##### 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 SECURITIESEXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2007
 Commission file number 0-6072
 EMS TECHNOLOGIES, INC.
  Georgia
    
    58-1035424(State or other jurisdiction of
    
    (IRS Employer ID Number)incorporation or organization)660 Engineering Drive, Norcross, Georgia
    
    30092(Address of principal executive offices)
    
    (Zip Code)
 (770) 263-9200  Registrants Telephone Number, Including Area Code
 þ o
  o þ o
 o þ
  Class
    
    Number of SharesCommon Stock, $.10 par Value
    
    15,374,073
 AVAILABLE INFORMATION
 www.ems-t.com




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##### Table of Contents



TABLE OF CONTENTS
 PART I  FINANCIAL INFORMATION
    
    
    2ITEM 1. Financial Statements
    
    
    2Consolidated Statements of Operations
    
    
    2Consolidated Balance Sheets
    
    
    3Consolidated Statements of Cash Flows
    
    
    5Notes to Consolidated Financial Statements
    
    
    6ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    12ITEM 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    25ITEM 4. Controls and Procedures
    
    
    26PART II  OTHER INFORMATION
    
    
    27ITEM 1A. Risk Factors
    
    
    27ITEM 4. Submission of Matters to a Vote of Security Holders
    
    
    27ITEM 6. Exhibits
    
    
    27SIGNATURES
    
    
    28EX-10.1 2007 STOCK INCENTIVE PLANEX-10.2 EXECUTIVE ANNUAL INCENTIVE PLAN, AS AMENDED AND RESTATEDEX-31.1 SECTION 302, CERTIFICATION OF THE CEOEX-31.2 SECTION 302, CERTIFICATION OF THE CFOEX-32 SECTION 906, CERTIFICATION OF THE CEO AND CFO




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PART I
 FINANCIAL INFORMATION
 
 ITEM 1. Financial Statements
 EMS Technologies, Inc. and Subsidiaries
 
 Consolidated Statements of Operations (Unaudited)
 (in thousands, except per share data)
 Quarters Ended
    
    
    Six Months EndedJune 30
    
    
    July 1
    
    
    June 30
    
    
    July 12007
    
    
    2006
    
    
    2007
    
    
    2006Product net sales
    
    $
    62,061
    
    
    
    56,308
    
    
    
    118,321
    
    
    
    107,165Service net sales
    
    
    10,086
    
    
    
    8,738
    
    
    
    20,400
    
    
    
    16,926Net sales
    
    
    72,147
    
    
    
    65,046
    
    
    
    138,721
    
    
    
    124,091Product cost of sales
    
    
    39,290
    
    
    
    35,553
    
    
    
    73,864
    
    
    
    68,030Service cost of sales
    
    
    5,950
    
    
    
    5,597
    
    
    
    13,012
    
    
    
    11,021Cost of sales
    
    
    45,240
    
    
    
    41,150
    
    
    
    86,876
    
    
    
    79,051Selling, general and administrative expenses
    
    
    18,147
    
    
    
    16,481
    
    
    
    35,750
    
    
    
    31,443Research and development expenses
    
    
    4,780
    
    
    
    4,050
    
    
    
    9,037
    
    
    
    7,854Operating income
    
    
    3,980
    
    
    
    3,365
    
    
    
    7,058
    
    
    
    5,743Interest income
    
    
    1,489
    
    
    
    621
    
    
    
    2,856
    
    
    
    962Interest expense
    
    
    (547
    )
    
    
    (446
    )
    
    
    (1,000
    )
    
    
    (1,041
    )Foreign exchange loss
    
    
    (324
    )
    
    
    (337
    )
    
    
    (476
    )
    
    
    (655
    )Earnings from continuing operations before income
taxes
    
    
    4,598
    
    
    
    3,203
    
    
    
    8,438
    
    
    
    5,009Income tax expense
    
    
    1,024
    
    
    
    962
    
    
    
    1,984
    
    
    
    1,504Earnings from continuing operations
    
    
    3,574
    
    
    
    2,241
    
    
    
    6,454
    
    
    
    3,505Discontinued operations (note 2):Earnings (loss) from discontinued operations before
income taxes
    
    
    2
    
    
    
    (556
    )
    
    
    (566
    )
    
    
    (1,170
    )Income tax benefit (expense)
    
    
    1
    
    
    
    (13
    )
    
    
    102
    
    
    
