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EF Johnson Technologies Announces Third Quarter Results
Date:11/12/2009

IRVING, Texas, Nov. 12 /PRNewswire-FirstCall/ -- EF Johnson Technologies, Inc. (Nasdaq: EFJI), a leading provider of secure wireless communications solutions, today announced its results for the quarter ended September 30, 2009. Revenues were $24.4 million, gross margin was 34% and net loss was $1.6 million, or $(0.06) per diluted share, for the three months ended September 30, 2009.

"While we are pleased with our orders and contract awards, the third quarter revenue results were not as strong as expected due to three federal customer change requests received in the last two weeks of the quarter which did not allow us to ship certain orders as anticipated. These orders were delayed into the fourth quarter," said Michael E. Jalbert, chairman and chief executive officer.

"The third quarter was our strongest order quarter of the year, driving our ending backlog to $64 million," Jalbert added. These new orders and contracts support our ongoing strategy to expand our customer base and product portfolio. Additionally, quarter three was our strongest contract award period with four new multi-year contracts including:

  • a three year, sole source, statewide mobile radio contract with initial orders of $7.8 million;
  • a multi-year, indefinite delivery indefinite quantity contract valued at $8.6 million from the US Department of Defense for Project 25 compliant radio accessories, with an initial order of $0.5 million;
  • a new, multi-year wireless sensor network contract vehicle valued up to $21 million, with an initial base contract award of $4.8 million; and
  • a $3.3 million Statewide Hybrid Project 25 Trunked and Conventional First Responder Radio System."

Third quarter revenues of $24.4 million decreased $10.1 million as compared to last year's third quarter revenues of $34.5 million. Our gross profit decreased $4.6 million to $8.2 million in the three months ended September 30, 2009, from $12.9 million for the same period in 2008. Gross profit as a percentage of revenues ("Gross Margin") was 34% for the three months ended September 30, 2009, versus 37% for the same period a year ago.

Operating expenses decreased $2.5 million to $9.5 million in the third quarter of 2009, as compared to last year's third quarter of $11.9 million. This comparative decline reflects not only integration of our business units, but our continued cost reduction initiatives throughout the year.

Net loss was $1.6 million, or $(0.06) per diluted share, for the three months ended September 30, 2009, as compared to net income of $0.6 million, or $0.02 per diluted share, for the same period last year.

Revenue for the first nine months of 2009 was $77.0 million, as compared to $101.0 million for the first nine months of 2008. The decline in revenues for the first nine months was primarily attributable to lower land mobile radio revenues, partially offset by increases in government services revenues. Gross Margin was 37% for the nine months ended September 30, 2009, versus 35% for the same period a year ago. Net loss for the first nine months of 2009 was $1.7 million as compared to net loss of $0.1 million for the first nine months of 2008. Loss per diluted share for the first nine months of 2009 was $(0.07) as compared to breakeven for the same period in 2008.

"While our nine month land mobile radio results are down comparatively with the prior year, our government broadband solutions revenues have grown during 2009, our gross margins have improved, and our operating expenses are under control. With our current backlog and orders pipeline, we are anticipating an improved fourth quarter revenue trend over our third quarter and 2008 fourth quarter," Jalbert added.

The Company will release the financial results for the quarter ending September 30, 2009, and has scheduled an investor webcast and conference call for 3:30 p.m. Central Time on Thursday, November 12, 2009. The investor conference call will be available via live webcast on the EF Johnson Technologies, Inc. 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 and are Made in America. For more information, visit http://www.EFJohnsonTechnologies.com.

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 timing and receipt of orders, the level of demand for the Company's products and services, dependence on continued funding of governmental agency programs, 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
                    CONSOLIDATED STATEMENTS OF OPERATIONS
         For the three and nine months ended September 30, 2009 and 2008
          (Unaudited and in thousands, except share and per share data)

                         Three Months Ended          Nine Months Ended
                            September 30,              September  30,
                      -------------------------   -------------------------
                          2009           2008         2009          2008
                      ----------     ----------   ----------     ----------
                                    (as restated)               (as restated)

    Revenues             $24,412        $34,500      $76,970       $100,969
    Cost of sales         16,170         21,649       48,439         65,719
                      ----------     ----------   ----------     ----------
        Gross profit       8,242         12,851       28,531         35,250
                      ----------     ----------   ----------     ----------

