##### 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 2, 2011
 Commission file number 0-6072
 EMS TECHNOLOGIES, INC.
  Georgia
    
    58-1035424(State or other jurisdiction of incorporation or
    
    (IRS Employer ID Number)organization)
 660 Engineering Drive, Norcross, Georgia
    
    30092(Address of principal executive offices)
    
    (Zip Code)
  þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o
 o þ
  Class
    
    Number of SharesCommon Stock, $.10 par value
    
    15,340,186




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##### 



TABLE OF CONTENTS
 PagePART I  FINANCIAL INFORMATION
    
    
    2Item 1. Financial Statements
    
    
    2Consolidated Statements of Operations (unaudited)
    
    
    2Consolidated Balance Sheets (unaudited)
    
    
    3Consolidated Statements of Cash Flows (unaudited)
    
    
    5Notes to Consolidated Financial Statements (unaudited)
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    16Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    27Item 4. Controls and Procedures
    
    
    30PART II  OTHER INFORMATION
    
    
    31Item 1A. Risk Factors
    
    
    31Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    32Item 6. Exhibits
    
    
    33SIGNATURES
    
    
    34Exhibit 10.1Exhibit 10.2Exhibit 10.3Exhibit 31.1Exhibit 31.2Exhibit 32




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##### 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 2
    
    
    April 32011
    
    
    2010Product net sales
    
    $
    70,997
    
    
    
    65,235Service net sales
    
    
    14,040
    
    
    
    17,667Net sales
    
    
    85,037
    
    
    
    82,902Product cost of sales
    
    
    46,746
    
    
    
    43,777Service cost of sales
    
    
    6,814
    
    
    
    9,505Cost of sales
    
    
    53,560
    
    
    
    53,282Selling, general and administrative expenses
    
    
    22,234
    
    
    
    21,674Research and development expenses
    
    
    5,674
    
    
    
    5,421Impairment loss on goodwill related charges
    
    
    
    
    
    
    384Acquisition-related items
    
    
    
    
    
    
    217Operating income
    
    
    3,569
    
    
    
    1,924Interest income
    
    
    112
    
    
    
    181Interest expense
    
    
    (513
    )
    
    
    (477
    )Foreign exchange loss, net
    
    
    (179
    )
    
    
    (693
    )Earnings before income taxes
    
    
    2,989
    
    
    
    935Income tax expense
    
    
    595
    
    
    
    344Net earnings
    
    $
    2,394
    
    
    
    591Net earnings per share:Basic
    
    $
    0.16
    
    
    
    0.04Diluted
    
    
    0.16
    
    
    
    0.04Weighted-average number of common shares outstanding:Basic
    
    
    15,230
    
    
    
    15,179Diluted
    
    
    15,356
    
    
    
    15,206
   2




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##### Table of Contents



EMS Technologies, Inc. and Subsidiaries
 
 Consolidated Balance Sheets

(Unaudited)
 (in thousands)
 April 2
    
    
    December 312011
    
    
    2010ASSETSCurrent assets:Cash and cash equivalents
    
    $
    71,504
    
    
    
    55,938Trade accounts receivable, net of allowance for doubtful accounts of
$1,171 in 2011 and $1,389 in 2010
    
    
    64,358
    
    
    
    68,691Costs and estimated earnings in excess of billings on long-term
contracts
    
    
    21,191
    
    
    
    21,980Inventories
    
    
    45,179
    
    
    
    41,649Deferred income taxes
    
    
    3,896
    
    
    
    3,891Other current assets
    
    
    8,669
    
    
    
    7,319Total current assets
    
    
    214,797
    
    
    
    199,468Property, plant and equipment:Land
    
    
    1,150
    
    
    
    1,150Buildings and leasehold improvements
    
    
    19,319
    
    
    
    19,115Machinery and equipment
    
    
    121,441
    
    
    
    117,855Furniture and fixtures
    
    
    10,967
    
    
    
    10,850Total property, plant and equipment
    
    
    152,877
    
    
    
    148,970Less accumulated depreciation
    
    
    104,249
    
    
    
    100,587Net property, plant and equipment
    
    
    48,628
    
    
    
    48,383Deferred income taxes
    
    
    11,850
    
    
    
    11,845Goodwill
    
    
    60,548
    
    
    
    60,474Other intangible assets, net of accumulated amortization
of $30,431 in 2011 and $28,079 in 2010
    
    
    39,465
    
    
    
    41,319Costs and estimated earnings in excess of billings on long-term contracts
    
    
    10,169
    
    
    
