##### 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 September 27, 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)
  þ  ̈
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller Reporting Company o
 o þ
  Class
    
    Number of SharesCommon Stock, $.10 par Value
    
    15,184,346
 AVAILABLE INFORMATION
 www.ems-t.com




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TABLE OF CONTENTS
 PagePART 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
    
    
    15Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    27Item 4. Controls and Procedures
    
    
    28PART II  OTHER INFORMATION
    
    
    29Item 1A. Risk Factors
    
    
    29Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    29Item 6. Exhibits
    
    
    30SIGNATURES
    
    
    31EX-4.1EX-31.1EX-31.2EX-32.1




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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
    
    
    Nine Months EndedSeptember 27
    
    
    September 29
    
    
    September 27
    
    
    September 292008
    
    
    2007
    
    
    2008
    
    
    2007Product net sales
    
    $
    71,508
    
    
    
    63,034
    
    
    
    201,133
    
    
    
    181,372Service net sales
    
    
    16,334
    
    
    
    10,111
    
    
    
    43,482
    
    
    
    30,494Net sales
    
    
    87,842
    
    
    
    73,145
    
    
    
    244,615
    
    
    
    211,866Product cost of sales
    
    
    45,413
    
    
    
    38,096
    
    
    
    127,555
    
    
    
    111,683Service cost of sales
    
    
    10,161
    
    
    
    5,478
    
    
    
    26,568
    
    
    
    18,767Cost of sales
    
    
    55,574
    
    
    
    43,574
    
    
    
    154,123
    
    
    
    130,450Selling, general and administrative expenses
    
    
    19,999
    
    
    
    19,526
    
    
    
    60,837
    
    
    
    55,276Research and development expenses
    
    
    5,064
    
    
    
    4,803
    
    
    
    15,606
    
    
    
    13,840Operating income
    
    
    7,205
    
    
    
    5,242
    
    
    
    14,049
    
    
    
    12,300Interest income
    
    
    598
    
    
    
    1,341
    
    
    
    2,341
    
    
    
    4,197Interest expense
    
    
    (402
    )
    
    
    (476
    )
    
    
    (1,199
    )
    
    
    (1,476
    )Foreign exchange loss, net
    
    
    (449
    )
    
    
    (236
    )
    
    
    (226
    )
    
    
    (712
    )Earnings from continuing operations before
income taxes
    
    
    6,952
    
    
    
    5,871
    
    
    
    14,965
    
    
    
    14,309Income tax expense
    
    
    875
    
    
    
    265
    
    
    
    1,317
    
    
    
    2,249Earnings from continuing operations
    
    
    6,077
    
    
    
    5,606
    
    
    
    13,648
    
    
    
    12,060Discontinued operations:Earnings (loss) from discontinued
operations before income taxes
    
    
    
    
    
    
    11
    
    
    
    
    
    
    
    (555
    )Income tax benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    102Earnings (loss) from discontinued operations
    
    
    
    
    
    
    11
    
    
    
    
    
    
    
    (453
    )Net earnings
    
    $
    6,077
    
    
    
    5,617
    
    
    
    13,648
    
    
    
    11,607Net earnings (loss) per share:Basic:From continuing operations
    
    $
    0.39
    
    
    
    0.37
    
    
    
    0.88
    
    
    
    0.79From discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.03
    )Net earnings
    
    $
    0.39
    
    
    
    0.37
    
    
    
    0.88
    
    
    
    0.76Diluted:From continuing operations
    
    $
    0.39
    
    
    
    0.36
    
    
    
    0.87
    
    
    
    0.78From discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.03
    )Net earnings
    
    $
    0.39
    
    
    
    0.36
    
    
    
    0.87
    
    
    
    0.75Weighted-average number of shares outstanding:Basic
    
    
    15,537
    
    
    
    15,343
    
    
    
    15,548
    
    
    
    15,318Diluted
    
    
    15,681
    
    
    
