##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended April 3, 2010
 Commission file number 0-6072
 EMS TECHNOLOGIES, INC.
  Georgia
    
    58-1035424(State or other jurisdiction of incorporation or 
organization)
    
    (IRS Employer ID Number)
 660 Engineering Drive, Norcross, Georgia
    
    30092(Address of principal executive offices)
    
    (Zip Code)
 Registrants Telephone Number, Including Area Code: (770) 263-9200
 þ o
 o o
 o þ o o
 o þ
  Class
    
    Number of SharesCommon Stock, $.10 par value
    
    15,307,081




---



##### 



TABLE OF CONTENTS
 PagePART I  FINANCIAL INFORMATION
    
    
    2Item 1. Financial Statements
    
    
    2Consolidated Statements of Operations (unaudited)
    
    
    2Consolidated Balance Sheets (unaudited)
    
    
    3Consolidated Statements of Cash Flows (unaudited)
    
    
    5Notes to Consolidated Financial Statements (unaudited)
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    26Item 4. Controls and Procedures
    
    
    29PART II  OTHER INFORMATION
    
    
    30Item 1A. Risk Factors
    
    
    30Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    30Item 6. Exhibits
    
    
    31SIGNATURES
    
    
    32Exhibit 4.1Exhibit 10.1Exhibit 31.1Exhibit 31.2Exhibit 32




---



##### Table of Contents



PART I
 FINANCIAL INFORMATION
 
 Item 1.
    
    Financial Statements
 EMS Technologies, Inc. and Subsidiaries
 
 Consolidated Statements of Operations (Unaudited)
 (in thousands, except per share data)
 Three Months EndedApril 3
    
    
    April 42010
    
    
    2009Product net sales
    
    $
    66,656
    
    
    
    68,791Service net sales
    
    
    16,246
    
    
    
    23,487Net sales
    
    
    82,902
    
    
    
    92,278Product cost of sales
    
    
    44,538
    
    
    
    47,414Service cost of sales
    
    
    8,744
    
    
    
    16,571Cost of sales
    
    
    53,282
    
    
    
    63,985Selling, general and administrative expenses
    
    
    21,674
    
    
    
    21,934Research and development expenses
    
    
    5,421
    
    
    
    4,406Impairment loss on goodwill related charges
    
    
    384
    
    
    
    Acquisition-related items
    
    
    217
    
    
    
    3,895Operating income (loss)
    
    
    1,924
    
    
    
    (1,942
    )Interest income
    
    
    181
    
    
    
    62Interest expense
    
    
    (477
    )
    
    
    (621
    )Foreign exchange loss, net
    
    
    (693
    )
    
    
    (467
    )Earnings (loss) before income taxes
    
    
    935
    
    
    
    (2,968
    )Income tax expense
    
    
    344
    
    
    
    Net earnings (loss)
    
    $
    591
    
    
    
    (2,968
    )Net earnings (loss) per share:Basic
    
    $
    0.04
    
    
    
    (0.20
    )Diluted
    
    
    0.04
    
    
    
    (0.20
    )Weighted-average number of common shares
outstanding:Basic
    
    
    15,179
    
    
    
    15,146Diluted
    
    
    15,206
    
    
    
    15,146
   2




---



##### Table of Contents



EMS Technologies, Inc. and Subsidiaries
 
 Consolidated Balance Sheets (Unaudited)
 (in thousands)
 April 3
    
    
    December 312010
    
    
    2009ASSETSCurrent assets:Cash and cash equivalents
    
    $
    53,723
    
    
    
    47,174Trade accounts receivable, net of allowance for doubtful account of
$1,162 in 2010 and $1,208 in 2009
    
    
    60,369
    
    
    
    60,959Costs and estimated earnings in excess of billings on long-term
contracts
    
    
    24,518
    
    
    
    25,290Inventories
    
    
    42,697
    
    
    
    40,655Deferred income taxes
    
    
    4,234
    
    
    
    4,306Other current assets
    
    
    19,556
    
    
    
    19,117Total current assets
    
    
    205,097
    
    
    
    197,501Property, plant and equipment:Land
    
    
    1,150
    
    
    
    1,150Buildings and leasehold improvements
    
    
    18,809
    
    
    
    18,792Machinery and equipment
    
    
    109,849
    
    
    
    107,712Furniture and fixtures
    
    
    10,560
    
    
    
    10,542Total property, plant and equipment
    
    
    140,368
    
    
    
    138,196Less accumulated depreciation
    
    
    93,199
    
    
    
    90,256Net property, plant and equipment
    
    
    47,169
    
    
    
    47,940Deferred income taxes
    
    
    9,426
    
    
    
    9,421Goodwill
    
    
    60,403
    
    
    
    60,336Other intangible assets, net of accumulated amortization
of $21,170 in 2010 and $18,817 in 2009
    
