##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended June 28, 2008
 Commission file number 0-6072
 EMS TECHNOLOGIES, INC.
  Georgia
    
    58-1035424(State or other jurisdiction of incorporation or
    
    (IRS Employer ID Number)organization)660 Engineering Drive, Norcross, Georgia
    
    30092(Address of principal executive offices)
    
    (Zip Code)
 
 Title of Class
    
    Exchange on Which RegisteredCommon Stock, $.10 par value
    
    The Nasdaq Stock Market LLC
  þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
  Class
    
    Number of SharesCommon Stock, $.10 par Value
    
    15,658,080
 AVAILABLE INFORMATION
 www.ems-t.com




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##### 



TABLE OF CONTENTS
 PART I  FINANCIAL INFORMATION
    
    
    2ITEM 1. Financial Statements
    
    
    2Consolidated Statements of Operations (unaudited)
    
    
    2Consolidated Balance Sheets (unaudited)
    
    
    3Consolidated Statements of Cash Flows (unaudited)
    
    
    5Notes to Consolidated Financial Statements (unaudited)
    
    
    6ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    14ITEM 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    28ITEM 4. Controls and Procedures
    
    
    29PART II  OTHER INFORMATION
    
    
    30ITEM 1A. Risk Factors
    
    
    30ITEM 4. Submission of Matters to a Vote of Security Holders
    
    
    30ITEM 6. Exhibits
    
    
    31SIGNATURES
    
    
    32EX-10.1 LETTER AGREEMENT/DON T. SCARTZEX-10.2 LETTER AGREEMENT/JAMES S. CHILDRESSEX-31.1 SECTION 302, CERTIFICATION OF THE CEOEX-31.2 SECTION 302, CERTIFICATION OF THE CFOEX-32 SECTION 906, CERTIFICATION OF THE CEO AND CFO




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PART I
 FINANCIAL INFORMATION
 
 ITEM 1. Financial Statements
 EMS Technologies, Inc. and Subsidiaries
 
 Consolidated Statements of Operations (Unaudited)
 (in thousands, except per share data)
 Three Months Ended
    
    
    Six Months EndedJune 28
    
    
    June 30
    
    
    June 28
    
    
    June 302008
    
    
    2007
    
    
    2008
    
    
    2007Product net sales
    
    $
    65,956
    
    
    
    62,061
    
    
    
    129,669
    
    
    
    118,321Service net sales
    
    
    15,323
    
    
    
    10,086
    
    
    
    27,104
    
    
    
    20,400Net sales
    
    
    81,279
    
    
    
    72,147
    
    
    
    156,773
    
    
    
    138,721Product cost of sales
    
    
    42,500
    
    
    
    39,290
    
    
    
    82,142
    
    
    
    73,864Service cost of sales
    
    
    9,211
    
    
    
    5,950
    
    
    
    16,407
    
    
    
    13,012Cost of sales
    
    
    51,711
    
    
    
    45,240
    
    
    
    98,549
    
    
    
    86,876Selling, general and administrative expenses
    
    
    20,640
    
    
    
    18,147
    
    
    
    40,838
    
    
    
    35,750Research and development expenses
    
    
    5,521
    
    
    
    4,780
    
    
    
    10,542
    
    
    
    9,037Operating income
    
    
    3,407
    
    
    
    3,980
    
    
    
    6,844
    
    
    
    7,058Interest income
    
    
    744
    
    
    
    1,489
    
    
    
    1,743
    
    
    
    2,856Interest expense
    
    
    (428
    )
    
    
    (547
    )
    
    
    (797
    )
    
    
    (1,000
    )Foreign exchange gain (loss), net
    
    
    172
    
    
    
    (324
    )
    
    
    223
    
    
    
    (476
    )Earnings from continuing operations before income taxes
    
    
    3,895
    
    
    
    4,598
    
    
    
    8,013
    
    
    
    8,438Income tax expense
    
    
    484
    
    
    
