##### Table of Contents



UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


Form 10-Q

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 27, 2003

Commission file number 0-6072

EMS TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)


Georgia
    
    58-1035424(State or other jurisdiction of
incorporation or organization)
    
    (IRS Employer ID Number)


660 Engineering DriveNorcross, Georgia 30092
(Address of principal executive offices) (Zip Code)

(770) 263-9200
Registrants Telephone Number, Including Area Code

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [  ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [X] No [  ]

The number of shares outstanding of each of the issuers classes of common
stock, as of the close of business on November 5, 2003:

Class
    
    Number of SharesCommon Stock, $.10 par Value
    
    10,691,219


AVAILABLE INFORMATION

EMS Technologies, Inc. makes available free of charge, on or through its
website at www.ems-t.com, its annual, quarterly and current reports, and any
amendments to those reports, as soon as reasonably practicable after
electronically filing such reports with the Securities and Exchange Commission.
Information contained on the Companys website is not part of this report.





---

TABLE OF CONTENTS



|                                               |  |  |  |  |  |  |  | 
|---------------------------------------------- |  |  |  |  |  |  |  | 
|PART I FINANCIAL INFORMATION                  
|PART II OTHER INFORMATION                     
|SIGNATURES                                    
|EX-31.1 SECTION 302 CERTIFICATION OF THE CEO  
|EX-31.2 SECTION 302 CERTIFICATION OF THE CFO  
|EX-32 SECTION 906 CERTIFICATION OF THE CEO/CFO



---



##### Table of Contents






PART I

FINANCIAL INFORMATION

ITEM 1. Financial Statements

EMS Technologies, Inc.
Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data)

Quarters Ended
    
    Nine Months EndedSep 27
    
    Sep 28
    
    Sep 27
    
    Sep 282003
    
    2002
    
    2003
    
    2002Net sales
    
    $
    61,536
    
    
    
    56,521
    
    
    
    183,343
    
    
    
    171,038Cost of sales
    
    
    39,409
    
    
    
    35,711
    
    
    
    116,674
    
    
    
    107,498Selling, general and administrative expenses
    
    
    14,304
    
    
    
    12,551
    
    
    
    41,531
    
    
    
    39,053Research and development expenses
    
    
    4,438
    
    
    
    4,725
    
    
    
    13,896
    
    
    
    15,202Operating income
    
    
    3,385
    
    
    
    3,534
    
    
    
    11,242
    
    
    
    9,285Non-operating (expense) income, net
    
    
    (9
    )
    
    
    271
    
    
    
    (287
    )
    
    
    266Foreign exchange (loss) gain
    
    
    (10
    )
    
    
    677
    
    
    
    (422
    )
    
    
    701Interest expense
    
    
    (518
    )
    
    
    (600
    )
    
    
    (1,551
    )
    
    
    (1,672
    )Earnings from continuing operations
before income taxes
    
    
    2,848
    
    
    
    3,882
    
    
    
    8,982
    
    
    
    8,580Income tax expense
    
    
    (899
    )
    
    
    (1,122
    )
    
    
    (2,874
    )
    
    
    (3,015
    )Earnings from continuing operations
    
    
    1,949
    
    
    
    2,760
    
    
    
    6,108
    
    
    
    5,565Discontinued operations (note 2):Gain (loss) from discontinued operations
    
    
    (25,016
    )
    
    
    (1,074
    )
    
    
    (43,755
    )
    
    
    803Income tax benefit
    
    
    2,476
    
    
    
    280
    
    
    
    3,008
    
    
    
    201Net earnings (loss)
    
    $
    (20,591
    )
    
    
    1,966
    
    
    
    (34,639
    )
    
    
    6,569Earnings (loss) per share:Basic:From continuing operations
    
    $
    0.18
    
    
    
    0.25
    
    
    
    0.57
    
    
    
    0.53From discontinued operations
    
    
    (2.11
    )
    
    
    (0.07
    )
    
    
    (3.82
    )
    
    
    0.09Net earnings (loss)
    
    
    (1.93
    )
    
    
    0.18
    
    
    
    (3.25
    )
    
    
    0.62Diluted:From continuing operations
    
    $
    0.18
    
    
    
    0.25
    
    
    
    0.57
    
    
    
    0.52From discontinued operations
    
    
    (2.09
    )
    
    
    (0.07
    )
    
    
    (3.81
    )
    
    
    0.09Net earnings (loss)
    
    
    (1.91
    )
    
    
    0.18
    
    
    
    (3.24
    )
    
    
    0.61Weighted average number of shares:Basic
    
    
    10,668
    
    
    
    10,636
    
    
    
    10,662
    
    
    
    10,532Diluted
    
    
    10,778
    
    
    
    10,806
    
    
    
    10,707
    
    
    
    10,754


See accompanying notes to interim consolidated financial statements.

2



---



##### Table of Contents



EMS Technologies, Inc.
Consolidated Balance Sheets (Unaudited)
(in thousands)

Sep 27
    
    Dec 312003
    
    2002ASSETSCurrent assets:Cash and cash equivalents
    
    $
    9,190
    
    
    
    12,430Trade accounts receivable
    
    
    69,354
    
    
    
    71,719Inventories
    
    
    35,065
    
    
    
    30,051Deferred income taxes
    
    
    1,693
    
    
    
    1,693Assets held for sale
    
    
    44,257
    
    
    
    77,128Total current assets
    
    
    159,559
    
    
    
    193,021Property, plant and equipment:Land
    
    
    2,126
    
    
    
    1,988Building and leasehold improvements
    
    
    15,012
    
    
    
    14,835Machinery and equipment
    
    
    73,518
    
    
    
    65,586Furniture and fixtures
    
    
    7,125
    
    
    
    6,554Total property, plant and equipment
    
    
    97,781
    
    
    
    88,963Less accumulated depreciation and amortization
    
    
    59,294
    
    
    
    52,226Net property, plant and equipment
    
    
    38,487
    
    
    
    36,737Deferred income taxes  non-current
    
    
    1,740
    
    
    
    1,780Accrued pension asset
    
    
    495
    
    
    
    425Intangible assets, net
    
    
    3,114
    
    
    
    3,499Goodwill, net
    
    
    13,526
    
    
    
    13,526Prepaid
income taxes
    
    
    3,015
    
    
    
    Other assets
    
    
    4,489
    
    
    
    7,315$
    224,425
    
    
    
    256,303


See accompanying notes to interim consolidated financial statements.

