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