    15,477
    
    
    
    15,736
    
    
    
    15,416
  2




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EMS Technologies, Inc. and Subsidiaries
 
 Consolidated Balance Sheets (Unaudited)
(in thousands)
 September 27
    
    
    December 312008
    
    
    2007ASSETSCurrent assets:Cash and cash equivalents
    
    $
    95,741
    
    
    
    133,959Trade accounts receivable, net
    
    
    96,129
    
    
    
    85,085Inventories
    
    
    35,030
    
    
    
    28,949Deferred income taxes
    
    
    1,868
    
    
    
    1,868Other current assets
    
    
    9,104
    
    
    
    7,196Total current assets
    
    
    237,872
    
    
    
    257,057Property, plant and equipment:Land
    
    
    1,150
    
    
    
    1,150Buildings and leasehold improvements
    
    
    16,148
    
    
    
    15,954Machinery and equipment
    
    
    95,403
    
    
    
    87,377Furniture and fixtures
    
    
    10,160
    
    
    
    9,665Total property, plant and equipment
    
    
    122,861
    
    
    
    114,146Less accumulated depreciation and amortization
    
    
    80,411
    
    
    
    74,223Net property, plant and equipment
    
    
    42,450
    
    
    
    39,923Deferred income taxes
    
    
    6,285
    
    
    
    5,490Goodwill
    
    
    31,770
    
    
    
    9,982Other intangible assets, net of accumulated amortization
of $8,518 in 2008 and $7,256 in 2007
    
    
    12,162
    
    
    
    5,837Other assets
    
    
    10,086
    
    
    
    5,511Total assets
    
    $
    340,625
    
    
    
    323,800
  3




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EMS Technologies, Inc. and Subsidiaries
Consolidated Balance Sheets (Unaudited), continued
(in thousands, except share data)
 September 27
    
    
    December 312008
    
    
    2007LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Current installments of long-term debt
    
    $
    1,279
    
    
    
    3,174Accounts payable
    
    
    30,116
    
    
    
    22,389Billings in excess of contract costs and estimated earnings
    
    
    8,327
    
    
    
    6,643Accrued compensation costs
    
    
    10,071
    
    
    
    9,553Accrued retirement costs
    
    
    2,062
    
    
    
    2,472Deferred service revenue
    
    
    8,533
    
    
    
    8,578Other current liabilities
    
    
    7,737
    
    
    
    5,757Total current liabilities
    
    
    68,125
    
    
    
    58,566Long-term debt, excluding current installments
    
    
    9,583
    
    
    
    10,546Other liabilities
    
    
    8,103
    
    
    
    7,562Total liabilities
    
    
    85,811
    
    
    
    76,674Shareholders equity:Preferred stock of $1.00 par value per share
Authorized 10,000,000 shares; none issued
    
    
    
    
    
    
    Common stock of $.10 par value per share
Authorized 75,000,000 shares, issued and outstanding
15,441,000 in 2008 and
15,581,000 in 2007
    
    
    1,544
    
    
    
    1,558Additional paid-in capital
    
    
    137,354
    
    
    
    139,727Accumulated other comprehensive income  foreign currency
translation adjustment
    
    
    9,286
    
    
    
    12,859Retained earnings
    
    
    106,630
    
    
    
    92,982Total shareholders equity
    
    
    254,814
    
    
    
    247,126Commitments and contingenciesTotal liabilities and shareholders equity
    
    $
    340,625
    
    
    
    323,800
  4




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EMS Technologies, Inc. and Subsidiaries
 
 Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
 Nine Months EndedSeptember 27
    
    
    September 292008
    
    
    2007Cash flows from operating activities:Net earnings
    
    $
    13,648
    
    
    
    11,607Adjustments to reconcile net earnings to net cash provided by operating
activities:Depreciation and amortization
    
    
    9,549
    
    
    
    6,847Deferred income taxes
    
    
    (795
    )
    
