Good day, ladies and gentlemen. Thank you for standing by. Welcome to the WidePoint Corporation First Quarter 2013 Earnings Conference Call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. (Operator Instructions) This conference is being recorded today, Wednesday, May 15, 2013. I would now like to turn the conference over to Mr. David Fore of Hayden Investor Relations. Please go ahead, sir.

Thank you, Operator. Good afternoon to all participants in WidePoint's first quarter 2013 financial results conference call. With me today are WidePoint's Chairman and CEO, Steve Komar; and Chief Financial Officer, Jim McCubbin. Steve will provide an overview of the first results, and Jim will provide additional financial details. Then, we'll open the call to questions from participants. Before I turn the call over to Steve, I'd like to remind all participants that during this conference call any forward-looking statements are made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. Expressions of future goals, including financial guidance, and similar expressions including, without limitation, expressions using terminology may, will, believe, expect, plans, anticipates, predicts, forecasts, and expressions which reflect something other than historical facts are intended to identify forward-looking statements. These forward-looking statements involve a number of risks and uncertainties, including those discussed in the Risk Factor sections of WidePoint's annual report on Form 10-K, and its quarterly reports on Form 10-Q, and in other SEC filings and company releases. Actual results may differ materially from any forward-looking statements due to such risks 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.

Thank you, David, and good day to everyone who has joined us this afternoon. Continuing our past practice, I’d like to acknowledge and reaffirm our appreciation to each of you ending our quarterly investor call and for your continued interest in WidePoint Corporation. I'm pleased to report that our first quarter performance met our overall goals and expectations. We’ve made a great deal of progress on several fronts since year end 2012 and I plan to share highlights of some of those with you on this call. Our progress is characterized by our increasing margins, growing pipelines and reinvestment initiatives, all of which are consistent with the strategic focal points we’ve adopted and shared with you during earlier investor calls. With $12 million in revenues and a minor net loss in the quarter, this results are primarily indicative of our goal of being less reliant on certain low margin business lines, as well as delays in the government procurement process during this seasonably weak contracted quarter and finally to our active reinvestment and restructuring efforts. Quite importantly, we believe we remain on track for our full year 2013 revenue growth and performance goals. Adding some substance to our efforts, WidePoint recorded an increase of 300 basis points in its gross margin performance from 24% now up to 27%, which indicates our strategic focus on emphasizing a migration to higher margin solutions and services. I’ll leave the more analytical and detail evaluation to Jim during his financial commentary, but I wanted to highlight several points to support our earlier announced reinvestment strategies in support of accelerating our revenue growth trajectory. Roughly 45 days ago at our year end 2012 investor call as those of you who attended that call may remember, I presented a detailed repositioning and reinvestment program about the…

Hello, everyone, and welcome to our call. The first quarter financial results were planned, delivering growth in the areas that we focused upon and providing a greater mix of higher margin services that were not fully offset by some of the fall up in revenues associated with phenomenal affects brought about by the federal government sequestration efforts on some of the other revenue streams during the quarter. As many of you are aware, financially, our first quarter and first half of the year tends to be lighter, but our second half as most of our sales and marketing efforts are conducted during this period of time are stronger. Even this in some of the recent spending awards that Steve just discussed, we believe we are on track meeting a number of our goals and objectives for 2013 either excited about turning this award into recurring revenue stream. Before I move on to the summary financial review, I would like to address our restructuring efforts. Steve just updated you on our progress, as a result of these efforts we had set out on the path to evolve the company. Even this, we are currently in the midst of developing new management structures and reporting that provides better visibility into what we're building and delivering to the marketplace, with these changes, we are no longer managing and reporting our business on a segmented basis. Over the coming quarters you will be receiving better visibility into how we are positioning the business and our revenue streams into a more consolidated and package enterprise data products and services. These changes are part of the realization of how quickly the marketplace is looking for solutions, driven by the convergent benefits derive from the integration of telecom expense management, mobile device management and mobile security management,…

Thank you, Jim. I think, without further ado, I’d like to now open the call to our listeners’ questions and comments. Lilly, if you can join and assist us in opening the call, I’d appreciate it.