3



---



##### Table of Contents



EMS Technologies, Inc.
Consolidated Balance Sheets (Unaudited), continued
(in thousands, except share data)

Sep 27
    
    Dec 312003
    
    2002LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Current installments of long-term debt
    
    $
    41,749
    
    
    
    33,783Accounts payable
    
    
    18,634
    
    
    
    21,038Accrued compensation
    
    
    5,584
    
    
    
    7,236Accrued retirement costs
    
    
    2,108
    
    
    
    2,511Accrued post-retirement benefits
    
    
    560
    
    
    
    443Deferred service revenue
    
    
    4,926
    
    
    
    4,108Liabilities related to assets held for sale
    
    
    14,903
    
    
    
    19,816Other liabilities
    
    
    2,404
    
    
    
    2,624Total current liabilities
    
    
    90,868
    
    
    
    91,559Long-term debt, excluding current installments
    
    
    15,880
    
    
    
    18,759Total liabilities
    
    
    106,748
    
    
    
    110,318Stockholders 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 10,691,000 in 2003
and 10,658,000 in 2002
    
    
    1,069
    
    
    
    1,066Additional paid-in capital
    
    
    61,206
    
    
    
    60,867Accumulated other comprehensive income (loss)
    
    
    168
    
    
    
    (5,821
    )Retained earnings
    
    
    55,234
    
    
    
    89,873Total stockholders equity
    
    
    117,677
    
    
    
    145,985$
    224,425
    
    
    
    256,303


See accompanying notes to interim consolidated financial statements.

4



---



##### Table of Contents



EMS Technologies, Inc.
Consolidated Statements of Cash Flows (Unaudited)
(in thousands)

Nine Months EndedSep 27
    
    Sep 282003
    
    2002Cash flows from operating activities:Net earnings (loss)
    
    $
    (34,639
    )
    
    
    6,569Adjustments to reconcile net earnings (loss) to net cash
provided by operating activities:Depreciation and amortization
    
    
    6,620
    
    
    
    5,636Deferred income taxes
    
    
    40
    
    
    
    1,274Loss (income) from discontinued operations
    
    
    40,747
    
    
    
    (1,004
    )Changes in operating assets and liabilities:Trade accounts receivable
    
    
    4,732
    
    
    
    (317
    )Inventories
    
    
    (3,182
    )
    
    
    1,166Accounts payable
    
    
    (2,952
    )
    
    
    (773
    )Income taxes payable
    
    
    972
    
    
    
    2,832Accrued costs, deferred revenue and other current liabilities
    
    
    (1,912
    )
    
    
    (1,759
    )Other
    
    
    247
    
    
    
    (3,466
    )Net cash provided by operating activities
    
    
    10,673
    
    
    
    10,158Cash flows used in investing activities:Purchase of property, plant and equipment
    
    
    (6,626
    )
    
    
    (6,590
    )Cash flows from financing activities:Repayments of term debt
    
    
    (1,495
    )
    
    
    (1,663
    )Net increase in revolving debt
    
    
    4,138
    
    
    
    1,974Proceeds from exercise of stock options, net of withholding
    
    
    654
    
    
    
    1,533Net cash provided by financing activities
    
    
    3,297
    
    
    
    1,844Cash used by discontinued operations
    
    
    (10,779
    )
    
    
    (7,266
    )Net change in cash and cash equivalents
    
    
    (3,435
    )
    
    
    (1,854
    )Effect of exchange rates on cash
    
    
    195
    
    
    
    (597
    )Cash and cash equivalents at beginning of period
    
    
    12,430
    
    
    
    11,777Cash and cash equivalents at end of period
    
    $
    9,190
    
    
    
    9,326Supplemental disclosures of cash flow information:Cash paid for interest
    
    $
    2,587
    
    
    
    2,840Cash paid for income taxes
    
    
    2,282
    
    
    
    149


5



---



##### Table of Contents



Non-Cash Investing and Financing:

In April 2002, the Company acquired Ottercom Ltd., a leading provider of
Inmarsat communication terminals located in Tewkesbury, UK. Ottercom Ltd.
products include critical components for EMS SATCOMs high-speed
aeronautical data products. The company, now called EMS SATCOM UK, Ltd.,
operates as a unit of the Companys SATCOM segment. Management believes
that this acquisition has helped strengthen the Companys presence in
global mobile Internet/e-mail access and communications, and will enable the
Company to continue to broaden its wireless product offerings and in-house
development capability.

To accomplish this transaction, EMS issued 81,245 new shares of its common
stock (valued at $1.9 million) and assumed liabilities totaling
approximately $1.2 million. No goodwill was recognized in this transaction;
rather, the $3.1 million total of net assets acquired was recorded as an
intangible asset on the balance sheet. This intangible represents the value
of Ottercom Ltd.s satellite communications technologies, intellectual
property and product designs. This intangible will be amortized over an
estimated useful life of 6 years.

See accompanying notes to interim consolidated financial statements.

6



---



##### Table of Contents



EMS Technologies, Inc.
Notes to Interim Consolidated Financial Statements (Unaudited)



|1. |  | Basis of Presentation
|-- |  | ---------------------



| |  | The interim consolidated financial statements include the accounts of EMS
Technologies, Inc. and its wholly-owned subsidiaries LXE Inc. and EMS
Technologies Canada, Ltd. (collectively, the Company). In the opinion of
management, the interim consolidated financial statements reflect all normal
and recurring adjustments necessary for a fair presentation of results for
such periods. The results of operations for any interim period are not
necessarily indicative of results for the full year. Certain prior period
financial statement balances have been reclassified to conform to the
current periods classification. These consolidated financial statements
should be read in conjunction with the consolidated financial statements and
related notes contained in the Companys Annual Report on Form 10-K for the
year ended December 31, 2002.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | In accordance with the provisions of Statement of Financial Accounting
Standards (SFAS) No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets, the Company has classified the revenues, expenses and
related assets and liabilities of its Montreal space operations and its
wireless networks healthcare operations, which are currently held for sale,
as discontinued operations for all periods presented in the accompanying
consolidated financial statements.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | -- Stock Option Plans
| |  | ---------------------



| |  | Prior to January 1, 1996, the Company accounted for its stock option plans
in accordance with the provisions of Accounting Principles Board (APB)
Opinion No. 25, Accounting for Stock Issued to Employees, and related
interpretations. As such, compensation expense would be recorded on the date
of grant only if the current market price of the underlying stock exceeded
the exercise price. On January 1, 1996, the Company adopted Statement of
Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based
Compensation, which permits entities to recognize as expense, over the
vesting period, the fair value of all stock-based awards on the date of
grant. Alternatively, SFAS No. 123 also allows entities to continue to apply
the provisions of APB Opinion No. 25 and provide pro forma net earnings and
pro forma earnings per share disclosures for employee stock option grants
made in 1995 and future years as if the fair-value-based method defined in
SFAS No. 123 had been applied. The Company has elected to continue to apply
the provisions of APB Opinion No. 25 and provide the pro forma disclosure
required by SFAS No. 123.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7



---



##### Table of Contents





| |  | The Company has adopted SFAS No. 148, Accounting for Stock-Based
Compensation  Transition and Disclosure, including the interim reporting
requirements. The following table illustrates the effect on net earnings and
earnings per share if the Company had applied the fair value method to
measure stock-based compensation (in thousands, except net earnings per
share):
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Quarters Ended
    
    Nine Months EndedSep 27
    
    Sep 28
    
    Sep 27
    
    Sep 282003
    
    2002
    
    2003
    
    2002Net earnings (loss):As reported
    
    $
    (20,591
    )
    
    
    1,966
    
    
    
    (34,639
    )
    
