occurring in our industry and while many are positive they're not universally so.
For example, in both federal and commercial space call volume is down which seems to contradict the push we've seen that has driven up the telecom lifecycle management revenues.
Call volume is not a metric that has substantial impact on our revenues, but it could be a harbinger of decline in certain sectors in the future.
For example, accessory sales may decrease as a result.
But as Jason mentioned, despite the decrease in volume we've seen an increase in activity from some of our government customers and especially from those heavily involved in battling the pandemic.
The National Institute of allergy and infectious diseases. The CDC the U.S. Army Corps of engineers.
And the department of Homeland Security.
All right at the forefront and have continued expanding their work with us and we have risen to the challenge.
Our offices and especially our logistics facilities have remained open the entire time, while at the same time observing all social distancing guidelines.
We have never missed a day.
And we're doing everything possible to ensure that we can get devices out to those on the front lines.
So ultimately we're receiving some mixed messages.
The trends are positive for the most part.
But there's still a fair amount of uncertainty, which makes predictions challenging.
We're optimistic about our prospects and our ability to drive profitability in the long term.
But the fact remains that we simply do not know what the world will look like.
As people tend to return to some semblance of normalcy.
However, we do know that so far Lifepoint has performed well and we're going to do everything we can to continue that trend.
Going forward, we're going to continue expanding RTL and capabilities and our IDN channel partnership.
We're going to keep chasing after the high margin managed services revenues and.
We're going to keep working to build our pipeline of new opportunities.
This past quarter, we grew managed services revenue by 52%.
GAAP net income by 26%.
We improved our cash position.
And we have no debt.
If you combine that financial strength with the resilience of our customer base and the opportunities ahead of US. We believe that we are in a strong position to continue executing against our strategic initiatives support the critical needs of our customers and deliver strong results for our shareholders.
With that covered.
We are ready to take questions from a major shareholders and analysts.
Operator would you please open the call for questions.
Thank you if he would like to ask a question. Please press star one on your telephone keypad at this time to join the queue.
If you're using a speakerphone please pick up your handset to provide the best sound quality.
And our first question will come from Mike Crawford with B. Riley. Please go ahead.
Thank you and thank you Jennifer waning.
This is.
Not provide guidance given the mixed messages you're saying.
What were the primary causes of various suggests the revenue up closer to 40 million versus the 30 million top end of the range that you saw just seven days before the end of the quarter.
Right.
Thank you Mike for that question and good afternoon.
Things are going well out in California, the when we had our earnings call on the 24th we had clear visibility into the first month of the year and we have preliminary numbers for February.
What happened was is that there was a significant increase in the number of devices being activated for the census project and also there was a late quarter.
Order from the federal Air Marshals under our Department Homeland Security, which bump up the.
The revenues for the last couple of months and so that's what caused the variance.
We should not see the.
The increase from the federal Air Marshals work, but we should see the continuing work from the census project. So.
Going forward into the second quarter barring any unknown circumstances.
We should see similar topline revenues.
It is slightly less perhaps than the the first quarter.
Okay.
Thank you and I believe.
The prior operating assumption was that you might managed 400000 devices census ended up taking 500000 devices.
That's correct and then.
Well, yes.
It's not direct please please.
Okay to the something you can and then.
Oh, you're getting paid.
Our device for months managed services price that you can disclose.
So so.
I'll answer both of those questions. The first question is the number of units that are that we mentioned in the last call was.
Like.
400, K around 500 Kay.
Because of the numerator schedule has now been extended from July to October.
There are also estimating that that's going to be additional device needed and additional numerators needed in case. Some of these numerators may fall ill, where they may have to complete this.
You know enumeration of.
Before the end of the year, so there'll be more folks on the street and they're increasing that number by approximately 20%.
On top of the half a million.
Okay and in terms of the pricing associated with it is based upon a time and material and labor hour.
So we should have a better estimate come second quarter.
But there should be a corresponding increase.
And our managed services because of that.
Does that answer your question.
Yeah that's helpful.
If I was just stipulate that.
Census wrapped up their work on.
That's over 31st or on a date then.
Past that day.
What would be.
Stations regarding ongoing work if any with the census Bureau from that point over the near term right.
Right. So so what will happen is is that right now. The current schedule is is that the information will end in October I think it would be I think it was mid October.
And then and then there will be decommissioning over these devices and live reverse logistics associated with these devices. So we see the revenues coming in.
Towards the end of the end of this year and beginning of next year the contract technically runs out until.
