SUISUN, CA--(Marketwired - Jul 21, 2017) - WPCS International Incorporated (
Sebastian Giordano, CEO of WPCS, commented, "Operational results this past year demonstrated that our sole business, Suisun City Operations, continues to perform profitably as it generated $1,064,000 in operating income on revenues of approximately $15,731,000."
Financial Results for the Year Ended April 30, 2017
Revenue for the twelve months ended April 30, 2017 increased by approximately $2,182,000, or 15%, to approximately $16,737,000, as compared to approximately $14,555,000, for the same period in 2016. Such increase was due primarily to revenue increases in our: (i) Suisun City Operations of approximately $1,177,000, and (ii) Texas Operations of approximately $1,005,000. Notwithstanding the foregoing, we do not anticipate any further revenues from the Texas Operations since it was closed in the fourth quarter of 2017.
The Company's loss from continuing operations for the year ended April 30, 2017 was approximately $1,219,000, due primarily to an approximate $2,545,000 operating loss, interest expense of approximately $7,000 and income tax provision of approximately $3,000, which were partially offset by income from various settlements totaling approximately $1,192,000 and other income of approximately $143,000. This compared to a loss from continuing operations of approximately $3,631,000 for the same period in 2016. Meanwhile, the net loss attribute to WPCS common shareholders for the year ended April 30, 2017 was approximately $2,256,000, or $0.76 per share, as compared to a loss of approximately $8,270,000, or $3.61 per share, for the same period in 2016.
The $2,545,000 loss from operations was comprised primarily of approximately $1,043,000 in operating income from Suisun City Operations and which was offset by approximately $2,602,000 of corporate overhead expenses, of which approximately $580,000 related to non-cash compensation expense recognized on the issuance of employee stock options, and a loss from our Texas Operations of approximately $986,000. This compared to a net loss from operations of approximately $4,032,000 for the same period in 2016.
ABOUT WPCS INTERNATIONAL INCORPORATED
WPCS is a full-service, low-voltage solutions provider, installing and servicing integrated structured cabling, audio-visual and security systems for public services, healthcare, energy and corporate enterprise markets in the United States. The Company delivers end-to-end solutions, superior project management and best-in-class products and technology. For more information about WPCS, 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, other future conditions and the risk factors detailed from time to time in the Company's periodic filings with the Securities and Exchange Commission, including without limitation, the Company's Annual Report on Form 10-K for the year ended April 30, 2017. 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 | ||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||
| April 30, | April 30, | |||||||||
| 2017 | 2016 | |||||||||
| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 1,659,318 | $ | 2,235,597 | ||||||
| Restricted cash | 500,026 | - | ||||||||
| Accounts receivable, net of allowance of $247,000 and $92,000 at April 30, 2017 and 2016, respectively | 4,199,674 | 2,886,154 | ||||||||
| Costs and estimated earnings in excess of billings on uncompleted contracts | 410,826 | 357,210 | ||||||||
| Prepaid expenses and other current assets | 41,135 | 66,256 | ||||||||
| Total current assets | 6,810,979 | 5,545,217 | ||||||||
| Property and equipment, net | 322,643 | 237,800 | ||||||||
| Other assets | 11,484 | 21,162 | ||||||||
| Total assets | $ | 7,145,106 | $ | 5,804,179 | ||||||
| LIABILITIES AND EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Current portion of loans payable | $ | 52,946 | $ | 53,996 | ||||||
| Accounts payable and accrued expenses | 1,790,256 | 2,071,765 | ||||||||
| Billings in excess of costs and estimated earnings on uncompleted contracts | 2,105,797 | 1,358,289 | ||||||||
| Total current liabilities | 3,948,999 | 3,484,050 | ||||||||
| Loans payable, net of current portion | 124,559 | 94,825 | ||||||||
| Total liabilities | 4,073,558 | 3,578,875 | ||||||||
| Commitments and contingencies | ||||||||||
| Stockholders' equity | ||||||||||
| Preferred stock - $0.0001 par value, 5,000,000 shares authorized at April 30, 2017 and 2016, respectively | ||||||||||