    
    (Gain) loss on sale of assets
    
    
    (7
    )
    
    
    38Loss from discontinued operations
    
    
    
    
    
    
    453Stock-based compensation expense
    
    
    1,708
    
    
    
    1,220Changes in operating assets and liabilities, net of effects of acquisitions:Trade accounts receivable
    
    
    (15,668
    )
    
    
    15,223Inventories
    
    
    (5,193
    )
    
    
    (1,860
    )Accounts payable
    
    
    5,631
    
    
    
    (5,871
    )Billings in excess of contract costs and estimated earnings
    
    
    1,777
    
    
    
    (934
    )Accrued compensation and retirement costs
    
    
    (531
    )
    
    
    884Deferred service revenue
    
    
    2,536
    
    
    
    1,335Accrued costs and other
    
    
    (403
    )
    
    
    1,535Net cash provided by operating activities in continuing operations
    
    
    12,252
    
    
    
    30,477Net cash used in operating activities in discontinued operations
    
    
    
    
    
    
    (3,048
    )Net cash provided by operating activities
    
    
    12,252
    
    
    
    27,429Cash flows from investing activities:Purchases of property, plant and equipment
    
    
    (10,835
    )
    
    
    (10,448
    )Payments for acquisitions of businesses
    
    
    (31,406
    )
    
    
    (5,000
    )Proceeds from sales of assets
    
    
    1,119
    
    
    
    845Net cash used in investing activities
    
    
    (41,122
    )
    
    
    (14,603
    )Cash flows from financing activities:Repayment of debt
    
    
    (2,852
    )
    
    
    (1,253
    )Change in restricted cash
    
    
    
    
    
    
    81Deferred financing costs paid
    
    
    (1,163
    )
    
    
    Payments for repurchase and retirement of common shares
    
    
    (4,829
    )
    
    
    Proceeds from exercise of stock options, net of withholding taxes paid
    
    
    732
    
    
    
    1,179Net cash (used in) provided by financing activities
    
    
    (8,112
    )
    
    
    7Effect of changes in exchange rates on cash and cash equivalents
    
    
    (1,236
    )
    
    
    1,667Net change in cash and cash equivalents
    
    
    (38,218
    )
    
    
    14,500Cash and cash equivalents at beginning of period
    
    
    133,959
    
    
    
    109,431Cash and cash equivalents at end of period
    
    $
    95,741
    
    
    
    123,931
  5




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EMS Technologies, Inc. and Subsidiaries
 
 Notes to Consolidated Financial Statements (Unaudited)
September 27, 2008 and September 29, 2007
 1. Basis of Presentation
    Accounting for the Impairment or Disposal of Long-Lived Assets
 Managements Use of Estimates
  Effect of New Accounting Pronouncements
 Fair
Value Measurements
 Application of FASB
Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair
Value Measurements for Purposes of Lease Classification or Measurement under Statement 13, Effective Date of FASB Statement No. 157 Accounting for Leases
 6




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Business Combinations Business
Combinations
 Noncontrolling Interests in Consolidated Financial
Statements
 Disclosures about Derivative Instruments and Hedging
Activities-An Amendment of SFAS No. 133
 Determination of the Useful Life of Intangible
Assets Goodwill and Other Intangible Assets
 2. Discontinued Operations
  7




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3. Earnings Per Share
  Three Months Ended
    
    
    Nine Months EndedSeptember 27
    
    
    September 29
    
    
    September 27
    
    
    September 292008
    
    
    2007
    
    
    2008
    
    
    2007Basic
weighted-average
number of common
shares outstanding
    
    
    15,537
    
    
    
    15,343
    
    
    
    15,548
    
    
    
    15,318Dilutive potential
shares using the
treasury stock
method
    
    
    144
    
    
    
    134
    
    
    
    188
    
    
    
    98Diluted
weighted-average
number of common
shares outstanding
    
    
    15,681
    
    
    
