EXHIBIT 99.1
[EMS TECHNOLOGIES LOGO] NEWS RELEASE
Atlanta, Georgia
July 29, 2003
Contact: Investor Relations
Phone: (770) 729-6510
E-mail: investor.relations@ems-t.com
WWW.EMS-T.COM
EMS TECHNOLOGIES ANNOUNCES
SECOND QUARTER RESULTS
EMS Technologies, Inc. (Nasdaq - ELMG) today reported a consolidated net loss
of $14.1 million ($1.32 per share) for the second quarter of 2003 and $14.0
million ($1.32 per share) for the first six months of 2003. The Company
recently announced plans to sell its Montreal commercial space division. This
press release includes details of historical results, which do not account for
the Montreal commercial space division as "discontinued operations." It also
presents those results on a pro forma basis showing how they are expected to be
restated beginning in the third quarter, when that division will be reported as
discontinued operations. On a pro forma basis, the consolidated net earnings
from continuing operations in 2003 were $2.4 million ($.23 per share) for the
second quarter and $4.2 million ($.40 per share) for first six months. The pro
forma losses from discontinued operations in 2003 were $16.5 million ($1.55
loss per share) for the second quarter and $18.3 million ($1.72 loss per share)
for the first six months.
The profitable performance of the Company's continuing operations has
been the result of record revenues in both the U.S. and Europe for LXE wireless
computer products, higher sales of EMS Wireless antennas and repeaters for
telecommunications systems, and more defense-related sales of high-speed
terminals from the SATCOM division and advanced communications products from
Space & Technology/Atlanta.
As previously announced, the 2003 results for the Space &
Technology/Montreal commercial space division reflected the effects of slow
market conditions and, in particular a $14 million charge in the second quarter
due to key-supplier delays and related technical problems on a large satellite
program. Management has also previously announced that the Company will record
a charge to discontinued operations in the third quarter equal to the
anticipated loss upon divestiture of Space & Technology/Montreal. Management,
in consultation with its advisors, has preliminarily estimated that this charge
could approach $20 million, although the actual charge to be recognized may
vary depending upon market conditions and further analysis.
Alfred G. Hansen, president and chief executive officer, commented,
"As the second quarter financial results show, four of our main business units
remain quite profitable. They have been able to do this by delivering
high-value products to meet the critical communications needs of our
customers...
- In uncertain economic times, companies often scale back on
many types of capital spending, but our customers continue to
find that their investments in materials handling and
logistics systems deliver a solid return. This year, our
customers have helped us set new sales records for the first
and second quarters, and LXE's financial performance has
remained strong in both U.S. and European markets. The key to
LXE's success has been a commitment to deliver best-of-kind
products and services,
NEWS RELEASE
(Continued)
July 29, 2003
and this commitment was recognized by the industry recently
when LXE won its second consecutive Mobile Star(TM) award for
providing the best customer service in its class.
- High-speed information by satellite has proven its enormous
value in the recent conflicts in Afghanistan and Iraq.
Defense customers - especially the U.S. military - continued
to augment their capabilities in the second quarter with
high-speed terminals and aeronautical antennas from our
SATCOM division. Emergency management systems are another
area of increasing public importance, and in the second
quarter, EMS's products attracted customers such as the New
York City fire department, which will use our mobile
terminals when traditional land communications have been
interrupted. And our SARMaster(TM) search-and rescue system
will be deployed later this year for greater safety in remote
areas of Vermont, Oregon and the state of Washington.
- New defense systems push the edge of the technology envelope
for space-based communications and sensing, as well as
airborne and terrestrial applications. Our Atlanta-based
Space & Technology division has the experience and technology
base to meet these challenges. During the second quarter we
announced a $12 million contract to supply key datalink
antenna systems for the U.S. Air Force F/A-22 Raptor
fighter/attack aircraft. In addition, EMS's switching
technology was selected for a $6 million contract to supply
the COSMO SkyMed earth observation satellite. Space &
Technology/Atlanta also received new orders for sophisticated
switching systems and beam-forming networks in defense space
applications. These contracts will reinforce backlog and
sales in the short term and provide opportunities for
significant follow-on business for the long-term.
- The telecommunications market may not be growing as rapidly
as it once did, but widespread use of wireless
telecommunications continues to place increasing demands on
the world's wireless infrastructure. Many of the leading
wireless service providers in the U.S. and Latin America have
turned to antennas and repeaters from EMS Wireless to expand
system capacity and efficiency, yet at a competitive cost. In
particular, EMS Wireless benefited in the second quarter from
major system build-outs by some of its U.S. customers. This
division also recently signed supplier agreements with major
companies serving Latin America and Eastern Europe.