    
    6,569Less: Stock-based employee compensation
expense determined under the fair value
method, net of tax
    
    
    (475
    )
    
    
    (856
    )
    
    
    (1,753
    )
    
    
    (1,971
    )Pro forma
    
    $
    (21,066
    )
    
    
    1,110
    
    
    
    (36,392
    )
    
    
    4,598Basic net earnings (loss) per share:As reported
    
    $
    (1.93
    )
    
    
    0.18
    
    
    
    (3.25
    )
    
    
    0.62Pro forma
    
    
    (1.97
    )
    
    
    0.10
    
    
    
    (3.41
    )
    
    
    0.44Diluted net earnings (loss) per share:As reported
    
    $
    (1.91
    )
    
    
    0.18
    
    
    
    (3.24
    )
    
    
    0.61Pro forma
    
    
    (1.95
    )
    
    
    0.10
    
    
    
    (3.40
    )
    
    
    0.43




|2. |  | Discontinued Operations
|-- |  | -----------------------



| |  | In the third quarter of 2003, EMS announced that its board of directors had
approved a formal plan to sell the Companys commercial space division based
in Montreal. Also during the third quarter of 2003, EMSs board of
directors approved plans to dispose of the Companys Atlanta-based
healthcare product line. As a result, these business components were
accounted for as discontinued operations, and the net assets held for sale
were written down to their estimated fair value upon disposal. The combined
fair value adjustment was a $19 million pre-tax charge (comprising write-downs of
$17 million related to assets associated with the Space & Technology/Montreal division and $2
million for the healthcare product line), with a related U.S. income
tax benefit of approximately $2.9 million. The fair values upon disposal were
estimated using discounted present value models.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

8



---



##### Table of Contents





| |  | The results of these discontinued operations for the third quarter and first
nine months of 2003 and 2002 were as follows (in thousands):
| |  | -----------------------------------------------------------------------------------------------------------------------------------------

Quarters Ended
    
    Nine Months EndedSep 27
    
    Sep 28
    
    Sep 27
    
    Sep 282003
    
    2002
    
    2003
    
    2002Net sales
    
    $
    7,305
    
    
    
    18,540
    
    
    
    16,415
    
    
    
    57,332Expense
    
    
    13,321
    
    
    
    19,614
    
    
    
    41,170
    
    
    
    56,529Valuation allowance
    
    
    19,000
    
    
    
    
    
    
    
    19,000
    
    
    
    Earnings (loss) before income taxes
    
    
    (25,016
    )
    
    
    (1,074
    )
    
    
    (43,755
    )
    
    
    803Income tax benefit
    
    
    2,476
    
    
    
    280
    
    
    
    3,008
    
    
    
    201Net earnings (loss)
    
    $
    (22,540
    )
    
    
    (794
    )
    
    
    (40,747
    )
    
    
    1,004




| |  | The table below presents the components of the balance sheet accounts
classified as current assets and liabilities related to assets held for sale
as of September 27, 2003 and December 31, 2002 (in thousands):
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Sep 27
    
    Dec 312003
    
    2002Accounts receivable
    
    $
    12,919
    
    
    
    30,257Inventories
    
    
    11,059
    
    
    
    10,953Investments
    
    
    909
    
    
    
    17,909Property, plant and equipment
    
    
    15,807
    
    
    
    14,670Other assets
    
    
    3,563
    
    
    
    3,339Total assets held for sale
    
    $
    44,257
    
    
    
    77,128Accounts payable
    
    $
    9,403
    
    
    
    14,697Long term debt
    
    
    2,399
    
    
    
    2,009Other current liabilities
    
    
    3,101
    
    
    
    3,110Total liabilities related
to assets held for sale
    
    $
    14,903
    
    
    
    19,816




|3. |  | Derivative Financial Instruments
|-- |  | --------------------------------



| |  | The Company uses derivative financial instruments (forward exchange
contracts) to hedge currency fluctuations in future cash flows denominated
in foreign currencies, thereby limiting the Companys risk that would
otherwise result from changes in exchange rates. The Company has established
policies and procedures for risk assessment and the approval, reporting and
monitoring of derivative financial instrument activities. The Company does
not enter into derivative financial instruments for trading or speculative
purposes.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

9



---



##### Table of Contents





| |  | SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities, requires the Company to recognize all derivatives on the
balance sheet at fair value. Under SFAS No. 133, certain of the Companys
routine long-term contracts are considered to be derivative instruments,
because these contracts create long-term obligations for non-U.S. customers
to pay the Companys Canadian subsidiary in U.S. dollars. Changes in the
fair values of these embedded derivatives are included in current earnings.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | For continuing operations, the derivative activity as reported in the
Companys financial statements during the third quarters and nine months
ended was (in thousands):
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Quarters Ended
    
    Nine Months EndedSep 27
    
    Sep 28
    
    Sep 27
    
    Sep 282003
    
    2002
    
    2003
    
    2002Beginning net asset (liability) for derivatives
    
    $
    515
    
    
    
    (247
    )
    
    
    (248
    )
    
    
    (18
    )Sales:Gain (loss) in value of embedded derivatives
    
    
    (10
    )
    
    
    7
    
    
    
    (3
    )
    
    
    18Foreign exchange gain (loss) on derivative
instruments:Gain (loss) in value on derivative
instruments that do not qualify as hedging
instruments
    
    
    20
    
    
    
    
    
    
    
    689
    
    
    
    (240
    )Matured foreign exchange contracts
    
    
    (423
    )
    
    
    180
    
    
    
    (336
    )
    
    
    180Net statement of operations gain (loss)
from changes in value of derivative
instruments
    
    
    (413
    )
    
    
    187
    
    
    
    350
    
    
    
    (42
    )Ending net asset (liability) for derivatives
    
    $
    102
    
    
    
    (60
    )
    
    
    102
    
    
    
    (60
    )




| |  | For discontinued operations, the net asset for derivatives at September 27,
2003 was $95,000.
| |  | ---------------------------------------------------------------------------------------------



| |  | All of the foreign currency contracts currently in place will expire by the
end of the fourth quarter of 2003.
| |  | --------------------------------------------------------------------------------------------------------------



|4. |  | Earnings Per Share
|-- |  | ------------------



| |  | Basic earnings per share is the per share allocation of income available to
common stockholders based only on the weighted average number of common
shares actually outstanding during the period. Diluted earnings per share
represents the per share allocation of income attributable to common
stockholders based on the weighted average number of common shares actually
outstanding plus all dilutive potential common shares outstanding during the
period.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10



---



##### Table of Contents





| |  | The Company has granted stock options that are potentially dilutive to basic
earnings per share, summarized as follows (shares in thousands):
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------

Sep 27
    
    Sep 282003
    
    2002Dilutive stock options, included in earnings
per share calculations:Shares
    
    
    1,135
    
    
    
    1,342Average exercise price per share
    
    $
    14.08
    
    
    
    15.29Anti-dilutive stock options, excluded from
per share calculations:Shares
    
    
    864
    
    
    
    517Average exercise price per share
    
    $
    20.75
    
    
    