    15,477
    
    
    
    15,736
    
    
    
    15,416
 8




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4. Comprehensive Income
  Three Months Ended
    
    
    Nine Months EndedSeptember 27
    
    
    September 29
    
    
    September 27
    
    
    September 292008
    
    
    2007
    
    
    2008
    
    
    2007Net earnings
    
    $
    6,077
    
    
    
    5,617
    
    
    
    13,648
    
    
    
    11,607Other comprehensive income (loss):Foreign currency translation adjustment
    
    
    (4,578
    )
    
    
    3,532
    
    
    
    (3,573
    )
    
    
    8,188$
    1,499
    
    
    
    9,149
    
    
    
    10,075
    
    
    
    19,795
 5. Trade Accounts Receivable
  September 27
    
    
    December 312008
    
    
    2007Amounts billed
    
    $
    72,762
    
    
    
    62,188Unbilled revenues under long-term contracts
    
    
    24,156
    
    
    
    24,001Allowance for doubtful accounts
    
    
    (789
    )
    
    
    (1,104
    )$
    96,129
    
    
    
    85,085
  6. Inventories
  September 27
    
    
    December 312008
    
    
    2007Parts and materials
    
    $
    24,853
    
    
    
    18,864Work-in-process
    
    
    3,363
    
    
    
    3,733Finished goods
    
    
    6,814
    
    
    
    6,352$
    35,030
    
    
    
    28,949
 7. Interim Segment Disclosures
  9




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Three Months Ended
    
    
    Nine Months EndedSeptember 27
    
    
    September 29
    
    
    September 27
    
    
    September 292008
    
    
    2007
    
    
    2008
    
    
    2007Net sales:Defense & Space Systems
    
    $
    18,944
    
    
    
    15,698
    
    
    
    53,351
    
    
    
    44,133LXE
    
    
    37,767
    
    
    
    33,399
    
    
    
    109,520
    
    
    
    103,449Satellite Communications
    
    
    31,131
    
    
    
    24,048
    
    
    
    81,744
    
    
    
    64,284Total
    
    $
    87,842
    
    
    
    73,145
    
    
    
    244,615
    
    
    
    211,866Operating income (loss):Defense & Space Systems
    
    $
    1,467
    
    
    
    1,445
    
    
    
    3,902
    
    
    
    3,248LXE
    
    
    1,676
    
    
    
    1,742
    
    
    
    2,879
    
    
    
    4,777Satellite Communications
    
    
    5,173
    
    
    
    3,527
    
    
    
    9,653
    
    
    
    7,715Corporate
    
    
    (1,111
    )
    
    
    (1,472
    )
    
    
    (2,385
    )
    
    
    (3,440
    )Total
    
    $
    7,205
    
    
    
    5,242
    
    
    
    14,049
    
    
    
    12,300Net earnings (loss) from
continuing operations:Defense & Space Systems
    
    $
    950
    
    
    
    870
    
    
    
    2,434
    
    
    
    1,922LXE
    
    
    1,007
    
    
    
    1,040
    
    
    
    1,749
    
    
    
    2,913Satellite Communications
    
    
    4,783
    
    
    
    3,509
    
    
    
    9,802
    
    
    
    7,610Corporate
    
    
    (663
    )
    
    
    187
    
    
    
    (337
    )
    
    
    (385
    )Total
    
    $
    6,077
    
    
    
    5,606
    
    
    
    13,648
    
    
    
    12,060
 Three Months Ended
    
    
    Nine Months EndedSeptember 27
    
    
    September 29
    
    
    September 27
    
    
    September 292008
    
    
    2007
    
    
    2008
    
    
    2007Depreciation and amortization:Defense & Space Systems
    
    $
    813
    
    
    
    659
    
    
    
    2,200
    
    
    
    1,930LXE
    
    
    826
    
    
    
    621
    
    
    
