EXHIBIT 99.1
[EMS TECHNOLOGIES LOGO]
NEWS RELEASE
The Science of Wireless Communications Atlanta, Georgia
November 8, 2005
Contact: Investor Relations
Phone: (770) 729-6510
E-mail:
investor.relations@ems-t.com
WWW.EMS-T.COM
EMS TECHNOLOGIES ANNOUNCES
RECORD QUARTERLY SALES AND
STRONG EARNINGS FROM CONTINUING OPERATIONS
ATLANTA - NOVEMBER 8, 2005 - EMS Technologies, Inc. (Nasdaq - ELMG) today
reported strong earnings from continuing operations in the third quarter on
record revenues. Third-quarter earnings from continuing operations were $3.3
million or $.29 per share in 2005, which tripled the $1.0 million in earnings,
or $.09 per share, reported for the comparable period in 2004. Third-quarter
revenues from continuing operations in 2005 were $84.4 million - 46% higher than
the revenues of $57.6 million reported in 2004.
Alfred G. Hansen, president and chief executive officer, commented,
"With these latest results, we reported another strong quarterly performance in
2005 based on solid revenue growth, execution and profitability by each of the
divisions in our continuing operations. LXE, SATCOM and EMS Wireless set new
revenue records for the third quarter, and when consolidated, all divisions
combined to set an all-time quarterly revenue record for the Company.
- "LXE has now reported quarter-over-comparable-quarter
growth for twelve consecutive periods. Newer products,
especially our latest vehicle-mount computers, helped lead the
growth in the third quarter of 2005. To maintain this sales
momentum, we continue to expand our product line, including
preparations for the full market roll-out of our new MX7
handheld computer, which has Bluetooth wireless technology and
voice recognition capabilities. We are also pleased with the
success of ongoing customer trials and the market potential of
our new family of forklift-mounted RFID readers.
- "Defense & Space Systems ("D&SS") made a significant
third-quarter investment in heightened marketing efforts for
specific opportunities. Defense communications programs remain
a high priority in the defense budget and we have focused our
efforts on this area. We have provided hardware for many
long-term, high-priority communications and electronic warfare
programs, and we believe that this has placed us in a strong
competitive position for future related business.
- "SATCOM's aeronautical products have firmly established
this division as a leading supplier of high-speed data ("HSD")
products to both commercial and military markets. Increased
sales of HSD products were a significant factor in SATCOM's
good performance for the third quarter. Future opportunities
also grew during the third quarter, when our HSD products were
selected to provide broadband capability on Airbus passenger
aircraft. In addition, we believe our previously announced
teaming-
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NEWS RELEASE
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Atlanta, GA
November 8, 2005
arrangements with the leading original equipment manufacturers
of avionics have helped build the potential for our next
generation of HSD equipment.
- "EMS Wireless continued to benefit in the third quarter
from renewed build-out activity by U.S. wireless service
providers. During the third period, we substantially completed
a warranty effort to make the performance of the downtilt
mechanism more robust in extremely hot weather conditions.
This antenna continues to be very popular with our customers
and is our leading seller during the current period of network
expansion.
"Soon after the end of the third quarter, we signed a definitive
agreement to sell our Space & Technology/Montreal division, and we now expect to
close this transaction before year-end. We also continued to pursue negotiations
under a non-binding letter of intent from a potential strategic buyer of our
SatNet division. During the third quarter, we recognized a $4.0 million asset
impairment charge for the SatNet division, based on the terms and conditions on
which we could expect to be able to sell the division, as well as the weakening
of the U.S. dollar and near-term market conditions. As a result of the effect of
this charge under the financial covenants in our revolving credit agreement, we
have discussed with our lenders - and we expect to obtain - a waiver of covenant
default prior to filing our third quarter report on Form 10-Q.
"We continue to be pleased with favorable business developments in
2005. Based on our current expectations, we are raising our earnings guidance
for the year to $.80 - $.85 per share from continuing operations, as compared
with the previous guidance of $.75 - $.80. Looking forward to 2006, we expect
revenue growth of 10-15%, based on the expected demand for our current products,
the planned introduction of new high-potential products, and positive outlook
for defense communications programs."
---------------
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 1,600 people worldwide, and has manufacturing facilities
in Atlanta, Montreal, Ottawa and Brazil.
The Company has four reporting segments...
- - LXE mobile computers and wireless local area networks, for materials
handling and logistics.
- - DEFENSE & SPACE SYSTEMS antennas and other hardware, for space and
satellite communications, radar, surveillance, military countermeasures, and
other specialized uses.
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NEWS RELEASE
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Atlanta, GA
November 8, 2005
- - SATCOM antennas and terminals, for aeronautical, land-mobile and maritime
communications via satellite.
