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Franklin Wireless Reports Quarter Ended December 31, 2006 Revenue and Profit Doubles Compared to Quarter Ended September 30, 2006
SAN DIEGO, CA, Feb 13, 2007 (MARKET WIRE via COMTEX) -- 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 $ - $ -