    (435
    )Earnings (loss) from discontinued operations
    
    
    3
    
    
    
    (569
    )
    
    
    (464
    )
    
    
    (1,605
    )Net earnings
    
    $
    3,577
    
    
    
    1,672
    
    
    
    5,990
    
    
    
    1,900Net earnings (loss) per share:Basic:From continuing operations
    
    $
    0.23
    
    
    
    0.15
    
    
    
    0.42
    
    
    
    0.25From discontinued operations
    
    
    
    
    
    
    (0.04
    )
    
    
    (0.03
    )
    
    
    (0.12
    )Net earnings
    
    $
    0.23
    
    
    
    0.11
    
    
    
    0.39
    
    
    
    0.13Diluted:From continuing operations
    
    $
    0.23
    
    
    
    0.15
    
    
    
    0.42
    
    
    
    0.25From discontinued operations
    
    
    
    
    
    
    (0.04
    )
    
    
    (0.03
    )
    
    
    (0.12
    )Net earnings
    
    $
    0.23
    
    
    
    0.11
    
    
    
    0.39
    
    
    
    0.13Weighted average number of shares (note 3):Basic
    
    
    15,312
    
    
    
    15,185
    
    
    
    15,303
    
    
    
    14,083Diluted
    
    
    15,388
    
    
    
    15,252
    
    
    
    15,384
    
    
    
    14,147
  2




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EMS Technologies, Inc. and Subsidiaries
 
 Consolidated Balance Sheets (Unaudited)
 (in thousands)
 June 30
    
    
    Dec 312007
    
    
    2006ASSETSCurrent assets:Cash and cash equivalents
    
    $
    117,043
    
    
    
    109,431Restricted cash
    
    
    81
    
    
    
    162Trade accounts receivable, net (note 5)
    
    
    81,108
    
    
    
    93,720Inventories, net (note 6)
    
    
    29,699
    
    
    
    26,042Deferred income taxes, net
    
    
    1,963
    
    
    
    1,963Other current assets
    
    
    6,069
    
    
    
    7,697Total current assets
    
    
    235,963
    
    
    
    239,015Property, plant and equipment:Land
    
    
    1,150
    
    
    
    1,150Buildings and leasehold improvements
    
    
    15,526
    
    
    
    15,361Machinery and equipment
    
    
    78,149
    
    
    
    72,569Furniture and fixtures
    
    
    9,326
    
    
    
    7,763Total property, plant and equipment
    
    
    104,151
    
    
    
    96,843Less accumulated depreciation and amortization
    
    
    69,846
    
    
    
    65,108Net property, plant and equipment
    
    
    34,305
    
    
    
    31,735Deferred income taxes, net  non-current
    
    
    6,282
    
    
    
    6,282Intangible assets, net
    
    
    1,901
    
    
    
    2,084Goodwill
    
    
    9,982
    
    
    
    9,982Other assets
    
    
    7,192
    
    
    
    2,586Total assets
    
    $
    295,625
    
    
    
    291,684
  3




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EMS Technologies, Inc. and Subsidiaries
Consolidated Balance Sheets (Unaudited), continued
(in thousands, except share data)
 June 30
    
    
    Dec 312007
    
    
    2006LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Current installments of long-term debt
    
    $
    2,737
    
    
    
    3,102Accounts payable
    
    
    23,743
    
    
    
    29,285Billings in excess of contract costs
    
    
    7,798
    
    
    
    7,899Accrued compensation costs
    
    
    7,122
    
    
    
    8,042Accrued retirement costs
    
    
    1,403
    
    
    
    2,666Deferred service revenue
    
    
    6,976
    
    
    
    6,289Other current liabilities (note 8)
    
    
    4,566
    
    
    
    5,162Total current liabilities
    
    
    54,345
    
    
    
    62,445Long-term debt, excluding current installments
    
    
    11,161
    
    
    
    11,755Other liabilities
    
    
    5,210
    
    
    
    4,401Total liabilities
    
    
    70,716
    
    
    
    78,601Shareholders equity:Preferred stock of $1.00 par value per shareAuthorized 10,000,000 shares; none issued
    
    
    
    
    
    
    Common stock of $.10 par value per shareAuthorized 75,000,000 shares, issued and outstanding 15,364,000 in 2007 and
15,327,000 in 2006
    
    
    1,536
    
    
    
    1,533Additional paid-in capital
    
    
    134,227
    
    
    