    23.04




| |  | For each earnings per share calculation reported for the third quarters and
first nine-month periods of 2003 and 2002, the numerators were the same as
reported in the statement of operations. Following is a reconciliation of
the denominator for basic and diluted earnings per share calculations for
the third quarters and nine months ended September 27, 2003 and September
28, 2002 (in thousands):
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Quarters Ended
    
    Nine Months EndedSep 27
    
    Sep 28
    
    Sep 27
    
    Sep 282003
    
    2002
    
    2003
    
    2002Basic-weighted average common shares
outstanding
    
    
    10,668
    
    
    
    10,636
    
    
    
    10,662
    
    
    
    10,532Common equivalent shares from stock options
    
    
    110
    
    
    
    170
    
    
    
    45
    
    
    
    222Diluted-weighted average common and common
equivalent shares outstanding
    
    
    10,778
    
    
    
    10,806
    
    
    
    10,707
    
    
    
    10,754


11



---



##### Table of Contents





|5. |  | Comprehensive Income (Loss)
|-- |  | ---------------------------



| |  | Following is a summary of comprehensive income (loss) (in thousands):
| |  | ---------------------------------------------------------------------

Quarters Ended
    
    Nine Months EndedSep 27
    
    Sep 28
    
    Sep 27
    
    Sep 282003
    
    2002
    
    2003
    
    2002Net income (loss)
    
    $
    (20,591
    )
    
    
    1,966
    
    
    
    (34,639
    )
    
    
    6,569Other comprehensive income (loss):Foreign currency translation adjustment
    
    
    (310
    )
    
    
    (2,082
    )
    
    
    5,924
    
    
    
    125Increase in the value of investment
securities available for sale
    
    
    65
    
    
    
    
    
    
    
    65
    
    
    
    Comprehensive income (loss)
    
    $
    (20,836
    )
    
    
    (116
    )
    
    
    (28,650
    )
    
    
    6,694




|6. |  | Trade Accounts Receivable
|-- |  | -------------------------



| |  | Trade accounts receivable include the following (in thousands):
| |  | ---------------------------------------------------------------

Sep 27
    
    Dec 312003
    
    2002Amounts billed
    
    $
    52,376
    
    
    
    51,725Unbilled revenues under long-term contracts
    
    
    20,690
    
    
    
    23,477Customer advanced payments
    
    
    (2,204
    )
    
    
    (2,376
    )Allowance for doubtful accounts
    
    
    (1,508
    )
    
    
    (1,107
    )Trade accounts receivable, net
    
    $
    69,354
    
    
    
    71,719




|7. |  | Inventories
|-- |  | -----------



| |  | Inventories include the following (in thousands):
| |  | -------------------------------------------------

Sep 27
    
    Dec 312003
    
    2002Parts and materials
    
    $
    25,073
    
    
    
    21,351Work in process
    
    
    5,336
    
    
    
    4,472Finished goods
    
    
    4,656
    
    
    
    4,228Inventories, net
    
    $
    35,065
    
    
    
    30,051


12



---



##### Table of Contents





|8. |  | Interim Segment Disclosures
|-- |  | ---------------------------



| |  | As a result of the planned sale of the Space & Technology/Montreal
operations, which is now reported in discontinued operations, the Company
has four remaining reportable segments: Space & Technology/Atlanta, LXE, EMS
Wireless and SATCOM. Each segment is separately managed and comprises a
range of products and services that share distinct operating
characteristics. The Company evaluates each segment primarily upon operating
profit.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The Space & Technology/Atlanta segment manufactures custom-designed, highly
engineered hardware for use in advanced communications, primarily for the
defense market. Orders in this segment typically involve development and
production schedules that can extend a year or more; and most revenues are
recognized under percentage-of-completion long-term contract accounting.
Hardware is sold to prime contractors or systems integrators rather than to
end-users.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The LXE segment manufactures rugged mobile computers and wireless local area
network (WLAN) products for use throughout the supply chain. The
manufacturing cycle for each order is generally just a few days, and
revenues are recognized upon shipment of hardware. Hardware is marketed to
end-users and to third parties that combine their products and services with
the Companys hardware for delivery to end-users.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The EMS Wireless segment manufactures antennas and repeaters for
PCS/cellular communications systems. The manufacturing cycle for each order
is generally just a few days, and revenues are generally recognized upon
shipment of hardware. Hardware is marketed to wireless service providers and
to original equipment manufacturers (OEMs) for mobile voice/paging
services, as well as for other emerging high-speed wireless systems.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The SATCOM segment manufactures antennas and other hardware for satellite
communications systems. The manufacturing cycle for most orders is generally
just a few days, and revenues are recognized upon shipment of hardware. The
SATCOM segment also has orders that involve development and production
schedules that can extend a year or more, and these revenues are recognized
under percentage-of-completion long-term contract accounting. Hardware is
marketed to third parties that combine their products and services with the
Companys hardware for delivery to end-users.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Following is a summary of the Companys interim segment data (in thousands):
| |  | ----------------------------------------------------------------------------

Quarters Ended
    
    Nine Months EndedSep 27
    
    Sep 28
    
    Sep 27
    
    Sep 282003
    
    2002
    
    2003
    
    2002Net sales:Space & Technology/Atlanta
    
    $
    11,690
    
    
    
    13,572
    
    
    
    34,779
    
    
    
    37,057LXE
    
    
    25,555
    
    
    
    21,065
    
    
    
    71,904
    
    
    
    62,861EMS Wireless
    
    
    12,060
    
    
    
    10,306
    
    
    
    36,172
    
    
    
    37,967SATCOM
    
    
    10,941
    
    
    
    8,052
    
    
    
    32,730
    
    
    
    23,193Other
    
    
    1,290
    
    
    
    3,526
    
    
    
    7,758
    
    
    
    9,960Total
    
    $
    61,536
    
    
    
    56,521
    
    
    
    183,343
    
    
    
    171,038Operating income (loss):Space & Technology/Atlanta
    
    $
    1,214
    
    
    
    1,879
    
    
    
    3,131
    
    
    
    3,427LXE
    
    
    1,922
    
    
    
    1,197
    
    
    
    4,985
    
    
    
    2,754EMS Wireless
    
    
    242
    
    
    
    (97
    )
    
    
    1,967
    
    
    
    2,734SATCOM
    
    
    1,565
    
    
    
    897
    
    
    
    4,206
    
    
    
    2,802Other
    
    
    (1,558
    )
    
    
    (342
    )
    
    
    (3,047
    )
    
    
    (2,432
    )Total
    
    $
    3,385
    
    
    
    3,534
    
    
    
    11,242
    
    
    
    9,285Net earnings (loss):Space & Technology/Atlanta
    
    $
    695
    
    
    
    1,050
    
    
    
    1,734
    
    
    
    1,803LXE
    
    
    1,186
    
    
    
    583
    
    
    
    2,969
    
    
    
    1,748EMS Wireless
    
    
    123
    
    
    
    180
    
    
    
    1,114
    
    
    
    1,839SATCOM
    
    
    1,279
    
    
    
    1,184
    
    
    
    3,306
    
    
    
