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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2008
 Commission File #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)
   Title of Class
    
    Exchange on Which RegisteredCommon Stock, $.10 par value
    
    Nasdaq Global Select Market
  o þ
 o þ
 þ o
 o
  Large accelerated filer o
Accelerated filer þ
Non-accelerated
filer o(Do not check if a smaller reporting company)
Smaller reporting company o o þ
   DOCUMENTS INCORPORATED BY REFERENCE
  AVAILABLE INFORMATION
 www.ems-t.com




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TABLE OF CONTENTS  PART IItem 1. BusinessItem 1A. Risk FactorsItem 1B. Unresolved Staff CommentsItem 2. PropertiesItem 3. Legal ProceedingsItem 4. Submission of Matters to a Vote of Security HoldersPART IIItem 5. Market for Registrants Common Equity, Related Shareholder Matters and Issuer Purchases of Equity SecuritiesItem 6. Selected Financial DataItem 7. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 7A. Quantitative and Qualitative Disclosures about Market RiskItem 8. Financial Statements and Supplementary DataItem 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureItem 9A. Controls and ProceduresItem 9B. Other Information.PART IIIItem 10. Directors, Executive Officers, and Corporate GovernanceItem 11. Executive CompensationItem 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder MattersItem 13. Certain Relationships and Related Transactions and Director IndependenceItem 14. Principal Accountant Fees and ServicesPART IVItem 15. Exhibits, Financial Statement SchedulesSIGNATURESEX-4.4EX-4.5EX-4.6EX-4.7EX-4.8EX-4.9EX-4.10EX-10.4EX-10.6EX-10.7EX-10.8EX-10.17EX-10.22EX-10.23EX-10.31EX-14.1EX-21.1EX-23.1EX-31.1EX-31.2EX-32    Table of Contents  FORWARD-LOOKING STATEMENTS
  1.
    
    statements about what the Company or management believes or expects,2.
    
    statements about anticipated technological developments or anticipated market
response to or impact of current or future technological developments or product
offerings,3.
    
    statements about potential or anticipated benefits of recent acquisitions,4.
    
    statements about trends in markets that are served or pursued by the Company,5.
    
    statements implying that the Companys technology or products are well-suited for
particular markets, and6.
    
    statements about the Companys plans for product developments or market initiatives.
  
 PART I
 
 Item 1. Business
 Overview
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Competitive Strengths
 Technological Leadership
  Commitment to Research and Development
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Technological Synergies
  Strong Customer Relationships
  Diverse Global Customer Base
  Strong Manufacturing Capabilities
  Our Markets and Products
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Percentage of Net SalesSegment
    
    Primary Operations
    
    2008
    
    2007
    
    2006Defense & Space
    
    Engineered hardware
for satellites,
defense and
electronics
applications
(primarily defense)
    
    
    22.9
    
    
    
    20.5
    
    
    
    20.1LXE
    
    Rugged mobile
terminals and
related equipment
for wireless data
collection
(predominantly
commercial)
    
    
    43.5
    
    
    
    48.2
    
    
    
    52.8Satellite Communications
    
    Satellite
communications
antennas, terminals
and networking
equipment for
aircraft, and
ground-based
vehicles and
satellite ground
stations for search
and rescue
operations
(majority
commercial)
    
    
    33.6
    
    
    
    31.3
    
    
    
    27.1
 Defense & Space
   Products/Services
    
    Key Features/Benefits
    
    Selected Applications
    
    ProgramsSpace Hardware Systems
    
    Microwave subsystems
capable of
high-frequency, low
noise, high-power
and fast switching,
facilitating
jam-resistant,
secure mobile
communications and
surveillance
    
    High-rate commercial
and secure military
communications
    
    Wideband Global SATCOM
(WGS), Advanced EHF
(AEHF),
Transformational
Satellite (TSAT),
National Security
Programs, W2A, Skynet 5Earth observation/Environmental
sensing
    
    COSMO, SARLUPE,
National Polar-
Orbiting Environmental
Satellite Systems
(NPOESS)Direct broadcast
television (incl.
HDTV)
    
    DirecTV, Globalstar 2,
YahsatDirect broadcast radio
    
    SIRIUS-XMCommunications-On-The
Move RF Front End
Systems
    
    Small, low profile,
low radar signature
(stealth), high
performance, and
agile beam antenna,
RF electronics, and
positioning systems
    
    Airborne commercial
Ku broadband and TV
receive product for
in-flight
entertainment
    
    JetBlue, Frontier,
WestJet, Virgin Blue
Airlines, Panasonic
eXconnectMilitary tactical
communications
(airborne, ship,
ground mobile, and
soldier)
    
    F-22 Intra-Flight Data
Link, High Altitude
Long Endurance (HALE)
Datalink, Hawklink
MH-60 Datalink, WIN-T
Army Mobile
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Products/Services
    
    Key Features/Benefits
    
    Selected Applications
    
    ProgramsDataLinks, Navy Airborne Data
Links.Military SATCOM
communications
(airborne, ground
mobile, and soldier)
    
    B2 Satellite
CommuniucationsRadar and Electronic
Warfare Microwave
Systems
    
    Low loss, high power
ferrite components
and electronic
systems, and front
end panels
    
