ATLANTA and MONTREAL, Dec. 22, 2005 (PRIMEZONE) -- EMS Technologies, Inc. (Nasdaq:ELMG) has announced the signing of a definitive agreement for the sale of its Satellite Networks (SatNet) division to Advantech Advanced Microwave Technologies Inc., a manufacturer of satellite and terrestrial wireless communication equipment, with corporate headquarters in Montreal, Canada. The parties are seeking to close the transaction as soon as possible, subject to obtaining certain customer and supplier consents.
The Company also announced that in connection with these final steps in discontinuing its SatNet division, it anticipates an additional impairment charge during the fourth quarter of approximately $2.5 million on the assets being sold, and it may recognize additional losses through discontinued operations arising from the SatNet division's operations during the fourth quarter.
Alfred G. Hansen, president and chief executive officer, stated, "This agreement is another important milestone as we focus company resources on the long-term growth of our core businesses. Satellite Networks has been a pioneer in the DVB-RCS arena, and will bring a deep technology base to Advantech in the growing arena of satellite broadband communications. While I believe its operations have a bright long-term future in the hands of Advantech, it remains a small start-up venture whose orders stream is difficult to predict. Continued delays in orders, and resulting continuing losses and cash funding requirements, during the fourth quarter underscore that EMS and its shareholders are better served by a sale to a company like Advantech, which can integrate SatNet with other complementary product lines and technologies and enable its success.
"The sales price anticipated under our previously announced non-binding letter of intent would not have resulted in a material further impairment charge, but as we completed the negotiations, it became apparent that the division's disappointing prospects for fourth-quarter revenues and earnings could not support a transaction at that level. However, this transaction will still permit further reduction of EMS debt and also relieve the Company of future SatNet cash-funding requirements. This will also enable management to focus on our strong continuing operations and place us in a better position to capitalize on their promising opportunities."
Needham & Company, investment bankers, acted as exclusive financial advisors to EMS Technologies with respect to the sale.
About EMS Technologies, Inc.
EMS Technologies, Inc. (Nasdaq:ELMG) is a leading innovator in the design and manufacture of wireless, satellite and defense solutions, and focuses its unique range of advanced technologies on the needs of broadband and mobile information users. The Company is headquartered in Atlanta, has approximately 1,400 workers worldwide, and operates manufacturing facilities in Atlanta, Ottawa, Montreal and Brazil.
For more information, visit the Company's website at www.ems-t.com.