    2,426Other
    
    
    (1,399
    )
    
    
    (777
    )
    
    
    (2,387
    )
    
    
    (1,802
    )Corporate
    
    
    65
    
    
    
    540
    
    
    
    (628
    )
    
    
    (449
    )Discontinued Operations
    
    
    (22,540
    )
    
    
    (794
    )
    
    
    (40,747
    )
    
    
    1,004Total
    
    $
    (20,591
    )
    
    
    1,966
    
    
    
    (34,639
    )
    
    
    6,569


13



---



##### Table of Contents



Sep 27
    
    Dec 312003
    
    2002Assets:Space & Technology/Atlanta
    
    $
    38,219
    
    
    
    48,304LXE
    
    
    65,055
    
    
    
    67,152EMS Wireless
    
    
    24,808
    
    
    
    21,277SATCOM
    
    
    26,961
    
    
    
    23,049Other
    
    
    25,125
    
    
    
    19,393Assets held for sale
    
    
    44,257
    
    
    
    77,128Total
    
    $
    224,425
    
    
    
    256,303Goodwill:LXE
    
    $
    9,982
    
    
    
    9,982EMS Wireless
    
    
    3,544
    
    
    
    3,544Total
    
    $
    13,526
    
    
    
    13,526




|9. |  | Acquisition
|-- |  | -----------



| |  | In April 2002, the Company acquired Ottercom Ltd., a leading provider of
Inmarsat communication terminals located in Tewkesbury, UK. Ottercom Ltd.
products include critical components for EMS SATCOMs high-speed
aeronautical data products. The company, now called EMS SATCOM UK, Ltd.,
operates as a unit of the Companys SATCOM segment. Management believes
that this acquisition has helped strengthen the
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

14



---



##### Table of Contents





| |  | Companys presence in global mobile Internet/e-mail access and
communications, and will enable the Company to continue to broaden its
wireless product offerings and in-house development capability.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | To accomplish this transaction, EMS issued 81,245 new shares of its common
stock (valued at $1.9 million) and assumed liabilities totaling
approximately $1.2 million. No goodwill was recognized in this transaction;
rather, the $3.1 million total of net assets acquired was recorded as an
intangible asset on the balance sheet. This intangible represents the value
of Ottercom Ltd.s satellite communications technologies, intellectual
property and product designs. This intangible is being amortized over an
estimated useful life of 6 years.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|10. |  | Warranty Liability
|--- |  | ------------------



| |  | The Company provides a limited warranty for each of its products. The basic
warranty periods vary from one to five years, depending upon the type of
product. For certain products, customers can purchase warranty coverage for
specified additional periods.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The Company records a liability for the estimated costs to be incurred under
warranties. The amount of this liability is based upon historical, as well
as expected, rates of warranty claims. The warranty liability is
periodically reviewed for adequacy and adjusted as necessary. Following is
a reconciliation of the aggregate product warranty liability for the quarter
and nine months ended September 27, 2003 (in thousands):
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Quarter EndedBalance at June 28, 2003
    
    $
    1,486Accruals for warranties issued during the period
    
    
    410Settlements made during the period
    
    
    (259
    )Balance at September 27, 2003
    
    $
    1,637


FirstNine MonthsBalance at December 31, 2002
    
    $
    1,360Accruals for warranties issued during the period
    
    
    844Settlements made during the period
    
    
    (567
    )Balance at September 27, 2003
    
    $
    1,637


ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.



| |  | The following discussion and analysis should be read in conjunction with the
Companys consolidated financial statements and related notes included in
Item 1 of Part 1 of this quarterly report and the audited consolidated
financial statements and notes and Managements Discussion and Analysis of
Financial Condition and Results of Operations contained in our Annual Report
on Form 10-K for the year ended December 31, 2002.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

15



---



##### Table of Contents





| |  | Discontinued Operations
| |  | -----------------------



| |  | As discussed in Note 2, EMSs Montreal commercial space operations and its
healthcare product line have been classified as discontinued operations, and
the net assets held for sale were written down to their estimated fair value
upon disposal. The combined fair value adjustment was a
$19 million pre-tax charge (comprising write-downs of
$17 million related to assets associated with the Space & Technology/Montreal division
and $2 million for the healthcare product line), partially
offset by a related
U.S. income tax benefit of approximately $2.9 million that was
identified after completing further tax analysis following the
Companys initial public release of its third quarter financial
results. The fair
values upon disposal were estimated using discounted present value models.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | In addition to the fair value adjustment, the
2003 results from discontinued operations included $6 million of
losses for the third quarter and $24 million of losses for the
first nine months. Essentially all of these losses were related to
the Space & Technology/Montreal operations, which has
experienced declining revenues due to very difficult conditions in
commercial space markets. In the first nine months of 2003,
Space & Technology/Montreal incurred losses of
approximately $19 million on two long-term commercial space contracts, as a
result of key supplier delays and unanticipated technical problems.
No significant income tax benefits were accrued for these interim
losses, because the Company has reserved substantially all of the
various Canadian tax benefit carryforwards related to
Space & Technology/Montreal until the timing of their
future realization becomes more certain. The Company believes that it
has recorded adequate reserves for known risks associated with its
contracts, which combined with the benefits of an improved rate of
new orders in the third quarter of 2003, should result in a
substantially lower loss for the fourth quarter of 2003 as compared
with the third quarter of 2003. However, the Space &
Technology/Montreal operations could still incur further losses from
unanticipated technical problems or delays.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Critical Accounting Policies
| |  | ----------------------------



| |  | Our consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America,
which often require the judgment of management in the selection and
application of certain accounting principles and methods. We consider the
following to be critical to an understanding of our financial statements
because their application requires significant judgment, and because
differences, between actual future events and the expectations on which
these judgments were based, can have significant effects on our financial
results reported for future periods.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Revenue recognition on long-term contracts
| |  | ------------------------------------------



| |  | Revenue recognition for fixed-price, long-term contracts in the Companys
Space & Technology/Atlanta and SATCOM segments, as well as the Space &
Technology/Montreal operations currently held for sale, is a critical
accounting policy involving significant management estimates. These
segments long-term contracts use the ratio of cost-incurred to
total-estimated-cost, as the measure of performance that determines how much
revenue should be recognized. The calculation of total-estimated-cost
relies on engineering estimates of the cost to complete the contract, with
allowances for identifiable risks and uncertainties. These engineering
estimates are frequently reviewed and updated. However, unforeseen problems
can occur to substantially reduce the rate of future revenue recognition in
relation to costs incurred.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Most of the Space & Technology/Atlanta and Space & Technology/Montreal
contracts involve development of new or unproven applications of technology.
Due to technological uncertainties, a contract may be broadly defined in
its early stages, with a structure to accommodate future changes in the
scope of work or contract value as technical development progresses. In
such cases, management must estimate the future expected levels of scope of
work and likely contract value changes to determine the appropriate level of
current revenue associated with current costs incurred. Actual future
changes may vary from expected changes, resulting in a reduction (or
increase) in revenues recognized in future periods.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

