SAN DIEGO, CA--(Marketwire - February 14, 2011) - Franklin Wireless Corp. (
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).
FRANKLIN WIRELESS CORP. | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
UNAUDITED | |||||||
(IN THOUSANDS) | |||||||
December 31, | June 30, | ||||||
2010 | 2010 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 15,810 | $ | 16,108 | |||
Accounts receivable | 4,605 | 3,119 | |||||
Inventories | 320 | 198 | |||||
Intangible assets, net | 2,480 | 2,859 | |||||
Deferred tax assets, net | 1,668 | 1,672 | |||||
Property and equipment, net | 461 | 985 | |||||
Advance payment to vendor | 630 | 458 | |||||
Other assets | 653 | 496 | |||||
TOTAL ASSETS | $ | 26,627 | $ | 25,895 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Trade accounts payable | $ | 5,111 | $ | 6,418 | |||
Accrued liabilities | 362 | 732 | |||||
Other liabilities | 3,640 | 3,076 | |||||
TOTAL LIABILITIES | 9,113 | 10,226 | |||||
Stockholders' equity | |||||||
Common stock | 14 | 14 | |||||
Additional paid-in capital | 5,991 | 5,556 | |||||
Retained earnings | 12,140 | 8,982 | |||||
Treasury stock | (1,873 | ) | - | ||||
Non-controlling interest | 1,337 | 1,130 | |||||
Other | (95 | ) | (13 | ) | |||
Total stockholders' equity | 17,514 | 15,669 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 26,627 | $ | 25,895 | |||
FRANKLIN WIRELESS CORP. | |||||||
STATEMENT OF OPERATIONS | |||||||
UNAUDITED | |||||||
(IN THOUSANDS, EXCEPT PER SHARE DATA) | |||||||
THREE MONTHS ENDED | |||||||
December 31 | |||||||
2010 | 2009 | ||||||
Net sales | $ | 15,583 | $ | 25,177 | |||
Cost of goods sold | 9,483 | 22,280 | |||||
Gross profit | 6,100 | 2,897 | |||||
Operating Expenses | |||||||
Selling, general and administrative | 2,497 | 1,458 | |||||
Total Operating Expenses | 2,497 | 1,458 | |||||
Income from operations | 3,603 | 1,439 | |||||
Other income (expense) | |||||||
Interest income | 11 | 11 | |||||
Other income (expense), net | (106 | ) | 22 | ||||
Total other income (expense) | (95 | ) | 33 | ||||
Income before taxes | 3,508 | 1,472 | |||||
Income tax provision/(benefit) | 1,105 | 576 | |||||
Non-controlling interests in net loss of subsidiary | (372 | ) | (74 | ) | |||
Net Income | $ | 2,031 | $ | 822 | |||
Basic earnings per share | $ | 0.17 | $ | 0.06 | |||
Diluted earnings per share | $ | 0.17 | $ | 0.06 | |||
Weighted average common shares outstanding - basic | 11,978 | 13,548 | |||||
Weighted average common shares outstanding - diluted | 12,151 | 13,665 | |||||
About Franklin Wireless
Franklin Wireless Corp. (
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.
Contact Information:
Contact:
Richard Walker
Franklin Wireless Corp.
+1 858 623 0000
rick.walker@franklinwireless.com