-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KqJpexTQqxR85uWqMcoUAhse3p3hEqMrgyAe8kNb3AmVMwryc4O18lOwbZfE6vg5 IMo9E+8OaiN/eAZEwQSCNQ== 0001013762-05-001837.txt : 20051215 0001013762-05-001837.hdr.sgml : 20051215 20051215093254 ACCESSION NUMBER: 0001013762-05-001837 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20051215 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20051215 DATE AS OF CHANGE: 20051215 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WPCS INTERNATIONAL INC CENTRAL INDEX KEY: 0001086745 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATION SERVICES, NEC [4899] IRS NUMBER: 980204758 STATE OF INCORPORATION: DE FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-26277 FILM NUMBER: 051265346 BUSINESS ADDRESS: STREET 1: 140 SOUTH VILLAGE AVENUE STREET 2: SUITE 20 CITY: EXTON STATE: PA ZIP: 19341 BUSINESS PHONE: 6109030400 MAIL ADDRESS: STREET 1: 140 SOUTH VILLAGE AVENUE STREET 2: SUITE 20 CITY: EXTON STATE: PA ZIP: 19341 FORMER COMPANY: FORMER CONFORMED NAME: PHOENIX STAR VENTURES INC DATE OF NAME CHANGE: 20010424 FORMER COMPANY: FORMER CONFORMED NAME: WOWTOWN COM INC DATE OF NAME CHANGE: 20000315 FORMER COMPANY: FORMER CONFORMED NAME: PARAMOUNT SERVICES CORP DATE OF NAME CHANGE: 19990519 8-K 1 dec1420058k.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant To Section 13 Or 15(D) of The Securities Exchange Act of 1934 Date of report (date of earliest event reported): December 15, 2005 WPCS INTERNATIONAL INCORPORATED (Exact name of registrant as specified in its charter) Delaware 0-26277 98-0204758 (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) One East Uwchlan Avenue, Suite 301, Exton, PA 19341 (Address of principal executive offices) Registrant's telephone number, including area code: (610) 903-0400 Copy of correspondence to: Marc J. Ross, Esq. Sichenzia Ross Friedman Ference LLP 1065 Avenue of the Americas New York, New York 10018 Tel: (212) 930-9700 Fax: (212) 930-9725 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02 Results of Operations and Financial Condition On December 15, 2005, WPCS International Incorporated (the "Company") announced its operating results for the second quarter ended October 31, 2005. A copy of the press release that discusses this matter is filed as Exhibit 99.1 to, and incorporated by reference in, this report. The information in this Current Report is being furnished and shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, except as shall be expressly set forth by specific reference in any such filing. ITEM 9.01 Financial Statements and Exhibits. (c) Exhibits. 99.1 Press Release, dated December 15, 2005, issued by WPCS International Incorporated. 2 SIGNATURE Pursuant to the requirement of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. WPCS INTERNATIONAL INCORPORATED By: /s/ ANDREW HIDALGO -------------------- Andrew Hidalgo President Dated: December 15, 2005 3 EX-99 2 dec1420058k991.txt Exhibit 99.1 PRESS RELEASE SOURCE: WPCS International Incorporated WPCS Posts Record $0.20 EPS for 2nd Quarter FY2006 EXTON, PA -- (PR Newswire-First Call) - December 15, 2005 - NASDAQ: WPCS - News) WPCS International Incorporated (WPCS), a leader in wireless infrastructure services and specialty communication systems, has reported its financial results for the second quarter, ended October 31, 2005. For the quarter ended October 31, 2005, WPCS reported total revenue of approximately $14.3 million compared to $10.3 million for the same period a year ago, which represents an increase of approximately 38%. For the second quarter of FY2006, the reported net income was approximately $785,000 or $0.20 per diluted share. For the same period last year, the reported net income was approximately $31,000 or $0.02 per diluted share. For the six months ended October 31, 2005, WPCS reported total revenue of approximately $26.4 million compared to $17.6 million for the same period a year ago, which represents an increase of approximately 50%. For the six months ended October 31, 2005, the reported net income was approximately $1.1 million or $0.29 per diluted share. For the same period last year, the reported net income was approximately $108,000 or $0.06 per diluted share. For