    8,611Other assets
    
    
    2,898
    
    
    
    2,844Total assets
    
    $
    388,355
    
    
    
    372,944
   3




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##### Table of Contents



EMS Technologies, Inc. and Subsidiaries
Consolidated Balance Sheets (Unaudited), continued
(in thousands, except share data)
 April 2
    
    
    December 312011
    
    
    2010LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Current installments of long-term debt
    
    $
    1,530
    
    
    
    1,496Accounts payable
    
    
    30,657
    
    
    
    24,979Billings in excess of contract costs and estimated earnings on
long-term contracts
    
    
    8,767
    
    
    
    8,593Accrued compensation and related costs
    
    
    11,923
    
    
    
    20,626Deferred revenue
    
    
    11,045
    
    
    
    10,897Other current liabilities
    
    
    7,768
    
    
    
    6,946Total current liabilities
    
    
    71,690
    
    
    
    73,537Long-term debt, excluding current installments
    
    
    38,011
    
    
    
    27,476Deferred income taxes
    
    
    3,748
    
    
    
    4,859Other liabilities
    
    
    11,106
    
    
    
    10,052Total liabilities
    
    
    124,555
    
    
    
    115,924Shareholders equity:Preferred stock of $1.00 par value per share; Authorized 10,000
shares; none issued
    
    
    
    
    
    
    Common stock of $0.10 par value per share; Authorized 75,000 shares;
issued and
outstanding 15,336 in 2011 and 15,311 in 2010
    
    
    1,534
    
    
    
    1,531Additional paid-in capital
    
    
    138,912
    
    
    
    138,138Accumulated other comprehensive income  foreign currency translation
adjustment
    
    
    13,507
    
    
    
    9,898Retained earnings
    
    
    109,847
    
    
    
    107,453Total shareholders equity
    
    
    263,800
    
    
    
    257,020Commitments and contingenciesTotal liabilities and shareholders equity
    
    $
    388,355
    
    
    
    372,944
   4




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EMS Technologies, Inc. and Subsidiaries
 
 Consolidated Statements of Cash Flows

(Unaudited)
 (in thousands)
 Three Months EndedApril 2
    
    
    April 32011
    
    
    2010Cash flows from operating activities:Net earnings
    
    $
    2,394
    
    
    
    591Adjustments to reconcile net earnings to net cash provided by operating
activities:Depreciation and amortization
    
    
    4,836
    
    
    
    5,040Deferred income taxes
    
    
    (1,117
    )
    
    
    Stock-based compensation expense
    
    
    479
    
    
    
    400Change in fair value of contingent consideration liability
    
    
    
    
    
    
    217Payment for acquisition of business under contingent consideration
arrangement
    
    
    (325
    )
    
    
    Changes in
operating assets and liabilities, net of effects of acquisitions:Trade accounts receivable
    
    
    5,605
    
    
    
    327Costs and estimated earnings in excess of billings on long-term contracts
    
    
    (343
    )
    
    
    (1,276
    )Billings in excess of costs and estimated earnings on long-term contracts
    
    
    172
    
    
    
    805Inventories
    
    
    (2,373
    )
    
    
    (1,691
    )Accounts payable
    
    
    4,834
    
    
    
    1,741Income taxes
    
    
    972
    
    
    
    (467
    )Accrued compensation and retirement costs
    
    
    (8,939
    )
    
    
    501Deferred revenue
    
    
    840
    
    
    
    2,043Other
    
    
    (764
    )
    
    
    (652
    )Net cash provided by operating activities
    
    
    6,271
    
    
    
    7,579Cash flows from investing activities:Purchases of property, plant and equipment
    
    
    (2,601
    )
    
    
    (1,787
    )Proceeds from sales of assets
    
    
    11
    
    
    
    18Net cash used in investing activities
    
    
    (2,590
    )
    
    
    (1,769
    )Cash flows from financing activities:Net borrowings under revolving credit facility
    
    
    11,000
    
    
    
    500Repayment of other debt
    
    
    (432
    )
    
    
    (340
    )Deferred financing costs paid
    
    
    
    
    
    
    (28
    )Payment for acquisition of business under contingent consideration arrangement
    
    
    (626
    )
    
    
    Payments for repurchase and retirement of common shares
    
    
    (68
    )
    
    
    Proceeds from exercises of stock options
    
    
    366
    
    
    
    Net cash provided by financing activities
    
    
    10,240
    
    
    
