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EF Johnson Technologies, Inc. Announces First Quarter 2009 Financial Results

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 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

Safe Harbor

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.

                       March 31, 2009 and December 31, 2008
          (Unaudited and in thousands, except share and per share data)

                                               March 31,         December 31,
                                                 2009                2008
    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

      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

       EQUITY                                   $94,677           $97,687

       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.
Copyright©2009 PR Newswire.
All rights reserved

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