    133,050Accumulated other comprehensive income  foreign currency translation adjustment
    
    
    8,918
    
    
    
    4,262Retained earnings
    
    
    80,228
    
    
    
    74,238Total shareholders equity
    
    
    224,909
    
    
    
    213,083Total liabilities and shareholders equity
    
    $
    295,625
    
    
    
    291,684
  4




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EMS Technologies, Inc. and Subsidiaries
 
 Consolidated Statements of Cash Flows (Unaudited)
 (in thousands)
 Six Months EndedJune 30
    
    
    July 12007
    
    
    2006Cash flows from operating activities:Net earnings
    
    $
    5,990
    
    
    
    1,900Adjustments to reconcile net earnings to net cash provided by (used in)
operating activities:Depreciation and other intangibles amortization
    
    
    4,474
    
    
    
    4,318Loss (gain) on sale of assets
    
    
    25
    
    
    
    (316
    )Loss from discontinued operations
    
    
    464
    
    
    
    1,605Stock-based compensation expense
    
    
    709
    
    
    
    205Changes in operating assets and liabilities:Trade accounts receivable
    
    
    11,103
    
    
    
    (4,854
    )Inventories
    
    
    (2,929
    )
    
    
    (2,962
    )Accounts payable
    
    
    (4,309
    )
    
    
    (6,175
    )Billings in excess of contract costs
    
    
    (345
    )
    
    
    500Income taxes payable
    
    
    990
    
    
    
    (129
    )Accrued retirement costs
    
    
    (2,263
    )
    
    
    (3,011
    )Accrued costs, deferred revenue, and other
    
    
    1,541
    
    
    
    1,603Net cash provided by (used in) operating activities in
continuing operations
    
    
    15,450
    
    
    
    (7,316
    )Net cash (used in) provided by operating activities in
discontinued operations
    
    
    (3,637
    )
    
    
    7,205Net cash provided by (used in) operating activities
    
    
    11,813
    
    
    
    (111
    )Cash flows from investing activities:Purchase of property, plant and equipment
    
    
    (5,626
    )
    
    
    (3,750
    )Payments for asset acquisitions
    
    
    
    
    
    
    (125
    )Proceeds from sale of assets
    
    
    845
    
    
    
    10,525Net cash (used in) provided by investing activities in
continuing operations
    
    
    (4,781
    )
    
    
    6,650Net cash used in investing activities in discontinued operations
    
    
    
    
    
    
    (223
    )Net cash (used in) provided by investing activities
    
    
    (4,781
    )
    
    
    6,427Cash flows from financing activities:Net change in revolving debt
    
    
    (399
    )
    
    
    (27,035
    )Repayment of term debt
    
    
    (546
    )
    
    
    (797
    )Change in restricted cash
    
    
    81
    
    
    
    2,461Proceeds from stock offering, net of expenses
    
    
    
    
    
    
    58,736Proceeds from exercise of stock options, net of withholding taxes paid
    
    
    471
    
    
    
    1,305Net cash
(used in) provided by financing activities in continuing operations
    
    
    (393
    )
    
    
    34,670Net change in cash and cash equivalents
    
    
    6,639
    
    
    
    40,986Effect of exchange rates on cash and cash equivalents
    
    
    973
    
    
    
    1,204Cash and cash equivalents at beginning of period
    
    
    109,431
    
    
    
    12,795Cash and cash equivalents at end of period
    
    $
    117,043
    
    
    
    54,985
  5




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EMS Technologies, Inc. and Subsidiaries
 
 Notes to Consolidated Financial Statements (Unaudited)
 June 30, 2007 and July 1, 2006
 1. Basis of Presentation
      Managements Use of Estimates
   Cash Equivalents
  Effect of New Accounting Pronouncements
   6




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2. Discontinued Operations
     Quarters Ended
    
    
    Six Months EndedJune 30
    
    
    July 1
    
    
    June 30
    
    
    July 12007
    
    
    2006
    
    
    2007
    
    
    2006Net sales
    
    $
    
    
    
    
    12,917
    
    
    
    
    
    
    
    29,341Expenses
    
    
    
    
    
    
    (12,675
    )
    
    
    
    
    
    
    (29,482
    )Gain (loss) on the sale of assets
    
    
    2
    
    
    
    (798
    )
    
    
    (566
    )
    
    
    (1,029
    )Earnings (loss) before income taxes
    
    
    2
    
    
    