16



---



##### Table of Contents





| |  | Accounting for government research incentives
| |  | ---------------------------------------------



| |  | Our accrual of research incentives from the Canadian government is a
critical accounting policy involving management estimates for our
Montreal-based operations, including the Space & Technology/Montreal
operations currently held for sale. These incentives are in the form of a
cash reimbursement for a portion of certain qualified research expenditures.
Incentives are recorded as a reduction of cost of sales, because the
underlying research efforts primarily apply to development of technological
capabilities for specific business opportunities. For the nine months ended
September 27, 2003, total incentives earned were approximately $1.1 million,
compared with $3.9 million for the nine months ended September 28, 2002. We
have established procedures to identify qualified costs and to submit
appropriate claims for reimbursement; all of these claims are subject to
financial and scientific audits by the Canadian government concerning
whether certain expenses qualified for incentive programs. Although there
have historically been no significant disallowances of previously accrued
incentives that resulted from these audits, such disallowances in the future
would have an unfavorable effect on our statement of operations.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Evaluation of long-lived assets for impairment
| |  | ----------------------------------------------



| |  | All long-lived assets on the balance sheet are periodically reviewed for
impairment. To test recoverability, we estimate the cash flows expected to
result from the long-lived assets under several different scenarios,
including the potential sale of assets, as well as continuing to hold the
assets under several different kinds of business conditions. No long-lived
assets classified as held and used were determined to be impaired as of
September 27, 2003.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | In the third quarter of 2003, the assets of the Space & Technology/Montreal
and the healthcare product line were reclassified from assets held and
used to assets held for sale. As a result, these business components
were accounted for as discontinued operations, and the net assets held for
sale were written down to their estimated fair value upon disposal. The
combined fair value adjustment was a $19 million pre-tax charge, comprising
write-downs of $17 million related to the Space & Technology/Montreal
division and $2 million for the healthcare product line. The fair values
upon disposal were estimated using discounted present value models.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Establishment of reserves for deferred income tax assets
| |  | --------------------------------------------------------



| |  | It has been managements expectation that in the future our Canadian
operations would earn more than enough research-related tax benefits each
year to offset any Canadian federal tax liability for any given year. As a
result, we have reserved substantially all the net deferred tax assets
associated with these research-related tax benefits (totaling approximately
$17 million at September 27, 2003), because they are unlikely to be
realized. These net deferred tax assets may be sold as part of the assets
of the Companys Space & Technology/Montreal division.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

17



---



##### Table of Contents





| |  | Results of Operations
| |  | ---------------------



| |  | Net Sales
| |  | ---------



| |  | Consolidated net sales increased to $61.5 million in the third quarter of
2003, compared with $56.5 million in the third quarter of 2002. For the
first nine months, sales increased to $183.3 million in 2003, compared with
$171.0 million for the comparable period in 2002.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Net Sales and Operating Income (Loss) by Segment
| |  | ------------------------------------------------



| |  | Our segment net sales and operating income (loss) were as follows (in
thousands):
| |  | ---------------------------------------------------------------------------------

Quarters Ended
    
    Nine Months EndedSep 27
    
    Sep 28
    
    Sep 27
    
    Sep 282003
    
    2002
    
    2003
    
    2002Net sales:Space & Technology/Atlanta
    
    $
    11,690
    
    
    
    13,572
    
    
    
    34,779
    
    
    
    37,057LXE
    
    
    25,555
    
    
    
    21,065
    
    
    
    71,904
    
    
    
    62,861EMS Wireless
    
    
    12,060
    
    
    
    10,306
    
    
    
    36,172
    
    
    
    37,967SATCOM
    
    
    10,941
    
    
    
    8,052
    
    
    
    32,730
    
    
    
    23,193Other
    
    
    1,290
    
    
    
    3,526
    
    
    
    7,758
    
    
    
    9,960Total
    
    $
    61,536
    
    
    
    56,521
    
    
    
    183,343
    
    
    
    171,038Operating income (loss):Space & Technology/Atlanta
    
    $
    1,214
    
    
    
    1,879
    
    
    
    3,131
    
    
    
    3,427LXE
    
    
    1,922
    
    
    
    1,197
    
    
    
    4,985
    
    
    
    2,754EMS Wireless
    
    
    242
    
    
    
    (97
    )
    
    
    1,967
    
    
    
    2,734SATCOM
    
    
    1,565
    
    
    
    897
    
    
    
    4,206
    
    
    
    2,802Other
    
    
    (1,558
    )
    
    
    (342
    )
    
    
    (3,047
    )
    
    
    (2,432
    )Total
    
    $
    3,385
    
    
    
    3,534
    
    
    
    11,242
    
    
    
    9,285




| |  | Space & Technology/Atlanta:The Space & Technology/Atlanta (S&T/Atlanta)
segment primarily serves defense markets. For the third quarter,
S&T/Atlanta net sales decreased in 2003 because the comparable 2002 period
included particularly strong progress on certain defense orders. For the
nine months, revenues decreased due to lower non-defense orders in 2003
compared with 2002.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | LXE:For the third quarter and first nine months, LXEs net sales in 2003
were higher than in 2002 due to stronger international revenues,
particularly from increased hardware unit sales and service revenues in our
European markets and from the effects of a stronger euro. In addition, 2003
domestic revenues for the third quarter and first nine months were also
higher than for the same periods in 2002.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

18



---



##### Table of Contents





| |  | EMS Wireless:For the third quarter, EMS Wireless net sales increased in
2003 compared with 2002 primarily from higher sales of repeater products.
For the nine months, sales decreased in 2003 compared with 2002 due to a
broad slowdown in capital spending in telecommunications markets,
particularly in the first quarter of 2003.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | SATCOM:For the third quarter and first nine months, net sales in our
SATCOM segment increased in 2003 compared with 2002 due to higher unit sales
in several key product lines, including HSD aeronautical terminals and land
mobile and portable terminals, as well as maritime terminals for voice and
high speed data. Sales of aeronautical terminals, especially in the earlier
part of 2003, benefited by demand for enhanced mobile communications
capabilities for senior U.S. military commanders.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The Companys consolidated operating income (loss) included increases in the
Canada-based SATCOM segments costs (both in cost of sales and selling,
general and administrative expenses), which were significantly higher due to
the cost of introducing new products and to the foreign currency translation
effect of a strengthening Canadian dollar against the U.S. dollar.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Cost of Sales
| |  | -------------



| |  | Cost of sales, as a percentage of consolidated net sales, was 64% for the
interim periods of 2003, compared with 63% for the same periods in 2002.
This slight increase on a consolidated basis related primarily to the effect
of a stronger Canadian dollar on the costs associated with the Canada-based
SATCOM segment.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Selling, General and Administrative Expenses
| |  | --------------------------------------------



| |  | Selling, general and administrative expenses (SG&A), as a percentage of
net sales, did not change significantly for the interim periods in 2003 as
compared with 2002. The increase in total expenditures for the interim
periods in 2003 as compared with 2002 related to the introduction of new
products from our SATCOM segment and a new product line for broadband
satellite communications, as well as to the foreign currency translation
effect of a stronger Canadian dollar and euro on otherwise comparable SG&A
for the Companys non-U.S. operations.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Research and Development Expenses
| |  | ---------------------------------



| |  | Research and development expenses (R&D) represent the cost of our
internally funded efforts. Significant R&D efforts also occur under specific
customer orders in the S&T/Atlanta segment and, accordingly, are reflected
in cost of sales. Consolidated R&D decreased in 2003 compared with 2002, due
to reductions in internally funded R&D, as development was completed on a
high-speed aeronautical terminal for SATCOM and certain repeater products
for EMS Wireless.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Foreign Exchange Gain (Loss)
| |  | ----------------------------



| |  | We recognize foreign exchange gains and losses related to an asset or
liability denominated in a foreign currency, and if applicable, any embedded
derivatives. We use foreign currency forward contracts to hedge our
exposure to fluctuations in the foreign currency exchange rates.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

