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
|June 30, 2011||June 30, 2010|
|Cash and cash equivalents||$11,358||$16,108|
|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|
|LIABILITIES AND STOCKHOLDERS’ EQUITY|
|Trade accounts payable||$2,782||$6,418|
|Additional paid-in capital||13,527||8,982|
|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|
|Cost of goods sold||31,456||87,873|
|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)|
|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|
|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:FKWL – News) 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.
Franklin Wireless Corp.