SAN DIEGO, CA--(Marketwire - Feb 14, 2012) - Franklin Wireless Corp. (OTCBB: [ FKWL ]), the market leader in dual-mode WiMAX and CDMA modems for 3G and 4G wireless broadband data communications, today announced financial results for the second quarter of fiscal year 2012 ended December 31, 2011.

The Company reported net sales of $3.0 million for the quarter, compared with $15.6 million in net sales for the corresponding period of 2010. Gross margin for the second quarter of fiscal 2012 was 21.0%, compared with 39.1% for the same quarter last year. Total operating expenses were $1.6 million in the second quarter of fiscal 2012, down from $2.5 million in the second quarter of fiscal 2011. The Company reported a net loss of approximately $488,000, or $0.04 per basic and diluted share, compared with net income of $2.0 million, or $0.17 per basic and diluted share, for the same quarter last year. The Company ended the second quarter of fiscal 2012 with cash and cash equivalents of $14.1 million, compared with $11.4 million at the end of fiscal 2011.

The decrease in net sales year-over-year was due to several factors including increased competition in the dual-mode (3G and 4G) USB modem market, as well as competition from other similar products, which negatively affected volume and price. Net sales were also affected by delays in launching new products due to longer than expected schedules associated with design, testing and certification efforts. In addition, net sales in the South American and Latin American regions were down significantly due to timing of orders placed by a relatively small number of customers as well as the fact that some carrier customers are transitioning from CDMA to LTE or HSPA+ networks, which affected the quantity of CDMA related products sold during the second quarter of fiscal 2012.

"As was previously indicated, weakness in revenue was expected to continue into the second quarter of fiscal 2012, and our sales were essentially flat from the first quarter of fiscal 2012," said OC Kim, president of Franklin Wireless. "We expect that revenues will continue to be weak in the third quarter of fiscal 2012, as we transition to new 4G technologies including LTE, but are expected to ramp up in the fourth quarter of the fiscal year, driven primarily by our planned new product roll-outs. As indicated before, we are encouraged by the strong progress currently being made with respect to new product introductions as well as our potential to sign new and significant carrier customers in the near term. During this transition period, our balance sheet remains strong, including $14.1 million in cash, which is up from $11.4 million just six months ago as of the end fiscal 2011."

The Company's 10-Q filing for the three month period ending December 31, 2011 is on file with the SEC ([ www.sec.gov ]).

About Franklin Wireless

Franklin Wireless Corp. (OTCBB: [ FKWL ]) is engaged in the design, manufacture and sale of high speed wireless data products including third generation ("3G") and fourth generation ("4G") modems, routers and modules. Our current products are focused on widely deployed cellular technologies including CDMA EVDO Rev A, HSPA, WiMAX and LTE. We were the world's first supplier of both CDMA EVDO Rev A and dual-mode (CDMA EVDO Rev A/WiMAX) Universal Serial Bus (USB) modems. Franklin's other products include Wi-Fi "hotspot" routers (which operate over WiMAX or CDMA networks) and wireless modules that are generally sold to original equipment manufacturers (OEMs). Our company's primary customers are wireless carriers who seek innovative, reliable and cost effective technology solutions for their subscribers. Our customer base extends from the United States to South America and the Caribbean.

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.