Net Income Increases 147%; Gross Profit Margin Rises to 39%
SAN DIEGO, CA–(Marketwire – 02/14/11) – 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 second quarter of fiscal year 2011 ended December 31, 2010.
The company reported net sales of $15.6 million for the quarter, compared with $25.2 million in net sales for the corresponding period of 2009. Gross margin improved to 39.1% from 11.5% and despite the decrease in revenue, gross profit increased by 110% to $6.1 million compared to $2.9 million for the same quarter last year. In addition, net income increased to $2.0 million for the three month period ending December 31, 2010, compared with $821,546 for the same period in 2009, which represents a 147% increase year-over-year. The improved gross margin, gross profit 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.
“Despite operating in a very competitive environment during this past quarter, Franklin Wireless posted solid financial results including substantial increases in gross margin and net income,” said OC Kim, president of Franklin Wireless. “During the quarter, we continued to ship a greater mix of FTI supplied products, which was the primary reason for the improved results and we feel this further validates our strategic investment in FTI which took place in fiscal 2010.”
Diluted earnings per share improved to $0.17 for the quarter compared to $0.06 for same period last year. The 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. The Company expects to repurchase C-Motech’s remaining 1.6 million shares by March 31, 2011, which will further reduce the number of shares outstanding.
The company’s 10-Q filing for the three month period ending December 31, 2010 is on file with the SEC (www.sec.gov).
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.