However, on Monday, WPCS International released news of $12 million in new contracts. CEO Andrew Hidalgo stated that his company is “receiving many new projects from state and local municipalities, which indicates for us an increased level of fiscal stimulus spending.”

As Mr. Hidalgo indicated, stimulus spending of taxpayer dollars is now starting to flow, which has jumpstarted the flow of technical contracts to the company. According to Recovery.gov, about $132 billion or 48% of the $275 billion in contracts, grants and loans for infrastructure upgrades included in the 2008 Congressional stimulus package has been spent.  Based on the total labor hours for a quarter that recipients report for each funded project, the U.S. government has calculated that 749,142 jobs have been funded by the massive $787 billion bill.

Since WPCS engineers communications infrastructure, much of their revenue results from government expenditure. Newly contracted bids for government projects include assignments for multiple police and fire departments, townships and schools across America, and even the Commonwealth of Pennsylvania.

WPCS had already announced approximately $50 million in new contracts through June 2010, versus a mere $50 million contracted for the entire year of 2009. The 2010 contracts have also had especially high margins, which portend greater profitability for FY11.   

The Company is well-positioned to receive more contracts, and if wins continue to flow in, WPCS could present a buying opportunity as the stock may begin to reverse its three-month downward trend.

Disclosure: The subject security is a client of RedChip Companies, Inc. RedChip Companies, Inc., employees and affiliates may have positions and affect transactions in the securities or options of the issuers mentioned herein. For full financial disclosures for all RedChip clients, please visit http://www.redchip.com/disclosures.asp?src=rcv.

The new contracts include projects to be completed for New London Police Department, Central Connecticut State University, Camden City Police Department in N.J., Eagle Research, Duquesne Light, National Grid, Florida Department of Transportation, Clearwire, AT&T, Qwest, Boeing Co., DNV Global Energy Concepts and Infinity Wind Power.

Additionally, WPCS has been awarded many new international projects. In China, the Company has received new contracts from Jiaxing Gas Pipeline and Shenzhen Gas Pipeline. In Australia, WPCS has received new project awards from Stanthorpe Police, Nambour General Hospital, Clontarf Beach State High School, Oakey Hospital, Yeronga State High School, Wynnum State High School and Bremer State High School.

Jim Heinz, Executive Vice President of WPCS commented, “We are pleased to see bids being converted to backlog as it helps us establish some momentum. Although economic conditions remain less than favorable, we are seeing increased activity which is an indication that our market strategy and services capability is giving us a competitive advantage. We believe that we will see even stronger results in the future. We remain very confident that our goals can be achieved.”

Established in 2002, WPCS operates globally with over 20 locations and over 500 employees operating on three continents. Its goal is to provide new energy sources, safer communities, affordable healthcare and broader educational opportunities through its high-speed wireless communication technology, advanced specialty construction, and cost-effective electrical power. Everything from people, communities, markets, businesses and industry are connected to the information, services and resources needed to live, work, grow and learn.

WPCS is continually expanding its capabilities in domestic and international markets and is working to establish a leadership position in each market it serves. WPCS continues to balance its goals of profitable operations, return on investment and superior services.

Disclosure: The subject security is a client of RedChip Companies, Inc. RedChip Companies, Inc., employees and affiliates may have positions and affect transactions in the securities or options of the issuers mentioned herein. For full financial disclosures for all RedChip clients, please visit http://www.redchip.com/disclosures.asp?src=rcv.