    2,681
    
    
    
    1,617Satellite Communications
    
    
    1,912
    
    
    
    758
    
    
    
    3,896
    
    
    
    2,356Corporate
    
    
    305
    
    
    
    335
    
    
    
    772
    
    
    
    944Total
    
    $
    3,856
    
    
    
    2,373
    
    
    
    9,549
    
    
    
    6,847
 September 27
    
    
    December 312008
    
    
    2007Goodwill:LXE
    
    $
    21,575
    
    
    $
    9,982Satellite Communications
    
    
    10,195
    
    
    
    Total
    
    $
    31,770
    
    
    $
    9,982
 8. Warranty Liability
   10




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Three Months Ended
    
    
    Nine Months EndedSeptember 27
    
    
    September 29
    
    
    September 27
    
    
    September 292008
    
    
    2007
    
    
    2008
    
    
    2007Balance at beginning of the period
    
    $
    2,982
    
    
    
    2,246
    
    
    
    2,647
    
    
    
    2,051Accruals for warranties issued
during the period
    
    
    1,026
    
    
    
    925
    
    
    
    2,832
    
    
    
    2,157Settlements made during the period
    
    
    (935
    )
    
    
    (671
    )
    
    
    (2,406
    )
    
    
    (1,708
    )Balance at end of period
    
    $
    3,073
    
    
    
    2,500
    
    
    
    3,073
    
    
    
    2,500
 9. Revolving Credit Facilities
     10. Stock-Based Compensation
  11




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11. Income Taxes
  Accounting for Income Taxes
 12. Fair Value of Financial Instruments
  
    
    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.
 12




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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
    
    $
    67,209
    
    
    
    
    
    
    
    
    
    
    
    67,209Foreign currency
forward contracts
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    (2
    )
    13. Repurchase of Common Shares
  14. Litigation
  15. Acquisitions
     13




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Item 2. Management s Discussion and Analysis of Financial Condition and Results of Operations
   
    
    Defense & Space Systems (D&SS)- Develops highly engineered subsystems for defense
electronics and sophisticated satellite applications;
    
    LXE- Provides rugged mobile terminals and wireless data collection equipment for logistics
management systems and operates mainly in two markets; the Americas market which is comprised
of North, South and Central America; and the International market which is comprised of all
other geographic areas with the highest concentration in Europe, and;
    
    Satellite Communications Offers satellite-based communication, tracking, and messaging
solutions through a broad array of terminals and antennas for the aeronautical, ground-mobile
and emergency management markets. This reportable operating segment includes the previously
reported SATCOM segment, and the newly acquired Sky Connect business (refer to note 15 of the
consolidated financial statements in Item 1 of this quarterly report for additional
information).
  For continuing operations:
 
    
    Consolidated net sales increased by 20% to $87.8 million and 15% to $244.6 million in
the third quarter and first nine months of 2008, respectively compared to the same periods
in 2007. Net sales increased at Satellite Communications, D&SS and LXE for those periods
of 2008 as compared with the same periods of 2007, even in a challenging global economic
climate.
    
    Operating income was 37% higher in the third quarter of 2008 as compared with the same
period of 2007 mainly due to the nearly 50% increase in operating income reported by the
Satellite Communications segment. Operating income was 14% higher for the first nine
months of 2008 as compared with the first nine months of 2007 despite the unfavorable
effect of $2.3 million on revenue recognized under the percentage-of-completion method in
the second quarter of 2008 related to an increase in the estimated engineering effort
required on a Satellite Communications development project, and approximately $0.9 million
of severance charges for LXE in 2008.
 For discontinued operations:
 
    
    The financial results for discontinued operations in 2007 reflect only the resolution of
various contingencies under the asset-sale agreements. Discontinued operations had no net
effect on the 2008 third quarter or first nine month results.
 14




