Franklin Wireless Announces Third Quarter Fiscal 2011 Financial Results

Franklin Wireless Announces Third Quarter Fiscal 2011 Financial Results

SAN DIEGO, CA–(Marketwire – 05/13/11) – Franklin Wireless Corp. (OTC.BB:FKWL – News), the market leader in dual-mode WiMAX and CDMA modems for 3G and 4G wireless broadband data communications, today announced financial results for the third quarter of fiscal year 2011 ended March 31, 2011.

The Company reported net sales of $9.4 million for the quarter, compared with $31.6 million in net sales for the corresponding period of 2010. Gross margin improved to 29.7% from 13.5%, and despite the decrease in revenue, net income rose to $1.5 million for the three month period ending March 31, 2011, compared with $1.3 million for the same period in 2010, which represents a 13% increase year-over-year. The improved gross margin and net income were driven primarily by an increase in the proportion of FTI supplied products (vs. third party suppliers), which consisted of the Company’s U600 and U210 USB modems. On a fiscal year-to-date basis, net income more than doubled to $4.7 million from $2.3 million for the same period last fiscal year.

“During this past quarter, our Company continued to deliver solid bottom line financial results,” said OC Kim, president of Franklin Wireless. “In spite of lower revenues for the quarter, we were able to grow net income by 13% year-over-year, which is a significant achievement for our team.”

The Company noted that the results reflected the payment received from C-Motech for amounts owed to the Company of approximately $1.9 million, of which approximately $1.6 million was booked to other income.

Diluted earnings per share improved to $0.13 for the quarter compared to $0.10 for same period last year. The earnings per share increase was due to higher net income as well as the lower share count resulting from the recent repurchase of approximately 1.8 million shares from C-Motech as well as the previously announced cancellation of 250,000 shares that took place during the three month period ending March 31, 2011.

The Company’s 10-Q filing for the three month period ending March 31, 2011 is on file with the SEC (www.sec.gov).

FRANKLIN WIRELESS CORP.CONDENSED CONSOLIDATED BALANCE SHEETSUNAUDITED(IN THOUSANDS)

 

FRANKLIN WIRELESS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)

June 30, 2011 June 30, 2010
ASSETS
Cash and cash equivalents $11,358 $16,108
Accounts receivable 6,916 3,119
Inventories 935 198
Intangible assets, net 2,275 2,859
Deferred tax assets, net 1,679 1,672
Property and equipment, net 440 985
Advance payment to vendor 41 458
Other assets 527 496
——— ——–
TOTAL ASSETS $24,171 $25,895
========= =========
——— ———
LIABILITIES AND STOCKHOLDERS’ EQUITY
Trade accounts payable $2,782 $6,418
Accrued liabilities 319 732
Other liabilities 2,098 3,076
——– ——–
TOTAL LIABILITIES 5,199 10,226
——– ——–
Stockholders’ equity 14 14
Common stock 6,420 5,556
Additional paid-in capital 13,527 8,982
Retained earnings (1,873)
Treasury stock 901 1,130
Non-controlling interest (17) (13)
Other ——– ——–
Total stockholders’ equity 18,972 15,669
——– ——–
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $24,171 $25,895
======== ========

 

FRANKLIN WIRELESS CORP.
STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)

                     TWELVE MONTHS ENDED
                         JUNE 30,
2011 2010
——– ——–
Net sales $46,514 $101,898
Cost of goods sold 31,456 87,873
——– ——–
Gross profit 15,058 14,025
——– ——–
Operating Expenses
Selling, general and administrative 9,405 6,359
——– ——–
Total Operating Expenses 9,405 6,359
——– ——–
Income from Operations 5,653 7,666
======== ========
Other income, net (expense)
Interest income 46 79
Other income (expense), net 1,998 (164)
——– ——–
Total other income (expense) 2,044 (85)
——– ——–
income before taxes 7,697 7,581
Income tax provision/ (benefit) 3,354 2,954
Non-controlling interests in net loss of subsidiary 202 151
——– ——–
Net Income 4,545 $4,778
======== ========
Basic earnings per share $0.37 $0.35
Diluted earnings per share $0.36 $0.35
Weighted average common shares outstanding – basic 12,280 13,584
Weighted average common shares outstanding – diluted 12,464 13,741

 

 

About Franklin Wireless
Franklin Wireless Corp. (OTC.BB:FKWLNews) is engaged in the design, manufacture and sale of high speed wireless data products including third generation (“3G”) and fourth generation (“4G”) modems, routers and modules. Our current products are focused on widely deployed cellular technologies including CDMA EVDO Rev A, HSPA, WiMAX and LTE. We were the world’s first supplier of both CDMA EVDO Rev A and dual-mode (CDMA EVDO Rev A/WiMAX) Universal Serial Bus (USB) modems. Franklin’s other products include Wi-Fi “hotspot” routers (which operate over WiMAX or CDMA networks) and wireless modules that are generally sold to original equipment manufacturers (OEMs). Our company’s primary customers are wireless carriers who seek innovative, reliable and cost effective technology solutions for their subscribers. Our customer base extends from the United States to South America and the Caribbean.

Franklin Wireless is headquartered in San Diego, California and has a majority ownership position in Franklin Technology Inc. (FTI), a research and development facility located in Seoul, South Korea. FTI provides design, development and manufacturing services to Franklin for its wireless data products. For additional information, please visitwww.franklinwireless.com.

 

Safe Harbor Statement:
Certain statements in this press release constitute “forward-looking statements” within the meaning of section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements, expressed or implied by such forward-looking statements.

 

Contact:
Rick Walker
Franklin Wireless Corp.
Email: rick.walker@franklinwireless.com
(858) 623-0000