19



---



##### Table of Contents





| |  | Most of our Canadian operations contracts are in U.S. dollars, and foreign
exchange gains result from a stronger U.S. dollar against the Canadian
dollar. Our Canadian operations also do a significant amount of business in
the United Kingdom, and foreign exchange gains result from a stronger
Canadian dollar against the British pound.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | We also recognize net gains and losses from translation of the LXE European
subsidiaries short-term intercompany liabilities, payable in U.S. dollars,
from the purchase of hardware for resale in Europe. A weaker U.S. dollar
against the euro usually results in foreign exchange gains for LXE.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | In 2003, the net foreign currency losses of $10,000 and $422,000 in the
third quarter and first nine months, respectively, were mainly the result of
a weaker U.S. dollar against the Canadian dollar. In 2002, there were net
foreign currency gains of $677,000 and $701,000 primarily resulting from a
stronger U.S. dollar against the Canadian dollar.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Interest Expense
| |  | ----------------



| |  | Interest expense decreased for the third quarter and first nine months of
2003 compared with the same periods in 2002, due to decreased average debt
levels that resulted from positive cash flow and to slightly lower interest
rates.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Income Tax Expense
| |  | ------------------



| |  | The Company recognized an income tax expense of $899,000 for the quarter and
$2.9 million for the first nine months of 2003 related to consolidated
pre-tax income from continuing operations of $2.8 million and $9.0 million,
respectively. The 32% interim effective income tax rate is based upon
managements expectations for the full year. This consolidated effective
rate includes an approximated 37% effective income tax rate on profits for
U.S. and European operations, and a considerably lower tax rate on profits
from Canadian operations due to research-related tax benefits.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | New Accounting Pronouncements
| |  | -----------------------------



| |  | In April 2002, the Financial Accounting Standards Board (FASB) issued SFAS
No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB
Statement No. 13, and Technical Corrections. SFAS No. 145 rescinds SFAS
No. 4, Reporting Gains and Losses from Extinguishment of Debt, and an
amendment of that statement, SFAS No. 64, Extinguishments of Debt Made to
Satisfy Sinking-Fund Requirements. This statement also amends SFAS No. 13,
Accounting for Leases, to eliminate an inconsistency between the required
accounting for sale-leaseback transactions and the required accounting for
certain lease modifications that have economic effects that are similar to
sale-leaseback transactions. In addition, this statement amends other
existing authoritative pronouncements to make various technical corrections,
clarify meanings, or describe their applicability under changed conditions.
SFAS No. 145 is effective for the Companys fiscal year beginning in 2003
with earlier application encouraged. Adoption did not have a material impact
on the consolidated financial statements of the Company.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

20



---



##### Table of Contents





| |  | In November 2002, the FASB issued Interpretation No. 45, Guarantors
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others, which requires the guarantor to: (1)
recognize a liability for the fair value of the obligation to stand ready
to perform under a guarantee, and (2) provide disclosure information
concerning specified other guarantees, such as product warranties. The
recognition and measurement provisions of Interpretation No. 45 apply to
guarantees entered into or modified after December 31, 2002, and the
implementation of these provisions did not have a material impact on the
Companys consolidated financial statements. The Company has adopted the
disclosure requirements of Interpretation No. 45 for specified guarantees,
including product warranties, contingent consideration from a business
combination, and a parents guarantee of a portion of a subsidiarys debt to
a third party.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based
Compensation  Transition and Disclosure. SFAS No. 148 amends SFAS No.
123, Accounting for Stock-Based Compensation, to provide alternative
methods of transition for a voluntary change to the fair-value based method
of accounting for stock-based employee compensation. In addition, SFAS No.
148 amends the disclosure requirements of SFAS No. 123 to require prominent
disclosure in both annual and interim financial statements about the method
of accounting for stock-based employee compensation and the effect of the
method used on reporting results. The transition guidance and annual
disclosure provisions of SFAS No. 148 are effective for fiscal years ending
after December 15, 2002. The interim disclosure provisions are effective
for financial reports containing financial statements for interim periods
beginning after December 15, 2002. The disclosures required by SFAS No. 148
are included above in Note 1 of the Notes to Interim Consolidated Financial
Statements.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | In January 2003, the FASB issued Interpretation No. 46, Consolidation of
Variable Interest Entities. The interpretation provides guidance on
consolidating variable interest entities and applies immediately to variable
interests created after January 31, 2003. The interpretation requires
variable interest entities to be consolidated if the equity investment at
risk is not sufficient to permit an entity to finance its activities without
support from other parties, or if the equity investors lack certain
specified characteristics. Adoption of Interpretation No. 46 did not have a
material impact on the Companys consolidated financial statements.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | In April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on
Derivative Instruments and Hedging Activities, which amends SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities, to address
decisions reached by the Derivatives Implementation Group, developments in
other Board projects that address financial instruments, and implementation
issues related to the definition of a derivative. This statement is
effective for contracts entered into or modified after June 30, 2003 except
for specific hedging relationships designated after June 30, 2003. This
standard has not had a significant effect on the consolidated financial
statements for the Company.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity. SFAS No.
150 established standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity,
and imposes certain additional disclosure requirements. The provisions of
SFAS No. 150 are generally effective for all financial
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