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\

Description of Net Sales, Costs and Expenses
 Net sales
 Revenue Arrangements with Multiple Deliverables, Software Revenue Recognition,
  Cost of sales
      Selling, general and administrative expenses
  15




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Research and development expenses
  Interest income
  Interest expense
  Foreign exchange gains and losses
   Income taxes
  Discontinued operations
  16




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Results of Operations
  Three Months Ended
    
    
    Nine Months EndedSeptember 27
    
    
    September 29
    
    
    September 27
    
    
    September 292008
    
    
    2007
    
    
    2008
    
    
    2007Product net sales
    
    
    81.4
    %
    
    
    86.2
    
    
    
    82.2
    
    
    
    85.6Service net sales
    
    
    18.6
    
    
    
    13.8
    
    
    
    17.8
    
    
    
    14.4Net sales
    
    
    100.0
    
    
    
    100.0
    
    
    
    100.0
    
    
    
    100.0Product cost of sales as a percentage of product net
sales
    
    
    63.5
    
    
    
    60.4
    
    
    
    63.4
    
    
    
    61.6Service cost of sales as a percentage of service net
sales
    
    
    62.2
    
    
    
    54.2
    
    
    
    61.1
    
    
    
    61.5Cost of sales
    
    
    63.3
    
    
    
    59.6
    
    
    
    63.0
    
    
    
    61.6Selling, general and administrative expenses
    
    
    22.7
    
    
    
    26.7
    
    
    
    24.9
    
    
    
    26.1Research and development expenses
    
    
    5.8
    
    
    
    6.5
    
    
    
    6.4
    
    
    
    6.5Operating income
    
    
    8.2
    
    
    
    7.2
    
    
    
    5.7
    
    
    
    5.8Interest income
    
    
    0.7
    
    
    
    1.8
    
    
    
    1.0
    
    
    
    2.0Interest expense
    
    
    (0.5
    )
    
    
    (0.7
    )
    
    
    (0.5
    )
    
    
    (0.7
    )Foreign exchange loss, net
    
    
    (0.5
    )
    
    
    (0.3
    )
    
    
    (0.1
    )
    
    
    (0.3
    )Earnings from continuing operations before
income taxes
    
    
    7.9
    
    
    
    8.0
    
    
    
    6.1
    
    
    
    6.8Income tax expense
    
    
    1.0
    
    
    
    0.3
    
    
    
    0.5
    
    
    
    1.1Earnings from continuing operations
    
    
    6.9
    
    
    
    7.7
    
    
    
    5.6
    
    
    
    5.7Discontinued operations:Earnings (loss) from discontinued operations before
income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.3
    )Income tax benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.1Earnings (loss) from discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.2
    )Net earnings
    
    
    6.9
    %
    
    
    7.7
    
    
    
    5.6
    
    
    
    5.5
 Three Months ended September 27, 2008 and September 29, 2007:
    17




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Accounting for Income Taxes
 Nine Months ended September 27, 2008 and September 29, 2007:
   18




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19




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Net Sales, Cost of Sales, and Operating Income (Loss) by Segment
  Percentage IncreaseThree Months Ended
    
    
    Nine Months Ended
    
    
    (Decrease)September 27
    
    
    September 29
    
    
    September 27
    
    
    September 29
    
    
    Three
    
    
    Nine2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    Months
    
    
    MonthsNet sales:Defense & Space Systems
    
    $
    18,944
    
    
    
    15,698
    
    
    
    53,351
    
    
    
    44,133
    
    
    
    20.7
    %
    
    
    20.9LXE
    
    
    37,767
    
    
    
    33,399
    
    
    
    109,520
    
    
    
    103,449
    
    
    
    13.1
    
    
    
    5.9Satellite Communications
    
    
    31,131
    
    
    
    24,048
    
    
    
    81,744
    
    
    
    64,284
    
    
    
    29.5
    
    
    
    27.2Total
    
    $
    87,842
    
    
    
    73,145
    
    
    
    244,615
    
    
    
