Exhibit 99.1

 
PRESS RELEASE 
 SOURCE: WPCS International Incorporated
   
 
                                                                                                   

WPCS Reports Third Quarter FY2009 Financial Results

EXTON, PA - (PR Newswire-First Call) - - March 17, 2009 - NASDAQ: WPCS - News)  - WPCS International Incorporated (NASDAQ: WPCS), a leader in design-build engineering services for communications infrastructure, today reported financial results for the third quarter of fiscal year 2009 ended January 31, 2009. WPCS reported revenue of approximately $25.3 million for the third quarter compared to $24.8 million for the same period in the prior year, which represents an increase of 2%. WPCS reported net income of approximately $178,000 or $0.03 per diluted share for the third quarter compared to approximately $383,000 or $0.05 per diluted share for the same period in the prior year. Year to date through the nine months ended January 31, 2009 WPCS reported revenue of approximately $82.4 million compared to $74.7 million for the same period in the prior year, which represents a 10% increase. For the nine month period, the reported net income was approximately $1.4 million or $0.19 per diluted share compared to net income of approximately $3.2 million or $0.40 per diluted share for the same period in the prior year.

The company continues to maintain a healthy balance sheet with $28.3 million in working capital, $7.6 million in credit line borrowing and approximately $10 million in cash. In addition, the credit line borrowing to working capital ratio remains strong at 27%. Accounts receivable remained stable with day sales outstanding of 68 days. For the third quarter, the specialty communications sector represented 91% of revenue while the wireless infrastructure sector represented the other 9%. The consolidated gross margin for the third quarter was 27%. As of January 31, 2009, WPCS had approximately $41 million of backlog and a $136 million bid list. After reviewing the projected backlog recognition for the fourth quarter, it is now estimated that fiscal year 2009, ending April 30, 2009, will produce $0.25 in earnings per diluted share.  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 VH80444. Andrew Hidalgo, CEO of WPCS, will be discussing the company’s financial results, market conditions and strategic initiatives underway. 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 80444 # as the pass code.

Andrew Hidalgo, CEO of WPCS, commented, “Although as a company, we are consistently profitable with a strong balance sheet during these difficult economic times, the quarterly results are still not satisfactory. We have more to achieve. The lower earnings had been a result of a temporary slow down in public services spending. In general, local government and education held back on infrastructure spending until it became clear what additional funding would be made available through the stimulus package. The positive news is that the stimulus package has been legislated and although funds have yet to be disbursed, we have seen an increase in bid solicitations. The stimulus package has allocated $142 billion in infrastructure spending for the public services, healthcare and energy sectors which are the three primary sectors we have been successfully servicing for many years. We believe our opportunities to grow earnings and build shareholder value have increased and we look forward to a much improved fiscal year 2010.”

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
  
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
  
Unaudited
  
   
                         
   
Three Months Ended
    
Nine Months Ended
  
   
January 31,
    
January 31,
  
   
2009
    
2008
    
2009
    
2008
  
                         
REVENUE
   $ 25,323,422     $ 24,802,079     $ 82,358,634     $ 74,723,129  
                                 
COSTS AND EXPENSES:
                                
Cost of revenue
     18,369,219       18,010,149       59,975,397       53,844,717  
Selling, general and administrative expenses
     5,904,094       5,573,644       17,787,254       14,151,781  
Depreciation and amortization
     614,699       618,002       1,954,880       1,616,204  
                                 
Total costs and expenses
     24,888,012       24,201,795       79,717,531       69,612,702  
                                 
OPERATING INCOME
     435,410       600,284       2,641,103       5,110,427  
                                 
OTHER EXPENSE (INCOME):
                                
Interest expense
     85,480       69,269       333,764       377,487  
Interest income
     (3,042 )     (81,082 )     (51,155 )     (436,257 )
Minority interest
     73,840       (23,907 )     135,037       36,881  
                                 
INCOME BEFORE INCOME TAX PROVISION
     279,132       636,004       2,223,457       5,132,316  
                                 
Income tax provision
     101,036       252,701       845,240       1,974,885  
                                 
NET INCOME
   $ 178,096     $ 383,303     $ 1,378,217     $ 3,157,431  
                                 
Basic net income per common share
   $ 0.03     $ 0.05     $ 0.19     $ 0.45  
                                 
Diluted net income per common share
   $ 0.03     $ 0.05     $ 0.19     $ 0.40  
                                 
Basic weighted average number of common shares outstanding
     7,077,249       7,093,662       7,193,138       7,049,099  
                                 
Diluted weighted average number of common shares outstanding
     7,077,249       7,804,998       7,213,744       7,956,557  

 
 
 
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WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES
  
CONDENSED CONSOLIDATED BALANCE SHEETS
  
   
             
   
January 31,
    
April 30,
  
ASSETS
  
2009
    
2008
  
   
(Unaudited)
    
(Note 1)
  
CURRENT ASSETS:
            
             
Cash and cash equivalents
   $ 9,665,638     $ 7,449,530  
Accounts receivable, net of allowance of $113,613 and $98,786 at January 31, 2009 and April 30, 2008, respectively
     23,225,223       29,092,488  
Costs and estimated earnings in excess of billings on uncompleted contracts
     4,572,978       3,887,152  
Inventory
     2,757,475       2,791,782  
Prepaid expenses and other current assets
     1,768,849       1,002,993  
Prepaid income taxes
     361,103       122,342  
Deferred tax assets
     114,999       35,939  
Total current assets
     42,466,265       44,382,226  
                 
PROPERTY AND EQUIPMENT, net
     6,598,938       6,828,162  
                 
OTHER INTANGIBLE ASSETS, net
     2,069,547       2,929,937  
                 
GOODWILL
     32,256,592       28,987,501  
                 
OTHER ASSETS
     159,166       820,315  
                 
Total assets
   $ 83,550,508     $ 83,948,141  

 
 
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WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
 

LIABILITIES AND SHAREHOLDERS' EQUITY
  
January 31,
    
April 30,
  
   
2009
    
2008
  
   
(Unaudited)
    
(Note 1)
  
CURRENT LIABILITIES:
            
             
Current portion of loans payable
   $ 97,339     $ 1,272,112  
Borrowings under line of credit
     -       750,000  
Current portion of capital lease obligations
     97,425       91,491  
Accounts payable and accrued expenses
     6,589,306       9,305,791  
Billings in excess of costs and estimated earnings on uncompleted contracts
     3,366,170       3,602,422  
Deferred revenue
     706,449       602,560  
Due to shareholders
     3,334,135       2,300,083  
Total current liabilities
     14,190,824       17,924,459  
                 
Borrowings under line of credit
     7,626,056       4,376,056  
Loans payable, net of current portion
     86,786       156,978  
Capital lease obligations, net of current portion
     183,024       215,780  
Deferred tax liabilities
     1,253,252       1,173,786  
Total liabilities
     23,339,942       23,847,059  
                 
Minority interest in subsidiary
     1,466,887       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 January 31, 2009 and April 30, 2008, respectively
     694       725  
Additional paid-in capital
     50,133,358       50,775,938  
Retained earnings
     9,087,779       7,709,562  
Accumulated other comprehensive (loss) income on foreign currency translation
     (478,152 )     283,007  
                 
Total shareholders' equity
     58,743,679       58,769,232  
                 
Total liabilities and shareholders' equity
   $ 83,550,508     $ 83,948,141  


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