ATLANTA, May 17, 2005 (PRIMEZONE) -- EMS Technologies, Inc. (Nasdaq:ELMG) today reported revenues of approximately $64 million for the first quarter of 2005, and a loss from continuing operations of $1.4 million, or $.12 per share.
Alfred G. Hansen, president and chief executive officer, commented, "Our LXE and SATCOM divisions continued their string of solidly profitable performances into the first quarter due to the strength of their market positions. EMS Wireless and the startup SatNet divisions had tough starts to begin 2005 due to what has been uneven orders flow for both businesses. It was also disappointing that further delays in funding of previously won contracts and technical problems during the quarter on a small number of contracts at our Defense & Space Systems ("D&SS") unit resulted in that division's first quarterly loss in over three years.
"Despite this difficult combination of factors to begin 2005, there have been clear indications late in the first quarter and subsequently that the business outlook for the three unprofitable units is improving. Recently there have been exceptional orders at EMS Wireless, favorable strategic developments at SatNet, and progress on technical issues at D&SS, and as a result we believe that the second quarter is off to a strong start. We are pleased that at the midpoint of the second quarter, we now have orders accounting for over 70% of our revenue goals for the period. Further, based on our current forecast for the year, we still expect to achieve our previous 2005 earnings guidance of $.75 - $.80 per share from continuing operations.
-- "LXE extended its impressive record of top-line growth and
profitable financial performance, with consistently strong
revenues across markets in the Americas and internationally. Our
growth initiatives in Asia and Eastern Europe are proceeding as
planned, and we expect these regions to fuel additional revenues
later in the year. On the product front, LXE's recently
introduced Windows(R) CE.net-enabled vehicle-mount computers are
gaining wide market acceptance, and our mobile RFID terminal is
proving itself in demonstrations in customer warehouse
facilities.
-- "Defense & Space Systems remains well-positioned for new defense
work, having already won a role on, or being a leading contender
for, initiatives on transformational defense systems. However,
budget-related delays and evolving technical requirements at the
Department of Defense ("DoD") have created uncertainty about the
timing of specific, large contracts. Meanwhile, we continue to
build on a stable backlog and participate in key funded
technology development efforts. We are encouraged that the
situation at DoD appears to be stabilizing, and we expect
positive performance from the D&SS division for the remainder of
the year.
-- "As a result of network upgrades and expansion by the wireless
service companies, EMS Wireless experienced a significant
increase in orders late in the first quarter and continuing into
the second quarter. To meet demand, we are expanding our
production lines from four to eleven. In addition to the
production line efficiencies associated with higher production
rates, our purchasing and engineering efforts have helped achieve
important reductions in material costs, which should benefit the
Wireless division's profitability in future periods.
-- "A vigorous first quarter order rate at our SATCOM division has
helped build a strong backlog that will serve as a solid base of
business for the remainder of the year. Once again, SATCOM was
first to market with new high-speed aeronautical products that
should boost both military and commercial aircraft opportunities
in 2005. SATCOM high-speed equipment has now been selected for
the Sikorsky Blackhawk helicopter program, as well as for the new
Bombardier CL 604 and United States presidential helicopters.
-- "The Satellite Networks ("SatNet") group was recently selected as
supplier of DVB-RCS technology to the U.S. Defense Information
Systems Agency ("DISA"), after rigorous technical evaluation of
competing satellite platforms. Additionally, Telesat Canada has
contracted with SatNet for a DVB-RCS system to operate with the
ANIK F2 Ka-band payload, and Clear Channel has awarded SatNet a
contract to significantly upgrade its existing DVB-RCS system. We
believe the DISA order is a major strategic development for
SatNet, and further new orders during the quarter from
well-established commercial firms are signs of the market's
growth potential. However, the timing of the order stream in this
start-up market remains uncertain, and we are actively
investigating strategic options for SatNet.
"We continue to pursue plans to sell our Space & Technology/Montreal division, which is currently reported as discontinued operations. This division reported over $1 million in profits in the first quarter, and we believe that the improved prospects for this division should contribute to our sales effort."
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:
-- LXE mobile computers and wireless local area networks, for
materials handling and logistics
-- Defense & Space Systems antennas and other hardware, for space
and satellite communications, radar, surveillance, military
countermeasures, and other specialized uses,
-- 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 4:30 PM Eastern time on Tuesday, May 17, 2005, in which the Company's management will discuss the financial results for the first quarter of 2005. If you would like to participate in this conference, please call 800-807-2165 (international callers use 507-726-3531) within approximately 10 minutes before the call is scheduled to begin. A taped replay of the conference call will also be available through Tuesday, May 24, 2005 by dialing 800-670-2962 (international callers use 620-294-1036).