    Defense electronic
surveillance and
countermeasure
    
    EW  F-16, AQL-211
Radar  Phalanx, JSTARSSmart Weapons
    
    Small, flat,
conformal millimeter
wave radar antenna
systems that allow
for co-boresighting
of laser and EO/IR
for tri-mode missile
seekers
    
    Precision strike
air-to-ground
missiles
    
    Joint Air to Ground
Missile (JAGM), Small
Diameter Bomb II
 LXE
    Ò Ò Ò
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®
  Products/Services
    
    Key Features/Benefits
    
    Selected Applications
    
    CustomersHand-Held Terminals
    
    Small, lightweight
and rugged,
providing true
mobility
    
    Warehousing, LogisticsVehicle-Mounted Terminals
    
    Heavier-duty design
for use on
forklifts, cranes,
and other material
handling vehicles
    
    
    
    Consumer product
manufacturers,Wearable Terminals
    
    Very small and
lightweight with
ergonomic schemes
for mounting on
operators
    
    Warehouse order picking
    
    Third-party
logistics
providers, Retailers,
Container port
operatorsWireless Networks
    
    Communications link
between mobile
computers and local
network, primarily
based on 802.11
standardHost connectivity
software; accessory
products; maintenance
services
    
    Industry-standard
connectivity to
various host
computers; enhanced
system
functionality;
extended service on
either a contract or
pay-as-you-go basis
 Satellite Communications
   ®
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Products/Services
    
    Key Features/Benefits
    
    Selected Applications
    
    CustomersAeronautical Antennas
    
    Mechanically and
electronically-steered antennas for
two-way
communications
connected to an
aircrafts satcom,
steerable antenna
systems for live
television from
broadcast satellites
    
    Corporate aircraft,
government and
military aircraft,
commercial airlines
    
    Gulfstream,
Bombardier,
Honeywell,
Dassault, Thales,
L3 Communications,
BoeingAeronautical Terminals
    
    Provide aircraft
operators with
two-way high-speed
data (broadband)
capability
    
    Corporate aircraft,
government and
military aircraft,
commercial airlines
    
    Corporate aircraft
modification
centers, U.S.
Department of
Defense,
Northrup-Grumman,
L3 Communications,
Boeing,
Rockwell-Collins,
Honeywell, ThalesSatellite Packet Data 
Terminals
    
    Two-way messaging
and location
information in North
America, Mexico
Central America, and
Afghanistan
    
    Transportation,
Public Safety,
Workforce
Automation, Oil and
Gas Remote
Monitoring and
Control, Force
Tracking
    
    Long-Haul Trucking
Companies, @Road,
NATOEmergency Management 
Products
    
    Hardware and
software features
for search and
rescue (SAR) systems
    
    Rescue and Mission
Control Centers
    
    Over 18 Governments
Worldwide
  Acquisitions Completed in 2008
 Akerstroms Trux
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Sky Connect
    Acquisitions Completed in 2009
  Formation
   Satamatics
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Sales and Marketing
      Research, Development and Intellectual Property
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Backlog
  Manufacturing
  
    
    to perform those functions for which we have special capabilities and that are most
critical to quality and timely performance,
    
    to equip ourselves with the modern tools we need to perform our manufacturing functions
efficiently,
    
    to use outside sources for functions requiring special skills that we do not have, or
that do not offer attractive potential returns, or to perform standard tasks at a
competitive price leaving our internal resources to focus on providing the quicker response
for special needs and skills, and
    
