Exhibit 99.1
| PRESS RELEASE | SOURCE: WPCS International Incorporated |
WPCS Reports FY2009 Fourth Quarter and Year End Financial Results
EXTON, PA - (PR Newswire-First Call) - - July 29, 2009 - NASDAQ: WPCS - News) - WPCS International Incorporated (NASDAQ: WPCS), a leader in design-build engineering services for communications infrastructure, today announced financial results for its fourth quarter and year end April 30, 2009. For the fourth quarter ended April 30, 2009, WPCS reported revenue of $24.7 million compared to $26.7 million a year ago and net income was $293,000 or $0.04 per diluted share compared to net income of $921,000 or $0.13 per diluted share for the same period in the prior year. For the fiscal year ended April 30, 2009, WPCS reported revenue of $107.1 million compared to $101.4 million during the fiscal year ended April 30, 2008, which represents a 6% increase. Net income for fiscal year ended April 30, 2009 was $1.7 million or $0.23 per diluted share compared to $4.1 million or $0.52 per diluted share for the same period in the prior year.
“We were pleased with the company’s ability to remain profitable during fiscal year 2009, despite the challenging global economic conditions,” stated Andy Hidalgo, CEO of WPCS. “We remain committed to controlling the company’s cost structure and maintaining a strong working capital position while investing in our growth initiatives. The company continues to maintain a healthy balance sheet with $21.0 million in working capital, $5.6 million in credit line borrowing and $6.4 million in cash. In addition, the credit line borrowing to working capital ratio remains strong at 27%. For the year ended April 30, 2009, revenue segmentation was approximately 32% wireless communication, 15% specialty construction and 53% electrical power. The consolidated gross margin for the year was 27%. As of April 30, 2009, WPCS had approximately $38 million of backlog and a $169 million bid list. We continue to focus on targeting markets such as public services, healthcare, energy and international. These markets are displaying resiliency against an adverse economic climate. The management team remains optimistic in achieving our financial objectives for the current fiscal year.”
WPCS is reiterating guidance for its fiscal year 2010 ending April 30, 2010, of approximately $112 million in revenue and net income within a range of $2.2 million to $2.4 million. The fully diluted earnings per share is estimated to be within a range of $0.31 to $0.34 for the year. As a reminder, there will be an investor conference call at 5:00 pm ET today. To participate on the conference call, please dial 888-299-4099 for calls within the U.S. and 302-709-8337 for calls from international locations. Upon reaching the operator, verbally transmit the participant code VH85435. Andy Hidalgo, CEO of WPCS, will be discussing the company’s financial results, market conditions and strategic development. When the overview concludes, your questions can be asked by pressing *1 and your questions can be removed from the queue by pressing the number sign. Replays of the conference call will be available for a period of five days by dialing 402-220-2946 and using 85435 # as the pass code.
About WPCS International Incorporated:
WPCS is a design-build engineering company that focuses on the implementation requirements of communications infrastructure. The company provides its engineering capabilities including wireless communication, specialty construction and electrical power to the public services, healthcare, energy and corporate enterprise markets worldwide. For more information, please visit 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:
WPCS International Incorporated
610-903-0400 x101
ir@wpcs.com
| WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||
| April 30, | April 30, | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
| REVENUE | $ | 24,742,726 | $ | 26,707,999 | $ | 107,101,360 | $ | 101,431,128 | ||||||||
| COSTS AND EXPENSES: | ||||||||||||||||
| Cost of revenue | 18,358,718 | 19,239,593 | 78,334,115 | 73,084,310 | ||||||||||||
| Selling, general and administrative expenses | 5,265,210 | 5,150,992 | 23,052,464 | 19,302,773 | ||||||||||||
