WPCS Announces Financial Results for Fiscal 2016 First Quarter
Suisun Operations Generates Net Income of $542,000
Tweet
Share
E-mailSUISUN, CA -- (Marketwired) -- 09/17/15 -- WPCS International Incorporated (NASDAQ: WPCS), which specializes in contracting services for communications infrastructure, today announced its first quarter fiscal 2016 financial results for the three month period ended July 31, 2015.
Sebastian Giordano, Interim CEO of WPCS, commented, "We are extremely pleased to report that the Company had income from continuing operations of $84,000 for the three months ended July 31, 2015, as our Suisun Operations generated net income of $542,000 in the first quarter."
Financial Results for the Three Months Ended July 31, 2015 Revenue for the three months ended July 31, 2015 decreased $1,600,000, or 27.0%, to $4,464,000 as compared to $6,064,000 for the same period in 2014.
The Company's $84,000 income from continuing operations for the three months ended July 31, 2015 was due primarily to an operating loss of $311,000 as well as interest, taxes and other expenses totaling $5,000, which were offset by noncash income from Section 16 settlements of $400,000. This compared to a net operating loss from continuing operations of $2,647,500 for the same period in 2014.
WPCS has recorded the financial results for our divested subsidiaries as discontinued operations. For the three months ended July 31, 2015, WPCS recorded income from discontinued operations of approximately $41,000. Net loss attributable to common shareholders for the three-month period totaled $4,182,000 due primarily from dividends declared and deemed on preferred stock.
"As one multi-year, high revenue, but lower margin project neared completion, we expected topline revenues to be lower this quarter than the same period last year. However, Suisun's profitability this quarter was significantly bolstered by a robust 22.8% gross profit margin due to more lower revenue, higher margin jobs," Giordano concluded.
About WPCS International Incorporated WPCS provides contracting services to the public services, healthcare, energy and corporate enterprise markets in the United States. For more information, please visit www.wpcs.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, including, but not limited to, statements with respect to the Company's future growth opportunities and strategic plan. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.
WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
July 31, April 30,
2015 2015
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 5,539,610 $ 2,364,360
Accounts receivable, net of allowance of
$92,000 at July 31, 2015 and April 30, 2015,
respectively 5,069,955 6,494,890
Costs and estimated earnings in excess of
billings on uncompleted contracts 523,758 420,434
Prepaid expenses and other current assets 75,305 159,769
Current assets held for sale 5,037,959 4,566,251
------------ ------------
Total current assets 16,246,587 14,005,704
Property and equipment, net 158,724 162,986
Other assets 11,384 11,384
Other assets held for sale 978,211 977,119
------------ ------------
Total assets $ 17,394,906 $ 15,157,193
============ ============
LIABILITIES AND EQUITY
Current liabilities:
Current portion of loans payable $ 43,905 $ 39,935
Accounts payable and accrued expenses 4,131,620 5,409,361
Billings in excess of costs and estimated
earnings on uncompleted contracts 1,471,816 1,346,461
Other payable to Zurich 225,000 360,000
Short-term promissory notes - 1,703,000
Income taxes payable 2,250 4,908
Dividends payable 228,568 677,546
Current liabilities held for sale 7,935,488 5,710,807
------------ ------------
Total current liabilities 14,038,647 15,252,018
Loans payable, net of current portion 48,031 44,239
------------ ------------
Total liabilities 14,086,678 15,296,257
------------ ------------
Commitments and contingencies
Equity (deficit):
WPCS equity (deficit):
Preferred stock - $0.0001 par value, 5,000,000