    
    47,304
    
    
    
    49,256Costs and
estimated earnings in excess of billings on long-term contracts
    
    
    10,462
    
    
    
    7,711Other assets
    
    
    1,910
    
    
    
    1,920Total assets
    
    $
    381,771
    
    
    
    374,145
   3




---



##### Table of Contents



EMS Technologies, Inc. and Subsidiaries
 Consolidated Balance Sheets (Unaudited), continued

(in thousands, except share data)
 April 3
    
    
    December 312010
    
    
    2009LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Current installments of long-term debt
    
    $
    1,423
    
    
    
    1,398Accounts payable
    
    
    29,472
    
    
    
    27,333Billings in excess of contract costs and estimated earnings on long-term contracts
    
    
    9,952
    
    
    
    9,597Accrued compensation and retirement costs
    
    
    14,461
    
    
    
    13,946Deferred service revenue
    
    
    10,875
    
    
    
    9,588Contingent consideration arrangement liability
    
    
    13,946
    
    
    
    13,729Other current liabilities
    
    
    23,492
    
    
    
    23,763Total current liabilities
    
    
    103,621
    
    
    
    99,354Long-term debt, excluding current installments
    
    
    26,486
    
    
    
    26,352Deferred income taxes
    
    
    5,324
    
    
    
    5,757Other liabilities
    
    
    6,445
    
    
    
    5,591Total liabilities
    
    
    141,876
    
    
    
    137,054Shareholders equity:Preferred stock of $1.00 par value per share; Authorized 10,000 shares; none
issued
    
    
    
    
    
    
    Common stock of $.10 par value per share; Authorized 75,000 shares, issued and
outstanding 15,307 in 2010 and 15,249 in 2009
    
    
    1,525
    
    
    
    1,525Additional paid-in capital
    
    
    136,514
    
    
    
    136,112Accumulated other comprehensive income  foreign currency translation adjustment
    
    
    7,877
    
    
    
    6,066Retained earnings
    
    
    93,979
    
    
    
    93,388Total shareholders equity
    
    
    239,895
    
    
    
    237,091Commitments and contingenciesTotal liabilities and shareholders equity
    
    $
    381,771
    
    
    
    374,145
   4




---



##### Table of Contents



EMS Technologies, Inc. and Subsidiaries
 
 Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
 Three Months EndedApril 3
    
    
    April 42010
    
    
    2009Cash flows from operating activities:Net earnings (loss)
    
    $
    591
    
    
    
    (2,968
    )Adjustments to reconcile net earnings (loss) to net cash provided by
operating activities:Depreciation and amortization
    
    
    5,040
    
    
    
    4,607Stock-based compensation expense
    
    
    400
    
    
    
    497Change in fair value of contingent consideration liability
    
    
    217
    
    
    
    388Changes in operating assets and liabilities, net of effects of acquisitions:Trade accounts receivable
    
    
    327
    
    
    
    1,063Costs and estimated earnings in excess of billings on long-term contracts
    
    
    (1,276
    )
    
    
    7,893Inventories
    
    
    (1,691
    )
    
    
    (979
    )Accounts payable
    
    
    1,741
    
    
    
    1,197Deferred service revenue
    
    
    2,580
    
    
    
    2,259Other
    
    
    (350
    )
    
    
    18Net cash provided by operating activities
    
    
    7,579
    
    
    
    13,975Cash flows from investing activities:Purchases of property, plant and equipment
    
    
    (1,787
    )
    
    
    (4,505
    )Payments for acquisitions of businesses, net of cash acquired
    
    
    
    
    
    
    (83,814
    )Proceeds from sales of assets
    
    
    18
    
    
    
    1Net cash used in investing activities
    
    
    (1,769
    )
    
    
    (88,318
    )Cash flows from financing activities:Net borrowings under revolving credit facility
    
    
    500
    
    
    
    33,759Repayment of other debt
    
    
    (340
    )
    
    
    (315
    )Deferred financing costs paid
    
    
    (28
    )
    
    
    (251
    )Proceeds from exercise of stock options
    
    
    
    
    
    
    153Net cash provided by financing activities
    
    
    132
    
    
    
    33,346Effect of changes in exchange rates on cash and cash equivalents
    
    
    607
    
    
    
    (38
    )Net change in cash and cash equivalents
    
    
    6,549
    
    
    
    (41,035
    )Cash and cash equivalents at beginning of period
    
    
    47,174
    
    
    
    86,979Cash and cash equivalents at end of period
    
    $
    53,723
    
    
    
    45,944
   5




---



##### Table of Contents



EMS Technologies, Inc. and Subsidiaries
 
 Notes to Consolidated Financial Statements (Unaudited)
 April 3, 2010 and April 4, 2009
 1. Basis of Presentation
    Managements Use of Estimates
  Accounting Changes
 Improving Disclosures About Fair Value Measurements
 Recently Issued Pronouncements Not Yet Adopted
   6




