SOURCE: Franklin Wireless Corporation

Franklin Wireless Corporation

November 15, 2010 17:00 ET

Franklin Wireless Announces First Quarter Fiscal 2011 Financial Results

SAN DIEGO, CA--(Marketwire - November 15, 2010) - Franklin Wireless Corp. (OTCBB: FKWL), the market leader in dual-mode WiMAX and CDMA modems for 3G and 4G wireless broadband data communications, today announced financial results for the first quarter of fiscal year 2011 ended September 30, 2010.

The company reported an increase in net sales of 223% to $16.6 million for the quarter ending September 30, 2010, compared with $5.1 million in sales for the corresponding period of 2009. Net income before tax increased to $2.1 million for the three month period ending September 30, 2010, compared with $209,428 for the same period in 2009. The results were driven primarily by demand for the company's dual-mode 3G/4G USB modems as well as its single-mode devices including modems and routers. In addition, gross profit margin percent increased to 29.5% for the first quarter of fiscal 2011 compared to 15.1% for the same quarter last year.

"During the first quarter of our fiscal 2011, Franklin Wireless posted solid revenue, margin and net income results," said OC Kim, president of Franklin Wireless. "Increased demand for our dual-mode 3G/4G USB modems and other products as well as the addition of several new customers helped drive the overall growth compared with the same quarter one year ago. The margins for the quarter reflect, among other things, a greater mix of FTI supplied products, which consisted of the U600 and U210 USB modems. In the case of the U600, we began shipping this device for the first time to a tier 1 US carrier during this past quarter."

The company's 10-Q filing for the three month period ending September 30, 2010 is on file with the SEC (www.sec.gov).

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

                                            September 30,      June 30,
                                                 2010            2010
                                            --------------  --------------
  ASSETS

    Cash and cash equivalents               $       11,579  $       16,108
    Accounts receivable                              9,126           3,119
    Inventories                                         35             198
    Intangible assets, net                           2,658           2,859
    Deferred tax assets, net                         1,672           1,672
    Property and equipment, net                        456             985
    Advance payment to vendor                        1,629             458
    Other assets                                       585             496
                                            --------------  --------------
  TOTAL ASSETS                              $       27,740  $       25,895
                                            ==============  ==============

  LIABILITIES AND STOCKHOLDERS' EQUITY

    Trade accounts payable                  $        7,495  $        6,418
    Accrued liabilities                                588             732
    Other liabilities                                2,618           3,076
                                            --------------  --------------
  TOTAL LIABILITIES                                 10,701          10,226
                                            --------------  --------------

  Stockholders' equity
    Common stock                                        14              14
    Additional paid-in capital                       7,655           5,556
    Retained earnings                               10,109           8,982
    Treasury stock                                  (1,873)              -
    Non-controlling interest                           966           1,130
    Other                                              168             (13)
                                            --------------  --------------
  Total stockholders' equity                        17,039          15,669
                                            --------------  --------------

                                            --------------  --------------
  TOTAL LIABILITIES AND STOCKHOLDERS'
   EQUITY                                   $       27,740  $       25,895
                                            ==============  ==============





FRANKLIN WIRELESS CORP.
STATEMENT OF OPERATIONS
UNAUDITED
(IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                  THREE MONTHS ENDED
                                                     September 30
                                                 2010            2009
                                            --------------- ---------------

  Net sales                                 $        16,563 $         5,125

  Cost of goods sold                                 11,673           4,353

                                            --------------- ---------------
  Gross profit                                        4,890             772
                                            --------------- ---------------

  Operating Expenses
    Selling, general and administrative               2,951             577
                                            --------------- ---------------
  Total Operating Expenses                            2,951             577

                                            --------------- ---------------
  Income from operations                              1,939             195
                                            =============== ===============

  Other income (expense)
    Interest income                                      13              13
    Other income (expense), net                         161               1
                                            --------------- ---------------
  Total other income (expense)                          174              14
                                            --------------- ---------------

  Income before taxes                                 2,113             209

  Income tax provision/(benefit)                      1,150              75

  Non-controlling interests in net loss of
   subsidiary                                           164               -

                                            --------------- ---------------
  Net Income                                $         1,127 $           134
                                            =============== ===============

  Basic earnings per share                  $          0.08 $          0.01
  Diluted earnings per share                $          0.08 $          0.01

  Weighted average common shares
   outstanding - basic                               13,464          13,231
  Weighted average common shares
   outstanding - diluted                             13,629          13,250

About Franklin Wireless

Franklin Wireless Corp. (OTCBB: FKWL) 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 visit www.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.

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