SOURCE: Franklin Wireless Corporation

February 13, 2007 15:54 ET

Franklin Wireless Reports Quarter Ended December 31, 2006 Revenue and Profit Doubles Compared to Quarter Ended September 30, 2006

SAN DIEGO, CA -- (MARKET WIRE) -- February 13, 2007 -- Franklin Wireless Corp. (PINKSHEETS: FKLT) is reporting results for the quarterly period ended December 31, 2006.

The results are reported in US dollars and are prepared in accordance with United States generally accepted accounting principles.

Franklin Wireless' net sales for the six months ended December 31, 2006 amounted to $2,770,150, gross profit was 775,550, or 28% of revenue, operating expenses were $474,714 and net income were $312,583, or basic earnings per share of $0.0004. The balance sheet remains strong, with $1.02 million of cash and cash equivalents.

Results for the three months ended December 31, 2006 compared to three months ended December 31, 2005:

Net sales increased by 2,136.8% to $1,800,622 for the three months ended December 31, 2006 from $80,500 for the corresponding period of 2005. Gross profit was 26.8% of net sales for the three months ended December 31, 2006, compared to 47% for the corresponding period in 2005. Selling, general, and administrative expenses increased by 51.65% to $275,450 for the three months ended December 31, 2006 from $181,638 for the corresponding period of 2005. Net income was $213,659, or basic earnings per share of $0.0002 for the three months ended December 31, 2006, compared to a net loss of $129,824, or loss per share of $0.0002, in the corresponding period of 2005.

Results for the six months ended December 31, 2006 compared to six months ended December 31, 2005:

Net sales increased by 1,627.1% to $2,772,150 for the six months ended December 31, 2006 from $160,390 for the corresponding period of 2005. Gross profit was 28% of net sales for the six months ended December 31, 2006, compared to 62.5% for the corresponding period in 2005. The gross profit percentage decrease can be attributed to the increase in cost of goods sold due to the increase in sales of modem and module products for the six months ended December 31, 2006, while having no cost of sales, which was due to the service sales, for the corresponding period of 2005. Selling, general, and administrative expenses increased by 66.35% to $474,714 for the six months ended December 31, 2006 from $285,372 for the corresponding period of 2005. Net income was $312,583, or basic earnings per share of $0.0004 for the three months ended December 31, 2006, compared to a net loss of $207,770, or loss per share of $0.0003, in the corresponding period of 2005.

Highlights For the Six Months Ended December 31, 2006, Included:

--  The Company had a substantial sales increase of modem in Latin America
    for the three months ended December 31, 2006.
--  The Company had a profit increase due to the sales increase.
--  The Company received $400,000 in advance from an unaffiliated company
    for common stock during the six months ended December 31, 2006.
--  The Company issued 15,000,000 shares of its common stock, at $0.0091
    per share approximately, the total valued at $136,364.
    
About Franklin Wireless

Franklin Wireless Corporation (PINKSHEETS: FKLT) designs, builds, and markets broadband high speed data communication products. It offers third generation wireless modules and modems. The company's wireless broadband data products include wireless USB modems, PC cards, embedded modules, and stand-alone broadband modems used for high speed data services. It also provides wireless solutions to electronic consumer product companies. The company offers its products to various industries, including cellular operators, government agencies, personal computer makers, and application integrators, as well as computer/handheld computing industry, automotive industry, and telemetry markets. It markets its products through original equipment manufacturers (OEMs) and distributors, as well as directly to operators and end users in the United States, Canada, South America, Asia, and parts of Europe. The company was founded in 2001 and is headquartered in San Diego, California. For more information about Franklin Wireless, please visit www.fklt.com

                        FRANKLIN WIRELESS CORP.
                 Consolidated Statements of Operations
                             (Unaudited)


                          Three Months Ended         Six Months Ended
                              December 31,              December 31,
                        ------------------------- -------------------------
                            2006         2005         2006         2005
                        ------------ -----------  ------------ -----------

Net sales               $  1,800,622 $    80,500  $  2,770,150 $   160,390
Cost of goods sold         1,318,750      42,700     1,994,600      60,200
                        ------------ -----------  ------------ -----------
Gross profit                 481,872      37,800       775,550     100,190
                        ------------ -----------  ------------ -----------

Operating expenses:
    Selling, general,
     and administrative      275,450     181,638       474,714     285,372
    Research and
     development                   -           -             -      36,300
                        ------------ -----------  ------------ -----------
Total operating
 expenses                    275,450     181,638       474,714     321,672
                        ------------ -----------  ------------ -----------

Income (Loss) from
 operations                  206,422    (143,838)      300,836    (221,482)