- Our start-up venture - the Satellite Networks group -
continued to make important progress, reaching an agreement
with Alcatel Space to provide terminals and other equipment
for Alcatel's planned "DSL in the Sky" service, based on the
DVB-RCS communications standard that EMS helped develop.
Although recent market conditions have not been favorable for the
Company's Montreal commercial space business, it remains one of the world's
leading providers of high-performance space products. In the second quarter,
Montreal delivered complex antenna feeds for use in the Inmarsat-4 system,
which will support high-speed mobile Internet access, video-on-demand, video
conferencing, fax and e-mail services around the world. Montreal also completed
work on and delivered an extremely complicated, high-performance antenna system
for Ku and Ka-band communications services to be offered by Eutelsat. With this
demonstrated high level of
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NEWS RELEASE
(Continued)
July 29, 2003
engineering and manufacturing capabilities, along with superb facilities and a
unique role in Canada's international space activities, we believe our Montreal
commercial space operations should be attractive to a larger participant in the
commercial space business.
We believe the basic prospects for our businesses are strong. More
specific guidance about the earnings performance of the Company is clearly
subject to substantial uncertainties in current world economies, especially in
the telecommunications sector. However, we believe that in favorable
circumstances, the Company's continuing operations can achieve revenues in the
range of $275 - $280 million for the year 2003, with related annual earnings of
$8 - $8.9 million, or $.75 - $.83 earnings per share.
---------
EMS TECHNOLOGIES, INC. is a leading provider of technology solutions to
wireless and satellite markets. The Company focuses on mobile information
users, and increasingly on broadband applications. The Company is headquartered
in Atlanta, employs approximately 1,700 people worldwide, and has manufacturing
facilities in Atlanta, Montreal, Ottawa and Brazil.
The Company has four main families of products...
- - SPACE & TECHNOLOGY antennas and other hardware, for space and
satellite communications, radar, surveillance, military countermeasures, and
other specialized uses,
- - LXE mobile computers and wireless local area networks, for materials
handling and logistics,
- - EMS WIRELESS base station antennas and repeaters, for PCS/cellular
telecommunications,
- - SATCOM antennas and terminals, for aeronautical, land-mobile and
maritime communications via satellite.
THERE WILL BE A CONFERENCE CALL AT 9:30 AM EASTERN TIME ON TUESDAY, JULY 29,
2003, IN WHICH THE COMPANY'S MANAGEMENT WILL DISCUSS THE FINANCIAL RESULTS FOR
THE SECOND QUARTER. IF YOU WOULD LIKE TO PARTICIPATE IN THIS CONFERENCE, PLEASE
CALL 800-867-1054 (INTERNATIONAL CALLERS USE 303-262-2075) WITHIN APPROXIMATELY
10 MINUTES BEFORE THE CALL IS SCHEDULED TO BEGIN. THE CONFERENCE IDENTIFICATION
NUMBER IS 544826. A TAPED REPLAY OF THE CONFERENCE CALL WILL ALSO BE AVAILABLE
THROUGH TUESDAY, AUGUST 5, 2003 BY DIALING 800-405-2236 (INTERNATIONAL CALLERS
USE 303-590-3000) AND ENTERING THE FOLLOWING CODE: 544826.
Statements contained in this press release regarding the potential for various
businesses and products, potential proceeds from the sale of the Space &
Technology/Montreal division are forward-looking statements. Actual results
could differ from those statements as a result of a wide variety of factors.
Such factors include, but are not limited to...
- - uncertainties related to identifying a purchaser of the Space &
Technology/Montreal division, as well as external market conditions and internal
priorities and constraints that could affect a purchaser's willingness and
ability to complete the transaction on the terms and timing expected by the
Company;
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NEWS RELEASE
(Continued)
July 29, 2003
- - economic conditions in the U.S. and abroad and their effect on capital
spending in the Company's principal markets;
- - volatility of foreign exchange rates relative to the U.S. dollar and
their effect on purchasing power by international customers, as well as the
potential for realizing foreign exchange gains or losses associated with net
foreign assets held by the Company;
- - successful resolution of technical problems, proposed scope changes,
or proposed funding changes that may be encountered on contracts;
- - changes in the Company's consolidated effective income tax rate caused
by the extent to which the actual levels and mix of taxable earnings among the
U.S., Canada, and other taxing jurisdictions may vary from our current
expectations;
- - successful completion of technological development programs by the
Company and the effects of technology that may be developed by competitors;
- - successful transition of products from development stages to an
efficient manufacturing environment;
- - customer response to new products and services, and general conditions
in our target markets (such as logistics, PCS/cellular telephony, and
space-based communications);
- - the availability of financing for satellite data communications
systems and for expansion of terrestrial PCS/cellular phone systems;
- - the extent to which terrestrial systems reduce market opportunities
for space-based broadband communications systems by providing extensive
broadband Internet access on a dependable and economical basis;
- - the growth rate of demand for various mobile and high-speed
communications services;
- - development of successful working relationships with local business
and government personnel in connection with distribution and manufacture of
products in foreign countries;
- - the Company's ability to attract and retain qualified personnel,
particularly those with key technical skills; and
- - the availability of sufficient additional credit or other financing,
on acceptable terms, to support the Company's expected growth.