    1,024
    
    
    
    442
    
    
    
    1,984Earnings from continuing operations
    
    
    3,411
    
    
    
    3,574
    
    
    
    7,571
    
    
    
    6,454Discontinued operations:Earnings (loss) from discontinued operations before
income taxes
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    (566
    )Income tax benefit
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    102Earnings (loss) from discontinued operations
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    (464
    )Net earnings
    
    $
    3,411
    
    
    
    3,577
    
    
    
    7,571
    
    
    
    5,990Net earnings (loss) per share:Basic:From continuing operations
    
    $
    0.22
    
    
    
    0.23
    
    
    
    0.49
    
    
    
    0.42From discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.03
    )Net earnings
    
    $
    0.22
    
    
    
    0.23
    
    
    
    0.49
    
    
    
    0.39Diluted:From continuing operations
    
    $
    0.22
    
    
    
    0.23
    
    
    
    0.48
    
    
    
    0.42From discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.03
    )Net earnings
    
    $
    0.22
    
    
    
    0.23
    
    
    
    0.48
    
    
    
    0.39Weighted-average number of shares outstanding:Basic
    
    
    15,574
    
    
    
    15,312
    
    
    
    15,561
    
    
    
    15,303Diluted
    
    
    15,776
    
    
    
    15,388
    
    
    
    15,774
    
    
    
    15,384
  2




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EMS Technologies, Inc. and Subsidiaries
 
 Consolidated Balance Sheets (Unaudited)
 (in thousands)
 June 28
    
    
    Dec 312008
    
    
    2007ASSETSCurrent assets:Cash and cash equivalents
    
    $
    117,530
    
    
    
    133,959Trade accounts receivable, net
    
    
    92,674
    
    
    
    85,085Inventories
    
    
    33,889
    
    
    
    28,949Deferred income taxes
    
    
    1,868
    
    
    
    1,868Other current assets
    
    
    9,414
    
    
    
    7,196Total current assets
    
    
    255,375
    
    
    
    257,057Property, plant and equipment:Land
    
    
    1,150
    
    
    
    1,150Buildings and leasehold improvements
    
    
    16,005
    
    
    
    15,954Machinery and equipment
    
    
    92,427
    
    
    
    87,377Furniture and fixtures
    
    
    10,038
    
    
    
    9,665Total property, plant and equipment
    
    
    119,620
    
    
    
    114,146Less accumulated depreciation and amortization
    
    
    78,491
    
    
    
    74,223Net property, plant and equipment
    
    
    41,129
    
    
    
    39,923Deferred income taxes
    
    
    6,232
    
    
    
    5,490Goodwill
    
    
    21,741
    
    
    
    9,982Other intangible assets, net
    
    
    9,105
    
    
    
    5,837Other assets
    
    
    6,743
    
    
    
    5,511Total assets
    
    $
    340,325
    
    
    
    323,800
  3




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EMS Technologies, Inc. and Subsidiaries
 Consolidated Balance Sheets (Unaudited), continued
 (in thousands, except share data)
 June 28
    
    
    Dec 312008
    
    
    2007LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Current installments of long-term debt
    
    $
    1,258
    
    
    
    3,174Accounts payable
    
    
    28,653
    
    
    
    22,389Billings in excess of contract costs
    
    
    6,894
    
    
    
    6,643Accrued compensation costs
    
    
    9,163
    
    
    
    9,553Accrued retirement costs
    
    
    1,376
    
    
    
    2,472Deferred service revenue
    
    
    9,750
    
    
    
    8,578Other current liabilities
    
    
    8,235
    
    
    
    5,757Total current liabilities
    
    
    65,329
    
    
    
    58,566Long-term debt, excluding current installments
    
    
    9,913
    
    
    
    10,546Other liabilities
    
    
    7,653
    
    
    
    7,562Total liabilities
    
    
    82,895
    
    
    