    132Effect of changes in exchange rates on cash and cash equivalents
    
    
    1,645
    
    
    
    607Net change in cash and cash equivalents
    
    
    15,566
    
    
    
    6,549Cash and cash equivalents at beginning of period
    
    
    55,938
    
    
    
    47,174Cash and cash equivalents at end of period
    
    $
    71,504
    
    
    
    53,723
   5




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EMS Technologies, Inc. and Subsidiaries
 
 Notes to Consolidated Financial Statements (Unaudited)
 April 2, 2011 and April 3, 2010
 1. Basis of Presentation
    Managements Use of Estimates
   Recently Adopted Accounting Pronouncements
 Improving Disclosures About Fair Value Measurements
 Disclosure of Supplementary Pro Forma Information
for Business Combinations TM Business Combinations
  6




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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
   7




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
    
    Certain arrangements require that the Company design and develop technology
products to specifications provided by the customer and manufacture and deliver the
technology products. Such arrangements may also include services. These arrangements
generally do not fall under the guidelines of the new accounting standards updates, but are
accounted for in accordance with specific accounting guidance for construction-type and
production-type contracts for which specifications are provided by the customer, generally
following the percentage-of-completion method of accounting. If an arrangement includes
post-contract support, revenue for the support services is generally recognized on the
straight-line basis over the period of support.
 
    
    Other customer arrangements include the delivery of a standard product and a
related service contract that provides warranty and product maintenance over periods
ranging from one to three years. Generally, the products are considered a separate unit of
accounting, and revenue is recognized upon delivery. The service contracts are accounted
for as separately priced extended warranty and product maintenance contracts and the
revenue is deferred based on the stated contract price and recognized in income on a
straight-line basis over the contract period.
 
    
    The Company also enters arrangements under which the Company delivers a
standard product and one or more services, such as, installation, training certification,
airtime and support. Under certain of these arrangements, the product and certain services
are considered a single unit of accounting since the product does not have standalone value
without the related services. Under such arrangements the revenue is recognized for that
combined unit of accounting when the revenue recognition criteria are met for the services.
In other arrangements, the product does have standalone value without the service, in
which case the revenue is recognized when the recognition criteria are met for that unit of
accounting. The arrangement consideration is allocated to the units of accounting based on
the relative selling prices of each element on a standalone basis. The standalone selling
prices for each element are determined based on the best available information for each
element of the arrangement. Many of the Companys products and services are sold in
standalone transactions, in which case the Company uses the selling prices in those
standalone sales transactions to comparable customers for the standalone selling prices.
Such standalone sales are considered vendor specific objective evidence of selling price.
For products and services for which the Company has no, or limited, standalone sales
transactions, the Company estimates standalone selling price using a combination of the
limited standalone sales, price lists, cost plus margins, standalone sales of similar
products and stated contract prices.
  8




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2. Goodwill and Other Intangible Assets
  GlobalAviation
    
    
    LXE
    
    
    Tracking
    
    
    TotalBalance as of December 31, 2010
    
    $
    35,108
    
    
    
    1,937
    
    
    
    23,429
    
    
    
    60,474Foreign currency translation adjustment
    
    
    
    
    
    
    74
    
    
    
    
    
    
    
    74Balance as of April 2, 2011
    
    $
    35,108
    
    
    
    2,011
    
    
    
    23,429
    
    
    
    60,548
   As of April 2, 2011Gross
    
    
    
    
    
    
    NetCarrying
    
    
    Accumulated
    
    
    CarryingAmount
    
    
    Amortization
    
    
    AmountDeveloped technology
    
    $
    41,835
    
    
    
    20,529
    
    
    
    21,306Customer relationships
    
    
    19,287
    
    
    
    5,392
    
    
    
    13,895Trade names and trademarks
    
    
    6,334
    
    
    
    2,188
    
    
    
    4,146Other
    
    
    2,440
    
    
    
    2,322
    
    
    
    118$
    69,896
    
    
    
    30,431
    
    
    
    39,465
 As of December 31, 2010Gross
    
    
    
    
    
    
    NetCarrying
    
    
    Accumulated
    
    
    CarryingAmount
    
    
    Amortization
    
    
    AmountDeveloped technology
    
    $
    41,525
    
    
    
    19,039
    
    
    
    22,486Customer relationships
    
    
    19,164
    
    
    
    4,787
    
    
    
    14,377Trade names and trademarks
    
    
    6,281
    
    
    
    1,961
    
    
    
    4,320Other
    
    
    2,428
    
    
    