Additional relevant factors and risks are identified in the Company's Annual
Report on Form 10-K for the year ended December 31, 2002.
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NEWS RELEASE
(Continued)
July 29, 2003
EMS Technologies, Inc.
Consolidated Statements of Operations
(In millions, except per-share data)
**Pro forma, as expected to be
restated in the third quarter of
2003, when Space & Technology/
Montreal will be reported as
discontinued operations.
Quarter Ended Quarter Ended
June 28, 2003 June 29, 2002
------------------------ ------------------------
As Pro As Pro
Reported forma** Reported forma**
-------- ------- -------- -------
Net sales $ 64.4 68.1 82.9 62.7
Cost of sales 54.2 43.6 55.4 39.6
Selling, general and administrative expenses 16.7 14.9 15.7 13.9
Research and development expenses 6.7 4.9 7.5 5.7
------ ----- ----- -----
Operating income (loss) (13.2) 4.7 4.3 3.5
Non-operating income (loss) (0.3) (0.2) 0.1 0.1
Foreign exchange gain (loss) 1.7 (0.4) 0.2 (0.2)
Interest expense (0.9) (0.6) (1.0) (0.6)
------ ----- ----- -----
Earnings (loss) before income taxes (12.7) 3.5 3.6 2.8
Income tax expense (1.4) (1.1) (1.1) (1.0)
------ ----- ----- -----
Net earnings from continuing operations 2.4 1.8
Earnings (loss) from discontinued operations (16.5) 0.7
----- -----
Net earnings (loss) $(14.1) (14.1) 2.5 2.5
====== ===== ===== =====
Net earnings (loss) per share:
Basic - from continuing operations 0.23 0.17
Basic - from discontinued operations (1.55) 0.07
----- -----
Basic earnings (loss) per share $(1.32) (1.32) 0.24 0.24
====== ===== ===== =====
Diluted- from continuing operations 0.23 0.17
Diluted - from discontinued operations (1.55) 0.06
----- -----
Diluted earnings (loss) per share $(1.32) (1.32) 0.23 0.23
====== ===== ===== =====
Weighted average number of shares:
Common 10.7 10.7 10.5 10.5
Common and dilutive common equivalent 10.7 10.7 10.8 10.8
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NEWS RELEASE
(Continued)
July 29, 2003
EMS Technologies, Inc.
Consolidated Statements of Operations
(In millions, except per-share data)
**Pro forma, as expected to be
restated in the third quarter of
2003, when Space & Technology/
Montreal will be reported as
discontinued operations.
Six Months Ended Six Months Ended
June 28, 2003 June 29, 2002
------------------------- -------------------------
As Pro As Pro
Reported forma** Reported forma**
-------- ------- -------- -------
Net sales $ 130.9 126.5 153.3 117.6
Cost of sales 99.0 81.3 100.7 73.5
Selling, general and administrative expenses 31.5 27.9 30.5 27.1
Research and development expenses 13.0 9.8 14.2 10.6
------- ------ ------ ------
Operating income (loss) (12.6) 7.5 7.9 6.4
Non-operating income (loss) (0.3) (0.3) -- --
Foreign exchange gain (loss) 2.0 (0.4) 0.5 0.2
Interest expense (1.7) (1.1) (1.8) (1.1)
------- ------ ------ ------
Earnings (loss) before income taxes (12.6) 5.7 6.6 5.5
Income tax expense (1.4) (1.4) (2.0) (1.9)
------- ------ ------ ------
Net earnings from continuing operations 4.3 3.6
Earnings (loss) from discontinued operations (18.3) 1.0
------ ------
Net earnings (loss) $ (14.0) (14.0) 4.6 4.6
======= ====== ====== ======
Net earnings (loss) per share:
Basic - from continuing operations 0.40 0.34
Basic - from discontinued operations (1.72) 0.10
------ ------
Basic earnings (loss) per share $ (1.32) (1.32) 0.44 0.44
======= ====== ====== ======
Diluted- from continuing operations 0.40 0.33
Diluted - from discontinued operations (1.72) 0.10
------ ------
Diluted earnings (loss) per share $ (1.32) (1.32) 0.43 0.43
======= ====== ====== ======
Weighted average number of shares:
Common 10.7 10.7 10.5 10.5
Common and dilutive common equivalent 10.7 10.7 10.7 10.7
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NEWS RELEASE
(Continued)
July 29, 2003
EMS Technologies, Inc.