    76,674Shareholders equity:Preferred stock of $1.00 par value per shareAuthorized 10,000,000 shares; none issued
    
    
    
    
    
    
    Common stock of $.10 par value per shareAuthorized 75,000,000 shares, issued and outstanding 15,658,000 in 2008 and
15,581,000 in 2007
    
    
    1,566
    
    
    
    1,558Additional paid-in capital
    
    
    141,447
    
    
    
    139,727Accumulated other comprehensive income  foreign currency translation
adjustment
    
    
    13,864
    
    
    
    12,859Retained earnings
    
    
    100,553
    
    
    
    92,982Total shareholders equity
    
    
    257,430
    
    
    
    247,126Commitments and contingenciesTotal liabilities and shareholders equity
    
    $
    340,325
    
    
    
    323,800
  4




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EMS Technologies, Inc. and Subsidiaries
 
 Consolidated Statements of Cash Flows (Unaudited)
 (in thousands)
 Six Months EndedJune 28
    
    
    June 302008
    
    
    2007Cash flows from operating activities:Net earnings
    
    $
    7,571
    
    
    
    5,990Adjustments to reconcile net earnings to net cash provided by operating
activities:Depreciation and amortization
    
    
    5,693
    
    
    
    4,474Deferred income taxes
    
    
    (742
    )
    
    
    Loss from discontinued operations
    
    
    
    
    
    
    464(Gain) loss on sales of assets
    
    
    (11
    )
    
    
    25Stock-based compensation expense
    
    
    972
    
    
    
    709Changes in operating assets and liabilities, net of effects of acquisitions:Trade accounts receivable
    
    
    (2,231
    )
    
    
    11,103Inventories
    
    
    (3,799
    )
    
    
    (2,929
    )Accounts payable
    
    
    3,346
    
    
    
    (4,309
    )Billings in excess of contract costs
    
    
    305
    
    
    
    (345
    )Accrued compensation and retirement costs
    
    
    (2,485
    )
    
    
    (2,183
    )Deferred service revenue
    
    
    3,074
    
    
    
    1,475Accrued costs and other
    
    
    (4,935
    )
    
    
    976Net cash provided by operating activities in continuing operations
    
    
    6,758
    
    
    
    15,450Net cash used in operating activities in discontinued operations
    
    
    
    
    
    
    (3,637
    )Net cash provided by operating activities
    
    
    6,758
    
    
    
    11,813Cash flows from investing activities:Purchases of property, plant and equipment
    
    
    (5,861
    )
    
    
    (5,626
    )Payments for asset acquisitions
    
    
    (15,856
    )
    
    
    Proceeds from sales of assets
    
    
    506
    
    
    
    845Net cash used in investing activities
    
    
    (21,211
    )
    
    
    (4,781
    )Cash flows from financing activities:Repayment of debt
    
    
    (2,551
    )
    
    
    (945
    )Change in restricted cash
    
    
    
    
    
    
    81Deferred financing costs paid
    
    
    (1,041
    )
    
    
    Proceeds from exercise of stock options, net of withholding taxes paid
    
    
    756
    
    
    
    471Net cash used in financing activities
    
    
    (2,836
    )
    
    
    (393
    )Effect of changes in exchange rates on cash and cash equivalents
    
    
    860
    
    
    
    973Net change in cash and cash equivalents
    
    
    (16,429
    )
    
    
    7,612Cash and cash equivalents at beginning of period
    
    
    133,959
    
    
    
    109,431Cash and cash equivalents at end of period
    
    $
    117,530
    
    
    
    117,043
  5




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EMS Technologies, Inc. and Subsidiaries
 
 Notes to Consolidated Financial Statements (Unaudited)
 June 28, 2008 and June 30, 2007
 1. Basis of Presentation
     Managements Use of Estimates
  Effect of New Accounting Pronouncements
  6




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.
  2. Discontinued Operations
  7




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3. Earnings Per Share
  Three Months Ended
    
