IRVING, Texas, May 6 /PRNewswire-FirstCall/ -- EF Johnson Technologies, Inc. (Nasdaq: EFJI) today announced its results for the quarter ended March 31, 2009. Our revenues decreased $11.5 million, or 34%, to $22.4 million for the three months ended March 31, 2009 from $33.9 million for the same period in 2008. This anticipated quarterly decline was attributable to lower federal orders coupled with a decline in revenues associated with the FCC re-banding effort.
"While our state and local as well as government broadband solutions markets produced solid growth quarter over quarter, we continue to see delays and push outs in the federal market," said Michael E. Jalbert, chairman and chief executive officer. "Because of the lower first quarter revenues and our current projections continue to see weakness in the federal market, we have implemented additional cost reductions in the second quarter, including reductions in workforce and executive salary cuts, to provide a positive impact to our financials and cash flows in the second half of the year."
The Company announced today that it has reduced its workforce by 7% effective immediately, and intends to reduce its workforce by an additional 9% at the end of the second quarter. The Company expects these actions, coupled with its other cost reduction measures, to result in cost savings of $4.0 million to $5.0 million on an annualized basis.
Our gross profit of $7.7 million in the three months ended March 31, 2009 compares to $11.4 million for the same period in 2008. Gross profit as a percentage of revenues ("Gross Margin") improved to 34.3% for the three months ended March 31, 2009 compared to 33.6% for the same period a year ago. We attribute this increase in gross margin to improved cost, quality, and productivity.
The net loss was $1.3 million, or $(0.05) per share, for the three months ended March 31, 2009, compared to a net loss of $2.0 million, or $(0.08) per share, for the same period last year. The lower loss was due to the combination of lower sales and marketing as well as general and administrative expenses in the current quarter coupled with an escrow fund settlement of $2.8 million. As previously announced, the Company settled its claim against the escrow fund established in connection with the July 2006 acquisition of 3e Technologies International, Inc. (3eTI) for approximately $2.8 million, which was reported as a reduction to operating expenses.
"In spite of our business lumpiness and the impact on our projected quarterly revenues, we believe that the combination of our new products, our market focus, as well as our customer relationships should support our growth opportunities in the future," Jalbert added.
The Company's management plans to discuss the financial results and provide an operational progress report on its investor call today at 9:00 a.m. (EDT). The investor conference call will be available via live webcast on the Company's website at www.efjohnsontechnologies.com under the tab "Investor Relations." Investors are advised to go to the website at least 15 minutes prior to the call to register, download and install any necessary audio software. The webcast will be archived for 30 days.
To participate by telephone, the domestic dial-in number is (877) 407-8031 and the international dial-in number is (201) 689-8031. Participants are urged to call in to the conference call at least 10 minutes prior to the start time.
About EF Johnson Technologies, Inc.
Headquartered in Irving, Texas, EF Johnson Technologies, Inc. focuses on innovating, developing and marketing the highest quality secure communications solutions to organizations whose mission is to protect and save lives. The Company's customers include first responders in public safety and public service, the federal government, and industrial organizations. The Company's products are marketed under the EFJohnson, 3e Technologies International, and Transcrypt International names. For more information, visit http://www.EFJohnsonTechnologies.com.
Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain risks and uncertainties that could cause the actual results, performance or achievements to differ materially from those expressed, suggested or implied by the forward-looking statements due to a number of risk factors including, but not limited to, the level of demand for the Company's products and services, dependence on continued funding of governmental agency programs, the timing and receipt of orders, continued access to bank lines of credit, reliance on contract manufacturers, the timely procurement of necessary manufacturing components, software feature development and the implementation of application software, successful integration of the system components, general economic and business conditions, and other risks detailed in the Company's reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the period ended December 31, 2008 and in the company's subsequent filings with the SEC. These forward-looking statements are made as of the date of this press release and the company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements.
EF JOHNSON TECHNOLOGIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS March 31, 2009 and December 31, 2008 (Unaudited and in thousands, except share and per share data) March 31, December 31, 2009 2008 ASSETS Current assets: Cash and cash equivalents $7,704 $11,267 Accounts receivable, net of allowance for returns and doubtful accounts of $1,781 and $1,969, respectively 17,610 18,234 Accounts receivable due from related parties 1,000 1,281 Receivables - other 946 849 Cost in excess of billings on uncompleted contracts 5,034 5,116 Inventories, net 36,239 37,322 Prepaid expenses 1,831 1,632 Total current assets 70,364 75,701 Property, plant and equipment, net 5,566 5,996 Restricted cash 5,024 2,021 Goodwill 5,126 5,126 Other intangible assets, net of accumulated amortization 8,524 8,770 Other assets 73 73 TOTAL ASSETS $94,677 $97,687 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt obligations $9 $9 Accounts payable 11,175 11,728 Accrued expenses 8,924 10,786 Billings in excess of cost on uncompleted contracts 970 217 Deferred revenues 665 1,235 Total current liabilities 21,743 23,975 Long-term debt obligations, net of current portion 15,004 15,006 Deferred income taxes 631 631 Other liabilities 987 1,106 TOTAL LIABILITIES 38,365 40,718 Commitments and contingencies Stockholders' equity: Preferred stock ($0.01 par value; 3,000,000 shares authorized; none issued) - - Common stock ($0.01 par value; 50,000,000 voting shares authorized, 26,528,028 and 26,336,735 issued and outstanding as of March 31, 2009 and December 31, 2008, respectively) 262 262 Additional paid-in capital 155,256 154,688 Accumulated other comprehensive loss (969) (1,088) Accumulated deficit (98,119) (96,861) Treasury stock (103,255 and 18,083 shares at cost at March 31, 2009 and December 31, 2008) (118) (32) TOTAL STOCKHOLDERS' EQUITY 56,312 56,969 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $94,677 $97,687 EF JOHNSON TECHNOLOGIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS For the three months ended March 31, 2009 and March 31, 2008 (Unaudited and in thousands, except share and per share data) 2009 2008 (as restated) Revenues $22,429 $33,899 Cost of sales 14,731 22,505 Gross profit 7,698 11,394 Operating expenses: Research and development 3,331 3,255 Sales and marketing 2,476 3,166 General and administrative 5,423 6,401 Amortization of intangibles 246 407 Escrow fund settlement (2,804) - Total operating expenses 8,672 13,229 Loss from operations (974) (1,835) Interest expense, net (284) (181) Loss before income taxes (1,258) (2,016) Income tax benefit (expense) - - Net loss $(1,258) $(2,016) Net loss per share-Basic and dilutive $(0.05) $(0.08) Weighted average common shares-Basic and dilutive 26,383,931 26,062,748
|SOURCE EF Johnson Technologies, Inc.|
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