- - EMS WIRELESS base station antennas and repeaters, for PCS/cellular
telecommunications. THERE WILL BE A CONFERENCE CALL AT 4:30 PM EASTERN TIME ON
TUESDAY, NOVEMBER 8, 2005, IN WHICH THE COMPANY'S MANAGEMENT WILL DISCUSS THE
FINANCIAL RESULTS FOR THE THIRD QUARTER OF 2005. IF YOU WOULD LIKE TO
PARTICIPATE IN THIS CONFERENCE, PLEASE CALL 800-807-2165 (INTERNATIONAL CALLERS
USE 507-726-3531) WITHIN APPROXIMATELY 10 MINUTES BEFORE THE CALL IS SCHEDULED
TO BEGIN. A TAPED REPLAY OF THE CONFERENCE CALL WILL ALSO BE AVAILABLE THROUGH
WEDNESDAY, NOVEMBER 15, 2005 BY DIALING 800-670-2962 (INTERNATIONAL CALLERS USE
620-294-1036).
Statements contained in this press release regarding the Company's expectations
for its financial results for 2005, and concerning 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...
- 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;
- the requirement to obtain waivers from its bank creditors of
financial-performance covenants continued in the Company's
credit agreements, should the Company fail to meet its
expectations for earnings and positive cash flow in future
quarters, and the risk of credit agreement default if any such
waiver should be required and cannot be obtained;
- successful completion of technological development programs by
the Company and the effects of technology that may be
developed by, and patent rights that may be held or obtained
by, competitors;
- uncertainties related to the completion of the proposed sales
of the Company's Space & Technology/Montreal division, for
which a contract is currently in effect, and its SatNet
division, which is the subject of a non-binding letter of
intent, as well as external market conditions, internal
priorities and constraints, and financing availability that
could affect a purchaser's willingness and ability to complete
the transactions on terms and timing expected by the Company
(in the event a sales transaction is not completed, the Space
& Technology/Montreal operations and/or the SatNet division
could be required to be reclassified back into continuing
operations, and prior-year financial statements would be
restated to reflect that status);
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NEWS RELEASE
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Atlanta, GA
November 8, 2005
- the ability of the Company to obtain patent licenses, with
satisfactory license rights and royalty rates, from owners of
RFID-related patents that the Company concludes are valid and
would otherwise be infringed by Company products;
- U.S. defense budget pressures on near-term 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 by international
customers, and the cost structure of the Company's non-U.S.
operations, as well as the potential for realizing foreign
exchange gains and losses associated with non-U.S. assets or
liabilities 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 actual taxable earnings in
the U.S., Canada and other taxing jurisdictions may vary from
expected taxable earnings;
- 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 success of certain of our customers in marketing our line
of high-speed commercial airline communications products as a
complimentary offering with their own lines of avionics
products;
- 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;
- development of successful working relationships with local
business and government personnel in connection with
distribution and manufacture of products in foreign countries;
- the demand growth for various mobile and high-speed data
communications services, and the possible effect of public
health concerns about alleged health risks of radio frequency
emissions;
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NEWS RELEASE
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Atlanta, GA
November 8, 2005
- the Company's ability to attract and retain qualified
personnel, particularly those with key technical skills;
- the availability of sufficient additional credit or other
financing, on acceptable terms, to support the Company's
expected growth;
- the availability, capabilities and performance of suppliers of
basic materials, electronic components and sophisticated
subsystems on which the Company must rely in order to perform
according to contract requirements, or to introduce new
products on the desired schedule;
- the effects of consolidation in the telecommunications service
provider industry, including effects on the numbers of
suppliers used by the Company's customers, the overall demand
by such customers for our products, and the possibility that
such customers may demand greater price concessions; and
- uncertainties associated with U.S. export controls and the
export license process, which restrict the Company's ability
to hold technical discussions with customers, suppliers and
internal engineering resources and can reduce the Company's
ability to obtain sales from foreign customers or to perform
contracts with the desired level of efficiency or
profitability.
Additional relevant factors and risks are identified under the caption "Risk
Factors" in Part I, Item I, of the Company's Annual Report on Form 10-K/A
Amendment No. 1 for the year ended December 31, 2004, filed March 31, 2005.
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Atlanta, GA
November 8, 2005
EMS Technologies, Inc.