    Operating expenses:
      Research and
       development,
       net of
       reimbursements      2,424          3,559        8,860          6,935
      Sales and
       marketing           2,229          3,275        7,138          9,689
      General and
       administrative      4,577          4,756       15,329         16,862
      Amortization of
       intangibles           250            357          740          1,170
      Escrow fund
       settlement              -              -       (2,804)             -
                      ----------     ----------   ----------     ----------
        Total
         operating
         expenses          9,480         11,947       29,263         34,656
                      ----------     ----------   ----------     ----------
        Income (loss)
         from
         operations       (1,238)           904         (732)           594

    Interest expense,
     net                    (367)          (259)      (1,003)          (707)
                      ----------     ----------   ----------     ----------
      Income (loss)
       before income
       taxes              (1,605)           645       (1,735)          (113)

    Income tax
     (expense)                 -              -            -              -
                      ----------     ----------   ----------     ----------
      Net income
       (loss)            $(1,605)          $645      $(1,735)         $(113)
                      ==========     ==========   ==========     ==========

    Net income (loss)
     per share - Basic    $(0.06)         $0.02       $(0.07)            $-

    Net income (loss)
     per share -
     Diluted              $(0.06)         $0.02       $(0.07)            $-

    Weighted average
     common shares -
     Basic            26,440,835     26,121,544   26,355,828     26,088,648
                      ==========     ==========   ==========     ==========
    Weighted average
     common shares -
     Diluted          26,440,835     26,687,013   26,355,828     26,088,648
                      ==========     ==========   ==========     ==========



                 EF JOHNSON TECHNOLOGIES, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                     September 30, 2009 and December 31, 2008
            (Unaudited and in thousands, except share and per share data)

                                                 September 30,    December 31,
                                                     2009             2008
               ASSETS                             ---------         --------
    Current assets:
      Cash and cash equivalents                     $11,524           $11,267
      Restricted cash                                 5,030                 -
      Accounts receivable, net of
       allowance for returns and
       doubtful accounts of $1,888 and
       $1,969, respectively                          16,929            18,234
      Accounts receivable due from
       related parties                                    -             1,281
      Receivables - other                               320               849
      Cost in excess of billings on
       uncompleted contracts                          4,717             5,116
      Inventories, net                               32,743            37,322
      Prepaid expenses                                  789             1,632
                                                    -------           -------
        Total current assets                         72,052            75,701
    Property, plant and equipment, net                4,801             5,996
    Restricted cash                                       -             2,021
    Goodwill                                          5,126             5,126
    Other intangible assets, net of
     accumulated amortization                         8,025             8,770
    Other assets                                         71                73
                                                    -------           -------
      TOTAL ASSETS                                  $90,075           $97,687
                                                    =======           =======

          LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
      Current portion of long-term debt
       obligations                                  $15,667                $9
      Accounts payable                                7,860            11,728
      Accrued expenses                                8,325            10,786
      Billings in excess of cost on
       uncompleted contracts                            204               217
      Deferred revenues                                 602             1,235
                                                    -------           -------
        Total current liabilities                    32,658            23,975
    Long-term debt obligations, net
     of current portion                                   -            15,006
    Deferred income taxes                               631               631
    Other liabilities                                     9             1,106
                                                    -------           -------
      TOTAL LIABILITIES                              33,298            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, 26,470,277 and
       26,336,735 issued and
       outstanding as of  September 30,
       2009 and December 31, 2008,
       respectively)                                    262               262
      Additional paid-in capital                    155,899           154,688
      Accumulated other comprehensive
       loss                                            (659)           (1,088)
      Accumulated deficit                           (98,596)          (96,861)
      Treasury stock (118,989 and
       18,083 shares at cost at
       September 30, 2009 and December
       31, 2008)                                       (129)              (32)
                                                    -------           -------

      TOTAL STOCKHOLDERS' EQUITY                     56,777            56,969
                                                    -------           -------
      TOTAL LIABILITIES AND
       STOCKHOLDERS' EQUITY                         $90,075           $97,687
                                                    =======           =======


SOURCE EF Johnson Technologies, Inc.


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SOURCE EF Johnson Technologies, Inc.
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