| Convertible Series H, 8,500 shares designated - 8 and 2,638 shares issued and outstanding at April 30, 2017 and 2016, respectively; liquidation preference of $1,000 | 1,242 | 406,262 | ||||||||
| Convertible Series H-1, 9,488 shares designated - 4,289 and 8,119 shares issued and outstanding at April 30, 2017 and 2016, respectively; liquidation preference of $712,000 | 437,530 | 699,324 | ||||||||
| Convertible Series H-2, 3,500 shares designated- 3,305 and 0 shares issued and outstanding at April 30, 2017 and 2016, respectively; liquidation preference of $400,000 | 230,721 | - | ||||||||
| Convertible Series H-3, 8,461 shares designated - 7,017 and 0 shares issued and outstanding at April 30, 2017 and 2016, respectively; liquidation preference of $968,000 | 475,185 | - | ||||||||
| Common stock - $0.0001 par value, 100,000,000 shares authorized, 3,352,159 and 2,691,055 shares issued and outstanding as of April 30, 2017 and 2016, respectively | 335 | 269 | ||||||||
| Additional paid-in capital | 89,003,669 | 85,940,389 | ||||||||
| Accumulated deficit | (87,077,134 | ) | (84,820,940 | ) | ||||||
| Total stockholders' equity | 3,071,548 | 2,225,304 | ||||||||
| Total liabilities and stockholders' equity | $ | 7,145,106 | $ | 5,804,179 | ||||||
| The accompanying notes are an integral part of these consolidated financial statements. |
| WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES | |||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
| For the years ended | |||||||||
| April 30, | |||||||||
| 2017 | 2016 | ||||||||
| Revenue | $ | 16,736,991 | $ | 14,555,102 | |||||
| Costs and expenses: | |||||||||
| Cost of revenue | 12,893,901 | 11,570,364 | |||||||
| Selling, general and administrative expenses | 6,272,138 | 6,951,637 | |||||||
| Depreciation and amortization | 115,454 | 64,738 | |||||||
| 19,281,493 | 18,586,739 | ||||||||
| Operating loss | (2,544,502 | ) | (4,031,637 | ) | |||||
| Other income (expense): | |||||||||
| Interest expense | (6,621 | ) | (3,196 | ) | |||||
| Income from Section 16 settlement | - | 400,000 | |||||||
| Income from Arbitration settlement | 1,192,246 | - | |||||||
| Other income | 143,178 | 5,284 | |||||||
| Loss from continuing operations before income tax provision | (1,215,699 | ) | (3,629,549 | ) | |||||
| Income tax provision | 3,130 | 1,706 | |||||||
| Loss from continuing operations | (1,218,829 | ) | (3,631,255 | ) | |||||
| Discontinued operations: | |||||||||
| Income from discontinued operations | - | 27,261 | |||||||
| Gain from disposal | - | 837,720 | |||||||
| Consolidated net loss | (1,218,829 | ) | (2,766,274 | ) | |||||
| Net income attributable to noncontrolling interest | - | 16,505 | |||||||
| Net loss attributable to WPCS | (1,218,829 | ) | (2,782,779 | ) | |||||
| Dividends declared on preferred stock | - | (4,742,768 | ) | ||||||
| Deemed dividend on convertible preferred stock, due to beneficial conversion feature | (1,037,365 | ) | (744,499 | ) | |||||
| Net loss attributable to WPCS common shareholders | $ | (2,256,194 | ) | $ | (8,270,046 | ) | |||
| Basic and diluted loss from continuing operations per common share | $ | (0.76 | ) | $ | (3.98 | ) | |||
| Gain from disposal | - | 0.37 | |||||||
| Basic and diluted net loss per common share | $ | (0.76 | ) | $ | (3.61 | ) | |||
| Basic and diluted weighted average number of common shares outstanding | 2,967,984 | 2,290,050 | |||||||
| The accompanying notes are an integral part of these consolidated financial statements. |
| WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES | ||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
| For the years ended | ||||||||||
| April 30, | ||||||||||
| 2017 | 2016 | |||||||||
| Operating activities: | ||||||||||
| Net loss from continuing operations | $ | (1,218,829 | ) | $ | (3,631,255 | ) | ||||
| Consolidated net income from discontinued operations | - | 864,981 | ||||||||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||
| Depreciation and amortization | 115,454 | 64,738 | ||||||||
| Shares based compensation | 602,431 | 2,506,239 | ||||||||
| Gain on sale of China Operations | - | (837,720 | ) | |||||||
| Income on Section 16 settlement | - | (400,000 | ) | |||||||
| Changes in operating assets and liabilities: | ||||||||||
| Accounts receivable | (1,313,520 | ) | 3,608,736 | |||||||
| Costs and estimated earnings in excess of billings on uncompleted contracts | (53,616 | ) | 63,224 | |||||||