Consolidated Balance Sheets
(In millions)
**Pro forma, as expected to be
restated in the third quarter of
2003, when Space & Technology/
Montreal will be reported as
discontinued operations.
June 28, 2003 December 31, 2002
------------------------ ------------------------
As Pro As Pro
Reported Forma** Reported Forma**
-------- ------- -------- -------
Cash $ 11.3 11.3 12.4 12.4
Receivables billed 59.0 50.9 62.0 51.8
Unbilled receivables under
long-term contracts 29.2 20.5 46.7 22.7
Customer advanced payments (3.3) (1.9) (6.9) (2.4)
------ ----- ----- -----
Trade accounts receivable 84.9 69.5 101.8 72.1
------ ----- ----- -----
Inventories 46.8 37.5 41.0 33.0
------ ----- ----- -----
Current assets 143.0 118.3 155.2 117.5
------ ----- ----- -----
Net property, plant and equipment 55.2 38.0 51.4 36.0
Goodwill 13.5 13.5 13.5 13.5
Investment in Skybridge 17.9 -- 17.9 --
Assets of discontinued operations -- 63.3 -- 75.8
Other assets 17.0 13.5 18.3 13.5
------ ----- ----- -----
$246.6 246.6 256.3 256.3
====== ===== ===== =====
Bank debt and current
installments, long-term debt $ 38.9 38.9 33.9 33.9
Accounts payable 31.8 22.1 35.7 21.0
Other liabilities 19.0 16.3 19.9 17.0
Liabilities of discontinued operations -- 12.4 -- 17.6
------ ----- ----- -----
Current liabilities 89.7 89.7 89.5 89.5
Long-term debt 18.7 18.7 20.8 20.8
Stockholders' equity 138.2 138.2 146.0 146.0
------ ----- ----- -----
$246.6 246.6 256.3 256.3
====== ===== ===== =====
(more)
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NEWS RELEASE
(Continued)
July 29, 2003
EMS Technologies, Inc.
Segment Data
(In millions)
Quarters Ended Six Months Ended
----------------------- ----------------------
June 28 June 29 June 28 June 29
2003 2002 2003 2002
------- ------- ------- -------
NET SALES
Space & Technology / Atlanta $ 10.9 11.8 23.1 23.5
Space & Technology / Montreal (3.7) 20.1 4.4 35.8
LXE 24.3 21.9 46.3 41.8
EMS Wireless 15.3 14.9 24.1 27.7
SatCom 11.2 8.8 21.8 15.1
Other 6.4 5.4 11.2 9.4
------ ---- ----- -----
Total $ 64.4 82.9 130.9 153.3
====== ==== ===== =====
OPERATING INCOME (LOSS)
Space & Technology / Atlanta $ 0.8 0.5 1.8 1.4
Space & Technology / Montreal (18.0) 0.7 (20.1) 1.5
LXE 1.6 0.6 3.0 1.3
EMS Wireless 1.5 1.7 1.7 2.7
SatCom 0.8 0.9 2.4 1.7
Other 0.1 (0.1) (1.4) (0.7)
------ ---- ----- -----
Total $(13.2) 4.3 (12.6) 7.9
====== ==== ===== =====
NET EARNINGS (LOSS)
Space & Technology / Atlanta $ 0.4 0.2 1.0 0.6
Space & Technology / Montreal (16.6) 0.5 (18.5) 0.7
LXE 0.9 0.7 1.7 1.0
EMS Wireless 0.9 1.0 1.0 1.6
SatCom 0.6 0.4 1.8 1.1
Other & Corporate (0.3) (0.3) (1.0) (0.4)
------ ---- ----- -----
Total $(14.1) 2.5 (14.0) 4.6
====== ==== ===== =====
FOR FURTHER INFORMATION PLEASE CONTACT: DON T. SCARTZ
CHIEF FINANCIAL OFFICER
770-729-6510
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