    
    Six Months EndedJune 28
    
    
    June 30
    
    
    June 28
    
    
    June 302008
    
    
    2007
    
    
    2008
    
    
    2007Basic weighted-average number of common shares
outstanding
    
    
    15,574
    
    
    
    15,312
    
    
    
    15,561
    
    
    
    15,303Dilutive shares using the treasury stock method
    
    
    202
    
    
    
    76
    
    
    
    213
    
    
    
    81Diluted weighted-average number of common shares
outstanding
    
    
    15,776
    
    
    
    15,388
    
    
    
    15,774
    
    
    
    15,384
 4. Comprehensive Income
  Three Months Ended
    
    
    Six Months EndedJune 28
    
    
    June 30
    
    
    June 28
    
    
    June 302008
    
    
    2007
    
    
    2008
    
    
    2007Net earnings
    
    $
    3,411
    
    
    
    3,577
    
    
    
    7,571
    
    
    
    5,990Other comprehensive income:Foreign currency translation adjustment
    
    
    97
    
    
    
    3,954
    
    
    
    1,005
    
    
    
    4,656Comprehensive income
    
    $
    3,508
    
    
    
    7,531
    
    
    
    8,576
    
    
    
    10,646
 8




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5. Trade Accounts Receivable
  June 28
    
    
    Dec 312008
    
    
    2007Amounts billed
    
    $
    63,569
    
    
    
    62,188Unbilled revenues under long-term contracts
    
    
    30,308
    
    
    
    24,001Allowance for doubtful accounts
    
    
    (1,203
    )
    
    
    (1,104
    )Trade accounts receivable, net
    
    $
    92,674
    
    
    
    85,085
  6. Inventories
  June 28
    
    
    Dec 312008
    
    
    2007Parts and materials
    
    $
    22,491
    
    
    
    18,864Work-in-process
    
    
    3,448
    
    
    
    3,733Finished goods
    
    
    7,950
    
    
    
    6,352Inventories
    
    $
    33,889
    
    
    
    28,949
 7. Interim Segment Disclosures
     9




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##### Table of Contents



Three Months Ended
    
    
    Six Months EndedJune 28
    
    
    June 30
    
    
    June 28
    
    
    June 302008
    
    
    2007
    
    
    2008
    
    
    2007Net sales:Defense & Space Systems
    
    $
    18,945
    
    
    
    14,726
    
    
    
    34,407
    
    
    
    28,435LXE
    
    
    37,543
    
    
    
    37,489
    
    
    
    71,753
    
    
    
    70,050SATCOM
    
    
    24,791
    
    
    
    19,932
    
    
    
    50,613
    
    
    
    40,236Total
    
    $
    81,279
    
    
    
    72,147
    
    
    
    156,773
    
    
    
    138,721Operating income (loss):Defense & Space Systems
    
    $
    1,871
    
    
    
    827
    
    
    
    2,435
    
    
    
    1,803LXE
    
    
    726
    
    
    
    2,160
    
    
    
    1,203
    
    
    
    3,035SATCOM
    
    
    1,397
    
    
    
    1,627
    
    
    
    4,480
    
    
    
    4,188Corporate
    
    
    (587
    )
    
    
    (634
    )
    
    
    (1,274
    )
    
    
    (1,968
    )Total
    
    $
    3,407
    
    
    
    3,980
    
    
    
    6,844
    
    
    
    7,058Net earnings (loss)
from continuing
operations:Defense & Space Systems
    
    $
    1,142
    
    
    
    487
    
    
    
    1,484
    
    
    
    1,052LXE
    
    
    500
    
    
    
    1,342
    
    
    
    742
    
    
    
    1,873SATCOM
    
    
    1,655
    
    
    
    1,667
    
    
    
    5,019
    
    
    
    4,195Other
    
    
    
    
    
    
    (139
    )
    
    
    
    
    
    
    (189
    )Corporate
    
    
    114
    
    
    
    217
    
    
    
    326
    
    
    