    (556
    )
    
    
    (566
    )
    
    
    (1,170
    )Income tax benefit (expense)
    
    
    1
    
    
    
    (13
    )
    
    
    102
    
    
    
    (435
    )Earnings (loss) from discontinued operations
    
    $
    3
    
    
    
    (569
    )
    
    
    (464
    )
    
    
    (1,605
    )
 7




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3. Earnings Per Share
  Quarters Ended
    
    Six Months EndedJune 30
    
    July 1
    
    June 30
    
    July 12007
    
    2006
    
    2007
    
    2006Basic-weighted average common shares outstanding
    
    
    15,312
    
    
    
    15,185
    
    
    
    15,303
    
    
    
    14,083Incremental share-based payment
    
    
    76
    
    
    
    67
    
    
    
    81
    
    
    
    64Diluted-weighted average common shares outstanding
    
    
    15,388
    
    
    
    15,252
    
    
    
    15,384
    
    
    
    14,147
 4. Comprehensive Income
  Quarters Ended
    
    
    Six Months EndedJune 30
    
    
    July 1
    
    
    June 30
    
    
    July 12007
    
    
    2006
    
    
    2007
    
    
    2006Net earnings
    
    $
    3,577
    
    
    
    1,672
    
    
    
    5,990
    
    
    
    1,900Other comprehensive income:Reclassification due to sale of discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,008Foreign currency translation adjustment
    
    
    3,954
    
    
    
    3,039
    
    
    
    4,656
    
    
    
    3,678Comprehensive income
    
    $
    7,531
    
    
    
    4,711
    
    
    
    10,646
    
    
    
    7,586
 5. Trade Accounts Receivable
  June 30
    
    
    Dec 312007
    
    
    2006Amounts billed
    
    $
    64,011
    
    
    
    71,327Unbilled revenues under long-term contracts (1)
    
    
    18,452
    
    
    
    23,134Allowance for doubtful accounts
    
    
    (1,355
    )
    
    
    (741
    )Trade accounts receivable, net
    
    $
    81,108
    
    
    
    93,720
 
 (1)
    
    Unbilled revenues under long-term contracts are usually billed and collected within one
year.  6. Inventories
  June 30
    
    
    Dec 312007
    
    
    2006Parts and materials
    
    $
    18,634
    
    
    
    17,318Work-in-process
    
    
    3,566
    
    
    
    4,124Finished goods
    
    
    7,499
    
    
    
    4,600Inventories, net
    
    $
    29,699
    
    
    
    26,042
 8




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7. Interim Segment Disclosures
      Quarters Ended
    
    
    Six Months EndedJune 30
    
    
    July 1
    
    
    June 30
    
    
    July 12007
    
    
    2006
    
    
    2007
    
    
    2006Net sales:Defense & Space Systems
    
    $
    14,726
    
    
    
    11,498
    
    
    
    28,435
    
    
    
    23,361LXE
    
    
    37,489
    
    
    
    35,106
    
    
    
    70,050
    
    
    
    66,725SATCOM
    
    
    19,932
    
    
    
    18,442
    
    
    
    40,236
    
    
    
    34,005Total
    
    $
    72,147
    
    
    
    65,046
    
    
    
    138,721
    
    
    
    124,091Operating income (loss):Defense & Space Systems
    
    $
    827
    
    
    
    349
    
    
    
    1,803
    
    
    
    732LXE
    
    
    2,160
    
    
    
    2,902
    
    
    
    3,035
    
    
    
    4,747SATCOM
    
    
    1,627
    
    
    
    1,337
    
    
    
    4,188
    
    
    
    2,854Corporate
    
    
    (634
    )
    
    
    (1,223
    )
    
    
    (1,968
    )
    
    
    (2,590
    )Total
    
    $
    3,980
    
    
    
    3,365
    
    
    
    7,058
    
    
    
    5,743Net earnings (loss) from continuing operations:Defense & Space Systems
    
    $
    487
    
    
    
    149
    
    
    
    1,052
    
    
    
    327LXE
    
    
    1,342
    
    
    
    1,684
    
    
    
    1,873
    
    
    
    2,792SATCOM
    
    
    1,667
    
    
    
    1,124
    
    
    
    4,195
    
    
    
    2,420Other
    
    
    (139
    )
    
    
    (132
    )
    
    
    (189
    )
    
