EX 99.1

EXTON, PA — (PR Newswire-First Call) - July 27, 2006) WPCS International Incorporated (Nasdaq: WPCS) has reported its financial results for the fiscal year and fourth quarter ended April 30, 2006. For the fiscal year ended April 30, 2006, WPCS reported total revenue of approximately $52.1 million compared to $40.1 million for the same period a year ago, which represents an increase of approximately 30%. For the year ended April 30, 2006, non-GAAP net income was approximately $2.5 million or $0.58 per diluted share, compared to a non-GAAP net loss of $85,000 or $0.03 per share for the same period a year ago.

From a GAAP perspective, the fourth quarter ended April 30, 2006 generated net income of approximately $8.0 million or $1.62 per diluted share, which includes a non-cash gain of approximately $7.3 million related to accounting for warrant liabilities under EITF 00-19. For the same period in the prior year, the reported net income was approximately $2.0 million or $0.51 per share, which included a non-cash gain of approximately $2.3 million related to accounting for warrant liabilities under EITF 00-19. For FY2006, the company reported a net loss of approximately $1.6 million or $0.40 per share, which includes a non-cash loss of approximately $4.1 million related to accounting for warrant liabilities under EITF 00-19. For the same period in the prior year, the reported net income was $1.3 million or $0.49 per share, which also included a non-cash gain of approximately $1.4 million related to accounting for warrant liabilities under EITF 00-19.

Andrew Hidalgo, CEO of WPCS International Incorporated, commented: “FY2006 was a very successful year for the company. From a non-GAAP perspective, we achieved the projected EPS target of $0.58 for the year and reached new highs in revenue and earnings. Although we had to comply with the accounting issues caused by EITF 00-19, which generated significant non-cash charges, we were able to eliminate these non-cash charges going forward and post a substantial credit in the fourth quarter. Addressing EITF 00-19 has overshadowed what has been a very successful year for WPCS and has caused some confusion for our investors. However, it is important for our investors to know that these charges and credits were non-cash related and do not affect the financial health of WPCS. It is all behind us and now we can focus on FY2007, which we believe will be our most successful year thus far.”

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.

WPCS INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS


			Year Ended		(Unaudited) Three Months Ended
			April 30,		April 30,
			2006	2005	2006	2005
				(Note 1)		(Note 1)

REVENUE			$52,144,575	$40,148,233	$13,901,504	$11,132,837

COSTS AND EXPENSES:
	Cost of revenue		38,010,945	32,445,470	10,284,208	9,008,148
	Selling, general and administrative expenses		9,191,392	7,032,504	2,358,446	2,271,896
	Depreciation and amortization		837,789	682,397	204,395	251,959

		Total costs and expenses	48,040,126	40,160,371	12,847,049	11,532,003

OPERATING INCOME (LOSS)			4,104,449	(12,138)	1,054,455	(399,166)

OTHER EXPENSE (INCOME):
	Interest expense		256,022	31,865	73,590	12,125
	Interest income		(121,720)	(10,817)	(68,984)	(6,048)
	Loss (gain) on change in fair value of warrants		4,078,494	(1,414,263)	(7,327,920)	(2,254,762)

INCOME (LOSS) BEFORE INCOME TAX PROVISION			(108,347)	1,381,077	8,377,769	1,849,519

Income tax provision			1,515,773	52,096	362,000	(109,640)

NET INCOME (LOSS)			($1,624,120)	$1,328,981	$8,015,769	$1,959,159

Basic net income (loss) per common share			($0.40)	$0.50	$1.75	$0.51

Diluted net income (loss) per common share			($0.40)	$0.49	$1.62	$0.51

Basic weighted average number of common shares outstanding			4,057,940	2,679,529	4,577,557	3,821,385

Diluted weighted average number of common shares outstanding			4,057,940	2,729,866	4,943,810	3,830,846

WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	April 30,		April 30,
ASSETS	2006		2005

CURRENT ASSETS:
Cash and cash equivalents	$	12,279,646	$	989,252
Accounts receivable, net of allowance of $104,786 and $75,786 at April 30, 2006 and 2005, respectively		12,141,789		9,907,316
Costs and estimated earnings in excess of billings on uncompleted contracts		1,441,977		908,955
Inventory		1,204,540		885,624
Prepaid expenses and other current assets		286,625		536,331
Deferred income taxes		78,000		62,000
Total current assets		27,432,577		13,289,478

PROPERTY AND EQUIPMENT, net		1,352,216		1,560,271

CUSTOMER LISTS, net		864,388		1,158,388

GOODWILL		14,239,918		13,961,642

DEBT ISSUANCE COSTS, net		111,091		-

DEFERRED INCOME TAXES		51,000		50,000

OTHER ASSETS		71,128		156,932

Total assets	$	44,122,318	$	30,176,711

WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (continued)

	April 30,			April 30,
LIABILITIES AND SHAREHOLDERS' EQUITY	2006			2005
				(Note 1)
CURRENT LIABILITIES:
Borrowings under line of credit	$	-		$	382,281
Current portion of capital lease obligation		-			2,073
Current portion of loans payable		231,065			187,420
Accounts payable and accrued expenses		4,989,861			5,338,813
Billings in excess of costs and estimated earnings on uncompleted contracts		1,213,364			1,204,491
Due to shareholders		381,377			915,290
Income taxes payable		420,066			24,790
Deferred income taxes		21,000			139,000
Total current liabilities		7,256,733			8,194,158

Borrowings under line of credit		3,000,000			-
Loans payable, net of current portion		256,692			261,455
Due to shareholders, net of current portion		514,623			927,005
Deferred income taxes		531,000			439,000
Warrant liability		-			1,994,570
Total liabilities		11,559,048			11,816,188

COMMITMENTS AND CONTINGENCIES

COMMON STOCK WITH REGISTRATION RIGHTS:
Common stock subject to continuing registration, $0.0001 par value, 2,083,887 shares
issued and outstanding at April 30, 2005		-			5,732,116

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, 5,264,284 and 1,737,498 shares issued and outstanding at April 30, 2006 and 2005, respectively		526			174
Additional paid-in capital		33,525,130			11,966,499
Retained earnings (accumulated deficit)		(962,386	)		661,734

Total shareholders' equity		32,563,270			12,628,407

Total liabilities and shareholders' equity	$	44,122,318		$	30,176,711

Note 1: Certain reclassifications have been made to prior period financial statements to conform to current presentation.

Reconciliation of Non-GAAP Financial Measure (Unaudited)

		Year Ended		Three Months Ended
		April 30,		April 30,
		2006	2005	2006	2005

NET INCOME (LOSS), as reported		($1,624,120)	$1,328,981	$8,015,769	$1,959,159

Plus:	Loss (gain) on change in fair value of warrants	4,078,494	(1,414,263)	(7,327,920)	(2,254,762)

NET INCOME (LOSS), Non-GAAP		$2,454,374	($85,282)	$687,849	($295,603)

Basic net income (loss) per common share, Non-GAAP		$0.60	($0.03)	$0.15	($0.08)

Diluted net income (loss) per common share, Non-GAAP		$0.58	($0.03)	$0.14	($0.08)

Basic weighted average number of common shares outstanding		4,057,940	2,679,529	4,577,557	3,821,385

Diluted weighted average number of common shares outstanding		4,202,772	2,679,529	4,943,810	3,821,385