WPCS Reports FY2010 Third Quarter Financial Results
EXTON, Pa., March 17 /PRNewswire-FirstCall/ -- WPCS International Incorporated (Nasdaq: WPCS), a leader in design-build engineering services for communications infrastructure, today announced financial results for the third quarter of fiscal year 2010 ended January 31, 2010. For the third quarter, WPCS reported revenue of $27.0 million compared to $25.3 million for the same period a year ago. WPCS reported net income of $71,000 or $0.01 per diluted share for the third quarter compared to $178,000 or $0.03 per diluted share for the same period a year ago. Year to date through the nine months ended January 31, 2010 WPCS reported revenue of $76.6 million compared to $82.4 million for the same period a year ago. For the nine month period, the reported net income was $843,000 or $0.12 per diluted share compared to net income of $1.4 million or $0.19 per diluted share for the same period a year ago.
Andrew Hidalgo, CEO of WPCS, commented, "The third quarter results were below our expectations from an earnings perspective. The primary reason behind the lower than expected earnings was a delay in bid to backlog conversion and a project cost overrun. However, there is positive news to report. At the end of the third quarter, the company reported a backlog of $49 million which is an increase of 75% over the previous quarter. WPCS also has a bid list of $186 million. The backlog increase gives us the opportunity to improve earnings in the quarters ahead. In fact, the $38 million of new projects we have announced in the first two months of calendar year 2010 is more than we announced in the first seven months of calendar year 2009. Due to the delay in converting bids to backlog, WPCS is revising its estimates for the fiscal year ending April 30, 2010. We project our revenue will be in the range of $102 million to $106 million, our net income in the range of $1.2 million to $1.4 million and $0.17 to $0.20 in earnings per diluted share. WPCS continues to maintain a healthy balance sheet with $4 million in cash, $20.9 million in working capital and $5.6 million in credit line borrowings. Our credit line borrowing to working capital ratio remains favorably low at 27%. The $2 million paid towards The Pride Group acquisition contributed to a lower cash position in the third quarter. We are also pleased to announce that Bank of America has approved the renewal of our $15 million credit facility for another three years. In summary, through these challenging economic times, WPCS has continued to deliver profitable results but we are committed to improving earnings. We believe the recent growth in backlog is a positive sign of better 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. and 302-709-8337 for calls from international locations. Upon reaching the operator, verbally transmit the participant code VH58841. 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 58841 # as the pass code.
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