| Depreciation and amortization | 623,944 | 782,399 | 2,578,824 | 2,398,603 | ||||||||||||
| Total costs and expenses | 24,247,872 | 25,172,984 | 103,965,403 | 94,785,686 | ||||||||||||
| OPERATING INCOME | 494,854 | 1,535,015 | 3,135,957 | 6,645,442 | ||||||||||||
| OTHER EXPENSE (INCOME): | ||||||||||||||||
| Interest expense | 87,258 | 145,497 | 421,022 | 522,984 | ||||||||||||
| Interest income | (2,792 | ) | (74,865 | ) | (53,947 | ) | (511,122 | ) | ||||||||
| Minority interest | (26,809 | ) | (58,996 | ) | 108,228 | (22,115 | ) | |||||||||
| INCOME BEFORE INCOME TAX PROVISION | 437,197 | 1,523,379 | 2,660,654 | 6,655,695 | ||||||||||||
| Income tax provision | 143,787 | 602,463 | 989,027 | 2,577,348 | ||||||||||||
| NET INCOME | $ | 293,410 | $ | 920,916 | $ | 1,671,627 | $ | 4,078,347 | ||||||||
| Basic net income per common share | $ | 0.04 | $ | 0.13 | $ | 0.23 | $ | 0.58 | ||||||||
| Diluted net income per common share | $ | 0.04 | $ | 0.13 | $ | 0.23 | $ | 0.52 | ||||||||
| Basic weighted average number of common shares outstanding | 6,942,266 | 7,218,643 | 7,131,967 | 7,090,789 | ||||||||||||
| Diluted weighted average number of common shares outstanding | 6,942,266 | 7,264,688 | 7,154,285 | 7,848,341 | ||||||||||||
| WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| April 30, | April 30, | |||||||
| ASSETS | 2009 | 2008 | ||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 6,396,810 | $ | 7,449,530 | ||||
| Accounts receivable, net of allowance of $155,458 and $98,786 at April 30, 2009 and April 30, 2008, respectively | 25,662,784 | 29,092,488 | ||||||
| Costs and estimated earnings in excess of billings on uncompleted contracts | 5,229,043 | 3,887,152 | ||||||
| Inventory | 2,481,383 | 2,791,782 | ||||||
| Prepaid expenses and other current assets | 1,674,952 | 1,002,993 | ||||||
| Prepaid income taxes | 295,683 | 122,342 | ||||||
| Deferred tax assets | 70,413 | 35,939 | ||||||
| Total current assets | 41,811,068 | 44,382,226 | ||||||
| PROPERTY AND EQUIPMENT, net | 6,668,032 | 6,828,162 | ||||||
| OTHER INTANGIBLE ASSETS, net | 1,983,879 | 2,929,937 | ||||||
| GOODWILL | 32,549,186 | 28,987,501 | ||||||
| OTHER ASSETS | 132,948 | 820,315 | ||||||
| Total assets | $ | 83,145,113 | $ | 83,948,141 | ||||
| WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES | ||||||||
| CONSOLIDATED BALANCE SHEETS (continued) | ||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | April 30, | April 30, | ||||||
| 2009 | 2008 | |||||||
| CURRENT LIABILITIES: | ||||||||
| Current portion of loans payable | $ | 89,210 | $ | 1,272,112 | ||||
| Borrowings under line of credit | 5,626,056 | 750,000 | ||||||
| Current portion of capital lease obligations | 96,001 | 91,491 | ||||||
| Accounts payable and accrued expenses | 8,997,296 | 9,305,791 | ||||||
| Billings in excess of costs and estimated earnings on uncompleted contracts | 2,511,220 | 3,602,422 | ||||||
| Deferred revenue | 507,650 | 602,560 | ||||||
| Due to shareholders | 2,951,008 | 2,300,083 | ||||||
| Total current liabilities | 20,778,441 | 17,924,459 | ||||||
| Borrowings under line of credit | - | 4,376,056 | ||||||
| Loans payable, net of current portion | 71,634 | 156,978 | ||||||
| Capital lease obligations, net of current portion | 151,425 | 215,780 | ||||||
| Deferred tax liabilities | 1,467,971 | 1,173,786 | ||||||
| Total liabilities | 22,469,471 | 23,847,059 | ||||||
| Minority interest in subsidiary | 1,440,078 | 1,331,850 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| SHAREHOLDERS' EQUITY: | ||||||||
| Preferred stock - $0.0001 par value, 5,000,000 shares authorized, none issued | - | - | ||||||
| Common stock - $0.0001 par value, 25,000,000 shares authorized, 6,942,266 and 7,251,083 shares issued and outstanding at April 30, 2009 and April 30, 2008, respectively | 694 | 725 | ||||||
| Additional paid-in capital | 50,175,479 | 50,775,938 | ||||||
| Retained earnings | 9,381,189 | 7,709,562 | ||||||
| Accumulated other comprehensive (loss) income on foreign currency translation | (321,798 | ) | 283,007 | |||||
| Total shareholders' equity | 59,235,564 | 58,769,232 | ||||||
| Total liabilities and shareholders' equity | $ | 83,145,113 | $ | 83,948,141 | ||||