ATLANTA, Jan. 8, 2007 (PRIME NEWSWIRE) -- EMS Technologies, Inc. (Nasdaq:ELMG) today announced that it expects earnings from continuing operations for the 2007 fiscal year to be in the range of $.95-$1.05 per share.
Paul Domorski, the Company's CEO, commented, "For the first nine months of 2006, our three core businesses have performed well, and the guidance for the full year 2007 is based on substantial future growth expectations, as well as reductions in corporate expenses, lower debt and higher invested cash, including the $40 million net proceeds from the recent sale of the EMS Wireless division. We presently do not have enough information to confirm or modify the most recent guidance on earnings from continuing operations for the full year 2006. However, to provide context, the guidance range for 2007 would represent profit growth of approximately 60% over the most recent earnings guidance for 2006, excluding the one-time $.18 per share income tax benefit previously reported in earnings for the third quarter of 2006.
"The expectations for 2007 reflect the benefit of strategic actions completed in 2006 that have strengthened the EMS balance sheet and sharpened the Company's strategic focus. We disposed of the unprofitable satellite networks division in Montreal, we successfully completed a $60 million public offering, and most recently, we sold the EMS Wireless division, which supplies base station antennas and other products to the cellular telecommunications market. These actions and positive cash flow from operations have resulted in the Company eliminating all non-mortgage debt and carrying over $100 million in cash on the balance sheet. We expect to invest in our three core businesses -- LXE, Defense & Space Systems, and SATCOM -- through planned investment in R&D and pursuit of strategic opportunities. Our 2007 guidance does not include the effect of any potential strategic investments.
"This guidance also includes the cost of efforts expected in 2007 that we believe will increase the prospects for growth well into the future. To continue SATCOM's long-term sales growth, that business will incur non-recurring costs at mid-year to move into a larger, more efficient facility currently under construction. Also, LXE plans to enhance and expand its worldwide enterprise resource planning capabilities, which should support greater international distribution of our rugged computers and wireless data networks.
"We believe that LXE and SATCOM will continue their historic profit growth trends, and with a high backlog level for our Defense &Space Systems business to begin the new year, the Company is well positioned for strong performance in 2007."
EMS Technologies, Inc. is an innovative leader in the technology of advanced wireless communications, focusing on the needs of the mobile information user and broadband applications. Headquartered in Atlanta and with approximately 1,000 workers worldwide, we provide wireless communications products for commercial and defense markets. The Company's business units address the needs of different markets, but they share a common foundation in broadband and other advanced wireless technologies, leading to important technical and marketing synergies:
*LXE is a leading provider of rugged computers and wireless data networks used for logistics applications such as distribution centers, warehouses and container ports. LXE automatic identification and data capture products serve mobile information users at over 7,500 sites worldwide; * Defense & Space Systems supplies highly-engineered subsystems for defense electronics and sophisticated satellite applications -- from military communications, radar, surveillance and countermeasure to commercial high-definition television, satellite radio, and live TV for today's most innovative airlines; and * SATCOM supplies a broad array of terminals and antennas that enable end-users in aircraft and other mobile platforms, such as military command vehicles or over-the-road trucks, to communicate over satellite networks at a variety of data speeds.
Statements contained in this press release regarding the Company's expectations for its earnings guidance for 2007, 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; * 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; * the ability of the Company to obtain patent licenses, with satisfactory license rights and royalty rates, from owners of 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; * changes in the rates at which our products are returned for repair or replacement under warranty; * customer response to new products and services, and general conditions in our target markets (such as logistics and space-based communications); * the success of certain of our customers in marketing our line of high-speed commercial airline communications products as a complementary offering with their own lines of avionics products; * the availability of financing for satellite data communications systems; * 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; * the Company's ability to attract and retain qualified senior management and other personnel, particularly those with key technical skills; * the availability of sufficient additional credit or other financing, on acceptable terms, to support any large acquisitions that we believe would contribute to our growth and profitability; * the ability to negotiate successfully with potential acquisition candidates, finance acquisitions, or effectively integrate the acquired businesses, products or technologies with our existing businesses and products, and the risk that any such acquisitions do not perform as expected and are dilutive to earnings; * 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; 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.
Further information concerning relevant factors and risks are identified under the caption "Risk Factors" in the Company's annual report on Form 10-K for the year ended December 31, 2005 and in the Company's quarterly report on Form 10-Q for the period ended September 30, 2006.