    to further improve the cost-effectiveness and time-to-market of our manufacturing
operations.
  Materials
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Competition
     Employees
  Government Regulation
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EXECUTIVE OFFICERS OF THE REGISTRANT
  Paul B. Domorski
 Neilson A. Mackay
 Gary B. Shell, ,
 Timothy C. Reis, ,
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Perry D. Tanner, ,
 Gary M. Hebb
 David M. Sheffield
 David A. Smith
 William H. Roeder
 Joanne Walker
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Item 1A. Risk Factors
 Our business is subject to certain risks, including the risks described below. This Item 1A does
not describe all risks applicable to our business and is intended only as a summary of the most
significant factors that affect our operations and the industries in which we operate. More
detailed information concerning these and other risks is contained in other sections of this Annual
Report on Form 10-K . The risks described below, as well as the other risks that are generally set
forth in this Annual Report on Form 10-K , and other risks and uncertainties not presently known to
us or that we currently consider immaterial, could materially and adversely affect our business,
results of operations and financial condition. Readers of this Annual Report on Form 10-K should
take such risks into account in evaluating any investment decision involving our common stock. At
any point, the trading price of our common stock could decline, and investors could lose all or a
portion of their investment.
 Risks Related to Our Business
  Decisions by our customers about the timing and scope of capital spending, particularly on major
programs, can have a significant effect on our net sales and earnings.
  If our commercial customers fail to find adequate funding for major potential programs, or our
government customers do not receive necessary funding approvals, our net sales would decline.
  We may encounter technical problems or contractual uncertainties, which can cause delays, added
costs, lost sales, and liability to customers.
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If we cannot continue to rapidly develop, manufacture and market innovative products and services
that meet customer requirements for performance and reliability, we may incur development costs
that we cannot recover and our net sales and earnings will suffer.
  Competing technology could be superior to ours, and could cause customer orders and net sales to
decline.
  Our competitors marketing and pricing strategies could make their products more attractive than
ours. This could cause reductions in customer orders or company profits.
  Our transitions to new product offerings can be costly and disruptive, and could adversely affect
our net sales or profitability.
  Our products may inadvertently infringe third party patents, which could create substantial
liability to our customers or the third-party patent owners.
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We may not be successful in protecting our intellectual property.
  Our success depends on our ability to attract and retain a highly skilled workforce.
  We depend on highly skilled suppliers, who may become unavailable or fail to achieve desired levels
of technical performance.
  Changes in regulations that limit the availability of radio frequency licenses or otherwise result
in increased expenses could cause our net sales or earnings to decline.
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The export license process for space products is uncertain, increasing the chance that we may not
obtain required export licenses in a timely or cost-effective manner.
  Export controls on space technology restrict our ability to hold technical discussions with foreign
customers, suppliers and internal engineering resources, which reduces our ability to obtain sales
from foreign customers or to perform contracts with the desired level of efficiency or
profitability.
  Economic or political conditions in other countries could cause our net sales or earnings to
decline.
  Unfavorable currency exchange rate movements could result in foreign exchange losses and cause our
earnings to decline.
  Our net sales in certain markets depend on the availability and performance of other companies with
which we have marketing relationships.
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Customer orders in backlog may not result in sales.
  We are exposed to the credit risk of some of our customers and to credit exposures in weakened
markets, which could cause our earnings to decline.
  Our products typically carry warranties, and the costs to us to repair or replace defective
products could exceed the amounts we have experienced historically.
  Changes in our consolidated effective income tax rate and the related effect on our results can be
difficult to predict.
  We may not effectively manage possible future growth, which could result in reduced earnings.
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We may make acquisitions and investments that could adversely affect our earnings or otherwise fail
to perform as expected.
 Business Combinations,
 We have residual liabilities under the terms of our sales of discontinued businesses.
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Risks Related to our Common Stock
  Our quarterly results are volatile and difficult to predict. If our quarterly performance results
fall short of market expectations, the market value of our shares is likely to decline.
  Our share price may fluctuate significantly, and an investor may not be able to sell our shares at
a price that would yield a favorable return on investment.
  
    
    actual or anticipated operating results,
    
    the limited average trading volume and public float for our stock, which means that
orders from a relatively few investors can significantly impact the price of our
stock, independently of our operating results,
    
    announcements of technological innovations, new products or new contracts by us,
our customers, our competitors or our customers competitors,
    
    government regulatory action,
    
    developments with respect to wireless and satellite communications, and
    
    general market conditions.
  Future sales of our common stock may cause our stock price to decline.
  Provisions in our governing documents and law could prevent or delay a change of control not
supported by our Board of Directors.
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
    
    allow our shareholders the right to acquire common stock from us at
discounted prices in the event a person acquires 20% or more of our common
stock, or announces an attempt to do so, without our Board of Directors
prior consent;
    
    authorize the issuance of up to 10,000,000 shares of blank check
preferred stock by our Board of Directors without shareholder approval,
which stock could have terms that could discourage or thwart a takeover
attempt;
    
    limit who may call a special meeting of shareholders;
    
    require unanimous written consent for shareholder action without a meeting;
    
    establish advance notice requirements for nominations for election to the
Board of Directors or for proposing matters that can be acted upon at
shareholder meetings;
    
    adopt the fair price requirements and rules regarding business
combinations with interested shareholders set forth in Article 11, Parts 2
and 3 of the Georgia Business Corporation Code; and
    
    require approval by the holders of at least 75% of the outstanding common
stock to amend any of the foregoing provisions.
 
 Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
    
 Item 3. Legal Proceedings
  
 Item 4. Submission of Matters to a Vote of Security Holders
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PART II
 
 Item 5. Market for Registrants Common Equity, Related Shareholder Matters and Issuer Purchases of
Equity Securities
  2008 Price Range
    
    2007 Price RangeHigh
    
    Low
    
    High
    
    LowFirst Quarter
    
    $
    27.71
    
    
    
    27.18
    
    
    $
    21.65
    
    
    
    18.72Second Quarter
    
    
    22.29
    
    
    
    21.63
    
    
    
    22.89
    
    
    
    18.00Third Quarter
    
    
    22.04
    
    
    
    21.50
    
    
    
    25.89
    
    
    
    19.62Fourth Quarter
    
    
    26.72
    
    
    
    25.00
    
    
    
    33.23
    
    
    
    23.85
   ISSUER PURCHASES OF EQUITY SECURITIES
 (c) Total Number
    
    
    (d) Maximum Numberof Shares
    
    
    (or ApproxmiatePurchased as
    
    
    Dollar Value) ofPart of Publicly
    
    
    Shares that May Yet(a) Total Number
    
    
    (b) Average
    
    
    Announced
    
    
    Be Purchasedof Shares
    
    
    Price Paid
    
    
    Plans or
    
    
    Under the Plans orPeriod
    
    Purchased (1)
    
    
    Per Share
    
    
    Program (2)
    