You know I'm gonna have to look this up I believe it was April 2022.
But you know a lot of the the revenues should trickle down.
In the towards the first quarter of next year.
Okay, great. Thank you and then last question is.
Hi.
I thought that maybe the.
She draft RFP excuse me.
Due in June you're saying maybe by the end of May is that based on any updated information you can.
Yes, so so in terms of the sole source, we didn't get the risk we received that and on the Thirtyth of April and that has a you know appeared to performance of 12 months, where the six months option period, which can be extended another 12 months if they execute a task order you know right at the end of.
That contract period, so conceivably two and a half years, the full recompete of the CWM SPP a contract.
The schedule was announced that it was toward the end of May beginning of June is when the RFP. The draft solicitation material is supposed to come out.
My guess is is that you know there's a possibility that may slip until June, but they're holding to their schedule of awarding that contract.
In October of this year.
Great well, thank you very much.
Okay. Thank you, Mike and enjoyed the surf party out an L.A.
And our next questions come from Barry Sine with Spartan Capital Securities. Please go ahead.
Hi, Barry Hey.
Good afternoon.
I guess first question for Kelly on the change in calculation.
But EBITDA and now you're giving at EBITDA not putting adjusted.
EBITDA on the Presley's I was able to go in and dig into the Q. It gives you guys.
Timely and figure out stock based compensation and that's a noncash charge and that's exactly something I see other companies.
Good so why the change in the philosophy that number.
It was actually pretty significant this quarter, if I look at the Q.
Hi, Barry Thank you for that question.
I believe after 11 consecutive quarters.
Positive adjusted EBITDA.
We are beyond.
Turning the company around and we don't have.
The one off expenses.
Future.
I will be a stock based compensation.
Scitor to be ongoing expense.
We don't see at least into first quarter of 2020, we have not seen.
A decline in our collection activity cash inflow.
Strong.
And so we wanted to stay with as much as.
Oh Jaffe type of financial metric I know EBITDA is non non gap.
While we do.
So I was really.
We'll also be change for the management.
To be measuring.
Yes, yes, GAAP net income and also the non gap.
But.
The press release to.
In the.
Gionee line item, we do specify the I'll now.
Okay compensation expense.
Very does that answer your question yes.
Yes.
[music].
Going back on the census.
So yes the.
Bringing back the device back in I guess, there's a fancy near term for that you mentioned that we set the devices out Youre building on time material labor hours.
Well not be the same thing for returning the devices and wouldn't that be perhaps.
Similar revenue similar amount of time, obviously theres no material I'll, because you're getting to buy back when the time be similar to return the devices.
I'm not exactly.
We'll be a far less in terms of the number of folks that's required to bring this stuff back because when we roll out the devices. There's a lot of you know.
Tasks that have to be performed in terms of imaging device is making sure that their logged in properly making sure that they are activated and so forth and so there's a lot of items that we have to handle and install when the devices combat. The thing that you know major tasks are you know the logistics.
Piece of it shipping and receiving and wiping the device in which is done.
You know automatically using tools that we have so the the the number of hours will decrease markedly come first quarter.
Okay, and you mentioned the push out until mid October on the enumeration period.
Conversely, if I were reading the press at announcement from the census Bureau that.
Things are still the at the out there and they wanted to push that out further.
Matt.
How what I would I interpret that in terms of looking at your your results.
You know if they do have you know as I said, an active Congress and they decide to change and push the data out there. Let's say you know end of this year or you know first quarter of next year.
We would have continuing revenues similar profile out until you know end of.
First quarter and then the reverse logistics will start in the second quarter. So.
We would have increased revenues.
As a result of that because a lot of the things that we have to do continues on for example, you know people, losing their passwords and having to reset their passwords and re imaging their phones in application support and all of that we do that and so.
Does the level of effort will continue on as long as the Numerators are out there.
Okay, and then I understand you're not giving formal guidance.
You did get some sense of what year over year comparisons would look like after that or that curative sensus revenue works its way through and I kind of missed that if you go back to what you were talking about I think you said you could see a year over year decline in overall.
Revenue.
And I'm guessing that might work its way through over a period of four quarters until that anniversary could you kind of repeat you said then maybe expand upon it.
And so you know at the end of a you know this year, we'll see the the sensus revenue trickle too you know an immaterial amount and so.
We'll see.
The revenue go back down to the pre census work.