Statements contained in this press release regarding the Company's expectations for its financial results for 2005, 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;
-- difficulty predicting the timing of receipt of major customer
orders, and the effect of customer timing decisions on our
periodic financial results;
-- 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,
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 success of certain of our customers in marketing our line of
high-speed commercial airline communications products as a
complementary offering with their own aeronautical 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;
-- 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 under the caption "Risk Factors" in Part I, Item I, of the Company's Annual Report on Form 10-K/A Amendment No. 1 for the year ended December 31, 2004, filed March 31, 2005.
EMS Technologies, Inc.
Consolidated Statements of Operations
(In millions, except per-share data)
1st Qtr 1st Qtr
2005 2004
--------- ---------
Net sales $ 63.7 64.1
Cost of sales 42.8 40.5
Selling, general and
administrative expenses 17.4 15.6
Research and development
expenses 4.4 5.6
--------- ---------
Operating income (loss) (0.9) 2.4
Non-operating income - 0.9
Foreign exchange gain (loss) (0.1) 0.1
Interest expense (1.1) (0.6)
--------- ---------
Earnings (loss) before
income taxes (2.1) 2.8
Income tax expense (benefit) (0.7) 0.9
--------- ---------
Earnings (loss) from
continuing operations (1.4) 1.9
Earnings from discontinued
operations 1.1 0.3
--------- ---------
Net earnings (loss) $ (0.3) 2.2
========= =========
Net earnings (loss) per share:
Basic - from continuing
operations $ (0.12) 0.17
Basic - from discontinued
operations 0.09 0.03
--------- ---------
Basic earnings (loss)
per share $ (0.03) 0.20
========= =========
Diluted - from continuing
operations $ (0.12) 0.17
Diluted - from discontinued
operations 0.09 0.03
--------- ---------
Diluted earnings (loss)
per share $ (0.03) 0.20
========= =========
Weighted average number
of shares:
Common 11.2 11.0
Common and dilutive common
equivalent 11.2 11.3
EMS Technologies, Inc.
Consolidated Balance Sheets
(In millions)
April 2 Dec 31
2005 2004
-------- --------
Assets
Cash $ 16.4 19.3
Receivables billed 59.5 59.0
Unbilled receivables under
long-term contracts 25.1 24.3
Customer advanced payments (3.9) (2.0)
-------- --------
Trade accounts receivable 80.7 81.3
-------- --------
Inventories 39.8 37.4
Other current assets 1.4 1.4
Assets held for sale 54.4 48.7
-------- --------
Current assets 192.7 188.1
-------- --------
Net property, plant and
equipment 36.9 37.2
Goodwill 13.5 13.5
Other assets 17.1 16.3
-------- --------
$ 260.2 255.1
======== ========
Liabilities and Stockholders' Equity
Bank debt and current
installments, long-term
debt $ 18.4 3.5
Accounts payable 23.6 25.6
Other liabilities 21.3 21.0
Liabilities related to
assets held for sale 22.5 21.0
-------- --------
Current liabilities 85.8 71.1
Long-term debt 49.2 58.0
Stockholders' equity 125.2 126.0
-------- --------
$ 260.2 255.1
======== ========
EMS Technologies, Inc.
Segment Data
(In millions)
1st Qtr 1st Qtr
2005 2004
--------- ---------
Net sales
LXE $ 26.8 24.9
Defense & Space Systems 11.3 12.8
EMS Wireless 12.2 12.2
SATCOM 9.9 10.1
SatNet 3.5 4.1
Other - -
--------- ---------
Total $ 63.7 64.1
========= =========
Operating income (loss)
LXE $ 1.0 1.1
Defense & Space Systems (0.5) 0.8
EMS Wireless (0.9) 0.1
SATCOM 0.4 0.2
SatNet (0.7) (0.1)
Other (0.2) 0.3
--------- ---------
Total $ (0.9) 2.4
========= =========
Earnings (loss) from continuing
operations
LXE $ 0.5 0.7
Defense & Space Systems (0.4) 0.4
EMS Wireless (0.6) -
SATCOM 0.5 0.2
SatNet (1.1) (0.2)
Other & Corporate (0.3) 0.8
--------- ---------
Total $ (1.4) 1.9
========= =========