    (477
    )Total
    
    $
    3,411
    
    
    
    3,574
    
    
    
    7,571
    
    
    
    6,454
 8. Warranty Liability
   Three Months Ended
    
    
    Six Months EndedJune 28
    
    
    June 30
    
    
    June 28
    
    
    June 302008
    
    
    2007
    
    
    2008
    
    
    2007Balance at beginning of the period
    
    $
    2,869
    
    
    
    2,131
    
    
    
    2,647
    
    
    
    2,051Accruals for warranties issued
during the period
    
    
    776
    
    
    
    563
    
    
    
    1,806
    
    
    
    1,232Settlements made during the period
    
    
    (663
    )
    
    
    (448
    )
    
    
    (1,471
    )
    
    
    (1,037
    )Balance at end of period
    
    $
    2,982
    
    
    
    2,246
    
    
    
    2,982
    
    
    
    2,246
 9. Revolving Credit Facilities
  10




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10. Stock-Based Compensation
    11. Income Taxes
  12. Fair Value of Financial Instruments
  11




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
    
    Level 1  Observable inputs such as quoted prices in active market;
    
    Level 2  Inputs, other than the quoted prices in active markets, that are observable
either directly or indirectly; and
    
    Level 3  Unobservable inputs in which there is little or no market data, which require
the reporting entity to develop its own assumptions.
  Fair Value Measurements of Assets (Liabilities) UsingQuoted Pricesin Active
    
    SignificantMarkets for
    
    Other
    
    SignificantIdentical Assets
    
    Observable
    
    Unobservable(Liabilities)
    
    Inputs
    
    Inputs
    
    Carrying(in thousands)
    
    (Level 1)
    
    (Level 2)
    
    (Level 3)
    
    AmountCash equivalents
    
    $
    92,344
    
    
    
    
    
    
    
    
    
    
    
    92,344Foreign currency
forward contracts
    
    
    (159
    )
    
    
    
    
    
    
    
    
    
    
    (159
    )
    13. Litigation
  14. Acquisitions
  12




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15. Subsequent Events
   13




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ITEM 2. Management s Discussion and Analysis of Financial Condition and Results of Operations
   
    
    Defense & Space Systems (D&SS)  Highly engineered hardware for satellites and defense
electronics applications;
    
    LXE  Rugged mobile computer terminals and related equipment for wireless local area
networks; and
    
    SATCOM  Satellite communications antennas and terminals for aircraft and ground-based
vehicles, and satellite ground stations for search and rescue operations.
  For continuing operations:
 
    
    Consolidated net sales reached an all-time-high of $81.3 million and $156.8 million for
continuing operations in the second quarter and first six months of 2008, respectively, due
to the continued strong sales growth from our SATCOM and D&SS segments for those periods,
even in a challenging global economic climate.
    
    Each of our segments reported operating income in the second quarter and first six
months of 2008. However, consolidated operating income for both periods was slightly below the amounts
in the comparable periods in 2007. The operating income in the periods in 2008 included
the effect on revenue recognized under the percentage-of-completion method, approximately
$2.3 million, of an increase in the estimated engineering effort required on a SATCOM
development project and approximately $0.6 million of severance charges for LXE.
 For discontinued operations:
 
    
    The financial results for discontinued operations in 2007 reflect only the resolution of
various contingencies under the asset-sale agreements, and discontinued operations had no
net effect on the 2008 second quarter or first six months results.
 Description of Net Sales, Costs and Expenses
 Net sales
  14




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Cost of sales
      Selling, general and administrative expenses
  Research and development expenses
  Interest income
  15




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Interest expense
  Foreign exchange gains and losses
   Income taxes
  Discontinued operations
  16




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Results of Operations
  Three Months Ended
    
    Six Months EndedJune 28
    
    June 30
    
    June 28
    
    June 302008
    
    2007
    
    2008
    
    2007Product net sales
    
    
    81.1
    %
    
    
    86.0
    %
    
    
    82.7
    %
    
    
    85.3
    %Service net sales
    
    
    18.9
    
    
    
