EXHIBIT 99.1
[EMS TECHNOLOGIES LOGO]
NEWS RELEASE
The Science of Wireless Communications Atlanta, Georgia
July 13, 2004
Contact: Don T. Scartz - CFO
Phone: (770) 729-6510
E-mail: investor.relations@ems-t.com
www.ems-t.com
EMS TECHNOLOGIES ANNOUNCES
PRELIMINARY SECOND QUARTER 2004 RESULTS
ATLANTA - JULY 13, 2004 - EMS Technologies, Inc. (Nasdaq - ELMG) today announced
that during the second quarter of 2004, it received record defense contract
awards that will benefit future periods; however, the Company's second quarter
earnings will be below its previously issued guidance primarily due to a low
order level in the SatNet division. EMS expects to announce final results for
the second quarter during the week of July 26, 2004, at which time there will be
a conference call to review both the historical results in detail and the
Company's guidance for the remainder of the year.
Earnings from continuing operations for the second quarter of 2004 are
expected to be in the range of $700,000 to $1.1 million, or $.06 - $.10 per
share, on consolidated revenues of $65-to-$66 million. The results from
continuing operations for the comparable period in 2003 were earnings of $2.5
million, or $.23 per share, on revenues of $66 million. Preliminary divisional
results for the second quarter of 2004 indicate that Space & Technology/Atlanta,
LXE, and SATCOM were solidly profitable, although somewhat below the 2003 second
quarter. EMS Wireless was also profitable, but its performance was less strong
than these other divisions.
The SatNet division had a major shortfall from order expectations.
SatNet's business of providing hardware for two-way, broadband communications is
similar to a startup situation, where the marketplace and customer base are
still being defined, and timing of specific orders is difficult to predict.
SatNet had a major opportunity that was expected but did not materialize late in
the second quarter. The customer requirement for this opportunity still exists,
and we are hopeful the order will be received in a future quarter. If SatNet had
been able to convert this opportunity into a sale in the second quarter, EMS's
consolidated earnings from continuing operations for the period would have
improved by approximately $1 million.
Alfred G. Hansen, president and chief executive officer, commented,
"The variance from expectation for the second quarter of 2004 is the result of
current weakness in our orders stream at SatNet and, to a lesser extent, EMS
Wireless. We believe this situation reflects current customer circumstances and
timing decisions and not long-term fundamental problems in these target markets.
With the recent high level of awards and other customer activity in most of our
other business units, our long-term outlook remains very positive:
- "Space & Technology/Atlanta has recently been selected to
participate on some very large contracts for the U.S.
Department of Defense (DoD), resulting in a record level of
new contract awards in a quarter. Recent firm orders on
current programs included follow-on production that pushed the
backlog to $7 million for antennas to be used in an advanced
intra-flight data link system for combat
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aircraft. By far the largest portion of the second quarter
awards related to new programs that we expect to be converted
into initial firm orders in the near future. Several of these
new programs are planned to extend more than a decade and are
expected to generate combined orders and revenues to EMS
exceeding $200 million over the programs' lives. We will begin
to ramp up in the remainder of 2004 for development efforts
that are expected to be worth $25-$30 million over the next
two years, with the further expectation of moving into
production phases that could yield combined annual revenues of
over $20 million beginning in 2007. We expect to make more
detailed public announcements about these awards in the coming
months, as contractual documentation is completed and we
obtain customer consents for our press releases.
- "LXE set a new revenue record for the second quarter,
extending its string of consecutive record-setting periods to
seven. An important factor in LXE's sales growth has been our
strategic plan of R&D investment, which has allowed us to
bring new products to market earlier in the year. One of these
recent new products is a rugged handheld computer that can
gather data using both bar-code and RFID technologies.
- "SATCOM revenues were down slightly, as we continue to work on
completing several agreements for DoD applications, which
should benefit us during the remainder of the year. SATCOM is
also continuing to work through the unexpectedly slow process
of approvals for a search-and-rescue system to be installed in
Greece. In addition, we expect to sign a long-term agreement
in the near future to be a supplier of high-speed
communications products to one of the world's largest avionics
companies, which could generate more than $25 million in
additional revenues for SATCOM over the term of the agreement.
- "EMS Wireless' results will likely be slightly better than
breakeven for the second quarter. While sales of our repeaters
and shipments from our Brazilian operations have been much
stronger than in the previous year, sales of our base-station
antennas in the U.S. were less than expected. Considering the
uncertain timing of our customers' expected rollouts, we are
taking immediate action to reduce operating expenses, which
should improve the profit outlook for this division in the
second half of 2004.
- "SatNet continues to develop its base of new customers, but in
this developing market for two-way satellite broadband
communications, the timing of orders is difficult to predict.
However, we believe that interest in our open standard DVB-RCS
equipment remains high, and we are working closely with major
suppliers of broadcast services to expand our markets and
geographic base. We are also taking steps to reduce the
division's operating expenses and lower its breakeven point in
the second half of 2004.
"Our discontinued operations - Space & Technology/Montreal - are
showing real improvement in their financial results. For the first two quarters
of 2004, the division has returned to reporting profit before taxes, interest
and other non-operating charges. We believe
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that the division's more stable financial situation and promising new
opportunities for its unique capabilities will enhance the business prospects
currently being evaluated by potential purchasers of these discontinued
operations.
"Despite the disappointment of the expected second quarter results,
there is much at EMS to be excited about. Our dynamic product lines continue to
make us a formidable competitor in our markets, as our technology strength and
leadership have enabled us to respond to new product opportunities ahead of our
competition. We have proven extremely successful in our recent defense marketing
efforts, and we have expanded beyond components to also supplying full systems
for defense applications. And our balance sheet remains strong, with debt below
the levels where we started the year."
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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 nearly 1,700 people worldwide, and has manufacturing facilities in
Atlanta, Montreal, Ottawa and Brazil.
The Company has five reporting segments...
- - 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 and land-mobile and maritime
communications via satellite, and
- - SATNET broadband technologies for use in high-data-rate, high-capacity two-way
satellite communications systems.
Statements contained in this press release regarding the potential for various
businesses and products 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;
- - economic conditions in the U.S. and abroad and their effect on capital
spending in the Company's principal markets;
- - difficulty predicting the timing of receipt of major customer orders, and the
effect of customer timing decisions on our quarterly results;
- - U.S. defense budget pressures on spending priorities;
- - uncertainties inherent in the process of converting contract awards into firm
contractual orders in the future;
- - volatility of foreign exchange rates relative to the U.S. dollar and their
effect on purchasing power of international customers, as well as the potential
for realizing foreign exchange gains or losses associated with net foreign
assets held by the Company;
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- - successful resolution of technical problems, potential scope changes or
potential 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 competing terrestrial systems reduce market opportunities
for space-based broadband communication 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, 2003
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