Good afternoon ladies and gentlemen and thank you for standing by. Welcome to the WidePoint Corporation First Quarter 2014 Earnings Conference Call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be opened for questions. (Operator Instructions) I would now like to turn the conference over to our host, Mr. David Fore of Hayden, IR. Please go ahead.

Thank you, operator. Good afternoon to all participants in WidePoint's first quarter 2014 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 quarterly results and Jim will provide additional financial details. Then we'll open the call to questions from participants. Before I turn the call 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 the 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 factors 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 other SEC filings the company releases. Actual results may differ materially from any forward-looking statements due to such risks 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.

Thank you, David, and good afternoon to all of you that have taken the time to join us today. I would like to once again continue to express our appreciation to each of you for your continued interest in the future of WidePoint Corporation. During the first quarter ended on March 31, we continue to build on a momentum we began establishing at the end of the 2013 calendar year. Today halfway through the second quarter of 2014, our major BPA with the Department of Homeland Security is well underway, with three cash quarters totaling between $11 million and $12 million issued to-date, and active presentations made to several other sizeable DHS agencies, and we still further expanded our addressable markets, not only with the acquisition of Softex Communications Ltd. announced just last week, but also with our commercial market partnerships, that can further leverage our industry-leading security solutions such as Certificate-on-Device. Given the extremely current nature of many of these events and achievements, it should be no surprise that our first quarter financial results do not yet reflect the revenue benefits to result from these achievements. On the other hand, we see a built-in opportunity to accelerate our revenue growth, and drive to increasing profitability in the coming quarters of 2014. Following my comments which will focus on the drivers for this growth in 2014 and 2015, Jim McCubbin will cover our first quarter financial results. As an aside, you will also find a summary release and other events in our just issued quarterly financial press release. First and foremost, as most of you know, at the end of last year WidePoint was awarded a five year $600 million single awardee Blanked Purchase Agreement by the Department of Homeland Security, for the provision of cellular wireless managed services, which…

Thank you, Steve. Hello everyone. Again, thank you for joining our call today. Today in my remarks, I am going to discuss our first quarter financial results, and provide an update on our expectations for 2014. Given many of you out there that have talked to me have requested I try to keep it simple and to the point, I will attempt to do that. In the first quarter, we witnessed a decrease in revenues of approximately 20% to $9.6 million as compared to $11.9 million in the first quarter of 2013. While we are expecting the first quarter to reflect the bottom or low point for revenues, a number of factors caused this result to be a bit lower than we had expected, they included, lower carrier services at DHS as a result of doing our job very well and reducing their spend, as well as some startup issues pushing off normalized spending patterns within DHS, as a result of the BPA issuance in this rollover and this transition over to this new contract vehicle. Two, lower managed services materially, as a result of the transition from one prime contractor to another prime contractor, on a major credentialing program for which we are a supplier. The purchasing behavior of the different prime contractor has moved from one of all purchasing to one more of just a time purchasing. While this should provide more consistent purchasing and revenue recognition over time and did cause a reduction in expected bulk purchases, coupled with the winter storms we saw, which also delayed commercial contract awards and start times, to later into the second quarter. And then third, on the resale and other services side of the revenue streams, we also saw lower result, because federal product resale procurement activity really -- there…

Thanks Jim. Very nicely summarized. I'd like to now open the call to our listener's questions. Operator, if you can assist us by arranging to open the line and sequencing to questions, that would be greatly appreciated.

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

Hi, good afternoon. This is Ross Licero on for Mike.

Hi Ross.

Hi. So could you give me a little more color on the healthcare BPA that you were awarded and the DOJ contract that you are awarded? Were these contested -- or excuse me, were the competitive bids, and is there a chance that they will be contested?

Well, as to the first part of your question, we are restrained in terms of -- that is not public information, until the government agency specifically releases that, we can't refer to it, other than the way we have, and I'd love nothing better to do more, but I really am constrained in doing that. I think as it relates to open competitive bidding, the answer is yes to both, and I do not anticipate any kind of a conflictive situation. The reality is, we will not know until the time measurements expire. But we do not believe nor expect to be involved in any situation like that.

Okay, great. And is the margin profile in line or better than what you are seeing today?

It's as good, if not better.

Okay, great. Then one last question, could you give a little more color on the Softex acquisition? What are you expecting from that down the road, and what drove you to Softex?

Okay, that's a very fair question. I am not sure I want to take an hour to answer it, I think I could. But we have spent a very substantial amount of time, not only looking at five or six different companies in the European market, as we definitely wanted to move towards some geographic expansion, there was no question about that, and this is in response to multinational client demand that's just rising with all our significant clients. We looked at several different companies, and frankly we thought that Softex was uniquely positioned and an attractive acquisition standing on its own for us, has a penetration strategy for those markets, but in addition to that, we saw a very tightly run, very well integrated management structure. They were historically a TEM software provider to multiple markets including Asia-Pacific and Africa. They reengineered their business, about three to four years ago, and/or about two years into a rollout and expansion of their existing data analytic products and capabilities, which they market somewhat differently in terms of business model through what we do in the states, they market through a distribution channel of the telecommunications providers such as Telefonica, O2, British Telecom, etcetera, etcetera, and it has been a very effective rollout and growth strategy for them. So net-net for us, to buy a going business with attractive standalone growth potential, a tough well-disciplined management team, this was the right acquisition strategy for us to launch into those new markets, rather than some of the other less successful strategies employed by several of our competitors. Does that help a little?

Yes, it does. Thank you.

You're welcome.

(Operator Instructions) Our next question comes from the line of Mike Crawford with B. Riley and Company. Please go ahead.

