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WidePoint Corporation (NYSE American: WYY), a company specializing in computer integrated systems design with annual revenue of $133.12 million, has entered into a new financial agreement with Old Dominion National Bank, securing a $4 million revolving line of credit.
According to InvestingPro data, the company operates with a moderate level of debt and currently maintains a market capitalization of approximately $36.56 million. This credit facility was established on Monday and will replace the previous loan agreement dated February 29, 2024.
The new credit line’s terms mirror those of the prior agreement, providing WidePoint with continued financial flexibility. The facility allows for borrowing up to $4 million or 80% of eligible accounts receivable, whichever is less. The interest rate on the borrowed funds is pegged to the Prime Rate as published in The Wall Street Journal, with a minimum rate set at 7.25%.
Monthly payments are required to cover the interest, while the full balance of interest and principal is due by the maturity date of February 28, 2025.
WidePoint must adhere to several financial covenants, including maintaining a minimum tangible net worth of $2 million, achieving a minimum annual EBITDA of $1 million (compared to current EBITDA of $0.98 million), and keeping a current asset to current liability ratio of at least 1:1.
The company’s current ratio stands at 1.07, slightly above the required covenant. These covenants will be measured annually starting December 31, 2024.
InvestingPro analysis suggests the company is currently undervalued, despite facing profitability challenges with a modest gross profit margin of 13.73%. For deeper insights into WidePoint’s financial health and growth potential, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro, which covers over 1,400 US stocks with detailed analysis and actionable intelligence.
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