WPCS Announces Sale of Assets of Two Operation Centers and Guidance for Fiscal Year 2013
WPCS International Incorporated (NASDAQ: WPCS), a leader in design-build engineering services for communications infrastructure, today announced that it has sold substantially all of the assets and liabilities of two operation centers to Kavveri Telecom for $5.5 million in cash of which $4.9 million was received at closing with the remaining $600,000 to be placed in escrow pending the completion of certain post closing matters. WPCS sold the assets and liabilities of the Hartford Operations in Connecticut and the Lakewood Operations in New Jersey. Both the Hartford and Lakewood Operations provide wireless product integration services which is different from the wireless services provided by the other WPCS operation centers that focus on design-build engineering services for communications infrastructure.
The proceeds will be used to extinguish bank debt and for future working capital. With the sale of the assets and liabilities of the two operation centers, WPCS has updated its revenue and EBITDA goals for fiscal year 2013, which ends on April 30, 2013 and is providing guidance for the current fiscal year. For the fiscal year, WPCS is projecting approximately $60 million in revenue and $1 million in EBITDA. The financial performance will be generated by the three domestic operation centers in Suisun City, Trenton and Seattle as well as the international operations in Australia and China.
"The last two fiscal years have been challenging due to economic conditions and certain projects that experienced substantial cost overruns. Due to these issues, the company was unable to achieve its EBITDA projections for fiscal year 2011 and 2012. However, the management team is working to strengthen the balance sheet and income statement so that we can target positive revenue and EBITDA results for this fiscal year," said Andrew Hidalgo, CEO of WPCS. "With the sale of the assets and liabilities of these two operation centers, it allows us to replace liquidity lost due to the project overruns and gives us a core group of operation centers that can take advantage of the communication infrastructure opportunities in the healthcare, public services and energy markets."
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