    
    Programs (3)January 2008 (January 1 to January 26)
    
    
    980
    
    
    
    
    
    
    
    June 2008 (May 25 to June 28)
    
    
    2,645
    
    
    
    
    
    
    
    August 2008 (July 27 to August 23)
    
    
    37,758
    
    
    $
    21.41
    
    
    
    36,700September 2008 (August 24 to
September 27)
    
    
    181,335
    
    
    
    22.30
    
    
    
    180,885October 2008 (September 28 to October
25)
    
    
    257,041
    
    
    
    19.42
    
    
    
    256,891Total
    
    
    479,759
    
    
    
    20.67
    
    
    
    474,476
    
    
    $10.2 million
 
 (1)
    
    The category includes 4,683 shares delivered to us by employees to pay withholding
taxes due upon vesting of restricted share awards, and 600 shares purchased from employees
under a stock option benefit program.(2)
    
    This balance represents the number of shares that were repurchased under the Companys
$20 million repurchase program (the Program) which was initially announced on July 30,
2008. Unless terminated earlier by resolution of the Companys Board of Directors, the
Program will expire when the Company has purchased all shares authorized for repurchase.
The Program does not obligate the Company to repurchase any particular amount of common
shares, and may be suspended or discontinued at any time without notice.(3)
    
    This balance represents the value of shares that could be repurchased under the Program
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Item 6. Selected Financial Data
  Years Ended December 312008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004Net sales
    
    $
    335,045
    
    
    
    287,879
    
    
    
    261,119
    
    
    
    225,887
    
    
    
    201,100Cost of sales
    
    
    213,654
    
    
    
    175,278
    
    
    
    164,611
    
    
    
    146,965
    
    
    
    130,623Selling, general and administrative expenses
    
    
    82,368
    
    
    
    74,561
    
    
    
    66,335
    
    
    
    56,944
    
    
    
    49,346Research and development expenses
    
    
    19,399
    
    
    
    18,773
    
    
    
    15,816
    
    
    
    11,754
    
    
    
    12,034Operating income
    
    
    19,624
    
    
    
    19,267
    
    
    
    14,357
    
    
    
    10,224
    
    
    
    9,097Interest income and other
    
    
    2,430
    
    
    
    5,403
    
    
    
    2,254
    
    
    
    588
    
    
    
    1,085Interest expense
    
    
    (1,679
    )
    
    
    (1,953
    )
    
    
    (1,921
    )
    
    
    (3,304
    )
    
    
    (1,791
    )Foreign exchange loss, net
    
    
    (586
    )
    
    
    (1,390
    )
    
    
    (710
    )
    
    
    (288
    )
    
    
    (187
    )Earnings from continuing operations before
income taxes
    
    
    19,789
    
    
    
    21,327
    
    
    
    13,980
    
    
    
    7,220
    
    
    
    8,204Income tax benefit (expense)
    
    
    682
    
    
    
    (2,080
    )
    
    
    1,823
    
    
    
    (2,094
    )
    
    
    (2,134
    )Earnings from continuing operations
    
    
    20,471
    
    
    
    19,247
    
    
    
    15,803
    
    
    
    5,126
    
    
    
    6,070Discontinued operations:(Loss) earnings from discontinued operations
before income taxes
    
    
    
    
    
    
    (585
    )
    
    
    24,427
    
    
    
    (13,971
    )
    
    
    (6,016
    )Income tax benefit (expense)
    
    
    
    
    
    
    82
    
    
    
    (7,222
    )
    
    
    (2,598
    )
    
    
    138(Loss) earnings from discontinued operations
    
    
    
    
    
    
    (503
    )
    
    
    17,205
    
    
    
    (16,569
    )
    
    
    (5,878
    )Net earnings (loss)
    
    $
    20,471
    
    
    
    18,744
    
    
    
    33,008
    
    
    
    (11,443
    )
    
    
    192Net earnings (loss) per share:Basic:From continuing operations
    
    $
    1.32
    
    
    
    1.25
    
    
    
    1.08
    
    
    
    0.46
    
    
    
    0.55From discontinued operations
    
    
    
    
    
    
    (0.03
    )
    
    
    1.18
    
    
    
    (1.48
    )
    
    
    (0.53
    )Net earnings (loss)
    
    $
    1.32
    
    
    
    1.22
    
    
    
    2.26
    
    
    
    (1.02
    )
    
    
    0.02Diluted:From continuing operations
    
    $
    1.31
    
    
    
    1.24
    
    
    
    1.08
    
    
    
    0.46
    
    
    
    0.54From discontinued operations
    
    
    
    
    
    
    (0.03
    )
    
    
    1.17
    
    
    
    (1.48
    )
    
    
    (0.52
    )Net earnings (loss)
    
    $
    1.31
    
    
    
    1.21
    
    
    
    2.25
    
    
    
    (1.02
    )
    
    
    0.02Weighted average number of shares outstanding:Basic
    
    
    15,452
    
    
    
    15,354
    
    
    
    14,621
    
    
    
    11,179
    
    
    
    11,094Diluted
    
    
    15,628
    
    
    
    15,482
    
    
    
    14,679
    
    
    
    11,225
    
    
    
