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EXTON, PA - (Marketwire – September 14, 2011) - WPCS International Incorporated (NASDAQ: WPCS), a leader in design-build engineering services for communications infrastructure, today announced financial results for the fiscal year 2012 first quarter ended July 31, 2011. For the first quarter, WPCS reported revenue of $25.4 million compared to $17.8 million in the preceding quarter ended April 30, 2011, which represents an increase of approximately 43%. The Company generated revenue of $28.9 million for the same period a year ago.

In the first quarter, WPCS generated EBITDA of approximately $753,000 compared to an EBITDA loss of $5.1 million in the preceding quarter ended April 30, 2011. The Company generated $238,000 in EBITDA for the same period a year ago. EBITDA is defined as earnings before interest, taxes, acquisition-related contingent earn-out costs, one-time charges related to seeking strategic alternatives including the possible sale of the company and depreciation and amortization.

Andrew Hidalgo, CEO of WPCS, commented, “We are pleased to announce that we achieved profitable EBITDA results for the quarter. This marks what we believe is the beginning of our turnaround from a difficult prior year. The first quarter was very encouraging. We experienced solid revenue growth over the preceding quarter while maintaining a healthy backlog and bid list. Our balance sheet remains strong with $4.1 million in cash and $15.2 million in working capital. Our net tangible asset value is $22.6 million or $3.25 per diluted share. We are very excited about the opportunities in our current fiscal year and we look forward to achieving profitable quarters ahead.”

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. or 302-709-8337 for calls from international locations. Upon reaching the operator, verbally transmit the participant code VH16503. 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 call will be available for a period of five days by dialing 402-220-2946 and entering 16503 # as the program identification number.

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.

This press release includes financial measures that are not in accordance with GAAP, consisting of EBITDA and net tangible asset value. Management uses EBITDA to evaluate the Company's operating and financial performance in light of business objectives, for planning purposes, when publicly providing our business outlook and to facilitate period-to-period comparisons. Management uses net tangible asset value to evaluate the strength of the Company’s balance sheet. WPCS believes that these measures are useful to investors because they enhance investors' ability to review the Company's business from the same perspective as our management and to facilitate comparisons of this period's results with prior periods. Non-GAAP measures are used by some investors when assessing the ongoing operating and financial performance of our Company. These financial measures are not in accordance with GAAP and may differ from non-GAAP methods of accounting and reporting used by other companies. The presentation of the additional information should not be considered a substitute for net income (loss) or net income (loss) per diluted share prepared in accordance with GAAP. The primary material limitations associated with the use of non-GAAP measures as compared to the most directly comparable GAAP financial measures are (i) they may not be comparable to similarly titled measures used by other companies in our industry, and (ii) they exclude financial information that some may consider important in evaluating our performance. Pursuant to the requirements of Regulation G, WPCS has included a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

	Three Months Ended
	July 31,
	2011			2010

REVENUE	$	25,419,503		$	28,852,498

COSTS AND EXPENSES:
Cost of revenue		19,573,186			22,697,975
Selling, general and administrative expenses		5,156,522			5,916,327
Depreciation and amortization		604,832			734,615
Change in fair value of acquisition-related contingent consideration		43,068			63,052

		25,377,608			29,411,969

OPERATING INCOME (LOSS)		41,895			(559,471	)

OTHER EXPENSE (INCOME):
Interest expense		95,932			54,635
Interest income		(8,476	)		(10,069	)

LOSS BEFORE INCOME TAX BENEFIT		(45,561	)		(604,037	)

Income tax benefit		(26,340	)		(238,379	)

CONSOLIDATED NET LOSS		(19,221	)		(365,658	)

Net income attributable to noncontrolling interest		15,456			10,293

NET LOSS ATTRIBUTABLE TO WPCS	$	(34,677	)	$	(375,951	)

Basic net loss per common share attributable to WPCS	$	(0.00	)	$	(0.05	)

