Irving, TX – May 6, 2009 – 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.