---



##### Table of Contents



Revenue Recognition  Multiple-Deliverable Revenue Arrangements,
 
    
    Eliminates the requirement for objective evidence of fair value of an undelivered item
for treatment of the delivered item as a separate unit of accounting;
    
    Requires use of the relative selling price method for allocating total consideration to
elements of the arrangement instead of the relative-fair-value method or the residual
method;
    
    Allows the use of an estimated selling price for any element within the arrangement to
allocate consideration to individual elements when vendor-specific objective evidence or
other third party evidence of selling price do not exist; and
    
    Expands the required disclosures.
 Software  Certain Revenue Arrangements That Include Software Elements
  2. Business Combinations
  Business Combinations TM , Business Combinations
    7




---



##### Table of Contents



3. Goodwill and Other Intangible Assets
   GlobalAviation
    
    
    Tracking
    
    
    LXE
    
    
    TotalBalance as of December 31, 2009
    
    $
    35,108
    
    
    
    23,429
    
    
    
    1,799
    
    
    
    60,336Foreign currency translation
adjustment
    
    
    
    
    
    
    
    
    
    
    67
    
    
    
    67Balance as of April 3, 2010
    
    $
    35,108
    
    
    
    23,429
    
    
    
    1,866
    
    
    
    60,403
   As of April 3, 2010Gross
    
    
    
    
    
    
    NetCarrying
    
    
    Accumulated
    
    
    CarryingAmount
    
    
    Amortization
    
    
    AmountDeveloped technology
    
    $
    40,797
    
    
    
    15,017
    
    
    
    25,780Customer relationships
    
    
    19,045
    
    
    
    3,046
    
    
    
    15,999Trade names and trademarks
    
    
    6,204
    
    
    
    1,261
    
    
    
    4,943Other
    
    
    2,428
    
    
    
    1,846
    
    
    
    582$
    68,474
    
    
    
    21,170
    
    
    
    47,304
 As of December 31, 2009Gross
    
    
    
    
    
    
    NetCarrying
    
    
    Accumulated
    
    
    CarryingAmount
    
    
    Amortization
    
    
    AmountDeveloped technology
    
    $
    40,385
    
    
    
    13,460
    
    
    
    26,925Customer relationships
    
    
    19,052
    
    
    
    2,493
    
    
    
    16,559Trade names and trademarks
    
    
    6,208
    
    
    
    1,052
    
    
    
    5,156Other
    
    
    2,428
    
    
    
    1,812
    
    
    
    616$
    68,073
    
    
    
    18,817
    
    
    
    49,256
    8




---



##### Table of Contents



4. Fair Value Measurements
 Fair Value Measurements and Disclosures
 
    
    Level 1  Observable inputs consisting of quoted prices in active markets;
    
    Level 2  Inputs, other than quoted prices in active markets, that are observable
either directly or indirectly; and
    
    Level 3  Unobservable inputs in which there is little or no market data, which require
the reporting entity to develop its own assumptions.
     5. Interim Segment Disclosures
     9




---



##### Table of Contents



Three Months EndedApril 3
    
    
    April 42010
    
    
    2009Net sales:Aviation
    
    $
    26,186
    
    
    
    34,513LXE
    
    
    30,573
    
    
    
    23,944Defense & Space
    
    
    16,534
    
    
    
    26,908Global Tracking
    
    
    9,860
    
    
    
    6,913Less intercompany sales
    
    
    (251
    )
    
    
    Global Tracking external sales
    
    
    9,609
    
    
    
    6,913Total
    
    $
    82,902
    
    
    
    92,278Operating income (loss):Aviation
    
    $
    309
    
    
    
    5,066LXE
    
    
    892
    
    
    
    (5,061
    )Defense & Space
    
    
    918
    
    
    
    2,892Global Tracking
    
    
    154
    
    
    
    (759
    )Corporate & Other
    
    
    (349
    )
    
    
    (4,080
    )Total
    
    $
    1,924
    
    
    
    (1,942
    )Earnings (loss) before income taxes:Aviation
    
    $
    (72
    )
    
    
    5,556LXE
    
    
    783
    
    
    
    (5,138
    )Defense & Space
    
    
    922
    
    
    
    2,892Global Tracking
    
    
    46
    
    
    
    (407
    )Corporate & Other
    
    
    (744
    )
    
    
    (5,871
    )Total
    
    $
    935
    
    
    
    (2,968
    )
  10




---



##### Table of Contents



April 3
    
    
    December 312010
    
    
    2009Assets:Aviation
    
    $
    146,155
    
    
    
    144,483LXE
    
    
    79,285
    
    
    