    
    (217
    )Corporate
    
    
    217
    
    
    
    (584
    )
    
    
    (477
    )
    
    
    (1,817
    )Total
    
    $
    3,574
    
    
    
    2,241
    
    
    
    6,454
    
    
    
    3,505
 8. Warranty Liability
  9




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Quarters Ended
    
    
    Six Months EndedJune 30
    
    
    July 1
    
    
    June 30
    
    
    July 12007
    
    
    2006
    
    
    2007
    
    
    2006Balance at beginning of the period
    
    $
    2,131
    
    
    
    1,967
    
    
    
    2,051
    
    
    
    1,894Accruals for warranties issued during the period
    
    
    563
    
    
    
    710
    
    
    
    1,232
    
    
    
    1,078Settlements made during the period
    
    
    (448
    )
    
    
    (523
    )
    
    
    (1,037
    )
    
    
    (818
    )Balance at end of period
    
    $
    2,246
    
    
    
    2,154
    
    
    
    2,246
    
    
    
    2,154
 9.
Revolving Credit Facilities
    10. Stock-Based Compensation
    10




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11. Income Taxes
    12. Litigation
  13. Subsequent Events
  11




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ITEM 2. Management s Discussion and Analysis of Financial Condition and Results of Operations
   
    
    Defense & Space Systems  Highly engineered hardware for satellites and defense
electronics applications;
    
    LXE  Rugged mobile computer terminals and related equipment for wireless local area
networks; and
    
    SATCOM  Satellite communications antennas and terminals for aircraft and ground-based
vehicles, and satellite ground stations for search and rescue operations.
  For continuing operations:
 
    
    The increases in consolidated net sales for the second quarter and first six months of
2007 as compared with 2006 reflected record revenues for the interim periods by our SATCOM
and LXE divisions and favorable execution on long-term contracts by D&SS, which reported its
highest revenues for these interim periods in the past 10 years.
    
    The main factors resulting in higher consolidated operating income for the second
quarter and first six months of 2007 as compared with 2006 were the continued high
profitability in our SATCOM division and lower corporate expenses.
 For discontinued operations:
 
    
    The financial results for discontinued operations now reflect only the resolution of
various contingencies under the asset-sale agreements, and discontinued operations had no
material net effect on the second quarter results.
 Description of Net Sales, Costs and Expenses
 Net sales
   12




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Cost of sales
      Selling, general and administrative expenses
  Research and development expenses
  Interest income
  13




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##### Table of Contents



Interest expense
  Foreign exchange gains and losses
   Income taxes
  Discontinued operations
  14




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##### Table of Contents



Results of Operations
 Quarters Ended
    
    Six Months EndedJune 30
    
    July 1
    
    June 30
    
    July 12007
    
    2006
    
    2007
    
    2006Product net sales
    
    
    86.0
    %
    
    
    86.6
    %
    
    
    85.3
    %
    
    
    86.4
    %Service net sales
    
    
    14.0
    
    
    
    13.4
    
    
    
    14.7
    
    
    
    13.6Net sales
    
    
    100.0
    
    
    
    100.0
    
    
    
    100.0
    
    
    
    100.0Product cost of sales, as a percentage of product net sales
    
    
    63.3
    
    
    
    63.1
    
    
    
    62.4
    
    
    
    63.5Service cost of sales, as a percentage of service net sales
    
    
    59.0
    
    
    
    64.1
    
    
    
    63.8
    
    
    
    65.1Cost of sales
    
    
    62.7
    
    
    
    63.3
    
    
    
    62.6
    
    
    
    63.7Selling, general and administrative expenses
    
    
    25.2
    
    
    
    25.3
    
    
    
    25.8
    
    
    
    25.4Research and development expenses
    
    
    6.6
    
    
    
    6.2
    
    
    
    6.5
    
    
    
    6.3Operating income
    
    
    5.5
    
    
    
    5.2
    
    
    
    5.1
    
    
    
    4.6Interest income
    
    
    2.1
    
    
    
    0.9
    
    
    
    2.0
    
    
    
    0.7Interest expense
    
    
    (0.8
    )
    
    
    (0.7
    )
    
    
    (0.7
    )
    
    
    (0.8
    )Foreign exchange loss
    
    
    (0.4
    )
    
    
    (0.5
    )
    
    
    (0.3
    )
    
    
    (0.5
    )Earnings from continuing operations before
income taxes
    
    
    6.4
    
    
    