Thank you, Mr. Komar. (Operator Instructions) Our first question comes from the line of Mike Malouf with Craig-Hallum Capital Group. Please go ahead.

Thanks, guys. My first question is more of a definitional question. I’m wondering if you can just give us a sense of what you would define as transformative as far as iSYS. I know you can’t talk about the actual deal, but just to try and put in perspective?

I think that's a fair question, Mike. And I think that I got to give you credit for asking it. Please understand my inability to respond in any specific form. I would say that, number one, we are always cautious. The process has to be completed. Number two, there's probably a phase in the sales cycle of individual awards to different sub departments. But the reality is the total billing potential is in excess of $100 million or $200 million.

It’s in the hundreds of million of dollars.

And we probably are in very grey area right now, so I appreciate if you let me leave the stage with that comment.

Fair enough. Fair enough. Well, I move to a question for Jim. You mentioned that you are looking at -- as you transition the company, doing all of the -- some of the strategic moves that you're doing, that you're really targeting that 40% to 60% gross margin run rate. It’s obviously a wide margin and a high-margin. But I'm just wondering if you could comment a little bit on timing and whether that’s tied more to time, as I just said or a particular revenue run rate. So, if you're doing $100 million, do you get close to that or is it $150 million or $200 million, if you could just kind of give us some guidance on that that would be helpful? Thanks.

All right. Mike, what you are going with our segmentation going way, we are moving towards a singular platform. We are going to be reporting on revenues and the different kinds of revenue from sales offerings that are under the singular platform of what we are providing. With that, we will be starting to break that out by revenue stream. So you will get a little bit better visibility as well. So just overall know that’s coming down your way quarter-by-quarter, as we define these by Mobile Device Management, Mobile Security Management, TEM. And these aren’t segments but these are products that are also linked together. With that, I think that would be very helpful for everybody's modeling. Given that, most of the revenues that we are chasing right now are in the 40% to 60% range for any incremental new revenues. The one potential sizable award that is working its way through the system will probably represent half of high-margin work and half of low margin work. We will be bifurcating that, okay, in the product mix. So you will be able to see it, okay and break it out. Depending on that, that’s the only reason I'm not giving you a specific answer at this point in time. We do believe that a considerable amount of the revenues, as we undertake this new work will be at greater margins. I think it will take us throughout the year and demonstrating the breakout of what that looks like by product service area and you will see it. I just I can’t because of one of the events right now, I can't really tell you exactly how it’s going to play out, okay.

Got it. Thanks for taking my questions.

Thank you, Mike.

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

Good afternoon, gentlemen. With that review of the year end conference call note and on that conference call you talked about two of the significant bids, subtle bids that you expected to hear by the end of the second quarter. Is the one that you referred, one large one that referred to, one of those two bids and is there other one still outstanding?

The quick and dirty answer, Michael is yeah. It clearly was one of the two and the other one is still outstanding.

Okay. Secondly, there was somewhat of specific comment about "working through the bureaucracy”, is this one award that you have had that IDIQ that requires other cash to be granted or is there potentially a protest involved?

Right now, we would like to not comment on anything to do with it. We've been asked not to.

Okay.

Right now, it’s working its way through the system.

Okay.

We have been assured we’ll know in one to two months max probably less. And we’ve been asked to basically just remain quiet, and I think it will be very foolish to do anything other.

We’re in a very good position with it right now, okay.

Wonderful. Also, on the last conference call, you sort of tried to quantify the potential impact of sequestration and you felt that there was $1 million to $5 million worth of potential revenue at risk. Is there any updating to that observation at the end of the fiscal year?

No. In fact, I think we realized about a $1 million of it in the first quarter. So, I’d still say if we want to define it, in 2013 we’ll probably see $2 million to $4 million maybe a little bit narrower. But we have other things offsetting it. But in the first quarter, nothings awarded. And it’s the quarter that everybody does sales and marketing, so it’s commercially and federally.

