8-K

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 17, 2007

WPCS INTERNATIONAL INCORPORATED

(Exact name of registrant as specified in its charter)

Delaware	0-26277	98-0204758
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer 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

61 Broadway

New York, New York 10006

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 17, 2007, WPCS International Incorporated (the “Company”) announced its operating results for the second fiscal quarter ended October 31, 2007. 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 17, 2007, issued by WPCS International Incorporated.

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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
December 17, 2007	By:	/s/ ANDREW HIDALGO
		Andrew Hidalgo
		Chief Executive Officer

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EX-99.1

Exhibit 99.1

PRESS RELEASE                                                                                                                                                                        &# 160;                                           SOURCE: WPCS International Incorporated

WPCS Reports Record Revenue and $0.19 EPS for the 2^nd Quarter

EXTON, PA - (PR Newswire - First Call) – December 17, 2007) WPCS International Incorporated (NASDAQ: WPCS) a leader in design-build engineering services for specialty communication systems and wireless infrastructure, has reported its financial results for the second quarter ended October 31, 2007.

For the second quarter, WPCS reported total revenue of approximately $28.1 million compared to $17.8 million for the same period a year ago, which represents an increase of approximately 58%.  For the second quarter of FY2008, the reported net income was approximately $1.5 million or $0.19 per diluted share compared to $1.1 million or $0.18 per diluted share for the same period a year ago, which represents a net income increase of approximately 41%.

For the six months ended October 31, 2007, WPCS reported total revenue of approximately $49.9 million compared to $34.2 million for the same period a year ago, which represents an increase of approximately 46%.  For the six months ended October 31, 2007, the reported net income was approximately $2.8 million or $0.35 per diluted share compared to $2.0 million or $0.34 per diluted share for the same period a year ago, which represents a net income increase of approximately 40%.

Andrew Hidalgo, CEO of WPCS International Incorporated, stated: “The management team at WPCS is pleased with the second quarter results. The company met analyst expectations and we are on track in achieving our guidance estimates for fiscal year 2008. The second quarter was the first full quarter for two acquisitions concluded in August 2007. The third quarter will include two new acquisitions concluded in November 2007. At the end of the second quarter, our bid list is approximately $125 million and our backlog stands at approximately $36 million. These figures are very strong. In addition, our balance sheet remains healthy with $11 million in cash and $27.7 million in working capital. Our engineering services continue to be in demand in the U.S., in China and in our newly established operations in Australia. We remain encouraged that FY2008 will be our most successful year thus far.”

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:

Carol Lindley

WPCS International Incorporated

610-903-0400 x100

ir@wpcs.com

WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended						Six Months Ended
	October 31,						October 31,
	2007			2006			2007			2006
REVENUE	$	28,105,044		$	17,753,044		$	49,921,050		$	34,189,322
COSTS AND EXPENSES:
Cost of revenue		20,646,816			12,360,962			35,834,568			24,052,430
Selling, general and administrative expenses		4,518,881			3,239,738			8,578,137			6,336,060
Depreciation and amortization		468,615			337,242			998,202			570,891
Total costs and expenses		25,634,312			15,937,942			45,410,907			30,959,381
OPERATING INCOME		2,470,732			1,815,102			4,510,143			3,229,941
OTHER EXPENSE (INCOME):
Interest expense		185,636			134,502			308,218			214,436
Interest income		(140,663	)		(74,214	)		(355,175	)		(174,752	)
Minority interest		57,140			-			60,788			-
INCOME BEFORE INCOME TAX PROVISION		2,368,619			1,754,814			4,496,312			3,190,257
Income tax provision		867,106			690,167			1,722,184			1,211,180
NET INCOME	$	1,501,513		$	1,064,647		$	2,774,128		$	1,979,077
Basic net income per common share	$	0.21		$	0.19		$	0.39		$	0.37
Diluted net income per common share	$	0.19		$	0.18		$	0.35		$	0.34
Basic weighted average number of common shares outstanding		7,079,977			5,500,579			7,026,818			5,408,531
Diluted weighted average number of common shares outstanding		7,953,098			6,026,999			8,007,103			5,849,495

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WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	October 31,		April 30,
ASSETS	2007		2007
	(Unaudited)		(Note 1)
CURRENT ASSETS:
Cash and cash equivalents	$	11,024,104	$	21,558,739
Accounts receivable, net of allowance of $98,786 at October 31, 2007 and April 30, 2007		23,544,604		16,560,636
Costs and estimated earnings in excess of billings on uncompleted contracts		5,136,082		2,499,940
Inventory		3,390,568		2,260,082
Prepaid expenses and other current assets		1,343,722		732,043
Deferred tax assets		35,000		27,000
Total current assets		44,474,080		43,638,440
PROPERTY AND EQUIPMENT, net		6,308,336		5,488,920
OTHER INTANGIBLE ASSETS, net		2,096,281		1,683,349
GOODWILL		22,214,441		20,469,608
OTHER ASSETS		144,275		273,353
Total assets	$	75,237,413	$	71,553,670

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WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (continued)

LIABILITIES AND SHAREHOLDERS' EQUITY

	October 31,		April 30,
	2007		2007
	(Unaudited)		(Note 1)
CURRENT LIABILITIES:
Current portion of loans payable	$	3,231,949	$	2,598,872
Current portion of capital lease obligations		22,554		-
Accounts payable and accrued expenses		9,518,305		6,802,110
Billings in excess of costs and estimated earnings on uncompleted contracts		2,344,853		2,272,688
Deferred revenue		656,107		504,458
Due to shareholders		644,000		707,000
Income taxes payable		373,226		433,361
Total current liabilities		16,790,994		13,318,489
Borrowings under line of credit		-		4,454,217
Loans payable, net of current portion		171,706		284,016
Capital lease obligations, net of current portion		347,366		-
Deferred tax liabilities		730,000		611,000
Total liabilities		18,040,066		18,667,722
Minority interest in subsidiary		1,414,753		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, 7,084,344 and 6,971,698 shares issued and outstanding at October 31, 2007 and April 30, 2007, respectively		708		696
Additional paid-in capital		49,267,666		47,901,160
Retained earnings		6,405,343		3,631,215
Accumulated other comprehensive income (loss) on foreign currency translation		108,877		(1,088	)
Total shareholders' equity		55,782,594		51,531,983
Total liabilities and shareholders' equity	$	75,237,413	$	71,553,670

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

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