    11,237
 As of December 312008
    
    2007
    
    2006
    
    2005
    
    2004Working capital
related to
continuing
operations
    
    $
    165,419
    
    
    
    198,491
    
    
    
    176,570
    
    
    
    67,580
    
    
    
    68,835Total assets
    
    
    327,365
    
    
    
    323,800
    
    
    
    291,684
    
    
    
    225,341
    
    
    
    256,953Long-term debt,
including current
installments
    
    
    10,552
    
    
    
    13,720
    
    
    
    14,857
    
    
    
    43,408
    
    
    
    61,454Shareholders equity
    
    
    242,742
    
    
    
    247,126
    
    
    
    213,083
    
    
    
    113,656
    
    
    
    126,021
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Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
 The following discussion and analysis should be read in conjunction with the consolidated financial
statements and related notes and other financial information appearing elsewhere in this Annual
Report on Form 10-K . The discussion contains forward-looking statements that involve risks and
uncertainties. Actual results could differ materially from those anticipated in the
forward-looking statements as a result of a variety of factors, including those discussed under the
caption Risk Factors in Item 1A. of this Annual Report on Form 10-K . The historical results of
operations are not necessarily indicative of future results.
 Overview
  
    
    Defense & Space (D&S) Develops highly engineered subsystems for defense electronics
and sophisticated satellite applications;
    
    LXE Provides rugged mobile terminals and wireless data collection equipment for
logistics management systems and;
    
    Satellite Communications Offers satellite-based communication, tracking, and
messaging solutions through a broad array of terminals and antennas for the aeronautical,
ground-mobile and emergency management markets. This reportable operating segment includes
the previously reported SATCOM segment, and the newly acquired Sky Connect business (please
refer to Note 3 of the consolidated financial statements provided immediately following the
signature page of this Annual Report on Form 10-K for additional information).
   Financial and Performance Highlights of 2008
  
    
    Net sales reached an all-time high of $335.0 million in 2008, a 16.4% increase compared
to 2007, mainly due to record sales at Satellite Communications and D&S. Net sales at LXE
increased by 5.1% despite the challenging global economic climate.
    
    Operating income was slightly higher in 2008 as compared with 2007. Part of the revenue
increase in 2008 was from SATCOMs work on the Inmarsat Global satellite/GMS phone project,
which was not profitable in 2008. An agreement was reached with Inmarsat in January 2009
and the project has been concluded with the full effect recognized in the fourth quarter of
2008. Operating profits increased for the remainder of Satellite Communications business
and for Defense & Space in 2008 as compared with 2007. Operating income for LXE was down
due to the challenging global economic climate and approximately $1.1 million of severance
charges in 2008.
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
    
    Income tax for 2008 was a net benefit of $0.7 million. A $927,000 tax benefit was
recognized in 2008 related to revised estimates for research and development costs
qualifying for U.S. Federal tax credits from prior years. We also recognized a $1.2
million benefit from the reduction of the valuation allowance against deferred tax assets
based upon the continuing profitability of SATCOM.
 Description of Net Sales, Costs and Expenses
 Net sales
 Revenue Arrangements with Multiple Deliverables, Software Revenue Recognition,
  Cost of sales
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Selling, general and administrative expenses
  Research and development expenses
  Interest income and other
  Interest expense
  Foreign exchange gains and losses
   Income taxes
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Discontinued operations
   Results of Operations
  Years Ended December 312008
    
    2007
    
    2006Product net sales
    
    
    81.6
    %
    
    
    86.0
    %
    
    
    85.6
    %Service net sales
    
    
    18.4
    
    
    
    14.0
    
    
    
    14.4Net sales
    
    
    100.0
    
    
    
    100.0
    
    
    
    100.0Product cost of sales, as a percentage of product
net sales
    
    
    64.3
    
    
    
    61.3
    
    
    
    62.4Service cost of sales, as a percentage of service
net sales
    
    
    61.2
    
    
    
    58.6
    
    
    
    66.7Cost of sales
    
    
    63.8
    
    
    
    60.9
    
    
    
    63.0Selling, general and administrative expenses
    
    
    24.5
    
    
    
    25.9
    
    
    
    25.4Research and development expenses
    
    
    5.8
    
    
    
    6.5
    
    
    
    6.1Operating income
    
    
    5.9
    
    
    
    6.7
    
    
    
    5.5Interest income and other
    
    
    0.7
    
    
    
    1.9
    
    
    
    0.9Interest expense
    
    
    (0.5
    )
    
    
    (0.7
    )
    
    
    (0.7
    )Foreign exchange loss, net
    
    
    (0.2
    )
    
    
    (0.5
    )
    
    
    (0.3
    )Earnings from continuing operations before
income taxes
    
    
    5.9
    
    
    
    7.4
    
    
    
    5.4Income tax benefit (expense)
    
    
    0.2
    
    
    
    (0.7
    )
    
    
    0.7Earnings from continuing operations
    
    
    6.1
    
    
    
    6.7
    
    
    
    6.1Discontinued operations:Loss (earnings) from discontinued operations before
income taxes
    
    
    
    
    
    
    (0.2
    )
    
    
    9.3Income tax benefit (expense)
    
    
    
    
    
    
    
    
    
    
    (2.8
    )(Loss) earnings from discontinued operations
    
    
    
