Good afternoon and welcome to WidePoint's Second Quarter 2019 Earnings Conference Call. My name is Jim and I will be your operator for today's meeting. Joining us for today's presentation is WidePoint's President and CEO, Jin Kang; Chief Sales and Marketing Officer, Jason Holloway; and President and CEO of Soft-ex Communications and WidePoint Interim CFO, Ian Sparling. Following their remarks, we will open the call for questions from WidePoint's publishing analysts and major institutional investors. If your questions were not taken today and you would like additional information, please contact WidePoint’s Investor Relations team at wyy@gatewayir, that’s G-A-T-E-W-A-Y-I-R.com. Before we begin the call, I would like to provide WidePoint's Safe Harbor statement that includes cautions regarding the forward-looking statements made during today's call. The matters discussed in this conference call may include forward-looking statements regarding future events and the future performance of WidePoint Corporation that involve risks and uncertainties and the future performance 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 company's 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.widepoint.com. Now I'd like to turn the call over to WidePoint's President and CEO, Mr. Jin Kang. Please proceed sir.

Thank you, operator, and good afternoon to everyone. Thank you for joining us today to review our financial results for the second quarter 2019. The second quarter was a continuation of the strong financial and operational performance that we demonstrated at the start of the year. From a financial perspective, the quarter was highlighted by a 26% increase in revenues to $22.1 million and a 14% increase in gross profit to $4.1 million, compared to the same quarter in 2018, which demonstrate the leverage we are continuing to develop in our operating model. The $22.1 million in revenues we reported marked the highest quarterly revenues for any second quarter in our company history. Additionally, our adjusted EBITDA improved by $463,000 to $600,000 in the second quarter of 2019 compared to Q2 of last year, marking our eighth consecutive quarter or two full years of positive adjusted EBITDA. As I outlined on our last call, our primary near-term objective is to more aggressively grow the top line while maintaining bottom line profitability. We were excited to achieve GAAP net income last quarter, as it represented the culmination of the turnaround of our business and the beginning of a new much more exciting chapter for WidePoint. To be sure, we are aware that this is a more complicated process than simply flipping a switch and there will still be some challenges to work through, as we aim to profitably scale the business. With that in mind, we did witness a slight dip in our bottom line in the second quarter, which was in line with our projections and guidance. While still an improvement over the same period last year, the sequential decline was primarily due to several one-time cost items and RSU awards that will not occur in Q3. Regardless, we were…

Thank you, Jin. There's a long list of reasons why we are confident in our ability to re-secure the contract with the Department of Homeland Security. I want to provide a bit more context regarding WidePoint's telecom management platform, ITMS that is deeply embedded within every major agency within DHS. Since originally being awarded the DHS contract roughly five years ago, the development team has never stopped improving ITMS. In fact the innovations that have gone into ITMS are second to none. In addition to continuously adding new functionality and reporting capabilities, WidePoint has worked with each individual DHS agency under the original award to develop highly customized functionality and specific reporting to that agency. Whenever applicable, WidePoint has then proactively deployed the customized functionality or reports to the other agencies under the DHS award. As you can imagine, this makes the ITMS platform even more strategically positioned for the recompete. Having a highly customized technology platform that is the backbone of our managed services offering along with federal accreditation such as the ATO or Authority to Operate, becoming FedRAMP-certified, moving to the cloud, and converging our IdM digital security solution into ITMS are testaments to WidePoint's commitment to winning the DHS recompete. We are very proud of the R&D invested in our solutions and we will never stop innovating. Now, obviously, past performance, though a good indicator, does not in any way guarantee future success. DHS has the option to displace us if they choose. That's the nature of a recompete. But in addition to our technical competitive advantages, we've also received positive reviews over the life of the contract from various departments complementing WidePoint on the quality of our services and the efficacy of our solutions. So, while there is no guarantee that we will rewin this business…