    2,292
    
    
    
    136$
    69,398
    
    
    
    28,079
    
    
    
    41,319
   9




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3. 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.
      4. Interim Segment Disclosures
    10




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Three Months EndedApril 2
    
    
    April 32011
    
    
    2010Net sales:Aviation
    
    $
    25,010
    
    
    
    26,186Defense & Space
    
    
    14,072
    
    
    
    16,534LXE
    
    
    36,219
    
    
    
    30,573Global Tracking
    
    
    9,908
    
    
    
    9,860Less intercompany sales
    
    
    (172
    )
    
    
    (251
    )Global Tracking external sales
    
    
    9,736
    
    
    
    9,609Total
    
    $
    85,037
    
    
    $
    82,902Operating income (loss):Aviation
    
    $
    825
    
    
    
    309Defense & Space
    
    
    432
    
    
    
    918LXE
    
    
    1,685
    
    
    
    892Global Tracking
    
    
    205
    
    
    
    154Corporate & Other
    
    
    422
    
    
    
    (349
    )Total
    
    $
    3,569
    
    
    
    1,924Earnings (loss) from continuing operations
before income taxes:Aviation
    
    $
    802
    
    
    
    (72
    )Defense & Space
    
    
    432
    
    
    
    922LXE
    
    
    1,657
    
    
    
    783Global Tracking
    
    
    159
    
    
    
    46Corporate & Other
    
    
    (61
    )
    
    
    (744
    )Total
    
    $
    2,989
    
    
    
    935
  11




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April 2
    
    
    December 312011
    
    
    2010Assets:Aviation
    
    $
    150,414
    
    
    
    149,834Defense & Space
    
    
    46,259
    
    
    
    45,968LXE
    
    
    91,890
    
    
    
    78,588Global Tracking
    
    
    79,384
    
    
    
    80,103Corporate & Other
    
    
    20,408
    
    
    
    18,451Total
    
    $
    388,355
    
    
    
    372,944Concentration of net assets by geographic
region:United States
    
    $
    65,879
    
    
    
    77,006Canada
    
    
    74,952
    
    
    
    68,677Europe
    
    
    113,543
    
    
    
    101,880Other
    
    
    9,426
    
    
    
    9,457Total
    
    $
    263,800
    
    
    
    257,020
  5. Earnings Per Share
  Three Months EndedApril 2
    
    
    April 32011
    
    
    2010Basic weighted-average number of common shares
outstanding
    
    
    15,230
    
    
    
    15,179Dilutive potential shares using the treasury share method
    
    
    126
    
    
    
    27Diluted weighted-average number of common shares
outstanding
    
    
    15,356
    
    
    
    15,206Shares 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
    
    
    660
    
    
    
    1,081
  12




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6. Comprehensive Income
  Three Months EndedApril 2
    
    
    April 32011
    
    
    2010Net earnings
    
    $
    2,394
    
    
    
    591Other comprehensive income:Foreign currency translation adjustment
    
    
    3,609
    
    
    
    1,811$
    6,003
    
    
    
    2,402
 7. Inventories
  April 2
    
    
    December 312011
    
    
    2010Parts and materials
    
    $
    26,966
    
    
    
    24,996Work-in-process
    
    
    7,602
    
    
    
    6,127Finished goods
    
    
    10,611
    
    
    
    10,526$
    45,179
    
    
    
    41,649
  8. Revolving Credit Facility
   9. Warranty Liability
   13




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Three Months EndedApril 2
    
    
    April 32011
    
    
    2010Balance at beginning of the period
    
    $
    4,205
    
    
    
    4,085Accruals for warranties issued during the period
    
    
    955
    
    
    
    762Settlements made during the period
    
    
    (736
    )
    
    
    (337
    )Balance at end of period
    
    $
    4,424
    
    
    
    4,510
 10. Stock-Based and Other Compensation
   11. Income Taxes
   12. Litigation
   14




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13. Subsequent Events
   15




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Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
   
    
    Aviation Designs and develops 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 $85.0 million in the three months ended April 2, 2011, up
2.6% from the same period in 2010, reflecting the second highest first quarter sales in our
history. The increase in net sales was mainly driven by record first quarter sales
achieved by our LXE division, reflecting the continued improvement in the overall logistics
market and the positive effects of changes in its marketing strategy. Net sales from our
D&S and Aviation segments were lower in the three months ended April 2, 2011 as compared to
the same period in 2010 reflecting the slower recovery in the defense and aviation markets.
Net sales from our Global Tracking segment were relatively unchanged from the prior year.
 
