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EMS Technologies Revises Guidance for Fiscal 2006

11 July 2006

EMS Technologies, Inc. (Nasdaq:ELMG) today revised its earnings guidance for the full year, 2006. The previously announced earnings target of $.96 to $1.06 per share in 2006 was revised to $.70 to $.80 per share as a result of developing uncertainty over the timing of orders at the Company's EMS Wireless division.


Paul Domorski, president and chief executive officer, commented, "Based on performance-to-date and expectations for the remainder of the year, the outlook for three of our four divisions -- LXE, Defense & Space Systems ("D&SS") and SATCOM -- continues to be bright. However, persistent uncertainty concerning the timing of future orders from major U.S. wireless carriers has clouded the picture for EMS Wireless.


"We began the year with the expectation of orders at EMS Wireless in 2006 similar to the 2005 levels, based on favorable indications from our customers concerning their intentions for further systems expansion in 2006. The division's first-quarter 2006 revenues of $15.6 million were a reasonable start for the year, but the significant increase in orders activity that we expected for the later part of the second quarter did not materialize.


"We still expect the Company to be profitable in the second quarter, although not at the level that analysts have forecast. Our revised earnings guidance for the full year is based on the assumption that the delays in major wireless system-rollout orders will continue through the end of the year. We could exceed the revised guidance levels if we receive several large system-expansion orders from one or more of our customers.


"We are conducting an intensive review and analysis of EMS Wireless. The solid performance of our other divisions has allowed me to deepen my personal involvement at EMS Wireless, particularly with a view to achieving profitability at the division's current level of sales. We recently initiated specific cost reductions as a step towards this goal, but a broader analysis of the division's capabilities, products, processes and market position is also under way.


"EMS Wireless has a strong product portfolio and a well-established role as a key supplier to the wireless services industry. We are developing an action plan that we believe will help enhance the value of that division."


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.


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.


CONTACT: EMS Technologies, Inc.


Don T. Scartz, Chief Financial Officer


770-729-6510

Source: primezone





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