Other income (expense):
    Interest income            6,944         245        12,229         275
    Other income                 293      14,925           318      14,942
    Other expenses                 -        (356)            -        (705)
                        ------------ -----------  ------------ -----------
Total other income
 (expense), net                7,237      14,814        12,547      14,512
                        ------------ -----------  ------------ -----------

Net income (loss)
 before income taxes         213,659    (129,024)      313,383    (206,970)

Provision for income
 taxes                             -         800           800         800
                        ------------ -----------  ------------ -----------

Net income (loss)       $    213,659 $  (129,824) $    312,583 $  (207,770)
                        ------------ -----------  ------------ -----------


Basic earnings (loss)
 per share              $     0.0002 $   (0.0002) $     0.0004 $   (0.0003)
Diluted earnings (loss)
 per share              $     0.0002 $   (0.0002) $     0.0004 $   (0.0003)

Weighted average common
 shares outstanding –
 basic                   894,237,852 816,116,973   888,105,624 804,515,460
Weighted average common
 shares outstanding –
 diluted                 894,237,852 816,116,973   888,105,624 804,515,460




                        FRANKLIN WIRELESS CORP.
                      Consolidated Balance Sheets


                                              -------------  -------------
                                               (Unaudited)
                                               December 31,     June 30,
                                                  2006            2006
                                              -------------  -------------
ASSETS
   Current assets:
        Cash and cash equivalents             $   1,014,689  $     568,387
        Inventory                                   307,670              –
        Accounts receivable                         114,135          1,750
                                              -------------  -------------
        Total current assets                      1,436,494        570,137
   Property and equipment, net                       12,444         12,715
   Intangible assets, net                           118,617        104,195
   Other assets                                       4,452          4,452
                                              -------------  -------------
   TOTAL ASSETS                               $   1,572,007  $     691,499
                                              -------------  -------------


LIABILITIES AND STOCKHOLDERS' EQUITY
   Current liabilities
        Accounts payable                      $     213,240  $         585
        Accrued liabilities                         146,240        190,968
        Other current liability                     263,636              –
        Notes payable to stockholders,
         current portion                            540,000        540,000
                                              -------------  -------------
        Total current liabilities                 1,163,116        731,553
                                              -------------  -------------

   Stockholders’ equity
   Common stock, no par value, authorized
    900,000,000 shares and Preferred stock,
    no par value, authorized 10,000,000
    shares; Common stock issued and
    outstanding – 897,040,050 and 882,040,050
    as of December 31, 2006 and June 30,
    2006, respectively, and no Preferred
    stock issued and outstanding                          –              –
   Additional paid-in capital                     4,765,756      4,629,393
   Stock subscription receivable                    (17,394)       (17,395)
   Accumulated deficit                           (4,339,471)    (4,652,052)
                                              -------------  -------------
   Total stockholders’ equity (deficit)             408,891        (40,054)
                                              -------------  -------------

   Total liabilities and stockholders’ equity $   1,572,007  $     691,499
                                              -------------  -------------



                        FRANKLIN WIRELESS CORP.
                Consolidated Statements of Cash Flows
                             (Unaudited)

                                                  ------------------------
                                                      Six Months Ended
                                                        December 31,
                                                  ------------------------
                                                      2006        2005
                                                  -----------  -----------

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net Income (loss)                              $   312,583  $  (207,770)
   Adjustments to reconcile net income (loss) to
    net cash provided by operating activities:
       Depreciation                                     2,844        3,100
       Amortization of intangible assets               39,358       22,500
       Increase (decrease) in cash due to change
        in:
           Accounts receivable                       (112,385)     (10,250)
           Inventory                                 (307,670)           –
           Accounts payable                           212,654       13,075
           Accrued liabilities                        (44,729)      44,434
                                                  -----------  -----------
Net cash provided (used) by operating activities      102,655     (134,911)
                                                  -----------  -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of property and equipment                 (2,573)           –
   Purchases of intangible assets                     (53,780)      (1,837)
                                                  -----------  -----------
Net cash used in investing activities                 (56,353)      (1,837)
                                                  -----------  -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Payment received for future stock issuance         263,636      (30,000)
       Proceeds from issuance of common stock         136,364      335,000
                                                  -----------  -----------
Net cash provided by financing activities             400,000      305,000
                                                  -----------  -----------

Net increase in cash and cash equivalents             446,302      168,252
Cash and cash equivalents, beginning of period        568,387       39,542
                                                  -----------  -----------
Cash and cash equivalents, end of period          $ 1,014,689  $   207,794
                                                  -----------  -----------

Supplemental disclosure of cash flow information:
   Cash paid during the year for:
       Interest                                   $         –  $         –
       Income taxes                               $         –  $         –

Contact Information

  • Contact:
    Franklin Wireless
    Rosalyn Guido
    (858) 623-0000
    Email Contact