    
    Our net earnings for the three months ended April 2, 2011 were $2.4 million compared
with $0.6 million in the three months ended April 3, 2010. This improvement of $1.8
million was mainly due to an increase in operating income in the first quarter of 2011 at LXE and Aviation of $0.8
million and $0.5 million, respectively. Net earnings for the three months ended April 3,
2010 included acquisition and impairment-related charges of $0.6 million. Our net earnings
also improved in the three months ended April 2, 2011 due to a $0.5 million favorable
change in foreign currency exchange gains and losses.
  16




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
    
    MMI Investments, L.P. and certain of its affiliates launched a proxy contest
relating to our 2011 Annual Meeting of Shareholders, and nominated their own slate of four
nominees for election to our board of directors. The ongoing proxy contest could adversely
affect our business. During the three months ended April 2, 2011 we incurred
$0.7 million related to the contested proxy; such costs are included in selling, general
and administrative expense in the consolidated statement of operations.
 
    
    Certain of our markets continue to see the unfavorable impact of the economy, and they
are not immune to increasing pressures and risks. We expect that we will continue to be
faced with these economic pressures through 2011. The economy and other factors could
cause a decline in expected future cash flows for one or more of our business units, and it
is reasonably possible that we may be required to recognize impairment losses related to
goodwill or other long-lived assets.
 Recent Developments or Strategic Alternatives
  Results of Operations
  Three Months EndedApril 2
    
    
    April 32011
    
    
    2010Product net sales
    
    $
    70,997
    
    
    
    83.5
    %
    
    $
    65,235
    
    
    
    78.7
    %Service net sales
    
    
    14,040
    
    
    
    16.5
    
    
    
    17,667
    
    
    
    21.3Net sales
    
    
    85,037
    
    
    
    100.0
    
    
    
    82,902
    
    
    
    100.0Product cost of sales
    
    
    46,746
    
    
    
    65.8
    
    
    
    43,777
    
    
    
    67.1Service cost of sales
    
    
    6,814
    
    
    
    48.5
    
    
    
    9,505
    
    
    
    53.8Cost of sales
    
    
    53,560
    
    
    
    63.0
    
    
    
    53,282
    
    
    
    64.3Selling, general and administrative expenses
    
    
    22,234
    
    
    
    26.1
    
    
    
    21,674
    
    
    
    26.1Research and development expenses
    
    
    5,674
    
    
    
    6.7
    
    
    
    5,421
    
    
    
    6.5Impairment loss on goodwill related charges
    
    
    
    
    
    
    
    
    
    
    384
    
    
    
    0.5Acquisition-related items
    
    
    
    
    
    
    
    
    
    
    217
    
    
    
    0.3Operating income
    
    
    3,569
    
    
    
    4.2
    
    
    
    1,924
    
    
    
    2.3Interest income
    
    
    112
    
    
    
    0.1
    
    
    
    181
    
    
    
    0.2Interest expense
    
    
    (513
    )
    
    
    (0.6
    )
    
    
    (477
    )
    
    
    (0.6
    )Foreign exchange loss, net
    
    
    (179
    )
    
    
    (0.2
    )
    
    
    (693
    )
    
    
    (0.8
    )Earnings from continuing operations
before income taxes
    
    
    2,989
    
    
    
    3.5
    
    
    
    935
    
    
    
    1.1Income tax expense
    
    
    595
    
    
    
    0.7
    
    
    
    344
    
    
    
    0.4Net earnings
    
    $
    2,394
    
    
    
    2.8
    %
    
    $
    591
    
    
    
    0.7
    %
   17




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##### Table of Contents



18




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##### Table of Contents



Segment Analysis
  Three Months Ended
    
    
    PercentageApril 2
    
    
    April 3
    
    
    Increase2011
    
    
    2010
    
    (Decrease)Net sales:Aviation
    
    $
    25,010
    
    
    
    26,186
    
    
    
    (4.5
    )%Defense & Space
    
    
    14,072
    
    
    
    16,534
    
    
    
    (14.9
    )LXE
    
    
    36,219
    
    
    
    30,573
    
    
    
    18.5Global Tracking
    
    
    9,908
    
    
    
    9,860
    
    
    
    0.5Less intercompany sales
    
    
    (172
    )
    
    
    (251
    )Global Tracking external sales
    
    
    9,736
    
    
    
    9,609Total
    
    $
    85,037
    
    
    
    82,902
    
    
    
