ATLANTA, March 1, 2004 (PRIMEZONE) -- EMS Technologies, Inc. (Nasdaq:ELMG) today reported earnings from continuing operations of $2.7 million, or $.25 per share, on revenues of $72.8 million for the fourth quarter of 2003, and $8.9 million, or $.82 per share, on revenues of $256.2 million for the fiscal year 2003.
Alfred G. Hansen, president and chief executive officer, commented, "In the fourth quarter, our continuing operations turned in another strong combined performance, with revenues in all divisions higher than in the preceding quarter. We also set a new record for combined annual revenues from continuing operations.
-- "LXE set a new record for fourth quarter revenues, and the division topped $100 million in annual revenues for the first time in its history. Our markets in the Americas and Europe remained great sources of new orders, and we were pleased with our expanded business in the Pacific Rim (Australia and Singapore). Our product line grew with the addition of a new Windows(r) CE-based handheld computer, and we accelerated the incorporation of RFID and speech recognition into our standard products. We also continued to enhance our marketing and distribution efforts with the launch of a new lease-finance program, and the recent signing of a Solutions Technology Integrator (STI) partnership with Cisco Systems, Inc.
-- "Space & Technology / Atlanta's results for the quarter reflected exceptional performance on current programs. It was also a very good quarter for new orders, which totaled almost $19 million. A significant amount of these orders were for commercial applications, including antenna systems for in-flight live television service to commercial aircraft. But a major portion of the orders related to important defense applications with substantial follow-on potential for the future.
-- "The SATCOM division's industry-leading product lines had their best combined revenue and earnings results of the year. Sales of our aeronautical terminals continued to be strong, especially in high-speed data applications for defense. We also had upticks in orders for our land-based high-speed and video communications products for defense, as well as emergency management products and packet data terminals for tracking and security.
-- "EMS Wireless revenues in the fourth quarter benefited from increased capital spending by the wireless service providers that we supply, as well as the roll-out of our new variable electronic downtilt antenna, which makes it much easier and less expensive for a wireless service provider to change antenna coverages to meet the demands of changing traffic patterns. We also booked a major new order for a large in-building system in our repeater product line.
-- "The Satellite Networks ("SatNet") group -- our start-up venture providing DVB-RCS-standard hubs and terminals for broadband communications via satellite -- rolled out five more systems in the fourth quarter, for a total of twelve systems delivered this year. We also received almost $7 million of new orders during the quarter, and signed a supply agreement with Alcatel, our largest SatNet customer. These new systems will be used for a variety of applications, including not only small business / home office use, but also networks for distance learning, voice-over-IP, and military ruggedized communications.
"As previously announced, management had begun the formal processes to dispose of the Company's Space & Technology / Montreal division and the healthcare product line. As a result, these business components were accounted for as discontinued operations. The sale of the healthcare product line was completed during the fourth quarter. We are proceeding with plans to sell our Space & Technology / Montreal business, which reported an approximately $4.5 million loss for the fourth quarter due to provisions for additional costs and inventory reserves related to legacy commercial space programs. However, the Space & Technology / Montreal division has shown good signs of recovery, receiving almost $40 million in new orders during the past two quarters, and significant additional orders are expected for the first quarter 2004. With the substantial intake of new orders and continued improvement in operations, we expect this business to return to profitability in 2004, and we will be evaluating any offers for the division in light of its improving current condition.
"We believe that EMS is well positioned for future growth. Each of our divisions is a leader in its respective markets. Our base of advanced wireless technologies is extraordinary. And our people are committed to success. Guidance about the future earnings performance of the Company is clearly subject to substantial uncertainties in current world economies (especially in the telecommunications sector) and in defense spending priorities. Yet we believe that the Company's continuing operations can achieve 10% - 15% growth for revenues in the range of $285 - $300 million for the year 2004, with related annual earnings per share of $.87 - $.92. These results include estimated earnings per share of $.13 - $.15 for the first quarter of 2004 on revenues of approximately $65 million."
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 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, land-mobile and maritime communications via satellite,
-- SatNet broadband technologies for use in high-data-rate, high-capacity satellite communication systems.
There will be a conference call at 9:30 AM Eastern time on Monday, March 1, 2004, in which the Company's management will discuss the financial results for the fourth quarter. If you would like to participate in this conference, please call 800-867-1054 (international callers use 303-262-2211) within approximately 10 minutes before the call is scheduled to begin. The conference identification number is 572014. A taped replay of the conference call will also be available through Monday, March 8, 2004 by dialing 800-405-2236 (international callers use 303-590-3000) and entering the following code: 572014.
Statements contained in this press release regarding the Company's expectations for its financial results for 2004, 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...
-- 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;
-- U.S. defense budget pressures on near-term spending priorities;
-- volatility of foreign exchange rates relative to the U.S. dollar and their effect on purchasing power by international customers, as well as the potential for realizing foreign exchange gains or losses associated with net foreign assets 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 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 terrestrial systems reduce market opportunities for space-based broadband communications 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, 2002.
EMS Technologies, Inc.