    211,866
    
    
    
    20.1
    
    
    
    15.5Cost of sales percentage:Defense & Space Systems
    
    
    77.7
    %
    
    
    73.7
    
    
    
    76.8
    
    
    
    76.0
    
    
    
    4.0
    
    
    
    0.8LXE
    
    
    60.8
    
    
    
    56.6
    
    
    
    59.5
    
    
    
    58.1
    
    
    
    4.2
    
    
    
    1.4Satellite Communications
    
    
    56.4
    
    
    
    53.9
    
    
    
    57.7
    
    
    
    57.0
    
    
    
    2.5
    
    
    
    0.7Total
    
    
    63.3
    
    
    
    59.6
    
    
    
    63.0
    
    
    
    61.6
    
    
    
    3.7
    
    
    
    1.4Operating income (loss):Defense & Space Systems
    
    $
    1,467
    
    
    
    1,445
    
    
    
    3,902
    
    
    
    3,248
    
    
    
    1.5
    
    
    
    20.1LXE
    
    
    1,676
    
    
    
    1,742
    
    
    
    2,879
    
    
    
    4,777
    
    
    
    (3.8
    )
    
    
    (39.7
    )Satellite Communications
    
    
    5,173
    
    
    
    3,527
    
    
    
    9,653
    
    
    
    7,715
    
    
    
    46.7
    
    
    
    25.1Corporate
    
    
    (1,111
    )
    
    
    (1,472
    )
    
    
    (2,385
    )
    
    
    (3,440
    )
    
    
    (24.5
    )
    
    
    (30.7
    )Total
    
    $
    7,205
    
    
    
    5,242
    
    
    
    14,049
    
    
    
    12,300
    
    
    
    37.4
    
    
    
    14.2
 Defense & Space Systems:
  LXE:
   20




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Satellite Communications:
  Discontinued Operations
   Liquidity and Capital Resources
     21




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Off-Balance Sheet Arrangements
    22




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Commitments and Contractual Obligations
  Critical Accounting Policies
 Managements Discussion and Analysis of Financial Condition and Results of
Operations
 Forward-Looking Statements
  §
    
    economic conditions in the U.S. and abroad and their effect on capital spending in our
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 us 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 currency exchange rates relative to the U.S. dollar and their
effect on purchasing power by international customers, and the cost structure of our
operations outside the U.S., as well as the potential for realizing foreign currency
exchange gains and losses associated with our assets or liabilities;§
    
    successful resolution of technical problems, proposed scope changes, or proposed funding
changes that may be encountered on contracts;§
    
    changes in our 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 our products are returned for repair or replacement under
warranty;
 23




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##### Table of Contents



§
    
    customer response to new products and services, and general conditions in our 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 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;§
    
    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;§
    
    our 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 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 our 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 us, and
obligations assumed by purchasers, in connection with our dispositions of discontinued
operations;§
    
    the availability, capabilities and performance of suppliers of basic materials,
electronic components and sophisticated subsystems on which we 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 our ability to obtain sales from foreign
customers or to perform contracts with the desired level of efficiency or profitability.
 
 Effect of New Accounting Pronouncements
 Fair Value Measurements
 Application of FASB Statement No. 157 to FASB
Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for
Purposes of Lease Classification or Measurement under Statement 13, Effective
Date of FASB Statement No. 157 Accounting for Leases
 24




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##### Table of Contents



Business Combinations Business
Combinations
 Noncontrolling Interests in Consolidated Financial
Statements
 Disclosures about Derivative Instruments and Hedging
Activities-An Amendment of SFAS No. 133
 Determination of the Useful Life of Intangible
Assets Goodwill and Other Intangible Assets
 25




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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 2.18% at September 27, 2008)
    
    $
    67,209
   Exchange Rate
    
    
    $U.S.($U.S. per unit of
    
    
    in thousandslocal currency)
    
