GlobeNewswire Inc | Sep 18, 2020 04:37PM EDT

September 18, 2020

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 Franklins 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 visitwww.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 0000bill.bauer@franklinwireless.com

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 2019Common stock, par value $0.001 per share,authorized 50,000,000 shares; 10,605,912 and 14,007 13,972 10,570,203 shares issued and outstanding asof June 30, 2020 and 2019, respectivelyAdditional 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 (4,513,479 ) (4,513,479 )30, 2020 and 2019Accumulated 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 7,298,888 (1,902,503 )income taxesIncome tax provision (benefit) 1,380,301 (428,745 )Net income (loss) 5,918,587 (1,473,758 )Less: non-controlling interests in net loss ? (55,564 )of subsidiary at 48.2%Less: non-controlling interests in net income 189,105 (142,070 )(loss) of subsidiary at 35.8%Less non-controlling interests in net income 178,864 ? of subsidiary at 33.7%Net income (loss) attributable to Parent $ 5,550,618 $ (1,276,124 )Company Basic earnings (loss) per share attributable $ 0.52 $ (0.12 )to Parent Company stockholdersDiluted earnings (loss) per share $ 0.52 $ (0.12 )attributable to Parent Company stockholders Weighted average common shares outstanding 10,581,499 10,570,203 -basicWeighted average common shares outstanding 10,715,979 10,570,203 -diluted 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) 367,969 (197,634 )attributable to non-controlling interestComprehensive income (loss) attributable to $ 5,534,994 $ (1,328,943 )controlling interest