ATLANTA, May 10, 2006 (PRIMEZONE) -- EMS Technologies, Inc. (Nasdaq:ELMG) today reported record first quarter revenues of approximately $75 million to begin the 2006 fiscal year, and earnings from continuing operations of $2.0 million, or $.15 per share. These results compare with 2005 first quarter revenues of $60 million and a loss from continuing operations of $700,000, or $(.06) per share.
Alfred G. Hansen, President and Chief Executive Officer, commented, "The combined performance of our divisions has helped EMS get a solid start to the year. The first quarter has historically been tough in all of our markets, but with strong product offerings and solid execution, three of our four divisions set first quarter revenue records.
-- "LXE's revenues benefited from impressive international market
activity and continued strength in the Americas, resulting in the
14th consecutive quarter that LXE has set a new sales record for
the period. LXE also continued to develop new products and
capabilities, including the ultra-rugged, second-generation RFID
reader -- the RX2. LXE's reputation for rugged and reliable
products was key to an important first quarter order from the
Port of Houston Authority for a turnkey wireless network and
terminals.
-- "Defense & Space Systems had exceptional orders in the first
quarter -- principally for new defense electronics applications --
which exceeded $20 million. New contracts now supported by D&SS
include the B2 EHF antenna program, a classified satellite
program, and an expanded role on an important new military
satellite program. And we continue to be recognized by our key
customers for the quality of our program contributions, including
most recently a Silver Supplier award from Northrop Grumman.
-- "SATCOM once again leveraged its market-leading position to post
new record results. This division's highest-ever first quarter
profits and revenues were the result of our success in broadband
applications, particularly with expanded use of HSD terminals on
both U.S. and foreign military aircraft. We also continued
technology development in our role as key supplier to all of the
leading marketers of broadband systems for the air transport
market, which we believe offers considerable promise for the
future.
-- "EMS Wireless followed up its record 2005 by starting 2006 with
the highest first-quarter revenues in the division's history.
Orders from the major wireless carriers have typically not been
strong in previous first quarters, with buildout activity slowed
by winter weather conditions. But several major customers
contributed to the new orders early in 2006, and the pace of
buildout activity is expected to increase;
"Our businesses are doing well, and the Company has never been in stronger financial position. During the quarter we closed the sale of our Satellite Networks division, and we completed a highly successful public stock offering that brought in almost $60 million and allowed us to pay off all non-mortgage debt. We also remain very optimistic about the remainder of the year, and we continue to expect to achieve our previously announced earnings target of $.96 to $1.06 per share for the year."
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 1,200 workers worldwide, we provide wireless communications products for diverse markets, including commercial and defense. The Company's four 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;
-- 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 variety of data speeds; and
-- EMS Wireless is recognized globally as a leading supplier of
RF-based mobile telephony solutions. The division's extensive
product line rages from base station antennas and wireless
backhaul products for PCS/cellular telecommunications to active
antennas and repeaters for complete in-building communications
solutions.
There will be a conference call at 9:30 AM Eastern time on Wednesday, May 10, 2006, in which the Company's management will discuss the financial results for the first quarter of 2006. If you would like to participate in this conference, please call 800-647-3898 (international callers use 641-297-7675) within approximately 10 minutes before the call is scheduled to begin. A taped replay of the conference call will also be available through Wednesday, May 17, 2006 by dialing 800-615-9956 (international callers use 973-854-2594).
Statements contained in this press release regarding the Company's expectations for its financial results for 2006, 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
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;
-- 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, 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
complementary 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;
-- the Company's ability to attract and retain qualified senior
management and technical personnel, and to devise and implement
effective senior management succession plans;
-- the ability to negotiate successfully with potential acquisition
candidates, finance acquisitions, or effectively integrate the
acquired businesses, products or technologies into our existing
businesses and products;
-- 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.
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.
EMS Technologies, Inc.
Consolidated Statements of Operations -- Unaudited
(In millions, except per-share data)
1st Qtr 1st Qtr
2006 2005
------- -------
Net sales $ 74.7 60.2
Cost of sales 48.9 40.7
Selling, general and administrative
expenses 17.2 16.1
Research and development expenses 5.0 3.6
------- -------
Operating income (loss) 3.6 (0.2)
Non-operating income 0.3 --
Foreign exchange loss (0.3) --
Interest expense (0.7) (0.9)
------- -------
Earnings (loss) from continuing
operations before income taxes 2.9 (1.1)
Income tax expense (benefit) 0.9 (0.4)
------- -------
Earnings (loss) from
continuing operations 2.0 (0.7)
Earnings (loss) from
discontinued operations (1.8) 0.4
------- -------
Net earnings (loss) $ 0.2 (0.3)
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Net earnings (loss) per share:
Basic - from continuing operations $ 0.15 (0.06)
Basic - from discontinued operations (0.13) 0.03
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Basic earnings (loss) per share $ 0.02 (0.03)
======= =======
Diluted - from continuing operations $ 0.15 (0.06)
Diluted - from discontinued operations (0.13) 0.03
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Diluted earnings (loss) per share $ 0.02 (0.03)
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Weighted average number of shares:
Common 13.2 11.2
Diluted 13.3 11.2
EMS Technologies, Inc.
Consolidated Balance Sheets -- Unaudited
(In millions)
April 1 Dec 31
2006 2005
Assets
Cash and cash equivalents $ 50.8 15.6
Receivables billed 64.5 70.9
Unbilled receivables under
long-term contracts 28.0 25.1
Customer advanced payments (4.9) (3.0)
------- -------
Trade accounts receivable 87.6 93.0
------- -------
Inventories 37.5 34.7
Other current assets 2.0 2.1
Assets held for sale - 6.7
------- -------
Current assets 177.9 152.1
------- -------
Net property, plant and equipment 34.4 34.3
Goodwill 13.5 13.5
Other assets 22.8 19.6
------- -------
$ 248.6 219.5
======= =======
Liabilities and Stockholders' Equity
Bank debt and current
installments of long-term debt $ 3.7 6.8
Accounts payable 27.1 34.1
Other liabilities 27.9 24.5
Liabilities related to assets held
for sale - 2.1
------- -------
Current liabilities 58.7 67.5
Long-term debt 12.6 36.6
Other long-term liabilities 1.7 1.7
Stockholders' equity 175.6 113.7
------- -------
$ 248.6 219.5
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EMS Technologies, Inc.
Segment Data - Unaudited
(In millions)
1st Qtr 1st Qtr
2006 2005
------- -------
Net sales
LXE $ 31.6 26.8
Defense & Space Systems 11.9 11.3
SATCOM 15.6 9.9
EMS Wireless 15.6 12.2
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Total $ 74.7 60.2
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Operating income (loss)
LXE $ 1.9 1.0
Defense & Space Systems 0.4 (0.5)
SATCOM 1.5 0.4
EMS Wireless 0.3 (0.9)
Other (0.5) (0.2)
------- -------
Total $ 3.6 (0.2)
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Earnings (loss) from continuing operations
LXE $ 1.1 0.5
Defense & Space Systems 0.2 (0.4)
SATCOM 1.3 0.5
EMS Wireless 0.1 (0.6)
Other (0.7) (0.7)
------- -------
Total $ 2.0 (0.7)
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