ATLANTA, Jan. 26, 2006 (PRIMEZONE) -- EMS Technologies, Inc. (Nasdaq:ELMG) today reaffirmed its earnings guidance for 2005 and provided earnings guidance for fiscal 2006. The Company announced that it expects to report earnings from continuing operations in 2005 of $0.80 -- $0.85 per share on net sales exceeding $300 million, as compared with $0.65 per share in 2004 on net sales of $247 million. Looking ahead to 2006, the Company expects earnings from continuing operations of $1.05 to $1.15 per share, without giving effect to potential stock option expenses resulting from the adoption of Statement of Financial Accounting Standards No. 123R, or to dilution resulting from the Company's proposed stock offering. The Company's 2006 earnings expectation is based on, among other things, the expected demand for current products, the planned introduction of new products, and the Company's outlook for defense communications programs. The Company anticipates that its operating margin for 2006 will be approximately 7%.
The Company has filed a registration statement (including a prospectus) with the SEC for a public offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering. You may get these documents free of charge by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-248-8863, ext. 72400.
EMS Technologies, Inc. is a leading designer, manufacturer and marketer of advanced wireless communications products for diverse commercial, defense and government markets. The Company focuses on the needs of the mobile information user and the increasing demand for wireless broadband communications. The Company has the following four reporting segments:
Defense & Space Systems -- highly engineered hardware components and subsystems for defense electronics and sophisticated satellite applications;
LXE -- rugged computers and wireless data networks used for logistics applications in warehouses and container ports;
SATCOM -- terminals and antennas that enable end-users in aircraft to communicate over satellite networks; and
EMS Wireless -- wireless base station antennas to the domestic PCS/cellular infrastructure market.
Statements contained in this press release regarding the Company's expectations for its financial results for 2005 and 2006, and concerning the potential for various businesses and products, are forward-looking statements. Actual results could differ materially 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 contained 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 sale of
the Company's SatNet division, which is the subject of a
definitive sale agreement, including external market conditions,
financing availability and other factors that could affect the
purchaser's ability to complete such transaction on the terms and
timing expected by the Company;
-- 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 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 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.
Additional relevant factors and risks are identified under the caption "Risk Factors" in the preliminary prospectus included in the Company's Registration Statement on Form S-3 filed with the Securities and Exchange Commission on January 26, 2006.