Reports Quarterly Revenues of $34.5 million, Gross Margin of 37%, and $0.4 million in Third Quarter Net Income
IRVING, Texas , Oct. 29 /PRNewswire-FirstCall/ -- EF Johnson Technologies, Inc. (Nasdaq: EFJI), a leading provider of secure wireless solutions, today announced its results for the quarter ended September 30, 2008 . Revenues were $34.5 million, gross margin was 37% and net income was $0.4 million or $0.02 per diluted share, for the three months ended September 30, 2008 .
"This quarter's financial performance reflects actions taken earlier this year to improve our product line, improve margins, and reduce costs; a continuing effort to focus the company on profitability in 2008," said Michael E. Jalbert , chairman and chief executive officer. "Additionally, our third quarter order performance was strong with several strategic wins, including:
Revenues increased $0.8 million, or 2%, to $34.5 million, as compared to last year's third quarter revenues of $33.7 million. Additionally, gross profit increased $3.0 million, or 31%, to $12.6 million in the three months ended September 30, 2008 , from $9.6 million for the same period in 2007. Gross profit as a percentage of revenues ("Gross Margin") was 37% for the three months ended September 30, 2008 , versus 29% for the same period a year ago. The improved Gross Margin in the three months ended September 30, 2008 was primarily due to favorable margins associated with revenues from products delivered in the third quarter of 2008, coupled with cost reduction programs, as compared to the lower margins achieved from the large deliveries against Department of Defense contracts in 2007.
Operating expenses declined $1.3 million, or 9%, to $11.9 million in the third quarter of 2008, as compared to last year's third quarter of $13.2 million, primarily due to cost reduction programs put in place in the first quarter of 2008 associated with the integration of our businesses.
Net income was $0.4 million, or $0.02 per diluted share, for the three months ended September 30, 2008 , as compared to net loss of $3.4 million, or $0.13 per share, for the same period last year. Net income was higher in the third quarter of 2008 due to the improvement in gross profit together with a lower operating expense structure.
For the nine months ended September 30, 2008 , revenues decreased $29.0 million, or 22%, to $101.0 million, as compared to $130.0 million for the nine months of 2007. The lower year to date revenues compared with the prior year are due to the cumulative shipments against the large DoD contract shipped in the first nine months of 2007, not replicated in 2008. Net loss for the first nine months of 2008 was $0.7 million as compared to net income of $0.1 million for the first nine months of 2007. Loss per share for the first nine months of 2008 was $0.03 per share as compared to breakeven earnings per share for the same period in 2007.
The Company recorded non-cash expenses of $5.2 million for the first nine months of 2008 related to $1.7 million of stock based compensation and $3.4 million of depreciation and amortization.
At September 30, 2008 , the company had $6.2 million in cash, compared with $15.6 million at December 31, 2007 , reflecting cash used in operations. The company had $2.0 million borrowings against its revolving credit facility at September 30, 2008 . The use of cash was primarily due to delayed collection of certain receivables which was resolved subsequent to the end of the quarter.
Commenting on the Company's business outlook, Mr. Jalbert said, "Although ongoing uncertainty surrounding the U.S. economy and federal government funding during an election year may impact purchasing decisions by key customers in the fourth quarter and into 2009, we remain cautiously optimistic."
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