**EXHIBIT11.1**

 

**EFJ, INC. ANDSUBSIDIARIES**

**COMPUTATION OF NETINCOME (LOSS) PER SHARE**

**(Unaudited and inthousands, except share and per share data)**

 
|                                                             |   | **Three Months Ended  June 30,** |   | **Six Months Ended  June 30,** |   |
|------------------------------------------------------------------|--------|----------------------------------|--------|--------------------------------|--------|
|                                                             |   | **2003**                         |   | **2002**                       |   | **2003** |   | **2002** |   |
|                                                             |   |                             |   |                           |   |   |   |   |   |
| Net income  (loss)                                               |   | $                                | (132   | )                              | $      | 195 |   | $ | (696 | ) | $ | 293 |   |
|                                                             |   |                             |   |                           |   |   |   |   |   |
| **Net income (loss)  per share – Basic:**                   |   |                             |   |                           |   |   |   |   |   |
|                                                             |   |                             |   |                           |   |   |   |   |   |
| Weighted  average common shares - Basic                          |   | 17,577,315                       |   | 17,577,315                     |   | 17,577,315 |   | 17,577,315 |   |
|                                                             |   |                             |   |                           |   |   |   |   |   |
| Net income  (loss) per share - Basic                             |   | $                                | (0.01  | )                              | $      | 0.01 |   | $ | (0.04 | ) | $ | 0.02 |   |
|                                                             |   |                             |   |                           |   |   |   |   |   |
| **Net income (loss)  per share – Diluted:**                 |   |                             |   |                           |   |   |   |   |   |
|                                                             |   |                             |   |                           |   |   |   |   |   |
| Shares used in  this computation:                                |   |                             |   |                           |   |   |   |   |   |
| Weighted  average common shares - Basic                          |   | 17,577,315                       |   | 17,577,315                     |   | 17,577,315 |   | 17,577,315 |   |
| Dilutive  effect of shares under employee stock plans - See Note |   | —                           |   | 659,847                        |   | — |   | 540,786 |   |
|                                                             |   |                             |   |                           |   |   |   |   |   |
| Weighted  average common shares – Diluted - See Note        |   | 17,577,315                       |   | 18,237,162                     |   | 17,577,315 |   | 18,118,101 |   |
|                                                             |   |                             |   |                           |   |   |   |   |   |
| Net income  (loss) per share – Diluted                      |   | $                                | (0.01  | )                              | $      | 0.01 |   | $ | (0.04 | ) | $ | 0.02 |   |

 

Note:                 Forthe three and six months ended June 30, 2003, the effect of diluted net lossper share would be anti-dilutive as the Company incurred a net loss for theperiod.  As such, dilutive effect ofoutstanding stock options are excluded from the calculation of the dilutedweighted average common shares, and the weighted average common shares is usedfor both the basic loss per share and the diluted net loss per share.

 

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