    2.6Cost of sales percentage:Aviation
    
    
    64.8
    %
    
    
    67.2
    
    
    
    (2.4
    )Defense & Space
    
    
    76.2
    
    
    
    77.5
    
    
    
    (1.3
    )LXE
    
    
    60.9
    
    
    
    58.3
    
    
    
    2.6Global Tracking
    
    
    55.3
    
    
    
    52.5
    
    
    
    2.8Total
    
    
    63.0
    
    
    
    64.3
    
    
    
    (1.3
    )Operating income (loss):Aviation
    
    $
    825
    
    
    
    309
    
    
    
    167.0Defense & Space
    
    
    432
    
    
    
    918
    
    
    
    (52.9
    )LXE
    
    
    1,685
    
    
    
    892
    
    
    
    88.9Global Tracking
    
    
    205
    
    
    
    154
    
    
    
    33.1Corporate & Other
    
    
    422
    
    
    
    (349
    )
    
    
    (2)Total
    
    $
    3,569
    
    
    
    1,924
    
    
    
    85.5Adjusted EBITDA (1)Aviation
    
    $
    2,769
    
    
    
    2,159
    
    
    
    28.3Defense & Space
    
    
    1,288
    
    
    
    1,831
    
    
    
    (29.7
    )LXE
    
    
    2,714
    
    
    
    1,707
    
    
    
    59.0Global Tracking
    
    
    1,110
    
    
    
    955
    
    
    
    16.2Corporate & Other
    
    
    1,656
    
    
    
    801
    
    
    
    106.7Total
    
    $
    9,537
    
    
    
    7,453
    
    
    
    28.0
 
 (1)
    
    Adjusted EBITDA is a financial measure that is not defined within
generally accepted accounting principles (GAAP). See section entitled Adjusted EBITDA
for an explanation of this measure and a reconciliation to net earnings.(2)
    
    The percentage change is not calculable or not meaningful.  19




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##### Table of Contents



Aviation:
    LXE:
     20




---



##### Table of Contents



Defense & Space
    Global Tracking:
     21




---



##### Table of Contents



Supplemental Information
  Three Months EndedApril 2
    
    
    April 32011
    
    
    2010Net sales:Aviation
    
    $
    25,010
    
    
    
    26,186Defense & Space
    
    
    14,072
    
    
    
    16,534AeroConnectivity
    
    
    39,082
    
    
    
    42,720LXE
    
    
    36,219
    
    
    
    30,573Global Tracking
    
    
    9,736
    
    
    
    9,609Global Resource Management
    
    
    45,955
    
    
    
    40,182Total
    
    $
    85,037
    
    
    
    82,902Cost of sales percentage:Aviation
    
    
    64.8
    %
    
    
    67.2Defense & Space
    
    
    76.2
    
    
    
    77.5AeroConnectivity
    
    
    68.9
    
    
    
    71.2LXE
    
    
    60.9
    
    
    
    58.3Global Tracking
    
    
    55.3
    
    
    
    52.5Global Resource Management
    
    
    59.7
    
    
    
    57.3Total
    
    
    63.0
    
    
    
    64.3Operating income (loss):Aviation
    
    $
    825
    
    
    
    309Defense & Space
    
    
    432
    
    
    
    918AeroConnectivity
    
    
    1,257
    
    
    
    1,227LXE
    
    
    1,685
    
    
    
    892Global Tracking
    
    
    205
    
    
    
    154Global Resource Management
    
    
    1,890
    
    
    
    1,046Corporate & Other
    
    
    422
    
    
    
    (349
    )Total
    
    $
    3,569
    
    
    
    1,924Adjusted EBITDAAviation
    
    $
    2,769
    
    
    
    2,159Defense & Space
    
    
    1,288
    
    
    
    1,831AeroConnectivity
    
    
    4,057
    
    
    
    3,990LXE
    
    
    2,714
    
    
    
    1,707Global Tracking
    
    
    1,110
    
    
    
    955Global Resource Management
    
    
    3,824
    
    
    
    2,662Corporate & Other
    
    
    1,656
    
    
    
    801Total
    
    $
    9,537
    
    
    
    7,453
  22




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##### Table of Contents



Adjusted EBITDA (a non-GAAP financial measure)
  Global
    
    
    Corp &Aviation
    
    
    LXE
    
    
    D&S
    
    
    Tracking
    
    
    Other
    
    
    TotalThree Months Ended April 2, 2011Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    2,394Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    595Earnings (loss) before income taxes
    
    $
    802
    
    
    
