Exhibit 99.1
| PRESS RELEASE | SOURCE: WPCS International Incorporated |
WPCS Reports Record Revenue and $0.72 EPS for FY2007
EXTON, PA - (PR Newswire - First Call) - July 30, 2007) – NASDAQ : WPCS – News) WPCS International Incorporated (WPCS), a leader in design-build engineering services for specialty communication systems and wireless infrastructure, has reported its financial results for the year ended April 30, 2007. For the year ended April 30, 2007, WPCS reported total revenue of approximately $70.0 million compared to $52.1 million a year ago, which represents an increase of approximately 34%. For FY2007, the reported net income was approximately $4.6 million or $0.72 per diluted share. For the same period last year, the reported net loss was approximately $1.6 million or $0.40 per diluted share which included a non-cash charge of approximately $4.1 million related to accounting for warrant liabilities.
Andrew Hidalgo, CEO of WPCS International Incorporated, stated: “FY2007 was a very successful year for WPCS. We achieved record revenue and we also achieved our earnings goal. Along with our outstanding sales results, WPCS strengthened its balance sheet considerably. In addition, we completed four acquisitions which have enhanced our geographic scope and engineering capacity while adding many new customers to our base. We will continue to build on our momentum as we establish our leadership position in specialty communication systems and wireless infrastructure.”
About WPCS International Incorporated:
WPCS International Incorporated provides design-build engineering services for specialty communication systems and wireless infrastructure including site design, integration, structured cabling, electrical contracting, trenching, construction and maintenance for corporations, government entities and educational institutions worldwide. For more information, please visit our website at www.wpcs.com.
Statements about the company's future expectations, including future revenue and earnings and all other statements in this press release, other than historical facts, are "forward looking" statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward looking statements involve risks and uncertainties and are subject to change at any time. The company’s actual results could differ materially from expected results. In reflecting subsequent events or circumstances, the company undertakes no obligation to update forward-looking statements.
CONTACT:
Carol Lindley
WPCS International Incorporated
610-903-0400 x100
ir@wpcs.com
WPCS INTERNATIONAL INC. AND SUBSIDIARIES | |
CONSOLIDATED STATEMENTS OF OPERATIONS | |
| | |
| | | | | | | |
| | | Year Ended | |
| | | April 30, | |
| | | 2007 | | | 2006 | |
| | | | | | | |
| | | | | | | |
| REVENUE | | $ | 70,000,070 | | | $ | 52,144,575 | |
| | | | | | | | | |
| COSTS AND EXPENSES: | | | | | | | | |
| Cost of revenue | | | 47,781,351 | | | | 38,010,945 | |
| Selling, general and administrative expenses | | | 13,244,909 | | | | 9,191,392 | |
| Depreciation and amortization | | | 1,239,486 | | | | 837,789 | |
| | | | | | | | | |
| Total costs and expenses | | | 62,265,746 | | | | 48,040,126 | |
| | | | | | | | | |
| OPERATING INCOME (LOSS) | | | 7,734,324 | | | | 4,104,449 | |
| | | | | | | | | |
| OTHER EXPENSE (INCOME): | | | | | | | | |
| Interest expense | | | 496,330 | | | | 256,022 | |
| Interest income | | | (525,524 | ) | | | (121,720 | ) |
| Minority interest | | | 23,099 | | | | - | |
| Loss (gain) on change in fair value of warrants | | | - | | | | 4,078,494 | |
| | | | | | | | | |
| INCOME (LOSS) BEFORE INCOME TAX PROVISION | | | 7,740,419 | | | | (108,347 | ) |
| | | | | | | | | |
| Income tax provision | | | 3,146,818 | | | | 1,515,773 | |