    14.0
    
    
    
    17.3
    
    
    
    14.7Net sales
    
    
    100.0
    
    
    
    100.0
    
    
    
    100.0
    
    
    
    100.0Product cost of sales, as a percentage of product net
sales
    
    
    64.4
    
    
    
    63.3
    
    
    
    63.3
    
    
    
    62.4Service cost of sales, as a percentage of service net
sales
    
    
    60.1
    
    
    
    59.0
    
    
    
    60.5
    
    
    
    63.8Cost of sales
    
    
    63.6
    
    
    
    62.7
    
    
    
    62.9
    
    
    
    62.6Selling, general and administrative expenses
    
    
    25.4
    
    
    
    25.2
    
    
    
    26.0
    
    
    
    25.8Research and development expenses
    
    
    6.8
    
    
    
    6.6
    
    
    
    6.7
    
    
    
    6.5Operating income
    
    
    4.2
    
    
    
    5.5
    
    
    
    4.4
    
    
    
    5.1Interest income
    
    
    0.9
    
    
    
    2.1
    
    
    
    1.1
    
    
    
    2.0Interest expense
    
    
    (0.5
    )
    
    
    (0.8
    )
    
    
    (0.5
    )
    
    
    (0.7
    )Foreign exchange gain (loss), net
    
    
    0.2
    
    
    
    (0.4
    )
    
    
    0.1
    
    
    
    (0.3
    )Earnings from continuing operations before
income taxes
    
    
    4.8
    
    
    
    6.4
    
    
    
    5.1
    
    
    
    6.1Income tax expense
    
    
    0.6
    
    
    
    1.4
    
    
    
    0.3
    
    
    
    1.4Earnings from continuing operations
    
    
    4.2
    
    
    
    5.0
    
    
    
    4.8
    
    
    
    4.7Discontinued operations:Earnings (loss) from discontinued operations before
income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.4
    )Income tax benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Earnings (loss) from discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.4
    )Net earnings
    
    
    4.2
    %
    
    
    5.0
    %
    
    
    4.8
    %
    
    
    4.3
    %
 Three Months ended June 28, 2008 and June 30, 2007:
    17




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Six Months ended June 28, 2008 and June 30, 2007:
    18




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19




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##### Table of Contents



Net Sales, Cost of Sales, and Operating Income (Loss) by Segment
  Percentage IncreaseThree Months Ended
    
    
    Six Months Ended
    
    
    (Decrease)June 28
    
    
    June 30
    
    
    June 28
    
    
    June 30
    
    
    Three
    
    
    Six2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    Months
    
    
    MonthsNet sales:Defense & Space Systems
    
    $
    18,945
    
    
    
    14,726
    
    
    
    34,407
    
    
    
    28,435
    
    
    
    28.7
    %
    
    
    21.0LXE
    
    
    37,543
    
    
    
    37,489
    
    
    
    71,753
    
    
    
    70,050
    
    
    
    0.1
    
    
    
    2.4SATCOM
    
    
    24,791
    
    
    
    19,932
    
    
    
    50,613
    
    
    
    40,236
    
    
    
    24.4
    
    
    
    25.8Total
    
    $
    81,279
    
    
    
    72,147
    
    
    
    156,773
    
    
    
    138,721
    
    
    
    12.7
    
    
    
    13.0Cost of sales percentage:Defense & Space Systems
    
    
    74.7
    %
    
    
    77.7
    
    
    
    76.4
    
    
    
    77.2
    
    
    
    (3.0
    )
    
    
    (0.8
    )LXE
    
    
    59.1
    
    
    
    58.2
    
    
    
    58.9
    
    
    
    58.8
    
    
    
    0.9
    
    
    
    0.1SATCOM
    
    
    60.7
    
    
    
    60.5
    
    
    
    58.5
    
    
    