    1,657
    
    
    
    432
    
    
    
    159
    
    
    
    (61
    )
    
    
    2,989Interest expense
    
    
    3
    
    
    
    24
    
    
    
    
    
    
    
    
    
    
    
    486
    
    
    
    513Depreciation and amortization
    
    
    1,878
    
    
    
    959
    
    
    
    773
    
    
    
    927
    
    
    
    299
    
    
    
    4,836Stock-based compensation
    
    
    86
    
    
    
    74
    
    
    
    83
    
    
    
    24
    
    
    
    212
    
    
    
    479Proxy contest costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    720
    
    
    
    720Adjusted EBITDA
    
    $
    2,769
    
    
    
    2,714
    
    
    
    1,288
    
    
    
    1,110
    
    
    
    1,656
    
    
    $
    9,537Three Months Ended April 3, 2010Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    591Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    344Earnings (loss) before income taxes
    
    $
    (72
    )
    
    
    783
    
    
    
    922
    
    
    
    47
    
    
    
    (745
    )
    
    
    935Interest expense
    
    
    
    
    
    
    17
    
    
    
    
    
    
    
    
    
    
    
    460
    
    
    
    477Depreciation and amortization
    
    
    2,168
    
    
    
    838
    
    
    
    845
    
    
    
    894
    
    
    
    295
    
    
    
    5,040Stock-based compensation
    
    
    63
    
    
    
    69
    
    
    
    64
    
    
    
    14
    
    
    
    190
    
    
    
    400Impairment loss on goodwill
related charges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    384
    
    
    
    384Acquisition-related items
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    217
    
    
    
    217Adjusted EBITDA
    
    $
    2,159
    
    
    
    1,707
    
    
    
    1,831
    
    
    
    955
    
    
    
    801
    
    
    $
    7,453
   23




---



##### Table of Contents



Backlog
  April 2
    
    
    December 312011
    
    
    2010Aviation
    
    $
    39,884
    
    
    
    38,049Defense & Space
    
    
    87,013
    
    
    
    73,058LXE
    
    
    25,078
    
    
    
    29,106Global Tracking
    
    
    19,567
    
    
    
    15,449Total
    
    $
    171,542
    
    
    
    155,662
  Liquidity and Capital Resources
       24




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##### Table of Contents



Off-Balance Sheet Arrangements
  Commitments and Contractual Obligations
  Critical Accounting Policies
  Revenue Recognition 
Multiple-Deliverable Revenue Arrangements Software  Certain Revenue
Arrangements That Include Software Elements
  25




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##### Table of Contents



Risk Factors and Forward-Looking Statements
  
    
    the progress and results of our formal process to pursue strategic alternatives, including
a possible sale transaction;
 
    
    the cost, time required of our management and employees and general disruption
to our operations associated with responding to the proxy contest by MMI Investments, L.P.;
 
    
    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 deferred tax assets are considered
realizable;
 
    
    successful transition of products from development stages to an efficient
manufacturing environment;
 
    
    changes in the rate at which our products are returned for repair or
replacement under warranty;
 
    
    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 estimated 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;
  26




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##### Table of Contents




    
    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.
  
 Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
  Money market funds with interest payable monthly at variable rates
and interest-bearing time deposits with interest payable upon
maturity (a weighted-average rate of 1.1% at April 2, 2011)
    
    $
    31,938Revolving credit agreement with U.S. and Canadian banks, maturing
in February 2013, interest payable quarterly at a variable rate
(3.75% at April 2, 2011)
    
    $
    32,000
    27




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##### Table of Contents



Exchange Rate
    
    
    Receivable /Functional
    
    
    (Payable)Currency per
    
    
    USDCurrency
    
    Functional
    
    Denominated
    
    
    EquivalentDenomination
    
    Currency
    
    Currency
    
    
    (in thousands)AUD
    
    CAD
    
    
    1.0001
    
    
    $
    3,991USD
    
    CAD
    
    
    0.9644
    
    
    
    (2,036
    )EUR
    
    GBP
    
    
    0.8812
    
    
    
    (1,001
    )EUR
    
    SEK
    
    
    8.9464
    
    
    
    (734
    )Other currencies
    
    
    
    
    
    
    
    
    45$
    265
  Exchange RateFunctionalCurrency per
    
    
    USDCurrency
    
    Functional
    
    Denominated
    
    
    EquivalentDenomination
    
    Currency
    
    Currency
    
    
    (in thousands)Accounts ReceivableUSD
    
    CAD
    
    
    0.9644
    
    
    $
    15,234USD
    
    SEK
    
    
    6.2972
    
    
    
