PRESS
RELEASE SOURCE:
WPCS International Incorporated
WPCS
Outlines Short-Term Strategic Plan
EXTON,
PA — (PR Newswire-First Call) - April 12, 2006 - NASDAQ: WPCS
- News)
WPCS
International Incorporated (WPCS), today announced that it has completed
an
agreement to modify the registration rights agreement associated with the
common
stock and warrants issued in November 2004 affected by EITF 00-19. This
modification will eliminate the provision for penalties resulting from
not
maintaining the effectiveness of the registration statement related to
these
common shares and shares underlying the warrants.
Therefore,
as of April 11, 2006, WPCS expects to record a credit of approximately
$7.3
million against previously posted non-cash charges, which will generate
an
estimated EPS of $1.47 to $1.51 per diluted share on a GAAP basis in the
current
fourth quarter ending April 30, 2006. WPCS will no longer incur any non-cash
charges pertaining to the warrants from this equity raise. In addition,
the
liabilities recorded on the balance sheet due to EITF 00-19 will be reclassified
to shareholders’ equity thereby re-establishing the positive net tangible asset
value of the company.
In
February 2006, WPCS filed an SB-2 registration statement with the SEC for
a
secondary equity offering of approximately 2 million common shares to be
used
primarily for acquisitions and working capital. As stated in the March
22, 2006
investor conference call, the company has decided not to proceed with this
offering due to market conditions. However, WPCS will continue to pursue
its
acquisition strategy with current available cash and to that end, WPCS
today
completed a sale of 876,931 registered shares of common stock to an
institutional investor, priced at $7.00 per share with no warrants. In
addition,
this investor agreed to waive the anti-dilution provisions in its warrant
agreement dated November 16, 2004.
Andrew
Hidalgo, CEO of WPCS, commented: “WPCS continues to have a successful year and
we are reaffirming the non-GAAP EPS guidance of $0.58 for FY2006, which
ends on
April 30, 2006. Our new short-term strategy has allowed us to reverse previously
recorded non-cash charges and terminate any future non-cash charges associated
with the warrants affected by EITF 00-19. Also, by agreeing to a smaller
registered direct sale, WPCS can continue with its organic and acquisition
growth plans which will give us the opportunity to increase our EPS target
for
fiscal year 2007, beginning May 1, 2006. The WPCS management team is excited
about the short-term strategic plan and looks forward to building long-term
value for our shareholders.”
About
WPCS International Incorporated:
WPCS
provides design-build engineering services for specialty communication
systems
and wireless infrastructure including site design, product integration,
trenching, electrical work, structured cabling, testing and project management.
The company has an extensive customer base that includes corporations,
government entities and educational institutions. For more information,
please
visit the website at www.wpcs.com.
Statements
about the company's expectations, including 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:
Heather
Tocket / Corporate Communications Manager
WPCS
International Incorporated
610-903-0400
x102
ir@wpcs.com