Thank you. Regarding the DoJ, you have been awarded it or you expect to be awarded any day? I didn't quite get that nuance?

DoJ?

Mike, its Jim. It’s an agency within DoJ. We are waiting formal notification, okay, of the award, on the other department that's health related we have received formal notification. We have not been given approval yet to publicly announce the details. On the health related department, it is a BPA representing $47.5 million for the DoJ related agency, it's also related to the telecom side and its $4.5 million per annum for five years --

Annual contract.

Right, for five years.

And what we say when we talk about the fact that we can't really get more specific about it, is what we have is verbal notifications.

On the one.

On the one. So we actually wish that this call, we are somewhere around the beginning of next week, we could be very precise with you. Right now, we have to [indiscernible] our language a little bit.

Mike, these were events that all happened in the last couple of weeks.

Okay. So you have verbal notification on the major health related sales department and you have a written --

No, no, we have formal written notification on the health related department, for the $47.5 million BPA, which does not include all the services that we are providing under DHS, and we believe that it can be expanded, okay. On the Department of Justice award, we just received verbal notification to expect a formal notification.

Okay. Thank you, Jim, and then may be if you could just go a little bit further along these lines, between how to think about, when you're talking about receipt of task orders, such as you had I think announced that you received some task orders on the DHS contract in Q1, now you're talking about hope to recognize first revenue on that contract in Q2, so the time between I guess the task order receipts, or maybe that's a two step process as well, and getting up to speed, where you can recognize revenue?

I don't know. Could you address that Jim? I mean, I will take a shot at it Mike. When we look at that environment and especially under a BPA environment, there is obviously the challenge of winning the award, then there is often a marketing timeline that can be multiple months, before a task order is received. Once the task order is in hand, it generally becomes an issue of just how quickly we can respond with the implementation. There is not an extended timeline associated with that. So when we talk about the fact that the task order has been received, we are immediately gearing up. So not sure if that's where you are going.

Hey Mike. Ahead of the first quarter, we won one task order, we figure it takes 30-45 days to really start getting to work on it, and then we want a second one, smaller one right after and then just recently we won a larger third one, okay, in about thirty days or so, we will start getting booked revenue. So figure anywhere from the time of receipt of task order to initial booking of or monetizing revenue streams of anywhere from 30 to 60 days. We anticipate seeing a number of other task orders, between now and then to probably the beginning or end of July, for the rest of the components of the DHS.

Okay, that's helpful. I thin in the past, you had disclosed in press release and on the prior earnings call, that you had received $2.3 million of orders, with the first two DHS agencies, Customs and Border protection, and also the federal protective service. Are you not able to name the third one, or are you hesitant to, because of customer sensitivity or --?

Under the contract, we have to get approval and right now we are seeking approval.

Okay.

Okay.

Great. Third, on device, is that something that is moving to revenue in Q2?

I would say that that is not likely. I suspect that this will be a second half of the year opportunity.

Mike, in the first quarter we had said that we'd expect some revenues from Cert-on devices, either the end of the second quarter or the beginning of the third quarter, starting. We still are in those parameters.

Okay.

We are working with an OEM right now, and we are working with some other people right now, as we speak. But again, you have to turn it into revenue and that's where we are right now.

And then last questions with Wave Systems, it has been a development stage company for like 15 or 20 years. So what is it that you actually saw from that company that was useful to WidePoint?

Mike, as you know, we are licensing and collaborating with Wave, because of our Cert-on device capabilities and some of our credentialing capabilities. Wave already has a presence through their OEMs and their partners, where they have a number of TPMs that address more of a Microsoft environment, that are already out there. This is one of the paths that we can utilize okay, for securitizing some of the devices that are already in the marketplace, be it laptops, be it tablets, and/or mobile devices, that are related more to that Microsoft world. Where on the Google Android world, we are focused initially on the micro SDs and then ultimately, where this takes us, is into actually the motherboard. That's usually a nine month to 12 month design cycle. So we have different ways of going after the marketplace. Wave offered us one solution set for locking down the credentials, on a certain kind of device.

Okay, thank you. That's very helpful. And then last question, sorry final, very last question, relates to your comment that you expect a 'modest' improvement in Q2 revenue. Can you define modest any greater in degree of specificity?

Well yeah. Right now I'd just rather be conservative in general. But I am looking for 20% may be better, is what I want to put out there. Expectation could be 25. It all comes down to revenue recognition and how fast our team can convert to work that we have won into revenues. I would much rather be conservative in the second quarter, but I know we have won the work. It's just now a matter of converting it and recognizing that revenue, and that's where the push is. As you know, a lot of this came in later, in the second quarter, than we had anticipated, and -- but we do have it, and we are still anticipating a number of other awards that will drive the effects of the third quarter. This is all timing. Its just, getting the awards which we firmly believe we will, and then just getting the work done, so we can start the process of building this and monetizing our revenue streams.

Okay. Thank you very much.

Thank you, Mike.

And there are no further questions in the queue. Please proceed.

Thanks operator. Obviously, we have taken and responded to all requests and operator, we thank you for your assistance. As a closing comment, I just wanted to state that we are really very-very excited and positive about our expectations and projections for the second half of 2014, and really beyond. Including the continuing diversification of our revenue growth and the positive impact of the most recent DHS and health department awards. I want you to be assured, that the management at WidePoint is completely focused on building the business of the future, and maximizing the valuation of the enterprise in the years ahead. So until we speak again, we thank you very much for your attention and interest and wish you all a very pleasant evening. Good night.

Ladies and gentlemen, this concludes the WidePoint Corporation first quarter 2014 earnings conference call. Thank you for your participation. You may now disconnect.