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Company Expands Gross and Operating Margins, Driving $6.8 Million Improvement in Net Income Attributable to Parent Company to $5.6 Million or Earnings Per Share of $0.52; Ends the Year with $34 Million in Cash and CD.

SAN DIEGO, Sept. 18, 2020 (GLOBE NEWSWIRE) — Franklin Wireless Corp.(FKWL), a market leader in broadband data communications including hardware and software solutions for M2M and the IoT, today announced full-year financial results for the fiscal year ended June 30, 2020.

Financial and Operational Highlights

  • Full-year revenue increased 105.9% to $75.1 million
  • Full-year operating expenses declined 5.1% to $7.4 million
  • Full-year R&D expenses increased by 27% vs. last year
  • Full-year net income attributable to parent company increased to $5.6 million, a positive swing of $6.8 million vs. last year

“Our fiscal 2020 financial results reflect Franklin’s ability to capitalize on the surge in demand for wireless connectivity brought on by the Pandemic,” said OC Kim, president of Franklin Wireless. “We were able to expand production to meet unprecedented demand from school districts, large carriers and other partners for advanced networking and connectivity technology as the country shifted to a work-from-home reality amidst the global pandemic. The price-point of our hotspots provide a compelling value proposition for school districts seeking solutions for connecting students at home.  Our continued focus on cost controls, including a reduction in SG&A expenses, enabled us to increase full-year net income by $6.8 million. As a result, we ended the fiscal year with a strengthened balance sheet, including $34 million in cash and CD. We continue to be well-positioned to meet demand for 5G technology and other networking solutions, with a loyal and growing customer base that includes two tier 1 U.S. carriers.”

About Franklin Wireless

Franklin Wireless Corp is a leading provider of intelligent wireless solutions including mobile hotspots, routers, trackers, and other devices. Our designs integrate innovative hardware and software enabling machine-to-machine (M2M) applications and the Internet of Things (IoT). Our M2M and IoT solutions include embedded modules, modems and gateways built to deliver reliable always-on connectivity supporting a broad spectrum of applications based on fifth generation and fourth generation (5G/4G) wireless technology. For more 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:
Franklin Wireless Corp.
+1 858 623 0000
[email protected]
             
             
             

FRANKLIN WIRELESS CORP.
Consolidated Balance Sheets

    As of June 30,  
    2020     2019  
ASSETS            
Current assets:                
Cash and cash equivalents   $ 28,161,644     $ 6,447,505  
Certificates of deposit account     5,381,918       5,380,226  
Accounts receivable     15,973,537       4,138,469  
Other receivables, net     61,090       40,807  
Inventories, net     11,783,403       1,052,740  
Prepaid expenses and other current assets     21,588       28,042  
Advance payments to vendors     27,838       51,340  
Total current assets     61,411,018       17,139,129  
Property and equipment, net     220,889       131,879  
Intangible assets, net     1,125,152       1,109,911  
Deferred tax assets, non-current     938,188       2,282,975  
Goodwill     273,285       273,285  
Right of use assets     1,139,670        
Other assets     283,369       258,097  
TOTAL ASSETS   $ 65,391,571     $ 21,195,276  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Current liabilities:                
Accounts payable   $ 42,083,255     $ 5,672,514  
Income tax payable     34,713       654  
Accrued liabilities     466,021       247,658  
Lease liabilities, current     400,508        
Total current liabilities     42,984,497       5,920,826  
Lease liabilities, non-current     784,233        
Notes payable, payroll protection plan loan     487,300        
Total liabilities     44,256,030       5,920,826  
                 
Commitments and contingencies (Note 8)                
Stockholders’ equity:                
Parent Company stockholders’ equity                
Preferred stock, par value $0.001 per share, authorized 10,000,000 shares; No preferred stock issued and outstanding as of June 30, 2020 and 2019            
Common stock, par value $0.001 per share, authorized 50,000,000 shares; 10,605,912 and 10,570,203 shares issued and outstanding as of June 30, 2020 and 2019, respectively     14,007       13,972  
Additional paid-in capital     7,475,365       7,442,272  
Retained earnings     18,028,059       12,477,441  
Treasury stock, 3,472,286 shares as of June 30, 2020 and 2019     (4,513,479 )     (4,513,479 )
Accumulated other comprehensive loss     (650,426 )     (634,802 )
Total Parent Company stockholders’ equity     20,353,526       14,785,404  
Non-controlling interests     782,015       489,046  
Total stockholders’ equity     21,135,541       15,274,450  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 65,391,571     $ 21,195,276  
                 

             

FRANKLIN WIRELESS CORP.
Consolidated Statements of Comprehensive Income (loss)

    Fiscal Years Ended June 30,  
    2020     2019  
Net sales   $ 75,072,298     $ 36,468,900  
Cost of goods sold     60,547,813       30,729,411  
Gross profit     14,524,485       5,739,489  
Operating expenses:                
Selling, general and administrative     3,699,859       4,891,365  
Research and development     3,746,502       2,955,581  
Total operating expenses     7,446,361       7,846,946  
Income (loss) from operations     7,078,124       (2,107,457 )
Other income, net:                
Interest income     159,749       138,462  
Income from governmental subsidy     16,282       64,201  
Other income, net     44,733       2,291  
Total other income, net     220,764       204,954  
Income (loss) before provision (benefit) for income taxes     7,298,888       (1,902,503 )
Income tax provision (benefit)     1,380,301       (428,745 )
Net income (loss)     5,918,587       (1,473,758 )
Less: non-controlling interests in net loss of subsidiary at 48.2%           (55,564 )
Less: non-controlling interests in net income (loss) of subsidiary at 35.8%     189,105       (142,070 )
Less non-controlling interests in net income of subsidiary at 33.7%     178,864        
Net income (loss) attributable to Parent Company   $ 5,550,618     $ (1,276,124 )
                 
Basic earnings (loss) per share attributable to Parent Company stockholders   $ 0.52     $ (0.12 )
Diluted earnings (loss) per share attributable to Parent Company stockholders   $ 0.52     $ (0.12 )
                 
Weighted average common shares outstanding – basic     10,581,499       10,570,203  
Weighted average common shares outstanding – diluted     10,715,979       10,570,203  
                 
Comprehensive income (loss)                
Net income (loss)   $ 5,918,587     $ (1,473,758 )
Translation adjustments     (15,624 )     (52,819 )
Comprehensive income (loss)     5,902,963       (1,526,577 )
Less: comprehensive income (loss) attributable to non-controlling interest     367,969       (197,634 )
Comprehensive income (loss) attributable to controlling interest   $ 5,534,994     $ (1,328,943 )
                 

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