So, perhaps another way we can answer that for you, Mark, is to say that when we threw that number out there, it was in fact a sanity check or a test for us, acknowledging that there was some risk. But I think the more important thing is to date, we have seen really little to nothing in the way of indications that that is real for us right now. Future quarters will tell. We’re not the bloodiest of the fact that there was just an announcement in the DoD the other day that they were furloughing 800,000 civilian employees, kind of hard to imagine and that would have an effect somewhere. But what we’re saying Number one, we don’t service those employees, number one, with any of our products. But it’s hard to imagine that there isn’t some kind of downstream impact and I just can’t give you any clarity on it at this point.

But, Mark, what is very interesting is the uptick in the areas that we’re working because of the cost savings. It’s driving a lot of some of the things that are presently in play right now.

Okay. Just a last question for me is just looking at the selling expense in selling and marketing lines, in absolute dollars is there sort of a rough idea of how much that will step up sequentially as the year evolves because as I understood it, as revenues build, you were going to be increasing the investments in sales and marketing?

Sales and marketing, we’re looking at because of the channels we’re making it a little bit more efficient, but about a $2 million investment in sales and marketing. As you know, specifically, we’ve brought on John Atkinson is the new EVP of Sales and Marketing and he has a really strong background in the identity management and information assurance areas in both the commercial and federal marketplace. With that, we’ve brought on a new Head of Federal Sales. In the first quarter, we’ve also brought on a new Head of the Sales and Marketing Research and work there and we’ve also identified and started bringing on a number of national sales reps and expanding our channels. So what we’re trying to do is we’re trying to work with what we have and spread this and stage it over the year, and that’s the most effective way to do it. It may slow down revenue capture little bit, but it also is the best way we can manage around our working capital and our EBITDA, and it’s the best effective way for us to do it.

Okay. Thank you very much.

Thank you, Mark.

Our next question comes from the line of Michael Potter with Monarch Group. Please go ahead.

Hi Mike.

Mr. Potter your line is open. Okay. Our next question comes from the line of Mr. Steve Shaw with Sidoti & Company. Please go ahead. Steve Shaw - Sidoti & Company: Hey guys. How are you doing?

Hi Steve. Good afternoon. Steve Shaw - Sidoti & Company: Did you guys mention any additions to headcounts sales and marketing efforts, I may have missed out?

Yeah. I just did. But what we did is, we are bringing on, we brought on a new Head of Sales and Marketing, John Atkinson. We’ve brought on a new Head of Federal Sales. We’ve brought on several national sales reps and in general, right now, we’re working our channels and working our direct marketing. We also brought on a new Head of Sales and Marketing from the perspective of collateral website research and targeting efforts. So we’ve been quite busy in making sure we could deploy the assets we can as soon in the year as we can. So we can make sure that the pipeline is there. And we are witnessing a tremendous uptick in pipeline activity. Does that help Steve? Steve Shaw - Sidoti & Company: Yeah, are you guys still going to continue to add throughout the year like you previously stated?

Yeah, we’re going to moderate it. We’re doing it and we’re trying to effectively manage it around our working capital, okay. Steve Shaw - Sidoti & Company: Okay.

Anything else Steve? Steve Shaw - Sidoti & Company: No. I am sorry. That’s it for me.

Okay.

Okay.

Thank you. And there are no further questions at the queue at this time. Mr. Komar, please continue with any closing remarks you may have.

That’s great. Thank you, Lilly. I’d like to close by conveying to our listeners just how excited we are about our opportunities for the remainder of 2013 and more so beyond. We believe we have the right products and solutions. We’re focused on exciting target markets and increasingly we have the personnel and resources to leverage and exploit those market opportunities. Specifically as we continue to work, we expand our presence in our target markets, particularly in commercial market space both in the U.S. and internationally. I’d like to thank you all for your time and interest in WidePoint. We fully appreciate your continued interest and hopefully your commitment to us. And we will look forward to talking with you again on our next conference call in mid-August and in some cases even sooner, as we continue our investor relations outreach program with WidePoint’s upcoming presentations at B. Riley conference next week in Los Angeles and the Marcum MicroCap Conference in New York City on May 30. On behalf of all of us here at WidePoint, thank you and have a great evening.

Thank you. Ladies and gentlemen, this concludes the WidePoint Corporation First Quarter 2013 Earnings Conference Call. Thank you for your participation. You may now disconnect.