Consolidated Statements of Operations
(In millions, except per-share data)
Quarter Ended Year Ended
------------------- ---------------------
Dec 31 Dec 31 Dec 31 Dec 31
2003 2002 2003 2002
--------- -------- --------- --------
Net sales $ 72.8 64.8 256.2 235.8
Cost of sales 47.1 41.6 163.7 151.1
Selling,
general and
administrative
expenses 16.2 14.5 57.9 51.4
Research and
development
expenses 5.4 5.1 19.3 20.4
Contract reserve
adjustment - (3.5) - (3.5)
--------- -------- --------- --------
Operating income 4.1 7.1 15.3 16.4
Non-operating
income (loss) 0.6 (0.3) 0.4 (0.1)
Foreign exchange
gain (loss) - (0.3) (0.4) 0.4
Interest expense (0.6) (0.6) (2.2) (2.3)
--------- -------- --------- --------
Earnings before
income taxes 4.1 5.9 13.1 14.4
Income tax
expense (1.4) (1.7) (4.2) (4.7)
--------- -------- --------- --------
Net earnings
from continuing
operations 2.7 4.2 8.9 9.7
Loss from
discontinued
operations (5.5) (2.2) (46.3) (1.1)
--------- -------- --------- --------
Net earnings
(loss) $ (2.8) 2.0 (37.4) 8.6
========= ======== ========= ========
Net earnings
(loss) per
share:
Basic - from
continuing
operations 0.26 0.39 0.83 0.91
Basic - from
discontinued
operations (0.52) (0.20) (4.32) (0.10)
--------- -------- --------- --------
Basic earnings
(loss) per
share $ (0.26) 0.19 (3.49) 0.81
========= ======== ========= ========
Diluted - from
continuing
operations 0.25 0.39 0.82 0.90
Diluted - from
discontinued
operations (0.50) (0.20) (4.29) (0.10)
--------- -------- --------- --------
Diluted earnings
(loss) per share $ (0.25) 0.19 (3.47) 0.80
========= ======== ========= ========
Weighted average
number of shares:
Common 10.8 10.7 10.7 10.6
Common and
dilutive common
equivalent 11.0 10.7 10.8 10.7
EMS Technologies, Inc.
Consolidated Balance Sheets
(In millions)
Dec 31 Dec 31
2003 2002
--------- ---------
Cash $ 14.2 12.4
Receivables billed 56.6 50.6
Unbilled receivables
under long-term contracts 18.6 23.3
Customer advanced payments (3.8) (2.4)
--------- ---------
Trade accounts receivable 71.4 71.5
--------- ---------
Inventories 33.5 30.0
Assets held for sale 40.1 77.9
--------- ---------
Current assets 159.2 191.8
--------- ---------
Net property, plant
and equipment 38.5 36.5
Goodwill 13.5 13.5
Other assets 17.3 14.5
--------- ---------
$ 228.5 256.3
========= =========
Bank debt and current $ 38.1 33.8
installments,
long-term debt
Accounts payable 18.8 21.0
Other liabilities 18.3 16.5
Liabilities related
to assets held for sale 17.8 20.3
--------- ---------
Current liabilities 93.0 91.6
Long-term debt 15.5 18.7
Stockholders' equity 120.0 146.0
--------- ---------
$ 228.5 256.3
========= =========
Quarters Ended Year Ended
------------- --------------
Dec 31 Dec 31 Dec 31 Dec 31
2003 2002 2003 2002
------------- ------ ------
Net sales
Space & Technology
/ Atlanta $ 12.9 16.1 49.3 54.2
Less Sales to
Discontinued
Operations (0.2) (0.4) (1.8) (1.4)
------ ------ ------ ------
Space & Technology
/ Atlanta external
sales 12.7 15.7 47.5 52.8
LXE 29.2 25.4 101.1 88.2
EMS Wireless 15.2 10.0 51.4 48.0
SatCom 12.2 9.6 44.7 32.7
SatNet 4.0 4.1 12.6 14.2
Other (0.5) - (1.1) (0.1)
------ ------ ------ ------
Total $ 72.8 64.8 256.2 235.8
====== ====== ====== ======
Operating income
(loss)
Space & Technology
/ Atlanta $ 0.8 1.6 3.9 5.0
Contract reserve
adjustment - 3.5 - 3.5
------ ------ ------ ------
Space & Technology
/ Atlanta 0.8 5.1 3.9 8.5
LXE 2.0 2.0 7.0 4.8
EMS Wireless 0.6 (0.3) 2.5 2.4
SatCom 1.2 1.4 5.0 4.0
SatNet (0.4) (0.1) (2.1) (1.8)
Other (0.1) (1.0) (1.0) (1.5)
------ ------ ------ ------
Total $ 4.1 7.1 15.3 16.4
====== ====== ====== ======
Net earnings (loss)
from continuing
operations
Space & Technology
/ Atlanta $ 0.5 3.1 2.2 4.9
LXE 1.3 1.1 4.2 2.8
EMS Wireless 0.5 (0.3) 1.6 1.5
SatCom 0.7 1.2 3.8 3.4
SatNet (0.5) (0.2) (2.2) (1.9)
Other & Corporate 0.2 (0.7) (0.7) (1.0)
------ ------ ------ ------
Total $ 2.7 4.2 8.9 9.7
====== ====== ====== ======