    4.9
    
    
    
    6.1
    
    
    
    4.0Income tax expense
    
    
    (1.4
    )
    
    
    (1.5
    )
    
    
    (1.4
    )
    
    
    (1.2
    )Earnings from continuing operations
    
    
    5.0
    
    
    
    3.4
    
    
    
    4.7
    
    
    
    2.8Discontinued operations:Earnings (loss) from discontinued operations before
income taxes
    
    
    
    
    
    
    (0.8
    )
    
    
    (0.4
    )
    
    
    (0.9
    )Income tax benefit (expense)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.4
    )Earnings (loss) from discontinued operations
    
    
    
    
    
    
    (0.8
    )
    
    
    (0.4
    )
    
    
    (1.3
    )Net earnings
    
    
    5.0
    %
    
    
    2.6
    %
    
    
    4.3
    %
    
    
    1.5
    %
 Three Months ended June 30, 2007 and July 1, 2006:
     15




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Six Months ended June 30, 2007 and July 1, 2006:
        16




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Net Sales, Cost of Sales, and Operating Income (Loss) by Segment
  Percentage IncreaseQuarters Ended
    
    
    Six Months Ended
    
    
    (Decrease)June 30
    
    
    July 1
    
    
    June 30
    
    
    July 1
    
    
    Three
    
    
    Six(in thousands, except percentages)
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    Months
    
    
    MonthsNet sales:Defense & Space Systems
    
    $
    14,726
    
    
    
    11,498
    
    
    
    28,435
    
    
    
    23,361
    
    
    
    28.1
    %
    
    
    21.7LXE
    
    
    37,489
    
    
    
    35,106
    
    
    
    70,050
    
    
    
    66,725
    
    
    
    6.8
    
    
    
    5.0SATCOM
    
    
    19,932
    
    
    
    18,442
    
    
    
    40,236
    
    
    
    34,005
    
    
    
    8.1
    
    
    
    18.3Total
    
    $
    72,147
    
    
    
    65,046
    
    
    
    138,721
    
    
    
    124,091
    
    
    
    10.9
    %
    
    
    11.8Cost of sales percentage:Defense & Space Systems
    
    
    77.7
    %
    
    
    78.7
    
    
    
    77.2
    
    
    
    79.0
    
    
    
    (1.0
    )
    
    
    (1.8
    )LXE
    
    
    58.2
    
    
    
    58.7
    
    
    
    58.8
    
    
    
    59.5
    
    
    
    (0.5
    )
    
    
    (0.7
    )SATCOM
    
    
    60.5
    
    
    
    61.1
    
    
    
    58.8
    
    
    
    60.1
    
    
    
    (0.6
    )
    
    
    (1.3
    )Total
    
    
    62.7
    %
    
    
    63.3
    
    
    
    62.6
    
    
    
    63.7
    
    
    
    (0.6
    )
    
    
    (1.1
    )Operating income (loss):Defense & Space Systems
    
    $
    827
    
    
    
    349
    
    
    
    1,803
    
    
    
    732
    
    
    
    137.0
    %
    
    
    146.3LXE
    
    
    2,160
    
    
    
    2,902
    
    
    
    3,035
    
    
    
    4,747
    
    
    
    (25.6
    )
    
    
    (36.1
    )SATCOM
    
    
    1,627
    
    
    
    1,337
    
    
    
    4,188
    
    
    
    2,854
    
    
    
    21.7
    
    
    
    46.7Corporate and other
    
    
    (634
    )
    
    
    (1,223
    )
    
    
    (1,968
    )
    
    
    (2,590
    )
    
    
    (48.2
    )
    
    
    (24.0
    )Total
    
    $
    3,980
    
    
    
    3,365
    
    
    
    7,058
    
    
    
    5,743
    
    
    
    18.3
    %
    
    
    22.9
 Defense & Space Systems:
  LXE:
   SATCOM:
 17




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Discontinued Operations
   Liquidity and Capital Resources
      18




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Off-Balance Sheet Arrangements
   Commitments and Contractual Obligations
  Critical Accounting Policies
  Revenue recognition on long-term contracts
   19