| | | | | | | | | |
| NET INCOME (LOSS) | | $ | 4,593,601 | | | $ | (1,624,120 | ) |
| | | | | | | | | |
| Basic net income (loss) per common share | | $ | 0.80 | | | $ | (0.40 | ) |
| | | | | | | | | |
| Diluted net income (loss) per common share | | $ | 0.72 | | | $ | (0.40 | ) |
| | | | | | | | | |
| Basic weighted average number of common shares outstanding | | | 5,772,423 | | | | 4,057,940 | |
| | | | | | | | | |
| Diluted weighted average number of common shares outstanding | | | 6,409,333 | | | | 4,057,940 | |
WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| | | April 30, | | April 30, | |
ASSETS | | 2007 | | 2006 | |
| | | | | | |
| CURRENT ASSETS: | | | | | |
| Cash and cash equivalents | | $ | 21,558,739 | | $ | 12,279,646 | |
| Accounts receivable, net of allowance of $98,786 and $104,786 at April 30, 2007 and 2006, respectively | | | 16,560,636 | | | 12,141,789 | |
| Costs and estimated earnings in excess of billings on uncompleted contracts | | | 2,499,940 | | | 1,441,977 | |
| Inventory | | | 2,260,082 | | | 1,204,540 | |
| Prepaid expenses and other current assets | | | 732,043 | | | 286,625 | |
| Deferred tax assets | | | 54,000 | | | 78,000 | |
| Total current assets | | | 43,665,440 | | | 27,432,577 | |
| | | | | | | | |
| PROPERTY AND EQUIPMENT, net | | | 5,488,920 | | | 1,352,216 | |
| | | | | | | | |
| OTHER INTANGIBLE ASSETS, net | | | 1,683,349 | | | 864,388 | |
| | | | | | | | |
| GOODWILL | | | 20,469,608 | | | 14,239,918 | |
| | | | | | | | |
| DEBT ISSUANCE COSTS, net | | | 10,000 | | | 111,091 | |
| | | | | | | | |
| DEFERRED TAX ASSETS | | | 111,000 | | | 51,000 | |
| | | | | | | | |
| OTHER ASSETS | | | 263,353 | | | 71,128 | |
| | | | | | | | |
| Total assets | | $ | 71,691,670 | | $ | 44,122,318 | |
| | | | | | | | |
| | | April 30, | | April 30, | |
LIABILITIES AND SHAREHOLDERS' EQUITY | | 2007 | | 2006 | |
| | | | | | |
| CURRENT LIABILITIES: | | | | | |
| | | | | | |
| Current portion of loans payable | | $ | 2,598,872 | | $ | 231,065 | |
| Accounts payable and accrued expenses | | | 6,802,110 | | | 4,989,861 | |
| Billings in excess of costs and estimated earnings on uncompleted contracts | | | 2,272,688 | | | 1,085,312 | |
| Deferred revenue | | | 504,458 | | | 128,052 | |
| Due to shareholders | | | 707,000 | | | 381,377 | |
| Income taxes payable | | | 433,361 | | | 420,066 | |
| Deferred tax liabilities | | | 27,000 | | | 21,000 | |
| Total current liabilities | | | 13,345,489 | | | 7,256,733 | |
| | | | | | | | |
| Borrowings under line of credit | | | 4,454,217 | | | 3,000,000 | |
| Loans payable, net of current portion | | | 284,016 | | | 256,692 | |
| Due to shareholders, net of current portion | | | - | | | 514,623 | |
| Deferred tax liabilities | | | 722,000 | | | 531,000 | |
| Total liabilities | | | 18,805,722 | | | 11,559,048 | |
| | | | | | | | |
| Minority interest in subsidiary | | | 1,353,965 | | | - | |
| COMMITMENTS AND CONTINGENCIES | | | | | | | |
| | | | | | | | |
| SHAREHOLDERS' EQUITY: | | | | | | | |
| Preferred stock - $0.0001 par value, 5,000,000 shares authorized, none issued | | | - | | | - | |
| | | | | | | | |
| Common stock - $0.0001 par value, 75,000,000 shares authorized, 6,971,698 and 5,264,284 shares issued and outstanding at April 30, 2007 and 2006, respectively | | | 696 | | | 526 | |
| Additional paid-in capital | | | 47,901,160 | | | 33,525,130 | |
| Retained earnings (accumulated deficit) | | | 3,631,215 | | | (962,386 | ) |
| Accumulated other comprehensive loss on translation of currency exchange | | | (1,088 | ) | | - | |
| | | | | | | | |
| Total shareholders' equity | | | 51,531,983 | | | 32,563,270 | |
| | | | | | | | |
| Total liabilities and shareholders' equity | | $ | 71,691,670 | | $ | 44,122,318 | |