    
    
    
    (0.2
    )
    
    
    6.5Net earnings
    
    
    6.1
    %
    
    
    6.5
    %
    
    
    12.6
    %
 Years ended December 31, 2008 and 2007:
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Years ended December 31, 2007 and 2006:
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Net Sales, Cost of Sales, and Operating Income (Loss) by Segment
  Years Ended December 312008
    
    
    2007
    
    
    2006Net sales:Defense & Space
    
    $
    76,643
    
    
    
    59,090
    
    
    
    52,416LXE
    
    
    145,885
    
    
    
    138,821
    
    
    
    138,001Satellite Communications
    
    
    112,517
    
    
    
    89,968
    
    
    
    70,702Total
    
    $
    335,045
    
    
    
    287,879
    
    
    
    261,119Cost-of-sales percentage:Defense & Space
    
    
    77.0
    %
    
    
    75.4
    %
    
    
    79.1
    %LXE
    
    
    60.3
    
    
    
    58.0
    
    
    
    58.5Satellite Communications
    
    
    58.4
    
    
    
    55.9
    
    
    
    59.4Total
    
    
    63.8
    
    
    
    60.9
    
    
    
    63.0Operating income (loss):Defense & Space
    
    $
    6,381
    
    
    
    4,876
    
    
    
    2,572LXE
    
    
    2,861
    
    
    
    7,067
    
    
    
    11,043Satellite Communications
    
    
    14,187
    
    
    
    12,189
    
    
    
    6,170Corporate
    
    
    (3,805
    )
    
    
    (4,865
    )
    
    
    (5,428
    )Total
    
    $
    19,624
    
    
    
    19,267
    
    
    
    14,357
 Defense & Space:
   LXE:
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Satellite Communications:
   Discontinued Operations:
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Liquidity and Capital Resources
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Off-Balance Sheet Arrangements
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Commitments and Contractual Obligations
  Payments due by periodLess than
    
    1-3
    
    4-5
    
    After 5Total
    
    1 year
    
    years
    
    years
    
    yearsLong-term debt, excluding capital
lease
obligations (1)
    
    $
    10,542
    
    
    
    1,294
    
    
    
    2,830
    
    
    
    3,363
    
    
    
    3,055Capital lease obligations
    
    
    10
    
    
    
    8
    
    
    
    2
    
    
    
    
    
    
    
    Operating lease obligations
    
    
    21,978
    
    
    
    4,142
    
    
    
    6,605
    
    
    
    4,315
    
    
    
    6,916Acquisition
costs for earn-out provisions
    
    
    1,500
    
    
    
    1,500
    
    
    
    
    
    
    
    
    
    
    
    Deferred compensation agreements
    
    
    584
    
    
    
    122
    
    
    
    281
    
    
    
    81
    
    
    
    100FIN 48-Uncertain tax positions
    
    
    2,949
    
    
    
    2,949
    
    
    
    
    
    
    
    
    
    
    
    License to acquire satellite service
    
    
    8,000
    
    
    
    1,000
    
    
    
    2,000
    
    
    
    2,000
    
    
    
    3,000Purchase
commitments (2)
    
    
    45,534
    
    
    
    40,495
    
    
    
    5,039
    
    
    
    
    
    
    
    
 
 (1)
    
    Excludes interest payments on long-term debt. Future interest expense is unpredictable
and varies depending on the level of borrowings outstanding, and the timing of repayments,
and therefore has not been included from the above table. Interest payments in 2008 were
approximately $1.1 million. There was no accrued interest at December 31, 2008.(2)
    
    Purchase commitments primarily represent existing commitments under purchase orders or
contracts to purchase inventory and raw materials for our products. Most of these purchase
orders and contracts can be terminated for a fee that is either fixed or based on when
termination occurs. Critical Accounting Policies
  Revenue recognition
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Revenue Arrangements with Multiple
Deliverables Software Revenue Recognition,
 Inventory valuation
  Business combinations
 Business Combinations Business Combinations
 Goodwill and Other Intangible Assets
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Accounting for the Impairment or Disposal of Long-Lived Assets
 Evaluation of long-lived assets for impairment
  Evaluation of contingencies related to discontinued operations
   Income taxes
  Accounting for Uncertainty in Income Taxes 
an Interpretation of FASB Statement No. 109
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Risk Factors and 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 currency 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, and 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 complementary offering with their own lines
of avionics products;
    
    the availability of financing for our customers major programs, such as satellite 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 distribution and manufacture of products in foreign countries;
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
    
    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;
    
    our 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 acquired
businesses, products or technologies do not perform as expected, are subject to undisclosed
or unanticipated liabilities, or are otherwise dilutive to our earnings;
    
    the potential effects, on cash and results of discontinued operations, of final
resolution of potential liabilities under warranties and representations made by 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.
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Effect of New Accounting Pronouncements
 Fair Value Measurements
 Application of FASB Statement No. 157 to FASB
Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for
Purposes of Lease Classification or Measurement under Statement 13, Effective
Date of FASB Statement No. 157 Accounting for Leases
 Business Combinations Business Combinations
 Noncontrolling Interests in Consolidated Financial
Statements
 Disclosures about Derivative Instruments and Hedging
Activities-An Amendment of SFAS No. 133
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Determination of the Useful Life of Intangible
Assets Goodwill and Other Intangible Assets
 