    71,632Defense & Space
    
    
    55,133
    
    
    
    53,883Global Tracking
    
    
    76,641
    
    
    
    75,922Corporate & Other
    
    
    24,557
    
    
    
    28,225Total
    
    $
    381,771
    
    
    
    374,145Concentration of net assets by geographic
region:United States
    
    $
    63,202
    
    
    
    72,826Canada
    
    
    65,982
    
    
    
    62,239Europe
    
    
    106,284
    
    
    
    97,216Other
    
    
    4,427
    
    
    
    4,810Total
    
    $
    239,895
    
    
    
    237,091
  6. Earnings Per Share
  Three Months EndedApril 3
    
    
    April 42010
    
    
    2009Basic weighted-average number of common shares
outstanding
    
    
    15,179
    
    
    
    15,146Dilutive potential shares using the treasury share method
    
    
    27
    
    
    
    Diluted weighted-average number of common shares
outstanding
    
    
    15,206
    
    
    
    15,146Shares that were not included in computation of diluted
earnings
per share that could potentially dilute future basic earnings
per share because their effect on the periods were
antidilutive
    
    
    1,081
    
    
    
    1,016
   11




---



##### Table of Contents



7. Comprehensive Income
  Three Months EndedApril 3
    
    
    April 42010
    
    
    2009Net earnings (loss)
    
    $
    591
    
    
    
    (2,968
    )Other comprehensive income (loss):Foreign currency translation adjustment
    
    
    1,811
    
    
    
    (1,180
    )$
    2,402
    
    
    
    (4,148
    )
 8. Inventories
  April 3
    
    
    December 312010
    
    
    2009Parts and materials
    
    $
    26,839
    
    
    
    25,221Work-in-process
    
    
    5,419
    
    
    
    5,142Finished goods
    
    
    10,439
    
    
    
    10,292$
    42,697
    
    
    
    40,655
  9. Revolving Credit Facility
   10. Warranty Liability
   12




---



##### Table of Contents



Three Months EndedApril 3
    
    
    April 42010
    
    
    2009Balance at beginning of the period
    
    $
    4,085
    
    
    
    2,789Additions at dates of acquisition for businesses
acquired during period
    
    
    
    
    
    
    516Accruals for warranties issued during the period
    
    
    762
    
    
    
    975Settlements made during the period
    
    
    (337
    )
    
    
    (900
    )Balance at end of period
    
    $
    4,510
    
    
    
    3,380
 11. Stock-Based Compensation
  12. Income Taxes
   13. Discontinued Operations
   13




---



##### Table of Contents



14. Repurchases of Common Shares
  15. Litigation
   14




---



##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
   
    
    Aviation Designs and develops satellite-based communications solutions through a broad
array of terminals and antennas for the aeronautical market that enable end-users in
aircraft and other mobile platforms to communicate over satellite and air-to-ground links.
This segment also designs and builds aircraft cabin equipment to process data on board
aircraft, including rugged data storage, cabin-wireless connectivity, and air-to-ground
connectivity;
    
    LXE Provides rugged mobile terminals and wireless data networks used for logistics
applications such as distribution centers, warehouses and container ports. LXE operates
mainly in three markets: the Americas market, which is comprised of North, South and
Central America; the International market, which is comprised of all other geographic
areas, with the highest concentration in Europe; along with direct sales to original
equipment manufacturers (OEM);
    
    Defense & Space (D&S) Supplies highly engineered subsystems for defense electronics
and sophisticated satellite applications from military communications, radar, surveillance
and countermeasures to commercial high-definition television, satellite radio, and live TV
for innovative airlines; and
    
    Global Tracking Provides satellite-based machine-to-machine mobile communications
equipment and services to track, monitor and control remote assets, regardless of whether
they are fixed, semi-fixed or mobile. Additionally, Global Tracking provides equipment for
the Cospas-Sarsat search-and-rescue system and incident-management software for rescue
coordination worldwide.
   
    
    Consolidated net sales were 10.2% lower in the first quarter of 2010, compared with same
period in 2009. Lower net sales at D&S and Aviation offset higher net sales at LXE and
Global Tracking in the first quarter of 2010. Net sales at D&S were lower due to the
completion of a significant military project that was included in D&Ss net sales in the
first quarter of 2009. The decline in net sales at Aviation reflects the impact of the
global economic slow-down in the air-transport, military, and business jet markets. Higher
product shipments to the Americas market and a new source of revenue from sales made
directly to OEMs increased net sales at LXE. Net sales improved at Global Tracking mainly
due to strong product sales in the security market and higher airtime revenues.
    
