Subject: [NEXTEL-1] EFJ, Inc. Reports Second Quarter Financial Results and Re-Affirms 2003 Financial Guidance

From: [email-masked]
Date: Wed, 30 Jul 2003 10:38:16 -0400

EFJ, Inc. Reports Second Quarter Financial Results and Re-Affirms 2003 Financial
Guidance

LINCOLN, Neb., July 30 /PRNewswire-FirstCall/ -- EFJ, Inc.  (OTC Bulletin Board:
EFJI) today reported consolidated revenues for the quarter were $10.7 million, an
increase of 19% from the first quarter and 13% from the prior year.  Gross margins
remain strong at 43%.  A planned acceleration in product development expense of
$0.7 million during the quarter off-set a $0.5 million gain in gross profit and
resulted in an operating loss for the quarter. The Company also reported a net
loss for the second quarter ended June 30, 2003, of $132,000 or $0.01 per share,
compared to a net profit of $195,000 or $0.01 per share for the comparable quarter
of 2002.  Despite the quarterly loss, the Company re-affirmed its guidance for the
full year of $0.13-0.16 earnings per share on revenues of $45-47 million due to
the targeted growth in the Homeland Security market.  Consolidated revenues
increased year-to-year from $19.4 to $19.7 million.

With gross margins holding steady at 44%, gross profit reached $8.6 million.
Expenses rose from $8.4 million in 2002 to $9.3 million in the current year,
accounted for by an increase of $0.9 million in R&D spending.  For the six-month
period ended June 30, 2003, EFJ reported a loss of $696,000 or $0.04 per share.
The comparable prior year period saw a net profit of $293,000 or $0.02 per share.

Unrestricted cash and cash available under the bank line of credit on June 30,
2003 remain strong at $11.4 million.
"Our sales growth has not yet accommodated our substantially higher R&D spending,"
said Michael E. Jalbert, Chairman and Chief Executive Officer.  "That spending
will increase further to broaden our product base, and, therefore, we are
projecting another operating loss in the third quarter.  But with a build-up of
orders booked for shipment in the fourth quarter, and an increase in our backlog
to over $14.4 million as of July 27, 2003, we expect to cover our R&D investment
and deliver on our revenue and profit guidance for the full year."

EFJ, Inc. also announced the appointment of Morgan Keegan, a full service
investment bank and member of the New York Stock Exchange, as advisor with respect
to the Company's ongoing assessment of its strategic alternatives to increase
shareholder value.

The Company has scheduled an investor conference call at 1:00 p.m. Eastern
Daylight Time on Wednesday, July 30, 2003, to discuss its financial results for
the second quarter FY2003 and outlook for the future.

EFJ, Inc. is the holding company of industry-leading wireless telecommunications
equipment and solutions businesses.  EFJ, Inc. is home to the EFJohnson Company,
one of the first developers of Project 25 mobile communications products compliant
with federal government interoperability standards, and Transcrypt International,
a leader in secure voice communication solutions.  2003 marks the 80th anniversary
of EFJohnson and the 25th anniversary of Transcrypt International. Headquartered
in Washington, D.C., EFJ, Inc. has a proven leadership team in place with decades
of experience in telecommunications and government sales. EFJohnson and Transcrypt
International are wholly owned subsidiaries of EFJ, Inc. For more information,
visit http://www.efji.com.

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 full
year 2003 guidance on revenue and earnings per share for the Company, expectation
regarding revenue growth at EFJohnson. 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, 2002.

EFJ, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS For the three and six months ended
June 30, 2003 and 2002 (Unaudited and in thousands, except share and per share
data)
THREE MONTHS ENDED     SIX MONTHS ENDED
JUNE 30,               JUNE 30,
2003       2002       2003        2002

Revenues                       $10,723     $9,514    $19,724     $19,411
Cost of sales                    6,079      5,364     11,121      10,846
Gross profit                   4,644      4,150      8,603       8,565
Operating expenses:
Research and
development                 1,813      1,108      3,215       2,328
Sales and marketing          1,533      1,410      2,844       2,667
General and
administrative              1,386      1,363      3,196       3,448
Total operating expenses       4,732      3,881      9,255       8,443

Income (loss) from
operations                       (88)       269       (652)        122

Other income (expense)               -        (91)        27         140
Interest income                      9         17         21          46
Interest expense                   (53)         -        (92)        (15)
Income (loss) before
income taxes                   (132)       195       (696)        293

Income tax provision                 -          -          -           -

Net income (loss)         $(132)      $195      $(696)       $293

Net income (loss) per share
- Basic                        $(0.01)     $0.01     $(0.04)      $0.02
Net income (loss) per share
- Diluted                      $(0.01)     $0.01     $(0.04)      $0.02

Weighted average common
shares - Basic             17,577,315  17,577,315  17,577,315  17,577,315
Weighted average common
shares - Diluted           17,577,315  18,237,162  17,577,315  18,118,101

EFJ, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS June 30, 2003 and December 31, 2002 (in
thousands, except share data)

JUNE 30,   DECEMBER 31,
2003          2002
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents                        $3,941       $11,333
Accounts receivable, net of allowance for
returns and doubtful accounts
of $176 and $236, respectively                   7,410         6,568
Receivables - other                                 182           252
Cost in excess of billings on uncompleted
contracts                                        1,927         1,686
Inventories, net                                 10,355        11,671
Deferred income taxes                             1,000         1,000
Prepaid expenses                                    996           487
Total current assets                    25,811        32,997

Property, plant and equipment, net                   2,843         2,601
Deferred income taxes                                2,000         2,000
Intangible assets, net of
accumulated amortization                            6,756         6,760
Other assets                                           748           898
TOTAL ASSETS                                    $38,158       $45,256

LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Revolving line of credit                             $-        $5,000
Current portion of long-term debt obligations       130            22
Accounts payable                                  2,952         4,007
Billings in excess of cost on uncompleted
contracts                                            -            38
Deferred revenue - current                          520           961
Accrued expenses                                  1,854         2,317
Total current liabilities               5,456        12,345

Long-term debt obligations,
net of current portion                                481           264
Deferred revenue, net of current portion               139           160
TOTAL LIABILITIES                                 6,076        12,769

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 as of June 30, 2003 and
December 31, 2002; 600,000 non-voting shares
authorized, 217,542 issued and outstanding)        176           176
Additional paid-in capital                       97,209        96,918
Accumulated deficit                             (65,303)      (64,607)
TOTAL STOCKHOLDERS' EQUITY                       32,082        32,487
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $38,158       $45,256

------------------------ Yahoo! Groups Sponsor ---------------------~-->
Free shipping on all inkjet cartridge & refill kit orders to US & Canada. Low prices up to 80% off. We have your brand: HP, Epson, Lexmark & more.
http://www.c1tracking.com/l.asp?cid=5510
http://us.click.yahoo.com/GHXcIA/n.WGAA/ySSFAA/61FxlB/TM
---------------------------------------------------------------------~->

Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/