 Item 7A. Quantitative and Qualitative Disclosures about Market Risk
  Government-obligations money market funds, other money market
instruments, and interest-bearing deposits, with
maturity dates of less than 3 months, interest payable month at
variable rates (a weighted-average rate of 1.05% as of December
31, 2008)
    
    $
    78,937
   Exchange Rate
    
    
    $U.S.($U.S. per unit of
    
    
    in thousandslocal currency)
    
    
    (reporting currency)Sweden
    
    0.1278 /Krona
    
    $
    1,063Australia
    
    0.7114 /Dollar
    
    
    937Canada
    
    0.8210 /Dollar
    
    
    418Netherlands
    
    1.3969 /Euro
    
    
    245United Kingdom
    
    1.4593 /Pound
    
    
    135France
    
    1.3969 /Euro
    
    
    84Belgium
    
    1.3969 /Euro
    
    
    74Italy
    
    1.3969 /Euro
    
    
    61Germany
    
    1.3969 /Euro
    
    
    39Total intercompany
payable subject to
foreign currency risk
    
    
    
    
    
    $
    3,056
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Average
    
    
    ($U.S.)Notional
    
    
    Contract
    
    
    FairAmount
    
    
    Rate
    
    
    ValueForeign currency forward contractsU.S. dollars (sell for Canadian dollars)
    
    
    19,000
    USD
    
    
    1.1603
    
    
    $
    (1,143
    )Swedish Krona (sell for U.S. dollars)
    
    
    3,200
    SEK
    
    
    0.1229
    
    
    
    (16
    )$
    (1,159
    )
   
 Item 8. Financial Statements and Supplementary Data
  
 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
  
 Item 9A. Controls and Procedures
 (a) Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
   (b) Managements Annual Report on Internal Control Over Financial Reporting
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Report of Independent
Registered Public Accounting Firm
 (c) Changes in Internal Control Over Financial Reporting
  (d) Report of Independent Registered Public Accounting Firm
 
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Item 9B. Other Information.
  
 PART III
 
 Item 10. Directors, Executive Officers, and Corporate Governance
  www.ems-t.com
  
 Item 11. Executive Compensation
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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
  (c)(a)
    
    
    
    
    
    Number of securitiesNumber of securities
    
    (b)
    
    remaining available forto be issued upon
    
    Weighted average
    
    future issuance underexercise of
    
    exercise price of
    
    equity compensation plansoutstanding options,
    
    outstanding options,
    
    (excluding securitiesPlan Category
    
    warrants and rights
    
    warrants and rights
    
    reflected in column(a))Equity compensation plans
approved
by security holders
    
    
    732,754
    
    
    $
    20.13
    
    
    
    1,801,000Equity compensation plans not
approved by security holders
    
    
    175,325
    
    
    $
    19.55
    
    
    
    74,732Total
    
    
    908,079
    
    
    $
    20.02
    
    
    
    1,875,732
  
 Item 13. Certain Relationships and Related Transactions and Director Independence
  
 Item 14. Principal Accountant Fees and Services
  
 PART IV
 
 Item 15. Exhibits, Financial Statement Schedules
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SCHEDULE II  VALUATION AND QUALIFYING ACCOUNTS
 Years Ended December 31, 2008, 2007 and 2006AdditionsBalance at
    
    charged to
    
    
    
    
    
    
    
    
    
    Balancebeginning
    
    costs and
    
    
    
    
    
    
    
    
    
    at endClassification
    
    of year
    
    expenses
    
    Deductions
    
    Other
    
    of yearAllowance for Doubtful Accounts:2006
    
    $
    588
    
    
    
    500
    
    
    
    (347
    )(a)
    
    
    
    
    
    
    7412007
    
    
    741
    
    
    
    1,404
    
    
    
    (1,041
    )(a)
    
    
    
    
    
    
    1,1042008
    
    
    1,104
    
    
    
    278
    
    
    
    (587
    )(a)
    
    
    61
    (b)
    
    
    856Valuation Allowance for
Deferred Tax Assets:2006
    
    $
    46,969
    
    
    
    307
    (c)
    
    
    (14,355
    )(d)
    
    
    
    
    
    
    32,9212007
    
    
    32,921
    
    
    
    16,222
    (c)
    
    
    (49
    )
    
    
    
    
    
    
    49,0942008
    
    
    49,094
    
    
    
    
    
    
    
    (20,545
    )(e)
    
    
    
    
    
    
    28,549Valuation Allowance for Assets
Held for Sale:2006
    
    $
    6,200
    
    
    
    
    
    
    
    (6,200
    )(f)
    
    
    
    
    
    
    
 
 (a)
    
    Deductions represent receivables that were charged off to the allowance or recovered during
the year.(b)
    
    Includes the balances at the date of acquisition for new businesses acquired during 2008.(c)
    
    In 2006, the Company increased the valuation allowance by $307,000 net, mainly for the
benefits associated with certain foreign net operating losses. This increase in valuation
allowance was based on managements assessment that, due to changing business conditions and the
limitation of tax planning strategies, the Company was not likely to fully realize these deferred
tax assets. The 2007 changes in the valuation allowance for deferred tax assets related primarily
to the net changes in the underlying deferred tax assets associated with the Companys operations
in Canada.(d)
    