| Current assets held for sale | - | (3,853,621 | ) | |||||||
| Prepaid expenses and other current assets | 25,121 | 93,513 | ||||||||
| Other assets | 9,678 | 4,222 | ||||||||
| Other assets held for sale | - | (34,523 | ) | |||||||
| Accounts payable and accrued expenses | (281,509 | ) | (3,342,504 | ) | ||||||
| Current liabilities held for sale | - | 2,200,030 | ||||||||
| Billings in excess of costs and estimated earnings on uncompleted contracts | 747,508 | 11,828 | ||||||||
| Net cash used in operating activities | (1,367,282 | ) | (2,682,112 | ) | ||||||
| Investing activities: | ||||||||||
| Acquisition of property and equipment | (77,272 | ) | (139,552 | ) | ||||||
| Proceeds from sale of China Operations, net of acquisition cost | - | 1,325,744 | ||||||||
| Net cash (used in) provided by investing activities | (77,272 | ) | 1,186,192 | |||||||
| Financing activities: | ||||||||||
| Proceeds from issuance of Series H-1 preferred stock and warrants | - | 1,575,000 | ||||||||
| Proceeds from issuance of Series H-2 preferred stock and warrants, net of offering costs | 429,631 | - | ||||||||
| Proceeds from issuance of Series H-3 preferred stock and warrants, net of offering costs | 1,033,011 | - | ||||||||
| Borrowings under loan payable obligations | - | 115,753 | ||||||||
| Repayment under loan payable obligations | (94,341 | ) | (51,106 | ) | ||||||
| Repayments under other payable to Zurich | - | (360,000 | ) | |||||||
| Repayments of short term convertible note | - | (4,000 | ) | |||||||
| Net cash provided by financing activities | 1,368,301 | 1,275,647 | ||||||||
| Effect of exchange rate changes on cash | - | 91,510 | ||||||||
| Net decrease in cash, cash equivalents and restricted cash | (76,253 | ) | (128,763 | ) | ||||||
| Cash, cash equivalents and restricted cash beginning of the year | 2,235,597 | 2,364,360 | ||||||||
| Cash, cash equivalents and restricted cash end of the year | $ | 2,159,344 | $ | 2,235,597 | ||||||
| The accompanying notes are an integral part of these consolidated financial statements. |
| WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES | |||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) | |||||||||
| For the years ended | |||||||||
| April 30, | |||||||||
| 2017 | 2016 | ||||||||
| Schedule of non-cash investing and financing activities: | |||||||||
| Automobile loan payable obligations | $ | 123,025 | $ | - | |||||
| Declaration on preferred dividend payable | $ | - | $ | 4,742,768 | |||||
| Issuance of warrants with Series H-2 preferred stock | $ | 231,248 | $ | - | |||||
| Beneficial conversion feature of Series H-2 convertible preferred stock | $ | 183,284 | $ | - | |||||
| Deemed dividends related to immediate accretion of beneficial conversion feature of Series H-2 convertible preferred stock | $ | 183,284 | $ | - | |||||
| Issuance of warrants with Series H-3 preferred stock | $ | 557,826 | $ | - | |||||
| Beneficial conversion feature of Series H-3 convertible preferred stock | $ | 476,375 | $ | - | |||||
| Deemed dividends related to immediate accretion of beneficial conversion feature of Series H-3 convertible preferred stock | $ | 476,375 | $ | - | |||||
| Conversion of dividends payable related to make-whole amount to common stock | $ | - | $ | 4,457,356 | |||||
| Conversion of dividends payable related to Series F-1 preferred stock | $ | - | $ | 624,977 | |||||
| Conversion of dividends payable related to Series G-1 preferred stock | $ | - | $ | 337,981 | |||||
| Conversion of short term convertible note to Series H preferred stock | $ | - | $ | 1,299,000 | |||||
| Conversion of Series F and F-1 preferred stock through the issuance of common stock | $ | - | $ | 3,292,741 | |||||
| Conversion of Series G and G-1 preferred stock through the issuance of common stock | $ | - | $ | 1,827,927 | |||||
| Conversion of Series H preferred stock through the issuance of common stock | $ | 405,020 | $ | 892,738 | |||||
| Conversion of Series H-1 preferred stock through the issuance of common stock | $ | 639,500 | $ | 75,000 | |||||
| Deemed dividend on conversion of Series H-1 convertible preferred stock to common stock | $ | 377,706 | $ | - | |||||
| The accompanying notes are an integral part of these consolidated financial statements. |
INVESTOR CONTACT WPCS International Incorporated Mr. David Allen Chief Financial Officer Phone: 707-759-6008 Email: Email Contact