Thank you, Jason. As noted on our earnings release during second quarter we delivered improved revenues and generated positive adjusted EBITDA for the eighth consecutive quarter. Our overall financial performance for quarter two was in line with the revenue and EBITDA guidance that we noted on our quarter one call. Turning to our results for the quarter ended June 30, 2019. Our revenue increased 26% to $22.1 million from $17.5 million last year. This improvement was driven by a 29% growth in managed services and 24% growth in carrier services. As Jason already alluded to, our managed service revenues increased due to the expansions within existing government and commercial customers, as well as an increase in sales of accessories to government customers. Carrier services revenues increased primarily due to the implementation of the U.S. Coast Guard contract and to a lesser extent the expansion of our Customs and Border Protection Task Order. Our gross profit increased 14% to $4.1 million or 18% of revenues from $3.5 million or 20% of revenues last year. This decrease in gross margin was driven by the increase in lower margin reselling and other services during the quarter. Operating expenses increased by 6% to $4.2 million from $4 million last year. The year-over-year increase was due to a number of once-off costs along with an increase in share-based compensation costs. GAAP net loss was $308,000, an improvement from a loss of $472,000 orders in quarter two of last year. On a non-GAAP basis, adjusted EBITDA for the second quarter 2019 increased to $599,000 from $136,000 last year. For the first six months of 2019, our non-GAAP EBITDA was $1.6 million compared to $222,000 in 2018. Shifting to the balance sheet. We exited the quarter with $5.4 million in cash, net working capital of $4.3 million, and approximately $5 million available to draw upon our own credit facility. In addition, adoption of the new policy on leases has led to the generation of immaterial assets on associated liability within the balance sheet, the details of which may be found in our 10-Q. At the present time, our cash reserves remain stable and we continue to expect that they will steadily improve with each quarter of positive performance. Before I turn it back over to Jin, I'd like to reiterate that we believe we will continue to build upon the financial strength of WidePoint in a manner consistent with that already demonstrated over the last two years. We remain excited about the future prospects and we'll continue to work hard to meet our financial goals. This completes my financial summary. For a more detailed analysis of our financial results, please reference our Form 10-Q, which is filed prior to this call. So with that, I'd like to turn it back over to Jin.

Thank you, Ian and Jason. I will take this opportunity to again thank Ian for taking on the added responsibility of interim CFO. He has been doing an excellent job, balancing his usual role as CEO of Soft-ex with his new responsibilities as interim CFO. I thank the team at Soft-ex and everyone else involved in taking on some extra responsibilities for their continued work in support of our organization. For this business to be successful, it requires more than good products and solid strategy. It requires more than our comprehensiveness of credentials and the holistic nature of our Trusted Mobility Management solutions. It also requires the right personnel. We are very careful about who we choose to bring into this organization and especially into leadership positions. We are, therefore, still in search of a new CFO. We have been considering several candidates but are in no rush to simply fill the position. We have good processes and systems in place and even better people capable of executing them until we find the right person to fill the CFO position. We intend to provide a more material update as the search progresses. The second quarter of 2019 was another strong quarter for WidePoint as demonstrated by our financial results, our expanded credentials and our ability to successfully win key recompetes. We understand that there is some uncertainty surrounding our business given the nature of the DHS recompete. However, the timing of this contract is out of our control. So we are focused on executing on our primary initiatives and controlling our controllables. In this regard, the second quarter was another successful quarter for WidePoint. Operationally, we achieved an important milestone to improve our credentials and become one step closer to achieving full FedRAMP certification. We successfully expanded contracts with current…

Mr. Kang, thank you. And thank you to each of our presenters for their remarks, today. [Operator Instructions] We'll take our first question from the line of Jorge Fermin with B. Riley. Please go ahead, sir.

Thank you. And in regards to your recent contract wins you mentioned the TM2 contract was a little bit higher on the margin side. But just on the Soft-ex and the Fed contracts could you -- if you could kind of go over the margin profile of those as well as kind of expected revenue timing from those as well?

The margin profile in terms of gross profitability, we're probably looking at somewhere around 45% to 48%, for the managed services portion. As well as our Soft-ex digital bill presentment and analytics. And in terms of -- what was the other part of the question? I...

Sorry the kind of revenue timing around, when you kind of expect the revenue to come in from these contracts?

As Jason mentioned, that these contracts were re-competes and renewals of the contract and small portion of it were expansions. And we expect those revenues to come in, in the third and the fourth quarter.

Great, thank you.

[Operator Instructions] And we have no questions from the phone side. I'll turn it back to our leadership team, for any additional or closing remarks.

Thank you, Operator. We appreciate everyone taking the time today, to join us. As operator mentioned, if there were any questions we did not address today, please contact our IR team. You can find their full contact information, at the bottom of today's earnings release. As always, we'll keep you informed, as we go forward, in early September, we will be in San Francisco, at the eighth annual Gateway Conference. At the end of October, we'll be at the Dawson James Conference in Florida. So we look forward to driving the business forward. And to continuing to keep you all informed, as we make progress. Thanks again. And have a great evening.

Ladies and gentlemen, this does concludes today's WidePoint announcement. We thank you all for your participation. And you may now disconnect. We hope that you enjoy the rest of your day. Thank you.