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##### Table of Contents



Inventory valuation
  Evaluation of long-lived assets for impairment
  Evaluation of contingencies related to discontinued operations
  In November 2005, March 2006, and December 2006, we completed transactions to sell our discontinued
operations, comprising the former S&T/Montreal, SatNet and EMS Wireless divisions, respectively.
The sales agreements obligated the purchasers and us to make cash adjustments if working capital or
net receivables, as of closing, varied from contractual benchmarks. We also may receive additional
cash or incur additional costs depending upon the outcome of certain other contingencies in the
sales contracts. We evaluate these contingencies and accrue a liability when we believe an outcome
is probable and can be estimated. As of June 30, 2007, we had accrued certain amounts related to
the expected resolution of these contingencies. Such accruals could vary from the actual amounts
ultimately paid. The most significant accrued cost is a $2.0 million liability for the estimated
loss under a sub-license agreement with one of the purchasers, which we released from a corporate
guarantee as part
of the sales agreement. Establishment of reserves for deferred income tax assets
  20




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21




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##### Table of Contents



Forward-Looking Statements
  §
    
    economic conditions in the U.S. and abroad and their effect on capital spending
in the Companys principal markets;§
    
    difficulty predicting the timing of receipt of major customer orders, and the
effect of customer timing decisions on the Companys quarterly results;§
    
    successful completion of technological development programs by the Company and
the effects of technology that may be developed by, and patent rights that may be held or
obtained by, competitors;§
    
    U.S. defense budget pressures on near-term spending priorities;§
    
    uncertainties inherent in the process of converting contract awards into firm
contractual orders in the future;§
    
    volatility of foreign exchange rates relative to the U.S. dollar and their
effect on purchasing power by international customers, and the cost structure of the
Companys non-U.S. operations, as well as the potential for realizing foreign exchange
gains and losses associated with non-U.S. assets or liabilities held by the Company;§
    
    successful resolution of technical problems, proposed scope changes, or
proposed funding changes that may be encountered on contracts;§
    
    changes in the Companys consolidated effective income tax rate caused by the
extent to which actual taxable earnings in the U.S., Canada and other taxing jurisdictions
may vary from expected taxable earnings;§
    
    successful transition of products from development stages to an efficient
manufacturing environment;§
    
    changes in the rate at which the Companys products are returned for repair or
replacement under warranty;§
    
    customer response to new products and services, general conditions in the
Companys target markets (such as logistics, and space-based
communications), and whether
these responses and conditions develop according to our expectations;§
    
    the success of certain of the Companys customers in marketing our line of
high-speed commercial airline communications products as a complimentary offering with
their own lines of avionics products;§
    
    the availability of financing for satellite data communications systems;§
    
    development of successful working relationships with local business and
government personnel in connection with distribution and manufacture of products in foreign
countries;§
    
    the demand growth for various mobile and high-speed data communications
services;§
    
    the Companys ability to attract and retain qualified personnel, particularly
those with key technical skills;
 22




---



##### Table of Contents



§
    
    the availability of sufficient additional credit or other financing, on
acceptable terms, to support any large acquisitions that we believe would contribute to our
growth and profitability;§
    
    the ability to negotiate successfully with potential acquisition candidates,
finance acquisitions, or effectively integrate the acquired businesses, products or
technologies into the Companys existing businesses and products, and the risk that any
such acquisitions do not perform as expected or are otherwise dilutive to our earnings;§
    
    the potential effects, on cash and results of discontinued operations, of final
resolution of potential liabilities under warranties and representations made by the
Company, and obligations assumed by purchasers, in connection with the Companys
dispositions of discontinued operations;§
    
    the availability, capabilities and performance of suppliers of basic materials,
electronic components and sophisticated subsystems on which the Company must rely in order
to perform according to contract requirements, or to introduce new products on the desired
schedule; and§
    
    uncertainties associated with U.S. export controls and the export license
process, which restrict the Companys ability to hold technical discussions with customers,
suppliers and internal engineering resources and can reduce the Companys ability to obtain
sales from foreign customers or to perform contracts with the desired level of efficiency
or profitability.
  23




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Effect of New Accounting Pronouncements
   24




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##### Table of Contents



ITEM 3. Quantitative and Qualitative Disclosures about Market Risk
  Revolving credit loan with a bank in the United Kingdom, matures in
April 2008, interest payable monthly at a variable rate (6.5% at
the end of the quarter)
    
    $
    1,569
   Exchange Rate
    
    
    $U.S.($U.S. per unit of
    
    
    in thousandslocal currency)
    