Consolidated Statements of Operations
(In millions, except per-share data)
Quarter Ended Nine Months Ended
---------------------- -------------------
Oct. 1 Oct. 2 Oct. 1 Oct. 2
2005 2004 2005 2004
---------- ------ ------- -------
Net sales $ 84.4 57.6 226.2 179.7
Cost of sales 58.3 37.5 153.4 116.2
Selling, general and administrative expenses 16.2 14.3 48.4 43.6
Research and development expenses 4.0 4.0 11.7 12.7
---------- ----- ----- -----
Operating income 5.9 1.8 12.7 7.2
Non-operating income 0.3 0.1 0.5 1.2
Foreign exchange loss (0.2) -- (0.3) (0.1)
Interest expense (1.0) (0.5) (3.0) (1.6)
---------- ----- ----- -----
Earnings before income taxes 5.0 1.4 9.9 6.7
Income tax expense 1.7 0.4 3.4 1.9
---------- ----- ----- -----
Earnings from continuing operations 3.3 1.0 6.5 4.8
Loss from discontinued operations (4.3) (2.7) (13.5) (4.5)
---------- ----- ----- -----
Net earnings (loss) $ (1.0) (1.7) (7.0) 0.3
=========== ====== ====== ======
Net earnings (loss) per share:
Basic - from continuing operations $ 0.30 0.09 0.58 0.44
Basic - from discontinued operations (0.39) (0.24) (1.20) (0.41)
---------- ----- ----- -----
Basic earnings (loss) per share $ (0.09) (0.15) (0.62) 0.03
=========== ====== ====== ======
Diluted - from continuing operations $ 0.29 0.09 0.58 0.43
Diluted - from discontinued operations (0.38) (0.24) (1.20) (0.41)
---------- ----- ----- -----
Diluted earnings (loss) per share $ (0.09) (0.15) (0.62) 0.02
=========== ====== ====== ======
Weighted average number of shares:
Common 11.2 11.1 11.2 11.1
Common and dilutive common equivalent 11.2 11.2 11.2 11.2
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November 8, 2005
EMS Technologies, Inc.
Consolidated Balance Sheets
(In millions)
Oct. 1 Dec. 31
2005 2004
--------- -------
Cash and cash equivalents $ 18.4 19.3
Receivables billed 68.1 56.0
Unbilled receivables under long-term contracts 27.7 21.2
Customer advanced payments (3.0) (1.9)
--------- ------
Trade accounts receivable 92.8 75.3
--------- ------
Inventories 32.7 33.4
Other current assets 1.4 1.4
Assets held for sale 56.2 64.7
--------- ------
Current assets 201.5 194.1
--------- ------
Net property, plant and equipment 33.2 31.5
Goodwill 13.5 13.5
Other assets 16.9 16.0
--------- ------
$ 265.1 255.1
========= =====
Bank debt and current
installments, long-term debt $ 18.5 3.5
Accounts payable 31.9 23.8
Other liabilities 23.7 19.7
Liabilities related to assets held for sale 18.5 24.1
--------- ------
Current liabilities 92.6 71.1
--------- ------
Long-term debt 51.5 58.0
Stockholders' equity 121.0 126.0
--------- ------
$ 265.1 255.1
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NEWS RELEASE
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Atlanta, GA
November 8, 2005
EMS Technologies, Inc.
Segment Data
(In millions)
Quarters Ended Nine Months Ended
-------------------- --------------------
Oct. 1 Oct. 2 Oct. 1 Oct. 2
2005 2004 2005 2004
--------- ------- ------- --------
NET SALES
LXE $ 30.7 27.3 89.1 80.0
Defense & Space Systems 13.5 11.8 38.0 36.9
SATCOM 14.4 9.0 36.4 28.5
EMS Wireless 25.9 9.5 62.6 34.6
Other (0.1) -- 0.1 (0.3)
--------- ------ ------ ------
Total $ 84.4 57.6 226.2 179.7
========= ====== ====== ======
OPERATING INCOME (LOSS)
LXE $ 1.6 1.8 4.7 4.6
Defense & Space Systems 1.6 0.1 2.5 1.6
SATCOM 1.5 0.6 2.9 1.3
EMS Wireless 1.3 (1.1) 3.0 (0.6)
Other (0.1) 0.4 (0.4) 0.3
--------- ------ ------ ------
Total $ 5.9 1.8 12.7 7.2
========= ====== ====== ======
EARNINGS (LOSS) FROM CONTINUING OPERATIONS
LXE $ 0.9 1.1 2.7 2.7
Defense & Space Systems 0.9 -- 1.4 0.8
SATCOM 1.2 0.6 2.4 1.3
EMS Wireless 0.7 (0.7) 1.6 (0.6)
Other (0.4) -- (1.6) 0.6
--------- ------ ------ ------
Total $ 3.3 1.0 6.5 4.8
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FOR FURTHER INFORMATION PLEASE CONTACT: DON T. SCARTZ
CHIEF FINANCIAL OFFICER
770-729-6510
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