    58.8
    
    
    
    0.2
    
    
    
    (0.3
    )Total
    
    
    63.6
    
    
    
    62.7
    
    
    
    62.9
    
    
    
    62.6
    
    
    
    0.9
    
    
    
    0.3Operating income (loss):Defense & Space Systems
    
    $
    1,871
    
    
    
    827
    
    
    
    2,435
    
    
    
    1,803
    
    
    
    126.2
    
    
    
    35.1LXE
    
    
    726
    
    
    
    2,160
    
    
    
    1,203
    
    
    
    3,035
    
    
    
    (66.4
    )
    
    
    (60.4
    )SATCOM
    
    
    1,397
    
    
    
    1,627
    
    
    
    4,480
    
    
    
    4,188
    
    
    
    (14.1
    )
    
    
    7.0Corporate and other
    
    
    (587
    )
    
    
    (634
    )
    
    
    (1,274
    )
    
    
    (1,968
    )
    
    
    (7.4
    )
    
    
    (35.3
    )Total
    
    $
    3,407
    
    
    
    3,980
    
    
    
    6,844
    
    
    
    7,058
    
    
    
    (14.4
    )
    
    
    (3.0
    )
 Defense & Space Systems:
  LXE:
   20




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SATCOM:
  Discontinued Operations
   Liquidity and Capital Resources
     21




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Off-Balance Sheet Arrangements
    Commitments and Contractual Obligations
  22




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Critical Accounting Policies
  Revenue recognition on long-term contracts
      Inventory valuation
  23




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Evaluation of long-lived assets for impairment
  Evaluation of contingencies related to discontinued operations
   Establishment of valuation allowance for deferred income tax assets
   24




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##### Table of Contents



Forward-Looking Statements
  §
    
    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 the Companys 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;§
    
    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 rate at which the Companys products are returned for repair or
replacement under warranty;§
    
    customer response to new products and services, and general conditions in the Companys
target markets (such as logistics, and space-based communications), and whether these
responses and conditions develop according to our expectations;§
    
    the success of certain of the Companys 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 our customers major programs, such as satellite data
communications systems;§
    
    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;§
    
    the Companys ability to attract and retain qualified personnel, particularly those with
key technical skills;
 25




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##### Table of Contents



§
    
    the availability of sufficient additional credit or other financing, on acceptable
terms, to support any large acquisitions that we believe would contribute to our growth and
profitability;§
    
    the ability to negotiate successfully with potential acquisition candidates, finance
acquisitions, or effectively integrate the acquired businesses, products or technologies
into the Companys existing businesses and products, and the risk that any acquired
businesses, products or technologies do not perform as expected, are subject to undisclosed
or unanticipated liabilities, or are otherwise dilutive to our earnings;§
    
    the potential effects, on cash and results of discontinued operations, of final
resolution of potential liabilities under warranties and representations made by the
Company, and obligations assumed by purchasers, in connection with the Companys
dispositions of discontinued operations;§
    
    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; 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.
 Form 10-K
 Effect of New Accounting Pronouncements
    26




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##### Table of Contents



.
  27




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##### Table of Contents



ITEM 3. Quantitative and Qualitative Disclosures about Market Risk
  Government-obligations money market funds, other money market
instruments, and interest-bearing time deposits, with maturity
dates of less than 3 months, interest payable monthly at variable
rates (a weighted-average rate of 2.23% at June 28, 2008)
    
    $
    92,344
   Exchange Rate
    
    $U.S.($U.S. per unit of
    
    in thousandslocal currency)
    
    (reporting currency)Australia
    
    0.9610 /Dollar
    
    $
    1,986Germany
    
    1.5748 /Euro
    
    
    842Italy
    
    1.5748 /Euro
    
    
    810Canada
    
    0.9879 /Dollar
    
    
    641France
    
    1.5748 /Euro
    
    
    552United Kingdom
    
    1.9938 /Pound
    
    
    514Netherlands
    
    1.5748 /Euro
    
    
    373Belgium
    
    1.5748 /Euro
    
    
    261Sweden
    
    0.1671 /Krona
    
    
    (98
    )Total intercompany payable (receivable) subject to
foreign currency risk
    