    Our net earnings for the first quarter of 2010 were $0.6 million compared with a net
loss of $3.0 million in the first quarter of 2009. This improvement was mainly due to an
increase in operating income at LXE and Global Tracking of $6.0 million and $0.9 million,
respectively, and lower acquisition-related charges of $3.7 million partially offset by a
decrease in operating income at Aviation and D&S of $4.8 million and $2.0 million,
respectively.
    
    Our markets continue to be impacted by the economy in certain markets and they are not
immune to
increasing pressures and risks. We expect that we will continue to be faced with these
economic pressures through 2010. These and other factors could cause a decline in expected
future cash flows for one or more of our business units (including our recently acquired
businesses), and as a result it is reasonably possible that we may be required to recognize
an impairment loss related to goodwill or other long-lived assets in the future.
  15




---



##### Table of Contents



Results of Operations
  Three Months EndedApril 3
    
    
    April 42010
    
    
    2009Product net sales
    
    $
    66,656
    
    
    
    80.4
    %
    
    $
    68,791
    
    
    
    74.5
    %Service net sales
    
    
    16,246
    
    
    
    19.6
    
    
    
    23,487
    
    
    
    25.5Net sales
    
    
    82,902
    
    
    
    100.0
    
    
    
    92,278
    
    
    
    100.0Product cost of sales
    
    
    44,538
    
    
    
    66.8
    
    
    
    47,414
    
    
    
    68.9Service cost of sales
    
    
    8,744
    
    
    
    53.8
    
    
    
    16,571
    
    
    
    70.6Cost of sales
    
    
    53,282
    
    
    
    64.3
    
    
    
    63,985
    
    
    
    69.3Selling, general and administrative
expenses
    
    
    21,674
    
    
    
    26.1
    
    
    
    21,934
    
    
    
    23.8Research and development expenses
    
    
    5,421
    
    
    
    6.5
    
    
    
    4,406
    
    
    
    4.8Impairment loss on goodwill related
charges
    
    
    384
    
    
    
    0.5
    
    
    
    
    
    
    
    Acquisition-related items
    
    
    217
    
    
    
    0.3
    
    
    
    3,895
    
    
    
    4.2Operating income (loss)
    
    
    1,924
    
    
    
    2.3
    
    
    
    (1,942
    )
    
    
    (2.1
    )Interest income
    
    
    181
    
    
    
    0.2
    
    
    
    62
    
    
    
    0.1Interest expense
    
    
    (477
    )
    
    
    (0.6
    )
    
    
    (621
    )
    
    
    (0.7
    )Foreign exchange loss, net
    
    
    (693
    )
    
    
    (0.8
    )
    
    
    (467
    )
    
    
    (0.5
    )Earnings (loss) before income taxes
    
    
    935
    
    
    
    1.1
    
    
    
    (2,968
    )
    
    
    (3.2
    )Income tax expense
    
    
    344
    
    
    
    (0.4
    )
    
    
    
    
    
    
    Net earnings (loss)
    
    $
    591
    
    
    
    0.7
    %
    
    $
    (2,968
    )
    
    
    (3.2
    )%
 Three Months ended April 3, 2010 and April 4, 2009:
    16




---



##### Table of Contents



17




---



##### Table of Contents



Segment Analysis
  Three Months Ended
    
    
    PercentageApril 3
    
    
    April 4
    
    
    Increase2010
    
    
    2009
    
    
    (Decrease)Net sales:Aviation
    
    $
    26,186
    
    
    
    34,513
    
    
    
    (24.1
    )%LXE
    
    
    30,573
    
    
    
    23,944
    
    
    
    27.7Defense & Space
    
    
    16,534
    
    
    
    26,908
    
    
    
    (38.6
    )Global Tracking
    
    
    9,860
    
    
    
    6,913
    
    
    
    42.6Less intercompany sales
    
    
    (251
    )
    
    
    
    
    
    
    (2)Global Tracking external sales
    
    
    9,609
    
    
    
    6,913
    
    
    
    39.0Total
    
    $
    82,902
    
    
    
    92,278
    
    
    
    (10.2
    )Cost of sales percentage:Aviation
    
    
    67.2
    %
    
    
    61.2LXE
    
    
    58.3
    
    
    
    67.3Defense & Space
    
    
    77.5
    
    
    
    78.4Global Tracking
    
    
    52.5
    
    
    
    76.1Total
    
    
    64.3
    
    
    
    69.3Operating income (loss):Aviation
    
    $
    309
    
    
    
    5,066
    
    
    
    (93.9
    )LXE
    
    
    892
    
    
    
    (5,061
    )
    
    
    (117.6
    )Defense & Space
    
    
    918
    
    
    
    2,892
    
    
    
    (68.3
    )Global Tracking
    
    
    154
    
    
    
    (759
    )
    
    
    (120.3
    )Corporate & Other
    
    
    (349
    )
    
    
    (4,080
    )
    
    
    91.4Total
    
    $
    1,924
    
    
    