    
    (reporting currency)United Kingdom
    
    2.0061 /Pound
    
    $
    1,149Australia
    
    0.8491 /Dollar
    
    
    1,028Belgium
    
    1.3519 /Euro
    
    
    996France
    
    1.3519 /Euro
    
    
    916Netherlands
    
    1.3519 /Euro
    
    
    908Germany
    
    1.3519 /Euro
    
    
    625Italy
    
    1.3519 /Euro
    
    
    573Singapore
    
    0.6536 /Dollar
    
    
    572Sweden
    
    0.1460 /Krona
    
    
    7Canada
    
    0.9404 /Dollar
    
    
    (1,843
    )Total short-term due to parent
    
    
    
    
    
    $
    4,931
  Average
    
    
    ($U.S.)Notional
    
    
    Contract
    
    
    FairAmount
    
    
    Rate
    
    
    ValueForeign currency forward contractsU.S. dollars (sell for Canadian dollars)
    
    
    16,900
    
    
    USD
    
    
    1.0809
    
    
    $
    322British pounds (buy with Canadian dollars)
    
    
    1,000
    
    
    GBP
    
    
    2.2405
    
    
    
    (102
    )Australian dollars (sell for U.S. dollars)
    
    
    800
    
    
    AUD
    
    
    0.7780
    
    
    
    (54
    )Euros (sell for U.S. dollars)
    
    
    1,550
    
    
    EUR
    
    
    1.3271
    
    
    
    (44
    )British pounds (sell for U.S. dollars)
    
    
    550
    
    
    GBP
    
    
    1.9626
    
    
    
    (26
    )$
    96Embedded derivativesQualifying for U.S. dollar contracts at
Canadian subsidiary
    
    
    3,227
    
    
    USD
    
    
    0.9404
    
    
    $
    (21
    )
 
 25




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##### Table of Contents



ITEM 4. Controls and Procedures
    26




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##### Table of Contents



PART II
 OTHER INFORMATION
 
 ITEM 1A. Risk Factors
  
 ITEM 4. Submission of Matters to a Vote of Security Holders
  Abstain orBrokerFor
    
    Withheld
    
    Non-VotesHermann Buerger
    
    
    9,253,009
    
    
    
    4,928,165
    
    
    
    Paul B. Domorski
    
    
    14,055,973
    
    
    
    125,201
    
    
    
    Francis J. Erbrick
    
    
    9,256,183
    
    
    
    4,924,991
    
    
    
    John R. Kreick
    
    
    9,256,301
    
    
    
    4,924,873
    
    
    
    John B. Mowell
    
    
    8,843,833
    
    
    
    5,337,341
    
    
    
    Bradford W. Parkinson
    
    
    9,209,396
    
    
    
    4,971,778
    
    
    
    Norman E. Thagard
    
    
    9,203,402
    
    
    
    4,977,772
    
    
    
    John L. Woodward, Jr.
    
    
    9,208,613
    
    
    
    4,972,561
    
    
    
    2007 Stock incentive plan
    
    
    11,447,214
    
    
    
    1,004,648
    
    
    
    1,729,312KPMG LLP
    
    
    13,999,737
    
    
    
    176,130
    
    
    
    5,307
 
 ITEM 6. Exhibits
  3.1
    
    Second Amended and Restated Articles of Incorporation of EMS Technologies, Inc. effective
March 22, 1999 (incorporated by reference to Exhibit 3.1 to the Companys Quarterly Report on Form
10-Q for the quarter ended April 3, 2004).3.2
    
    Bylaws of EMS Technologies, Inc., as amended through
August 3, 2007 (incorporated by
reference to Exhibit 3.2 to the Companys Report on
Form 8-K dated August 3, 2007).10.1
    
    EMS Technologies, Inc. 2007 Stock Incentive Plan, effective May 18, 2007. *10.2
    
    EMS Technologies, Inc. Executive Annual Incentive Plan, as amended and restated May 18,
2007. *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 27




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##### Table of Contents



SIGNATURES
  EMS TECHNOLOGIES, INC.By:
    
    /s/ Paul B. Domorski
    
    
    
    Date: August 8, 2007Paul B. DomorskiPresident, Chief Executive Officer and Director 
(Principal Executive Officer)By:
    
    /s/ Don T. Scartz
    
    
    
    Date: August 8, 2007Don T. ScartzExecutive Vice President, Chief FinancialOfficer and Treasurer (Principal Financial Officer)
 28