21



---



##### Table of Contents





| |  | instruments entered into or modified after May 31, 2003, and otherwise
effective at the beginning of the first interim period beginning after June
15, 2003. This standard has not had a significant effect on the consolidated
financial statements of the Company.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Liquidity and Capital Resources
| |  | -------------------------------



| |  | Net cash provided by operating activities was $10.7 million in the first
nine months of 2003, compared with $10.2 million in the first nine months of
2002. The main source of cash in the first nine months of 2003 related to
collection of certain significant accounts receivable at the S&T/Atlanta
division.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | During 2003, the net balance sheet increase in long-term debt was
approximately $5.1 million, but only $2.6 million of this increase related
to additional financing. The remaining increase of $2.5 million resulted
from a foreign exchange translation adjustment.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | At September 27, 2003, the Company had $6.4 million available for borrowing
under its U.S. revolving credit agreement and $0.6 million available for
borrowing under its Canadian revolving credit agreement. At September 27,
2003, the Company was either in compliance with or had received a bank
waiver of compliance relating to all covenants. Subsequent to the end of the
quarter, the Company amended its U.S. credit agreement to extend the term to
August 2004 and give the lender a security interest in certain of U.S.-based
assets. The Canadian credit agreement matures in 2003, and the Company
expects to extend this agreement on terms that are comparable with the
existing terms.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The Company has adopted plans to sell its Space & Technology/Montreal
division and its healthcare product line, and these sales are expected to be
completed within twelve months. Although the terms of potential sales are
uncertain, we expect that a substantial portion of the net proceeds of the
sales will be used to reduce the Companys debt.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The Company expects that capital expenditures for continuing operations in
2003 will range from $9 million to $10 million. These expenditures will be
used primarily to purchase equipment that enhances capacity and
productivity.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The Companys material contractual cash commitments and material other
commercial commitments have not changed significantly from those disclosed
in the Annual Report on Form 10-K for the year ended December 31, 2002.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Management believes that cash flows from operations and borrowings available
under its credit agreements will provide sufficient liquidity to meet the
operating and capital expenditure needs for existing operations during the
next twelve months. To fund long-term growth, the Company may consider such
measures as offerings of common stock or convertible securities, or revised
long-term credit arrangements.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Risk Factors and Forward-Looking Statements
| |  | -------------------------------------------



| |  | The Company has included forward-looking statements in Managements
Discussion and Analysis of Financial Condition and Results of Operations
regarding the potential for various businesses and products, and potential
proceeds from the sale of the Space & Technology/ Montreal division. Actual
results could differ from those statements as a result of a wide
variety of factors. Such factors include, but are not limited to...
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

22



---



##### Table of Contents





| |  | uncertainties related to identifying a purchaser of the Space &
Technology/Montreal division or healthcare product line, 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, particularly including the
markets for satellite hardware, which have declined substantially during
the past two years, and markets for the Companys PCS/cellular base
station antennas and repeater products, which are difficult to predict in
current circumstances;
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | budget pressures on near-term U.S. defense spending priorities;
|- |  | ---------------------------------------------------------------



| |  | 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 both held and used and held for sale;
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 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 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 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 data
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.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------

23



---



##### Table of Contents



ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

As of September 27, 2003, the Company had the following market risk sensitive
instruments (in thousands):

Sep 272003Revolving
credit loan with a U.S. bank, $10.0 million maturing in
August 2004, the remainder payable on demand, variable-rate interest payable
quarterly (average rate of 3.2% at the end of the quarter)
    
    $
    19,232Revolving credit loan with a bank in Canada, no specific maturity but
subject to review at least annually, variable rate interest payable monthly
(6.25% at the end of the quarter)
    
    
    17,076Term installment loan with a bank in Canada, maturing in December 2005,
principal and variable-rate interest payable quarterly (6.0% at the end of
the quarter)
    
    
    2,584Revolving credit loan with a bank in the United Kingdom, maturing in April
2004, variable-rate interest payable monthly (4.5% at the end of the quarter)
    
    
    1,442Total market-sensitive debt
    
    $
    40,334


As of September 27, 2003, the Company also had intercompany accounts that
eliminate in consolidation but that are considered market risk sensitive
instruments. Short-term due to the parent, payable by European and Australian
subsidiaries and arising from purchase of the parents products for sale, were
as follows:

Exchange Rate($U.S. per unit of
    
    $U.S. in thousandslocal currency)
    
    (Reporting Currency)Australia
    
    0.6745
    /
    Aus Dollar
    
    $
    1,045Belgium
    
    1.1478
    /
    Euro

    
    
    434Italy
    
    1.1478
    /
    Euro
    
    
    625France
    
    1.1478
    /
    Euro
    
    
    137Sweden
    
    0.1281
    /
    Krona
    
    
    105Germany
    
    1.1478
    /
    Euro

    
    
    206Netherlands
    
    1.1478
    /
    Euro

    
    
    219Total short-term due to parent
    
    
    
    
    
    $
    2,771


24



---



##### Table of Contents



The Company has foreign currency risks associated with forward contracts as
follows (in thousands, except average contract rate):

($U.S.)Notional
    
    Average Contract
    
    FairAmount
    
    Rate
    
    ValueForeign currency forward exchange
contracts:Euros (sell for U.S. dollars)
    
    1,300
    Euros
    
    1.1407
    
    
    
    (9
    )U.S. dollars (sell for Canadian dollars)
    
    6,000
    USD
    
    1.3996
    
    
    
    108British Pounds (sell for U.S. dollars)
    
    250
    Pounds
    
    1.6505
    
    
    
    (2
    )


The Company enters into foreign currency forward contracts in order to mitigate
the risks associated with currency fluctuations on future cash flows.

ITEM 4. Controls and Procedures

The Company has established and maintains disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14). The objective of these
controls and procedures is to ensure that information relating to the Company,
including its consolidated subsidiaries, and required to be filed by it in
reports under the Securities Exchange Act, as amended, is effectively
communicated to the Companys CEO and CFO, and is recorded, processed,
summarized and reported on a timely basis.

The CEO and CFO have evaluated the Companys disclosure controls and procedures
as of the end of the period covered in this report. Based upon
this evaluation, the CEO and CFO have concluded that the Companys disclosure
controls and procedures are adequate to accomplish their objective and are
functioning effectively.

Subsequent to the most recent evaluations by the CEO and CFO, there have been
no significant changes in the Companys internal controls (including corrective
actions for significant deficiencies or material weaknesses) or other factors
that could significantly affect these internal controls.

25



---



##### Table of Contents






PART II

OTHER INFORMATION

ITEM 6. Exhibits and Reports on Form 8-K

(a)
    
    Exhibits  The following exhibits are filed as part of this report:


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 Annual Report on
Form 10-K for the year ended December 31, 1998)3.2
    
    
    Bylaws of EMS Technologies, Inc., as amended through
March 15, 1999 (incorporated by reference to Exhibit 3.2 to the
Companys Annual Report on Form 10-K for the year ended December
31, 1998)31.1
    
    
    Certification of the Registrants Chief Executive
Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.31.2
    
    
    Certification of the Registrants Chief Financial
Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.32
    
    
    Certifications of the Registrants Chief Executive and
Chief Financial Officers, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.


(b)
    
    Reports on Form 8-K.On July 15, 2003, the Registrant filed a Report on Form 8-K, reporting
with respect to Item 5, Other Events and Required FD Disclosure.On July 29, 2003, the Registrant filed a Report on Form 8-K, reporting
with respect to Item 12, Results of Operations and Financial
Condition.


26



---



##### Table of Contents






SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

EMS TECHNOLOGIES, INCBy:
    
    /s/ Alfred G. Hansen
    
    Date:
    
    November 11, 2003Alfred G. HansenPresident, Chief Executive
Officer and Director
(Principal Executive
Officer)By:
    
    /s/ Don T. Scartz
    
    Date:
    
    November 11, 2003Don T. ScartzExecutive Vice President,
Chief Financial Officer and
Treasurer (Principal
Financial and Accounting
Officer)


27