Franklin Wireless Reports Record Quarterly Revenue of $66.2 Million, Up nearly 400% Year-over-Year

Strong Demand Amidst Covid-19 Pandemic Drives Nearly 400% Gain in Year-over-Year Sales

Net Income Rises to $0.58 Per Basic Share

Cash and Short-Term Investments Increase to $76.4 Million with No Financial Debt

SAN DIEGO, Feb. 17, 2021 (GLOBE NEWSWIRE) -- Franklin Wireless Corp.(FKWL), a market leader in broadband data communications including hardware and software solutions for M2M and the IoT (Internet of Things), today announced record second quarter results for the period ended December 31, 2020.

Financial and Operational Highlights (second fiscal quarter of 2021 vs. second fiscal quarter of 2020):

• Revenues increased 399.5% to $66.2 million, a record amount for any quarter in the Company’s history.

• Income before provision for taxes of $9.1 million versus $848,828 in the second quarter last year.

• Net income increased to $6.9 million, a positive swing of $6.3 million versus the second quarter last year.
  

“The continued record revenue and net income demonstrates the tireless work of our entire team to maximize opportunities during this challenging and difficult time for the global economy brought about by the Covid-19 global pandemic,” said OC Kim, president of Franklin Wireless. “Our manufacturing partners, suppliers and staff have done a great job overcoming supply chain delays and have consistently delivered our products on time, without increasing the cost of operations. It appears likely that the pandemic has caused long term changes to the way we work and learn, and these changes will increase demand for our wireless solutions for years to come. Operationally and financially, we are extremely well positioned to meet this demand for our products and solutions, with the strongest balance sheet in our history and a profitable business generating cash flow. We will keep working hard to take advantage of opportunities and deliver solutions to our customers to help them navigate these unprecedented times.”

Second Quarter Financial Results (three months ended December 31, 2020 compared to three months ended December 31, 2019)

The Company reported net sales of $66.2 million, compared with $13.3 million in net sales in the same period last year. The 399.5% year-over-year growth in net sales was primarily from increased demand for wireless connectivity due to the effect of both remote working and remote school attendance in the wake of the Covid-19 global pandemic.

Net income was approximately $6.9 million, or $0.58 per basic share, compared to approximately $581,000, or $0.05 per basic share last year.

The Company’s 10-Q filing for the period ending December 31, 2020 is on file with the SEC (www.sec.gov).

About Franklin Wireless
Franklin Wireless Corp. (FKWL) is a global leader in innovative hardware and software products that support machine-to-machine (M2M) applications and the Internet of Things (IoT), as well as intelligent wireless solutions including mobile hotspots, routers and modems. 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
ir@franklinwireless.com

FRANKLIN WIRELESS CORP.
CONSOLIDATED BALANCE SHEETS

		December 31, 2020 (Unaudited)				June 30, 2020
ASSETS
Current assets:
Cash and cash equivalents		$	71,025,316			$	28,161,644
Certificates of deposit account			5,384,496				5,381,918
Accounts receivable, net of allowance for bad debt of $61,890 and $0, respectively			16,366,586				15,973,537
Other receivables, net			50,244				61,090
Inventories, net			13,176,140				11,783,403
Prepaid expenses and other current assets			14,049				21,588
Advance payments to vendors			42,113				27,838
Total current assets			106,058,944				61,411,018
Property and equipment, net			185,563				220,889
Intangible assets, net			1,419,166				1,125,152
Deferred tax assets, non-current			685,280				938,188
Goodwill			273,285				273,285
Right of use assets			955,732				1,139,670
Other assets			144,964				283,369
TOTAL ASSETS		$	109,722,934			$	65,391,571
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	63,939,629			$	42,083,255
Income tax payable			1,970,289				34,713
Accrued liabilities			316,520				466,021
Advance payments from customers			688,572				–
Lease liabilities, current			376,574				400,508
Total current liabilities			67,291,584				42,984,497
Lease liabilities, non-current			617,790				784,233
Notes payable, payroll protection plan loan			–				487,300
Total liabilities			67,909,374				44,256,030
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 December 31, 2020 and June 30, 2020			–				–
Common stock, par value $0.001 per share, authorized 50,000,000 shares; 11,576,281 and 10,605,912 shares issued and outstanding as of December 31, 2020, and June 30, 2020, respectively			14,054				14,007
Additional paid-in capital			12,756,959				7,475,365
Retained earnings			31,805,030				18,028,059
Treasury stock, 2,549,208 and 3,472,286 shares as of December 31, 2020 and June 30, 2020			(3,554,893	)			(4,513,479	)
Accumulated other comprehensive loss			(365,906	)			(650,426	)
Total Parent Company stockholders’ equity			40,655,244				20,353,526
Non-controlling interests			1,158,316				782,015
Total stockholders’ equity			41,813,560				21,135,541
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	109,722,934			$	65,391,571

FRANKLIN WIRELESS CORP.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Unaudited)

		Three Months Ended								Six Months Ended
		December 31,								December 31,
		2020				2019				2020				2019
Net sales		$	66,247,578			$	13,263,855			$	128,817,028			$	22,134,130
Cost of goods sold			54,955,123				10,672,228				105,853,342				17,521,991
Gross profit			11,292,455				2,591,627				22,963,686				4,612,139
Operating expenses:
Selling, general and administrative			1,409,026				769,743				2,930,485				1,618,504
Research and development			1,151,732				1,024,424				2,130,124				1,919,936
Total operating expenses			2,560,758				1,794,167				5,060,609				3,538,440
Income from operations			8,731,697				797,460				17,903,077				1,073,699
Other income (loss), net:
Interest income			1,760				40,561				4,654				95,591
Income from governmental subsidy			44,347				33				66,433				4,126
Gain from the forgiveness of payroll protection plan loan			487,300				–				487,300				–
Other income (loss), net			(150,874	)			10,774				(169,052	)			26,366
Total other income (loss), net			382,533				51,368				389,335				126,083
Income before provision for income taxes			9,114,230				848,828				18,292,412				1,199,782
Income tax provision			2,138,406				114,886				4,139,140				175,860
Net income			6,975,824				733,942				14,153,272				1,023,922
Less: non-controlling interests in net income of subsidiary at 33.7%			119,213				–				376,301				–
Less: non-controlling interests in net income of subsidiary at 35.8%			–				153,064				–				189,106
Net income attributable to Parent Company		$	6,856,611			$	580,878			$	13,776,971			$	834,816
Basic income per share attributable to Parent Company stockholders		$	0.59			$	0.05			$	1.24			$	0.08
Diluted income per share attributable to Parent Company stockholders		$	0.58			$	0.05			$	1.22			$	0.08
Weighted average common shares outstanding – basic			11,566,309				10,570,203				11,118,511				10,570,203
Weighted average common shares outstanding – diluted			11,727,282				10,708,028				11,279,483				10,708,028
Comprehensive income
Net income		$	6,975,824			$	733,942			$	14,153,272			$	1,023,922
Translation adjustments			218,096				37,067				284,520				18,750
Comprehensive income			7,193,920				771,009				14,437,792				1,042,672
Less: comprehensive income attributable to non-controlling interest			119,213				153,064				376,301				189,106
Comprehensive income attributable to controlling interest		$	7,074,707			$	617,945			$	14,061,491			$	853,566