That's assuming that we don't you know activate any additional work going forward. So you know, giving everything given everything equal we would probably go back down to the run rate of perhaps a third quarter of last year is this kind of my estimate.
And and that that difficult period comparison, then would last for several quarters, because you'll have a census Bureau revenue in your results for several quarters correct.
We will have the census for the next second quarter third quarter and a lot of it in the fourth quarter, and then little bit into first quarter of next year.
Okay.
It does that answer your question.
Yes, yes.
My last question in Jan are on last earnings call.
Talked about two opportunities still kind of take another bite at the Apple for the first one was the.
A contractor general dynamics, who lost out what you were bidding with.
Had filed the protest if you give us an update on the status of that protests and then you also mentioned that the winning bidder was leidos and obviously you have a very good relationship with them and there's a possibility that you could Bob yourself in their winning bidding team even after the.
The contract has already been awarded to that.
Mhm. So so the current status of the the protesters is still ongoing to haven't settled the protest.
We don't have visibility into the current protest process other than we know that is under protest.
The other part you know like dose, yes, we have a fantastic a business working relationship with them.
And we are trying to get on the team. However, all of the things are sort of on hold because they're waiting for a that set them enough. This protest. So they're kind of you know waiting to make any kind of decision on teaming or adding additional team members until the protest is resolved and you know I figure.
You're going to ask when does that going to be I wish I had a crystal ball to be able to answer that question.
But I don't sorry.
Yes, you you're right I was going to ask that paying about there is no statutory or regulatory deadline that.
Okay. This issue in a certain day they have to make a decision X number of days later or can be indefinite.
No. There there is specific you know response time of Wendy's protests has to be responded to buy the agency you know I'd have to go back and look at you know how many days, but it's usually likes a 90 days response time from the agency and then if they do and O N b.
Protests and that's another 60 days and then I think that they can go through the federal Court of Appeals, which can take forever kind of thing so.
My guess is that they protested within the agency.
But that doesn't mean that they can raise it up to the I wouldn't be level. So it.
It could be a long drawn out process I'll try to find out more information and you know.
Try to fill you in on the next earnings call.
Okay. Those are my questions. Thank you very much.
Great. Thank you Barry.
As a reminder, ladies and gentlemen, if he would like to ask a question. Please press star one on your telephone keypad at any time to join the queue.
And next we'll move to Sam Donaldson, a private investor. Please proceed.
Well congratulations on a corridor I think many of US long term investors look forward to not only is the light at the end of the tunnel, there's light in the tunnel and I think.
And Jason and Kelly and all of the management team how about snakes, No says I should ask a question and not just crazy I do I'll do that.
As you seem to be very.
Happy that you think will get the Recompete I remember, who do DHS contract for the full contract.
If we do.
Our out of margins going to be better is there way that they will be better for this particular right.
Thank you. Thank you Sam. Thank you for that question to answer is yes, we do feel pretty confident you know I think a you know I.
I I use the to the term hammerlock versus a more to lock last time and and I know my Crawford keeps you know repeating that so he you know I think we have a very good chance of winning the DHS contract for you know all of the reason that we mentioned in the previous earnings call and yes, we do plan on.
Modifying our prices I don't want to go into too much details on that because I think that we'd be you know some competitive information that we don't want to give out but that is our goal to improve the the margins on the project.
Well actually I asked the question, particularly because one of our long time investors Gordon Grill post the contracts as they come forward and nitriles message Board immediately see.
Any money you lose money or what have you well never mind controls they don't control lifepoint. Thank goodness, they never have but it would be a good if a federal contracts provide a better margin than we've had to have in the past and that's why I ask.
Thank you and you know I want to dispel some rumors out there about that in terms of the profitability of the DHS contract. The DHS contract is a profitable contract a without the DHS contract, we would not be showing the improvements that we have in our bottom line profitability.
Yeah.
I understand all right, thanks, very much as gentlemen, ladies.
Appreciate your efforts.
Thank you Sam Thank you.
And at this time that concludes our question and answer session. If your question was not taken please contact Widepoints IR team at W. why why at Gateway IR Dot Com I'd now like to turn the call back over to Mr. Jim can.
His closing remarks, thank you for joining us.
Thank you. Thank you Christine. Thank you operator, we appreciate everyone's taking the time to join US today and as the operator mentioned if there were any questions that we did not address today. Please contact our IR team you can find their full contact information at the bottom of todays earnings release I. Thank you again and have a great evening.
Thank you all for joining us for White Plains first quarter 2020 Conference call. You may now disconnect your lines.
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