Diluted net loss per common share attributable to WPCS	$	(0.00	)	$	(0.05	)

Basic weighted average number of common shares outstanding		6,954,766			6,954,766

Diluted weighted average number of common shares outstanding		6,954,766			6,954,766

	July 31,		April 30,
ASSETS	2011		2011
	(Unaudited)
CURRENT ASSETS:

Cash and cash equivalents	$	4,063,322	$	4,879,106
Accounts receivable, net of allowance of $1,631,985 and $1,662,168 at
July 31, 2011 and April 30, 2011, respectively		25,777,082		22,474,024
Costs and estimated earnings in excess of billings on uncompleted contracts		4,546,270		4,669,012
Inventory		1,606,385		1,972,905
Prepaid expenses and other current assets		1,592,500		1,413,151
Prepaid income taxes		214,897		173,700
Income taxes receivable		1,185,000		1,166,225
Deferred tax assets		2,642,598		2,621,329
Total current assets		41,628,054		39,369,452

PROPERTY AND EQUIPMENT, net		5,909,461		6,035,353

OTHER INTANGIBLE ASSETS, net		742,897		803,171

GOODWILL		2,038,978		2,044,856

DEFERRED TAX ASSETS		2,674,841		2,675,511

OTHER ASSETS		134,145		134,654

Total assets	$	53,128,376	$	51,062,997

LIABILITIES AND EQUITY	July 31,			April 30,
	2011			2011
	(Unaudited)
CURRENT LIABILITIES:

Current portion of loans payable	$	97,299		$	35,724
Borrowings under line of credit		5,560,977			7,000,000
Current portion of capital lease obligations		48,175			54,496
Accounts payable and accrued expenses		13,599,932			10,249,503
Billings in excess of costs and estimated earnings on uncompleted contracts		2,168,352			2,039,117
Deferred revenue		809,169			792,414
Due joint venture partner		3,134,583			3,415,641
Acquisition-related contingent consideration		1,049,011			1,008,200
Total current liabilities		26,467,498			24,595,095

Loans payable, net of current portion		211,677			10,554
Capital lease obligations, net of current portion		5,432			15,465
Total liabilities		26,684,607			24,621,114


COMMITMENTS AND CONTINGENCIES

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, 6,954,766
shares issued and outstanding at July 31, 2011 and April 30, 2011		695			695
Additional paid-in capital		50,453,914			50,433,626
Accumulated deficit		(26,630,508	)		(26,595,831	)
Accumulated other comprehensive income on foreign currency translation, net of
tax effects of $191,979 and $185,060 at July 31, 2011 and April 30, 2011, respectively		1,560,411			1,564,965

Total WPCS shareholders' equity		25,384,512			25,403,455

Noncontrolling interest		1,059,257			1,038,428

Total equity		26,443,769			26,441,883

Total liabilities and equity	$	53,128,376		$	51,062,997

		Three Months Ended
		July 31,
		2011			2010

NET LOSS ATTRIBUTABLE TO WPCS, GAAP		$	(34,677	)	$	(375,951	)

Plus:
	Net income attributable to noncontrolling interest		15,456			10,293
	Income tax benefit		(26,340	)		(238,379	)
	Interest expense		95,932			54,635
	Interest income		(8,476	)		(10,069	)
	Change in fair value of acquisition-related contingent consideration		43,068			63,052
	One time strategic costs		63,670			-
	Depreciation and amortization		604,832			734,615

Consolidated EBITDA, Non-GAAP		$	753,465		$	238,196

	July 31,		April 30,
	2011		2011

Total WPCS shareholders' equity	$	25,384,512	$	25,403,455
Less:
Goodwill		2,038,978		2,044,856
Other Intangible Assets, net		742,897		803,171

Net tangible asset value	$	22,602,637	$	22,555,428

Diluted weighted average number of common shares outstanding		6,954,766		6,954,766

Net tangible asset value per common share attributable to WPCS	$	3.25	$	3.24