    (1,942
    )
    
    
    (199.1
    )Adjusted EBITDA (1)Aviation
    
    $
    2,096
    
    
    
    7,602
    
    
    
    (72.4
    )LXE
    
    
    1,638
    
    
    
    (4,087
    )
    
    
    (140.1
    )Defense & Space
    
    
    1,767
    
    
    
    3,698
    
    
    
    (52.2
    )Global Tracking
    
    
    940
    
    
    
    140
    
    
    
    571.4Corporate & Other
    
    
    612
    
    
    
    172
    
    
    
    (255.8
    )Total
    
    $
    7,053
    
    
    
    7,525
    
    
    
    (6.3
    )
 (1)
    
    Adjusted EBITDA is considered a non-GAAP financial measure. See
section entitled Adjusted EBITDA for an explanation of this measure and a reconciliation
to net earnings (loss).(2)
    
    The percentage change is not calculable.  18




---



##### Table of Contents



Aviation:
    LXE:
     19




---



##### Table of Contents



Defense & Space
    Global Tracking:
     20




---



##### Table of Contents



Adjusted EBITDA
  Defense &
    
    
    Global
    
    
    CorpAviation
    
    
    LXE
    
    
    Space
    
    
    Tracking
    
    
    & Other
    
    
    TotalThree Months Ended April 3, 2010Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    591Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    344(Loss) earnings before income taxes
    
    $
    (72
    )
    
    
    783
    
    
    
    922
    
    
    
    46
    
    
    
    (744
    )
    
    
    935Interest expense
    
    
    
    
    
    
    17
    
    
    
    
    
    
    
    
    
    
    
    460
    
    
    
    477Depreciation and amortization
    
    
    2,168
    
    
    
    838
    
    
    
    845
    
    
    
    894
    
    
    
    295
    
    
    
    5,040Impairment loss related charges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    384
    
    
    
    384Acquisition-related items
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    217
    
    
    
    217Adjusted EBITDA
    
    $
    2,096
    
    
    
    1,638
    
    
    
    1,767
    
    
    
    940
    
    
    
    612
    
    
    $
    7,053Three Months Ended April 4, 2009Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (2,968
    )Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Earnings (loss) before income taxes
    
    $
    5,556
    
    
    
    (5,138
    )
    
    
    2,892
    
    
    
    (407
    )
    
    
    (5,871
    )
    
    
    (2,968
    )Interest expense
    
    
    43
    
    
    
    85
    
    
    
    
    
    
    
    
    
    
    
    493
    
    
    
    621Depreciation and amortization
    
    
    2,003
    
    
    
    966
    
    
    
    806
    
    
    
    547
    
    
    
    285
    
    
    
    4,607Acquisition-related items
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,895
    
    
    
    3,895Acquisition-related foreign
exchange adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,370
    
    
    
    1,370Adjusted EBITDA
    
    $
    7,602
    
    
    
    (4,087
    )
    
    
    3,698
    
    
    
    140
    
    
    
    172
    
    
    $
    7,525
   21




---



##### Table of Contents



Backlog
  April 3
    
    
    December 312010
    
    
    2009Aviation
    
    $
    42.1
    
    
    
    49.4LXE
    
    
    21.1
    
    
    
    22.0Defense & Space
    
    
    87.3
    
    
    
    89.6Global Tracking
    
    
    22.2
    
    
    
    17.2Total
    
    $
    172.7
    
    
    
    178.2
  Liquidity and Capital Resources
       22




---



##### Table of Contents



Off-Balance Sheet Arrangements
      23




---



##### Table of Contents



Commitments and Contractual Obligations
 .
 Critical Accounting Policies
  Risk Factors and Forward-Looking Statements
  
    
    economic conditions in the U.S. and abroad and their effect on capital spending
in our principal markets;
    
    difficulty predicting the timing of receipt of major customer orders, and the
effect of customer timing decisions on our results;
    
    our successful completion of technological development programs and the effects
of technology that may be developed by, and patent rights that may be held or obtained by,
competitors;
    
    U.S. defense budget pressures on near-term spending priorities;
    
    uncertainties inherent in the process of converting contract awards into firm
contractual orders in the future;
    
    volatility of foreign currency exchange rates relative to the U.S. dollar and
their effect on purchasing power by international customers, and on the cost structure of
our operations outside the U.S., as well as the potential for realizing foreign exchange
gains and losses associated with assets or liabilities denominated in foreign currencies;
    
    successful resolution of technical problems, proposed scope changes, or
proposed funding changes that may be encountered on contracts;
    
    changes in our consolidated effective income tax rate caused by the extent to
which actual taxable earnings in the U.S., Canada and other taxing jurisdictions may vary
from expected taxable earnings, and the extent to which determined tax assets are
considered realizable;
    
    successful transition of products from development stages to an efficient
manufacturing environment;
  24