shares authorized at July 31, 2015 and April
30, 2015, respectively
Convertible Series F - 0 and 5,268 shares
issued and outstanding at July 31, 2015 and
April 30, 2015, respectively; liquidation
preference of $0 - 1,589,933
Convertible Series F-1 - 1,858 and 5,642
shares issued and outstanding at July 31,
2015 and April 30, 2015, respectively;
liquidation preference of $3,089,348 560,757 1,702,808
Convertible Series G - 0 and 2,088 shares
issued and outstanding at July 31, 2015 and
April 30, 2015, respectively; liquidation
preference of $0 - 731,706
Convertible Series G-1 - 2,122 and 3,128
shares issued and outstanding at July 31,
2015 and April 30, 2015, respectively;
liquidation preference of $4,329,212 743,726 1,096,250
Convertible Series H - 3,943 and 0 shares
issued and outstanding at July 31, 2015 and
April 30, 2015, respectively; liquidation
preference of $607,232 607,232 -
Convertible Series H-1 - 8,532 and 0 shares
issued and outstanding at July 31, 2015 and
April 30, 2015, respectively; liquidation
preference of $1,415,030 733,595 -
Common stock - $0.0001 par value, 100,000,000
shares authorized, 2,200,649 and 982,660
shares issued and outstanding as of July 31,
2015 and April 30, 2015, respectively 220 98
Additional paid-in capital 80,469,531 70,380,397
Accumulated deficit (80,732,898) (76,550,894)
Accumulated other comprehensive income on
foreign currency translation 349,076 349,723
------------ ------------
Total WPCS equity (deficit) 2,731,239 (699,979)
Noncontrolling interest 576,989 560,915
------------ ------------
Total equity (deficit) 3,308,228 (139,064)
------------ ------------
Total liabilities and equity $ 17,394,906 $ 15,157,193
============ ============
The accompanying notes are an integral part of these condensed consolidated financial statements.
WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the three months ended
July 31,
--------------------------
2015 2014
------------ ------------
Revenue $ 4,464,003 $ 6,064,457
------------ ------------
Costs and expenses:
Cost of revenue 3,447,203 4,780,419
Selling, general and administrative expenses 1,312,803 1,045,010
Depreciation and amortization 14,969 16,183
------------ ------------
4,774,975 5,841,612
------------ ------------
Operating (loss) income (310,972) 222,845
Other income (expense):
Interest expense (892) (2,835,482)
Income from Section 16 settlement 400,000 -
Other expenses (2,906) (7,500)
------------ ------------
Income (loss) from continuing operations before
income tax provision 85,230 (2,620,137)
Income tax provision 1,099 27,363
------------ ------------
Income (loss) from continuing operations 84,131 (2,647,500)
Discontinued operations:
Income (loss) from discontinued operations 41,261 (438,114)
Gain from disposal - 798,896
------------ ------------
Income from discontinued operations, net of
tax 41,261 360,782
Consolidated net income (loss) 125,392 (2,286,718)
Net income (loss) attributable to noncontrolling
interest 16,505 (49,020)
------------ ------------
Net income (loss) attributable to WPCS 108,887 (2,237,698)
Dividends declared on preferred stock (3,587,121) (74,487)
Deemed dividend on convertible preferred stock,
due to beneficial conversion feature (703,770) -
------------ ------------
Net loss attributable to WPCS common
shareholders $ (4,182,004) $ (2,312,185)
============ ============
Basic and diluted net loss attributable to WPCS
common shareholders:
Loss from continuing operations $ (2.86) $ (4.30)
------------ ------------
Income (loss) from discontinued operations $ 0.02 $ (0.62)
Gain from disposal $ - $ 1.26
------------ ------------
Basic and diluted net income from discontinued
operations $ 0.02 $ 0.64
------------ ------------
Basic and diluted net loss per common share
attributable to WPCS $ (2.84) $ (3.66)
============ ============
Basic and diluted weighted average number of
common shares outstanding 1,470,248 632,417
The accompanying notes are an integral part of these condensed consolidated financial statements.
WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the three months ended
July 31,
--------------------------
2015 2014
------------ ------------
Operating activities:
Net income (loss) from operations $ 84,131 $ (2,647,500)
Consolidated net income from discontinued
operations 41,261 360,782
Adjustments to reconcile consolidated net loss to
net cash provided by (used in) operating
activities:
Depreciation and amortization 14,969 16,183
Amortization of notes discount - 853,417
Interest expense related to make-whole amount - 1,889,716
Gain on sale of Pride - (798,896)
Income on Section 16 settlement (400,000) -
Changes in operating assets and liabilities:
Accounts receivable 1,424,935 (1,577,117)
Costs and estimated earnings in excess of
billings on uncompleted contracts (103,324) (169,500)
Deferred contract costs - 929
Current assets held for sale (506,215) 1,188,498
Prepaid expenses and other current assets 84,464 (84,620)
Other assets - 18,150
Other assets held for sale (34,522) 179,591
Income taxes payable (2,658) (2,200)
Accounts payable and accrued expenses (1,277,741) 2,082,017
Current liabilities held for sale 2,200,030 (559,652)
Accrued severance expense - (1,218,750)
Billings in excess of costs and estimated
earnings on uncompleted contracts 125,355 (182,441)
------------ ------------
Net cash provided by (used in) operating
activities 1,650,685 (651,393)
------------ ------------
Investing activities:
Acquisition of property and equipment (10,707) (137,314)
------------ ------------
Net cash used in investing activities (10,707) (137,314)
------------ ------------
Financing activities:
Proceeds from issuance of Series H-1 preferred
stock and warrants 1,575,000 -
Borrowings under loan payable obligations 7,762 10,559
Repayments under other payable to Zurich (135,000) -
Repayments of short term convertible note (4,000) -
Dividends paid on preferred stock - (72,034)
------------ ------------
Net cash provided by (used in) financing
activities 1,443,762 (61,475)
------------ ------------
Effect of exchange rate changes on cash 91,510 (7,939)
------------ ------------
Net increase (decrease) in cash and cash
equivalents 3,175,250 (858,121)
Cash and cash equivalents, beginning of the
quarter 2,364,360 2,177,070
------------ ------------
Cash and cash equivalents, end of the quarter $ 5,539,610 $ 1,318,949
============ ============
The accompanying notes are an integral part of these condensed consolidated financial statements.
WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(Unaudited)
For the three months ended
July 31,
---------------------------
2015 2014
------------- -------------
Schedule of non-cash investing and financing
activities:
Declaration on preferred dividend payable $ 3,587,121 $ -
Warrants issued with convertible preferred
stock $ 841,405 $ -
Deemed dividend on conversion of preferred
stock to common stock $ 703,770 $ -
Conversion of dividends payable related to
make-whole amount to common stock $ 3,375,792 $ -
Conversion of dividends payable related to
Series F-1 preferred stock $ 501,826 $ -
Conversion of dividends payable related to
Series G-1 preferred stock $ 158,481 $ -
Conversion of short term promissory notes to
Series H preferred stock $ 1,299,000 $ -
Conversion of Series F and F-1 preferred stock
to common stock $ 2,731,984 $ -
Conversion of Series G and G-1 preferred stock
to common stock $ 1,084,230 $ -
Conversion of Series H preferred stock to
common stock $ 691,768 $ -
Settlement of severance obligation and sale of
Pride $ - $ 970,000
Declaration on preferred dividends payable $ - $ 74,487
The accompanying notes are an integral part of these condensed consolidated financial statements.
INVESTOR CONTACT: WPCS International Incorporated David Allen Chief Financial Officer Phone: 707-759-6008 Email: Email Contact
Source: WPCS International Inc
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Tesla plans 'flying' Roadster stunt at SpaceX Texas site as early as August
- Memecoin Launchpad Comparison: MemeToro vs. Four.meme vs. Pump.fun — Who Leads BNB Chain in 2026?
- Rocket Lab Satellite Platforms Built for MDA Space Successfully Reach Orbit, Supporting Globalstar Direct-to-Device Communications Services
Create E-mail Alert Related Categories
Press ReleasesRelated Entities
Dividend, Earnings, Definitive AgreementSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