the quarter ended October 31, 2005, EBITDA, or earnings before interest, income taxes, depreciation and amortization was approximately $1.6 million, compared to $172,000 for the same period in the prior year. For the six months ended October 31, 2005, EBITDA, or earnings before interest, income taxes, depreciation and amortization was approximately $2.3 million, compared to $439,000 for the same period in the prior year. The reconciliation of net income per the Condensed Consolidated Statements of Income to the non-GAAP financial measure of EBITDA is included herein. Andrew Hidalgo, CEO of WPCS, stated: "The management team is pleased with the efforts this quarter to produce record revenue, net income and earnings per share for our shareholders. The company is working efficiently and is beginning to generate the results we are capable of delivering. The results posted in the second quarter keeps us right on track for achieving our $0.58 fiscal year diluted EPS objective. Business remains robust and even after posting record revenue of $14.3 million for the quarter the company still maintains a backlog of $20 million of projects that should be recognized over the third and fourth quarters. We also have a bid list that stands at $45 million. Currently, we do not see any slowdown in the deployment of wireless networks and the demand for our engineering services. With a growing customer base, WPCS has established itself as a leader in wireless engineering services for all facets of wireless deployment. The management team is confident in achieving its financial objectives for FY2006 and will review its third quarter results before deciding whether to adjust guidance for this current fiscal year." About WPCS International Incorporated: WPCS International Incorporated is an engineering company that focuses on the implementation requirements of wireless technology and specialty communication systems. The company provides a range of services including site design, product integration, security, structured cabling, construction and project management. The company has an extensive customer base that includes many major corporations, government entities and educational institutions. For more information, please visit our website at 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. Condensed consolidated statements of income and condensed consolidated balance sheets follow. - -------------------------------------------------------------------------------- Contact: Heather Tocket / Corporate Communications Manager WPCS International Incorporated 610-903-0400 x102 ir@wpcs.com WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ended Six Months Ended October 31, October 31, 2005 2004 2005 2004 -------------- -------------- ---------------- ---------------- (Note 1,2) (Note 1,2) REVENUE $ 14,250,243 $ 10,295,266 $ 26,421,882 $ 17,574,419 -------------- -------------- ---------------- ---------------- COSTS AND EXPENSES: Cost of revenue 10,339,132 8,604,711 19,469,223 14,224,298 Selling, general and administrative expenses 2,351,653 1,518,421 4,615,608 2,911,112 Depreciation and amortization 209,593 124,662 421,060 246,693 -------------- -------------- ---------------- ---------------- Total costs and expenses 12,900,378 10,247,794 24,505,891 17,382,103 -------------- -------------- ---------------- ---------------- OPERATING INCOME 1,349,865 47,472 1,915,991 192,316 OTHER EXPENSE: Interest expense 56,035 11,650 94,800 12,763 -------------- -------------- ---------------- ---------------- INCOME BEFORE INCOME TAX PROVISION 1,293,830 35,822 1,821,191 179,553 Income tax provision 509,025 4,539 721,108 71,895 -------------- -------------- ---------------- ---------------- NET INCOME $ 784,805 $ 31,283 $ 1,100,083 $ 107,658 ============== ============== ================ ================ Basic net income per common share $ 0.20 $ 0.02 $ 0.29 $ 0.06 ============== ============== ================ ================ Diluted net income per common share $ 0.20 $ 0.02 $ 0.29 $ 0.06 ============== ============== ================ ================ Basic weighted average number of common shares outstanding 3,853,994 1,737,498 3,837,689 1,737,498 ============== ============== ================ ================ Diluted weighted average number of common shares outstanding 3,869,522 1,777,797 3,846,313 1,804,162 ============== ============== ================ ================
WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
October 31, April 30, ASSETS 2005 2005 ----------------- ------------------- (Unaudited) CURRENT ASSETS: Cash and cash equivalents $ 1,800,224 $ 989,252 Accounts receivable, net of allowance of $93,786 and $75,786 at October 31, 2005 and April 30, 2005, respectively 12,322,495 9,907,316 Costs and estimated earnings in excess of billings on uncompleted contracts 1,966,928 908,955 Inventory 615,239 885,624 Prepaid expenses and other current assets 689,348 536,331 Deferred income taxes 92,000 112,000 ----------------- ------------------- Total current assets 17,486,234 13,339,478 PROPERTY AND EQUIPMENT, net 1,514,489 1,560,271 CUSTOMER LISTS, net 1,009,555 1,158,388 GOODWILL 14,108,283 13,961,642 DEBT ISSUANCE COSTS, net 137,206 - OTHER ASSETS 89,343 156,932 ----------------- ------------------- Total assets $ 34,345,110 $ 30,176,711 ================= ===================
WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
October 31, April 30, LIABILITIES AND SHAREHOLDERS' EQUITY 2005 2005 ------------------- ------------------- (Unaudited) CURRENT LIABILITIES: Borrowings under line of credit $ - $ 382,281 Current portion of capital lease obligation 708 2,073 Current portion of loans payable 202,083 187,420 Accounts payable and accrued expenses 5,144,023 5,338,813 Billings in excess of costs and estimated earnings on uncompleted contracts 1,603,502 1,204,491 Due to shareholders 122,995 915,290 Income taxes payable 788,151 24,790 Deferred income taxes 183,000 139,000 ------------------- ------------------- Total current liabilities 8,044,462 8,194,158 Borrowings under line of credit 3,000,000 - Loans payable, net of current portion 295,467 261,455 Due to shareholders, net of current portion 927,005 927,005 Deferred income taxes 323,000 439,000 ------------------- ------------------- Total liabilities 12,589,934 9,821,618 ------------------- ------------------- 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, 3,883,885 and 3,821,385 shares issued and outstanding at October 31, 2005 and April 30, 2005, respectively 388 382 Additional paid-in capital 21,407,234 21,107,240 Retained earnings(accumulated deficit) 347,554 (752,529) ------------------- ------------------- Total shareholders' equity 21,755,176 20,355,093 ------------------- ------------------- Total liabilities and shareholders' equity $ 34,345,110 $ 30,176,711 =================== ===================
Note 1. Reflects the retroactive effect of the January 10, 2005 one-for-twelve reverse stock split. Note 2. Certain reclassifications have been made to prior period financial statements to conform to current presentation. Reconciliation of Non-GAAP Financial Measures (Unaudited) EBITDA: Reconciliation of net income per the Condensed Consolidated Statements of Income to EBITDA:
Three Months Ended Six Months Ended October 31, October 31, 2005 2004 2005 2004 ---------------- -------------- ------------------- ---------------- NET INCOME $784,805 $31,283 $1,100,083 $107,658 ---------------- -------------- ------------------- ---------------- Plus: Income tax provision 509,025 4,539 721,108 71,895 Interest expense 56,035 11,650 94,800 12,763 Depreciation and amortization 209,593 124,662 421,060 246,693 ---------------- -------------- ------------------- ---------------- EBITDA $1,559,458 $172,134 $2,337,051 $439,009 ================ ============== =================== ================
EBITDA is defined as earnings before interest expense, income taxes, and depreciation and amortization. Our measure of EBITDA may not be comparable to similarly titled measures of other companies. WPCS' management believes that the non-GAAP financial information provides investors a useful indicator to understand our operating results. WPCS management uses such non-GAAP financial measures internally to evaluate the Company's operating performance and to determine compliance with debt covenants under the line of credit facility. -----END PRIVACY-ENHANCED MESSAGE-----