---



##### Table of Contents




    
    changes in the rate at which our products are returned for repair or
replacement under warranty;
    
    customer response to new products and services, and general conditions in our
target markets (such as logistics, and space-based communications), and whether these
responses and conditions develop according to our expectations;
    
    the increased potential for asset impairment charges as unfavorable economic or
financial market conditions, or other developments, might affect the fair value of one or
more of our business units;
    
    the success of certain of our customers in marketing our line of high-speed
commercial airline communications products as a complementary offering with their own lines
of avionics products;
    
    the continued availability of financing for various mobile and high-speed data
communications systems;
    
    risk that the recent turmoil in the credit markets may make it more difficult
for some customers to obtain financing and adversely affect their ability to pay, which in
turn could have an adverse impact on our business, operating results, and financial
condition;
    
    development of successful working relationships with local business and
government personnel in connection with the distribution and manufacture of products in
foreign countries;
    
    the demand growth for various mobile and high-speed data communications
services;
    
    our ability to attract and retain qualified senior management and other
personnel, particularly those with key technical skills;
    
    our ability to effectively integrate our acquired businesses, products or
technologies into our existing businesses and products, and the risk that any such acquired
businesses, products or technologies do not perform as expected, are subject to undisclosed
or unanticipated liabilities, or are otherwise dilutive to our earnings;
    
    the potential effects, on cash and results of discontinued operations, of final
resolution of potential liabilities under warranties and representations that we made, and
obligations assumed by purchasers, in connection with our dispositions of discontinued
operations;
    
    the availability, capabilities and performance of suppliers of basic materials,
electronic components and sophisticated subsystems on which we must rely in order to
perform according to contract requirements, or to introduce new products on the desired
schedule;
    
    uncertainties associated with U.S. export controls and the export license
process, which restrict our ability to hold technical discussions with customers, suppliers
and internal engineering resources and can reduce our ability to obtain sales from
customers outside the U.S. or to perform contracts with the desired level of efficiency or
profitability; and
    
    our ability to maintain compliance with the requirements of the Federal
Aviation Administration and the Federal Communications Commission, and with other
government regulations affecting our products and their production, service and
functioning.
  Effect of New Accounting Pronouncements
 Recently Issued Pronouncements Not Yet Adopted
   25




---



##### Table of Contents



Revenue Recognition  Multiple-Deliverable Revenue Arrangements,
 
    
    Eliminates the requirement for objective evidence of fair value of an undelivered item
for treatment of the delivered item as a separate unit of accounting;
    
    Requires use of the relative selling price method for allocating total consideration to
elements of the arrangement instead of the relative-fair-value method or the residual
method;
    
    Allows the use of an estimated selling price for any element within the arrangement to
allocate consideration to individual elements when vendor-specific objective evidence or
other third party evidence of selling price do not exist; and
    
    Expands the required disclosures.
 Software  Certain Revenue Arrangements That Include Software Elements
  
 Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
  Government-obligations money market funds, other money market
instruments, and interest-bearing time deposits, with maturity
dates of less than 3 months interest payable monthly at variable
rates (a weighted-average rate of 0.2% at April 3, 2010)
    
    $
    18,837Revolving credit agreement with U.S.
and Canadian banks, maturing in
February 2013, interest payable
quarterly at a variable rate (4.0%
at April 3, 2010)
    
    $
    19,000
    26




---



##### Table of Contents



Exchange Rate
    
    
    USD(USD per unit of
    
    
    in thousandslocal currency)
    
    
    (reporting currency)Australia
    
    0.9193 /AUD
    
    $
    2,801Belgium
    
    1.3491 /EUR
    
    
    1,664Canada
    
    0.9917 /CAD
    
    
    1,045Germany
    
    1.3491 /EUR
    
    
    886Netherlands
    
    1.3491 /EUR
    
    
    383United Kingdon
    
    1.5026 /GBP
    
    
    284Sweden
    
    0.1391 /SEK
    
    
    179France
    
    1.4316 /EUR
    
    
    176Italy
    
    1.3491 /EUR
    
    
    60Total amount subject to
foreign currency risk
    
    
    
    
    
    $
    7,478
  Exchange RateFunctionalCurrency per
    
    
    USDCurrency
    
    Functional
    
    
    Denominated
    
    
    EquivalentDenomination
    
    Currency
    
    
    Currency
    
    
    (in thousands)Accounts ReceivableUSD
    
    CAD
    
    
    1.0084
    
    
    $
    11,188USD
    
    EUR
    
    
    0.7412
    
    
    
    1,147USD
    
    GBP
    
    
    0.6576
    
    
    
    117Other currencies
    
    
    
    
    
    
    
    
    
