Subject: [NEXTEL-1] EFJ, Inc. Reports Revenue Growth in Domestic Market and Improved Profitability for Q3-2002

From: Marcel <[email-masked]>
Date: Sun, 27 Oct 2002 04:57:03 -0500

http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/10-24-2002/0001827253&EDATE=

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EFJ, Inc. Reports Revenue Growth in Domestic Market and Improved Profitability for Q3-2002

LINCOLN, Neb., Oct. 24 /PRNewswire-FirstCall/ -- EFJ, Inc.
(OTC Bulletin Board: EFJI) today announced a profit for the quarter ended
September 30, 2002 of $0.5 million, or $0.03 per share, compared to a net
income of $64,000 for the comparable period in 2001. Third quarter revenues
were $10.1 million, a 2% decrease from $10.3 million for the third quarter of
2001. Revenues at the EFJohnson subsidiary and Transcrypt International
division were $8.5 million and $1.6 million, respectively, in the third
quarter of 2002 compared to $8.6 million and $1.7 million, respectively, in
the same quarter in 2001. The Company's gross profit margin for the third
quarter in 2002 improved to 43%, as compared to 42% for the comparable period
in 2001.
For the nine months ending September 30, 2002, the Company's net income of
$0.8 million, or $0.04 per share, on $29.6 million of revenue was
significantly better than last year's net loss of $1.0 million, or $0.06 loss
per share, on $30.5 million of revenue. Lower year-to-date revenues are
primarily due to lower international sales and lower revenues from de-
emphasized commercial and contract manufacturing customers. Cash and cash
equivalents were $5.4 million on September 30, 2002.
The third quarter and year-to-date net income of $0.5 million and $0.8
million also included $0.2 million of non-cash compensation benefit and
$162,000 of non-cash compensation expense, respectively, due to variable
accounting treatment associated with outstanding options re-priced in 2000 and
2001.
"We are pleased with our continued performance improvement, especially our
bottom-line performance," said Michael E. Jalbert, EFJ, Inc. Chairman,
President and Chief Executive Officer. "We also saw EFJohnson's sales to the
domestic core customer base increase by 29% over the same quarter last year
reflecting increasing opportunities in the public safety sector and
governmental user segment of the market. EFJohnson's international sales,
however, continue to be weak," added Mr. Jalbert. "With the continued market
acceptance of our Project 25 product family we believe that we are positioning
the Company to take advantage of potential new domestic opportunities that the
national focus on Homeland Security should provide," Mr. Jalbert concluded.

EFJ, Inc. (http://www.efji.com) through its wholly-owned subsidiary,
EFJohnson designs, manufactures and markets turnkey trunked and conventional
radio system solutions, land mobile radio repeaters and infrastructure and
digital and analog mobile and portable radios, and through its division
Transcrypt International, manufactures information security products that
prevent the unauthorized interception of sensitive voice and data
communication.

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 relate to, among other matters, the
Company's continued development of Project 25 products and infrastructure
equipment, customer demand for the Company's products, including its digital
interoperable wireless communications solutions, and the Company's future
financial performance and position. 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, the timing of future product development,
the actual operational expense experienced, dependence on continued funding of
governmental agency programs, and other risks detailed in the Company's
reports filed with the Securities and Exchange Commission, including its
Annual Report on Form 10K for the year ended December 31, 2001.

EFJ, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 2002 and December 31, 2001
(in thousands, except share data)

SEPTEMBER 30 DECEMBER 31
2002 2001
ASSETS
(unaudited)
Current assets:
Cash and cash equivalents $ 5,411 $ 11,582
Accounts receivable, net of allowance
for returns and doubtful accounts of
$331 and $284 respectively 5,684 6,540
Receivables -- other 252 493
Cost in excess of billings on
uncompleted contracts 1,149 1,616
Inventories, net 13,109 11,262
Prepaid expenses 725 366
Total current assets 26,330 31,859

Property, plant and equipment, net 2,136 2,116
Deferred income taxes 500 500
Intangible assets, net of accumulated
amortization, including goodwill of $9,190 9,261 9,370
Other assets 769 275
TOTAL ASSETS $ 38,996 $ 44,120

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Revolving line of credit $ - $ 5,120
Accounts payable 4,008 4,409
Billings in excess of cost on
uncompleted contracts - 147
Long-term debt -- current 15 19
Deferred revenue -- current 435 794
Accrued expenses 2,772 2,725

Total current liabilities 7,230 13,214

Long-term liabilities:
Long-term debt 35 -
Deferred revenue -- long-term 191 312
TOTAL LIABILITIES 7,456 13,526

Stockholders' equity:
Preferred stock ($0.01 par value;
3,000,000 shares authorized; none issued) - -
Common stock ($0.01 par value;
25,000,000 voting shares authorized,
17,359,773 issued and outstanding;
600,000 non-voting shares authorized,
217,542 issued and outstanding) 176 176
Additional paid-in capital 96,597 96,435
Accumulated deficit (65,233) (66,017)
TOTAL STOCKHOLDERS' EQUITY 31,540 30,594
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 38,996 $ 44,120

EFJ, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the three and nine months ended September 30, 2002 and 2001
(Unaudited and in thousands, except share and per share data)

THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2002 2001 2002 2001

Revenues $10,136 $10,292 $29,547 $30,502
Cost of sales 5,800 5,919 16,646 18,279
Gross profit 4,336 4,373 12,901 12,223
Operating expenses:
Research and development 1,128 1,288 3,457 3,721
Sales and marketing 1,577 1,248 4,243 3,979
General and administrative 1,194 1,785 4,642 5,633
Total operating expenses 3,899 4,321 12,342 13,333

Income (loss) from
operations 437 52 559 (1,110)

Other income (expense), net 44 1 183 97
Interest income 11 79 60 312
Interest expense (1) (68) (18) (293)

Income (loss) before
income taxes 491 64 784 (994)

Income tax provision - - - -

Net income (loss) $ 491 $ 64 $ 784 $ (994)

Net income (loss) per
share -- Basic $ 0.03 $ 0.00 $ 0.04 $ (0.06)
Net income (loss) per
share -- Diluted $ 0.03 $ 0.00 $ 0.04 $ (0.06)

Weighted average common
shares -- Basic 17,577,315 17,577,315 17,577,315 16,280,878
Weighted average common
shares -- Diluted 17,837,605 17,577,315 17,976,991 16,280,878

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SOURCE EFJ, Inc.

Web Site: http://www.efji.com

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