    607USD
    
    EUR
    
    
    0.7031
    
    
    
    591GBP
    
    EUR
    
    
    1.1348
    
    
    
    573Other currencies
    
    
    
    
    
    
    
    
    473$
    17,478Accounts PayableUSD
    
    CAD
    
    
    0.9644
    
    
    $
    1,445GBP
    
    USD
    
    
    1.6115
    
    
    
    235Other currencies
    
    
    
    
    
    
    
    
    187$
    1,867
  28




---



##### Table of Contents



Exchange RateFunctionalCurrency per
    
    
    USDCurrency
    
    Functional
    
    Denominated
    
    
    EquivalentDenomination
    
    Currency
    
    Currency
    
    
    (in thousands)GBP
    
    CAD
    
    
    1.5533
    
    
    $
    1,237USD
    
    CAD
    
    
    0.9644
    
    
    
    948EUR
    
    GBP
    
    
    0.8812
    
    
    
    722GBP
    
    USD
    
    
    1.6115
    
    
    
    453EUR
    
    CAD
    
    
    1.3688
    
    
    
    357AUD
    
    CAD
    
    
    1.0001
    
    
    
    349Other currencies
    
    
    
    
    
    
    
    
    532$
    4,598
  Average
    
    FairNotional
    
    
    Contract
    
    ValueAmount
    
    
    Rate
    
    (USD)Foreign currency forward contracts:U.S. dollars (sell for Canadian dollars)
    
    14,300       USD
    
    0.9751
    
    $
    143
  29




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##### Table of Contents



Item 4.
    
    Controls and Procedures
 (a) Evaluation of Disclosure Controls and Procedures
   (b) Changes in Internal Control Over Financial Reporting
 Revenue Recognition 
Multiple-Deliverable Revenue Arrangements Software  Certain Revenue
Arrangements That Include Software Elements
  30




---



##### Table of Contents



PART II
 OTHER INFORMATION
 
 Item 1A.
    
    Risk Factors
  Our business could be negatively affected as a result of the formal process initiated by our board
to pursue strategic alternatives and the ongoing proxy contest.
  
    
    conducting the formal process and responding to proxy contests and other actions by
activist shareholders can be costly and time-consuming, disrupting our operations and
diverting the attention of management and our employees; and
 
    
    perceived uncertainties as to our future may result in the loss of potential
business opportunities and may make it more difficult to attract and retain qualified
personnel and business partners.
 The formal process initiated by the board of directors to pursue strategic alternatives may not
result in a transaction.
   31




---



##### Table of Contents



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
    
    
    ProgramsPeriod
    
    Purchased (1)
    
    
    Per Share
    
    
    Program (2)
    
    
    (in millions)Period 1 2011 (January 1 to January 29)
    
    
    
    
    
    
    
    
    
    
    Period 2 2011 (January 30 to February
26)
    
    
    1,486
    
    
    $
    19.71
    
    
    
    Period 3 2011 (February 27 to April 2)
    
    
    2,047
    
    
    
    18.91
    
    
    
    Total
    
    
    3,533
    
    
    $
    19.25
    
    
    
    
    
    
    $
    
 
 (1)
    
    The category represents 3,533 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.  32




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##### Table of Contents



Item 6.
    
    Exhibits
  3.1
    
    
    Second Amended and Restated Articles of Incorporation of EMS Technologies, Inc., effective
March 22, 1999 (incorporated by reference to Exhibit 3.1 to 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).10.1
    
    
    Form of Executive Protection Agreement dated as of March 7, 2011 between the Company and its
Named Executive Officers other than the Chief Executive Officer. *10.2
    
    
    Executive Protection Agreement dated as of March 7, 2011 between the Company and Neilson A.
Mackay. *10.3
    
    
    Executive Annual Incentive Compensation Plan as amended through March 7, 2011. *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  33




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##### Table of Contents



SIGNATURES
  EMS TECHNOLOGIES, INC.By:
    
    /s/ Neilson A. Mackay
    
    
    
    Date: May 12, 2011Neilson A. Mackay
President, and Chief Executive Officer
(Principal Executive Officer)By:
    
    /s/ Gary B. Shell
    
    
    
    Date: May 12, 2011Gary B. Shell
Senior Vice President, Chief Financial
Officer and Treasurer (Principal Financial Officer)
 AVAILABLE INFORMATION
 www.ems-t.com
  34