    
    268$
    12,720Accounts PayableUSD
    
    CAD
    
    
    1.0084
    
    
    $
    1,429EUR
    
    GBP
    
    
    0.8875
    
    
    
    516GBP
    
    USD
    
    
    1.5207
    
    
    
    436EUR
    
    USD
    
    
    1.3479
    
    
    
    233EUR
    
    SEK
    
    
    9.7305
    
    
    
    161Other currencies
    
    
    
    
    
    
    
    
    
    
    123$
    2,898
  27




---



##### Table of Contents



Exchange RateFunctionalCurrency per
    
    
    USDCurrency
    
    Functional
    
    
    Denominated
    
    
    EquivalentDenomination
    
    Currency
    
    
    Currency
    
    
    (in thousands)USD
    
    CAD
    
    
    1.0084
    
    
    $
    8,074GBP
    
    CAD
    
    
    1.5404
    
    
    
    1,337GBP
    
    USD
    
    
    1.5206
    
    
    
    1,092USD
    
    GBP
    
    
    0.6576
    
    
    
    1,216USD
    
    EUR
    
    
    0.7412
    
    
    
    2,167Other currencies
    
    
    
    
    
    
    
    
    
    
    585$
    14,471
  Average
    
    
    FairNotional
    
    
    Contract
    
    
    ValueAmount
    
    
    Rate
    
    
    (USD)Foreign currency forward contracts:U.S. dollars (sell for Canadian dollars)
    
    14,500USD
    
    
    1.0439
    
    
    $
    469
  28




---



##### Table of Contents



Item 4.
    
    Controls and Procedures
 (a) Evaluation of Disclosure Controls and Procedures
   (b) Changes in Internal Control Over Financial Reporting
   29




---



##### Table of Contents



PART II
 OTHER INFORMATION
 
 Item 1A.
    
    Risk Factors
  
 Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
  ISSUER PURCHASES OF EQUITY SECURITIES
 (d) Maximum  Number(c) Total Number
    
    
    (or Approximateof Shares
    
    
    Dollar Value) ofPurchased as
    
    
    Shares that May YetPart of Publicly
    
    
    Be Purchased(a) Total Number
    
    
    (b) Average
    
    
    Announced
    
    
    Under the Plans orof Shares
    
    
    Price Paid
    
    
    Plans or
    
    
    Programs (3)Period
    
    Purchased (1)
    
    
    Per Share
    
    
    Program (2)
    
    
    (in millions)Period 1 2010 (January 1 to January 30)
    
    
    
    
    
    
    
    
    
    
    Period 2 2010 (January 31 to February
27)
    
    
    980
    
    
    $
    12.92
    
    
    
    Period 3 2010 (February 28 to April 3)
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    980
    
    
    $
    12.92
    
    
    
    
    
    
    $
    9.9
 (1)
    
    The category includes 980 shares delivered to us by employees to pay withholding taxes
due upon vesting of restricted share awards.(2)
    
    During the period covered by this Quarterly Report on Form 10-Q, no shares were
repurchased under the Companys $20 million repurchase program (the Program) which was
initially announced on July 30, 2008. Further repurchases are no longer permitted under
the terms of the Companys principal credit agreements.(3)
    
    This balance represents the value of shares that could be repurchased under the Program
as of April 3, 2010.  30




---



##### Table of Contents



Item 6.
    
    Exhibits
  3.1
    
    
    Second Amended and Restated Articles of Incorporation of EMS Technologies, Inc., effective
March 22, 1999 (incorporated by reference to Exhibit 3.1 to our Quarterly Report on Form 10-Q for
the quarter ended April 4, 2009).3.2
    
    
    Bylaws of EMS Technologies, Inc. as amended through December 21, 2009 (incorporated by
reference to Exhibit 3.2 to our Annual Report on Form 10-K for the year ended December 31, 2009).4.1
    
    
    Waiver agreement, dated March 31, 2010, to Credit Agreement among EMS Technologies, Inc. and
EMS Technologies Canada, Inc. and Bank of America as Domestic and Canadian Administrative Agent. *10.1
    
    
    Compensation Arrangements with Certain Officers. *31.1
    
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002. *31.2
    
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002. *32
    
    
    Certification of the Companys Chief Executive Officer and Chief Financial Officer pursuant
to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
 *
    
    Filed herewith  31




---



##### Table of Contents



SIGNATURES
  EMS TECHNOLOGIES, INC.By:
    
    /s/ Neilson A. Mackay
    
    Date: May 13, 2010Neilson A. MackayPresident, and Chief Executive Officer(Principal Executive Officer)By:
    
    /s/ Gary B. Shell
    
    Date: May 13, 2010Gary B. ShellSenior Vice President, Chief FinancialOfficer and Treasurer (Principal Financial Officer)
 AVAILABLE INFORMATION
 www.ems-t.com
  32