Exhibit 99.1

PRESS RELEASE
  
SOURCE: WPCS International Incorporated

WPCS Reports Record Revenue and $0.52 EPS for FY2008


EXTON, PA - July 29, 2008 – WPCS International Incorporated (NASDAQ: WPCS), a leader in design-build engineering services for specialty communication systems and wireless infrastructure, today reported financial results for the fiscal year ended April 30, 2008. WPCS reported record revenue of approximately $101.4 million for fiscal year 2008 compared to $70.0 million a year ago, which represents an increase of approximately 45%. WPCS reported net income of approximately $4.1 million or $0.52 per diluted share for the fiscal year ended April 30, 2008. For the same period last year, the reported net income was approximately $4.6 million or $0.72 per diluted share.

For the fourth quarter ended April 30, 2008, WPCS reported revenue of approximately $26.7 million compared to $17.7 million a year ago, which represents an increase of approximately 51%.  For the fourth quarter, the reported net income was approximately $921,000 or $0.13 per diluted share.  For the same period last year, the reported net income was approximately $1.4 million or $0.18 per diluted share.

The company will be conducting a conference call today at 4:30 pm Eastern Time. 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 VH51651. Andrew Hidalgo, CEO of WPCS, will be discussing the company’s financial performance for FY2008 and will provide an operational and economic overview of the business that will include guidance for fiscal year 2009. 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 800-355-2355 and using 51651# as the pass code.


About WPCS International Incorporated:

WPCS is a design-build engineering company that focuses on the implementation requirements of wireless technology. The company serves the specialty communication systems and wireless infrastructure sectors and provides services that include site design, technology integration, electrical contracting, construction and project management for corporations, government entities and educational institutions 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,
  
   
2008
    
2007
    
2008
    
2007
  
                         
                         
REVENUE
   $ 26,707,999     $ 17,689,343     $ 101,431,128     $ 70,000,070  
                                 
COSTS AND EXPENSES:
                                
Cost of revenue
     19,239,593       11,578,549       73,084,310       47,781,351  
Selling, general and administrative expenses
     5,150,992       3,370,454       19,302,773       13,244,909  
Depreciation and amortization
     782,399       358,521       2,398,603       1,239,486  
                                 
Total costs and expenses
     25,172,984       15,307,524       94,785,686       62,265,746  
                                 
OPERATING INCOME
     1,535,015       2,381,819       6,645,442       7,734,324  
                                 
OTHER EXPENSE (INCOME):
                                
Interest expense
     145,497       169,507       522,984       496,330  
Interest income
     (74,865 )     (230,611 )     (511,122 )     (525,524 )
Minority interest
     (58,996 )     23,099       (22,115 )     23,099  
                                 
INCOME BEFORE INCOME TAX PROVISION
     1,523,379       2,419,824       6,655,695       7,740,419  
                                 
Income tax provision
     602,463       1,057,176       2,577,348       3,146,818  
                                 
NET INCOME
   $ 920,916     $ 1,362,648     $ 4,078,347     $ 4,593,601  
                                 
Basic net income per common share
   $ 0.13     $ 0.20     $ 0.58     $ 0.80  
                                 
Diluted net income per common share
   $ 0.13     $ 0.18     $ 0.52     $ 0.72  
                                 
Basic weighted average number of common shares outstanding
     7,218,643       6,879,964       7,090,789       5,772,423  
                                 
Diluted weighted average number of common shares outstanding
     7,258,741       7,679,006       7,840,852       6,409,333  

 
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WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS


   
April 30,
    
April 30,
  
ASSETS
  
2008
    
2007
  
         
(Note 1)
  
CURRENT ASSETS:
            
             
Cash and cash equivalents
   $ 7,449,530     $ 21,558,739  
Accounts receivable, net of allowance of $98,786 at April 30, 2008 and April 30, 2007
     29,092,488       16,560,636  
Costs and estimated earnings in excess of billings on uncompleted contracts
     3,887,152       2,499,940  
Inventory
     2,791,782       2,260,082  
Prepaid expenses and other current assets
     1,002,993       732,043  
Prepaid income tax
     122,342       -  
Deferred tax assets
     35,939       27,000  
Total current assets
     44,382,226       43,638,440  
                 
PROPERTY AND EQUIPMENT, net
     6,828,162       5,488,920  
                 
OTHER INTANGIBLE ASSETS, net
     2,929,937       1,683,349  
                 
GOODWILL
     28,987,501       20,469,608  
                 
OTHER ASSETS
     820,315       273,353  
                 
Total assets
   $ 83,948,141     $ 71,553,670  

 
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WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (continued)

LIABILITIES AND SHAREHOLDERS' EQUITY
  
April 30,
    
April 30,
  
   
2008
    
2007
  
         
(Note 1)
  
CURRENT LIABILITIES:
            
             
Current portion of loans payable
   $ 1,272,112     $ 1,881,682  
Borrowings under line of credit
     750,000       -  
Current portion of capital lease obligations
     91,491       -  
Accounts payable and accrued expenses
     9,305,791       6,802,110  
Billings in excess of costs and estimated earnings on uncompleted contracts
     3,602,422       2,272,688  
Deferred revenue
     602,560       504,458  
Due to shareholders
     2,300,083       1,424,190  
Income taxes payable
     -       433,361  
Total current liabilities
     17,924,459       13,318,489  
                 
Borrowings under line of credit
     4,376,056       4,454,217  
Loans payable, net of current portion
     156,978       284,016  
Capital lease obligations, net of current portion
     215,780       -  
Deferred tax liabilities
     1,173,786       611,000  
Total liabilities
     23,847,059       18,667,722  
                 
Minority interest in subsidiary
     1,331,850       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, 7,251,083 and 6,971,698 shares issued and outstanding at April 30, 2008 and April 30, 2007, respectively
     725       697  
Additional paid-in capital
     50,775,938       47,901,159  
Retained earnings
     7,709,562       3,631,215  
Accumulated other comprehensive income (loss) on foreign currency translation
     283,007       (1,088 )
                 
Total shareholders' equity
     58,769,232       51,531,983  
                 
Total liabilities and shareholders' equity
   $ 83,948,141     $ 71,553,670  


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