    
    (reporting currency)Australia
    
    0.8291 /Dollar
    
    $
    1,810France
    
    1.4595 /Euro
    
    
    899Belgium
    
    1.4595 /Euro
    
    
    781Germany
    
    1.4595 /Euro
    
    
    750Netherlands
    
    1.4595 /Euro
    
    
    541Italy
    
    1.4595 /Euro
    
    
    438United Kingdom
    
    1.8399 /Pound
    
    
    415Canada
    
    0.9663 /Dollar
    
    
    299Sweden
    
    0.1506 /Krona
    
    
    (1,094
    )Total intercompany payable
(receivable) subject to
foreign currency risk
    
    
    
    
    
    $
    4,839
  Average
    
    
    ($U.S.)Notional
    
    
    Contract
    
    
    FairAmount
    
    
    Rate
    
    
    ValueForeign currency forward contractsU.S. dollars (sell for Canadian dollars)
    
    18,000      USD
    
    
    1.0377
    
    
    $
    117British pounds (sell for U.S. dollars)
    
    170 GBP
    
    
    1.8350
    
    
    
    (2
    )Australian dollars (sell for U.S. dollars)
    
    400 AUD
    
    
    0.7895
    
    
    
    (16
    )Euros (sell for U.S. dollars)
    
    2,100  EURO
    
    
    1.4401
    
    
    
    (43
    )Australian dollars (sell for Canadian dollars)
    
    1,500       AUD
    
    
    0.8955
    
    
    
    (58
    )$
    (2
    )
   26




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Item 4. Controls and Procedures
    27




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PART II
 OTHER INFORMATION
 
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  ISSUER PURCHASES OF EQUITY SECURITIES
 (c) Total Number
    
    
    (d) Maximum Numberof Shares
    
    
    (or ApproximatePurchased as
    
    
    Dollar Value) ofPart of Publicly
    
    
    Shares that May Yet(a) Total Number
    
    
    (b) Average
    
    
    Announced
    
    
    Be Purchasedof Shares
    
    
    Price Paid
    
    
    Plans or
    
    
    Under the Plans orPeriod
    
    Purchased (1)
    
    
    Per Share
    
    
    Program (2)
    
    
    Programs (3)January 2008 (January 1 to January 26)
    
    
    980
    
    
    
    
    
    
    
    June 2008 (May 25 to June 28)
    
    
    2,645
    
    
    
    
    
    
    
    August 2008 (July 27 to August 23)
    
    
    37,758
    
    
    $
    21.41
    
    
    
    36,700September 2008 (August 24 to September 27)
    
    
    180,885
    
    
    
    22.30
    
    
    
    180,885Total
    
    
    222,268
    
    
    
    22.15
    
    
    
    217,585
    
    
    $15.2 million
 
 (1)
    
    The category includes 4,683 shares delivered to us by employees to pay withholding
taxes due upon vesting of restricted share awards.(2)
    
    This balance represents the number of shares that were repurchased under the Companys
$20 million repurchase program (the Program) which was initially announced on July 30,
2008. Unless terminated earlier by resolution of the Companys Board of Directors, the
Program will expire when the Company has purchased all shares authorized for repurchase.
The Program does not obligate the Company to repurchase any particular amount of common
shares, and could be suspended or discontinued at any time without notice.(3)
    
    This balance represents the value of shares that can be
repurchased under the Program as of September 27, 2008.  28




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Item 6. Exhibits
        
 *
    
    Filed herewith 29




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SIGNATURES
  EMS TECHNOLOGIES, INC.By:
    
    /s/ Paul B. Domorski
    
    Date:
    
    November 6, 2008Paul B. DomorskiPresident, and Chief Executive Officer(Principal Executive Officer)By:
    
    /s/ Gary B. Shell
    
    Date:
    
    November 6, 2008Gary B. ShellSenior Vice President, Chief FinancialOfficer and Treasurer (Principal Financial Officer)
 30