    
    
    $
    5,881
  Average
    
    
    ($U.S.)Notional
    
    
    Contract
    
    
    FairAmount
    
    
    Rate
    
    
    ValueForeign currency forward contractsAustralian dollars (sell for U.S. dollars)
    
    800 AUD
    
    
    0.8086
    
    
    $
    (112
    )U.S. dollars (sell for Canadian dollars)
    
    16,500 USD
    
    
    1.0097
    
    
    
    (31
    )Euros (sell for U.S. dollars)
    
    500 EURO
    
    
    1.5521
    
    
    
    (14
    )British pounds (sell for U.S. dollars)
    
    90 GBP
    
    
    1.9678
    
    
    
    (2
    )Euros (sell for Canadian dollars)
    
    15 EURO
    
    
    1.6059
    
    
    
    $
    (159
    )




28



---



##### Table of Contents



ITEM 4. Controls and Procedures
    29




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##### Table of Contents



PART II
 OTHER INFORMATION
 
 ITEM 1A. Risk Factors
  
 ITEM 4. Submission of Matters to a Vote of Security Holders
  Abstain orBrokerFor
    
    Withheld
    
    Non-VotesHermann Buerger
    
    
    8,179,790
    
    
    
    6,556,472
    
    
    
    Paul B. Domorski
    
    
    8,246,100
    
    
    
    6,490,162
    
    
    
    Francis J. Erbrick
    
    
    8,246,292
    
    
    
    6,489,970
    
    
    
    John R. Kreick
    
    
    8,247,149
    
    
    
    6,489,113
    
    
    
    John B. Mowell
    
    
    7,452,886
    
    
    
    7,283,376
    
    
    
    Thomas W. OConnell
    
    
    14,549,936
    
    
    
    186,326
    
    
    
    Bradford W. Parkinson
    
    
    8,202,230
    
    
    
    6,534,032
    
    
    
    Norman E. Thagard
    
    
    8,200,669
    
    
    
    6,535,593
    
    
    
    John L. Woodward, Jr.
    
    
    8,246,539
    
    
    
    6,489,723
    
    
    
    
 Abstain orBrokerFor
    
    Against
    
    Non-VotesSelection of KPMG LLP
    
    
    14,605,401
    
    
    
    124,376
    
    
    
    6,485
 30




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##### Table of Contents



ITEM 6. Exhibits
  3.1
    
    Second Amended and Restated Articles of Incorporation of EMS Technologies, Inc. effective
March 22, 1999 (incorporated by reference to Exhibit 3.1 to the Companys Quarterly Report on Form
10-Q for the quarter ended April 3, 2004).3.2
    
    Bylaws of EMS Technologies, Inc., as amended through November 2, 2007 (incorporated by
reference to Exhibit 3.2 to the Companys Quarterly Report on Form 10-Q for the quarter ended March
29, 2008).10.1
    
    Letter Agreement dated May 2, 2008, between the Company and Don T. Scartz. *10.2
    
    Letter Agreement dated May 1, 2008, between the Company and James S. Childress. *31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002. *31.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002. *32
    
    Certification of the Companys Chief Executive Officer and Chief Financial Officer pursuant
to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
 
 *
    
    Filed herewith 31




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##### Table of Contents



SIGNATURES
  EMS TECHNOLOGIES, INC.By:
    
    /s/ Paul B. Domorski

Paul B. Domorski
    
    
    
    Date: August 7, 2008President, and Chief Executive Officer(Principal Executive Officer)By:
    
    /s/ Gary B. Shell
    
    
    
    Date: August 7, 2008Gary B. ShellSenior Vice President, Chief FinancialOfficer and Treasurer (Principal Financial Officer)
 32