    In 2006, the decrease in valuation allowance for deferred tax assets reflects: 1) adjustments
of $8.2 million with a corresponding reduction in the Canadian deferred tax assets; 2) utilization
of a $3.3 million capital loss; 3) change in judgment of $1.7 million related to Canadian estimated
future taxable income; and 4) utilization/change in judgment/sale of operations of $1.2 million
related to non-Canadian foreign operations.(e)
    
    The decrease in the valuation allowance in 2008 was attributable primarily to utilization of
carryforwards with current period taxable income ($4.1 million), reduction of existing
carryforwards as a result of revisions to amounts available ($5.9 million), the effect of changes
in foreign currency exchange rates ($9.2 million) and a release
of
a portion of the  beginning-of-the-year valuation allowance based on revisions to projected taxable income in the
relatively near term ($1.3 million), supported by actual continuing profitability in the past several years.(f)
    
    The 2006 reduction in the allowance was a result of the sale of the Companys SatNet and
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*
    
    Filed herewith 52 of 82




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SIGNATURES
  EMS TECHNOLOGIES, INC.By:    

    /s/ Paul B. Domorski
    
    Date: 3/16/09President and Chief Executive Officer
  Signature
    
    Title
    
    Date/s/ Paul B. Domorski

Paul B. Domorski
    
    President and Chief Executive Officer, and Director
(Principal Executive Officer)
    
    3/16/09/s/ Gary B. Shell

Gary B. Shell
    
    Senior Vice President, Chief Financial Officer, and
Treasurer (Principal Financial Officer)
    
    3/16/09/s/ David M. Sheffield

David M. Sheffield
    
    Vice President, Finance and Chief Accounting Officer
(Principal Accounting Officer)
    
    3/16/09/s/ Hermann Buerger

Hermann Buerger
    
    Director
    
    3/16/09/s/ Francis J. Erbrick

Francis J. Erbrick
    
    Director
    
    3/16/09/s/ John R. Kreick

John R. Kreick
    
    Director
    
    3/16/09/s/ John B. Mowell

John B. Mowell
    
    Director, Chairman of the Board
    
    3/16/09/s/ Thomas W. OConnell

Thomas W. OConnell
    
    Director
    
    3/16/09/s/ Bradford W. Parkinson

Bradford W. Parkinson
    
    Director
    
    3/16/09/s/ Norman E. Thagard

Norman E. Thagard
    
    Director
    
    3/16/09/s/ John L. Woodward, Jr.

John L. Woodward, Jr.
    
    Director
    
    3/16/09
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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 PageReport of Independent Registered Public Accounting Firm
    
    
    55Consolidated Statements of Operations  Years ended December 31, 2008, 2007 and 2006
    
    
    56Consolidated Balance Sheets  December 31, 2008 and 2007
    
    
    57Consolidated Statements of Cash Flows  Years ended December 31, 2008, 2007 and 2006
    
    
    59Consolidated Statements of Shareholders Equity and Comprehensive Income 
Years ended December 31, 2008, 2007 and 2006
    
    
    60Notes to Consolidated Financial Statements
    
    
    61
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
       
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EMS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
 Years Ended December 312008
    
    
    2007
    
    
    2006Product net sales
    
    $
    273,268
    
    
    
    247,504
    
    
    
    223,512Service net sales
    
    
    61,777
    
    
    
    40,375
    
    
    
    37,607Net sales
    
    
    335,045
    
    
    
    287,879
    
    
    
    261,119Product cost of sales
    
    
    175,836
    
    
    
    151,611
    
    
    
    139,517Service cost of sales
    
    
    37,818
    
    
    
    23,667
    
    
    
    25,094Cost of sales
    
    
    213,654
    
    
    
    175,278
    
    
    
    164,611Selling, general and administrative expenses
    
    
    82,368
    
    
    
    74,561
    
    
    
    66,335Research and development expenses
    
    
    19,399
    
    
    
    18,773
    
    
    
    15,816Operating income
    
    
    19,624
    
    
    
    19,267
    
    
    
    14,357Interest income and other
    
    
    2,430
    
    
    
    5,403
    
    
    
    2,254Interest expense
    
    
    (1,679
    )
    
    
    (1,953
    )
    
    
    (1,921
    )Foreign exchange loss, net
    
    
    (586
    )
    
    
    (1,390
    )
    
    
    (710
    )Earnings from continuing operations before income taxes
    
    
    19,789
    
    
    
    21,327
    
    
    
    13,980Income tax benefit (expense)
    
    
    682
    
    
    
    (2,080
    )
    
    
    1,823Earnings from continuing operations
    
    
    20,471
    
    
    
    19,247
    
    
    
    15,803Discontinued operations:(Loss) earnings from discontinued operations before
income taxes
    
    
    
    
    
    
    (585
    )
    
    
    24,427Income tax benefit (expense)
    
    
    
    
    
    
    82
    
    
    
    (7,222
    )(Loss) earnings from discontinued operations
    
    
    
    
    
    
    (503
    )
    
    
    17,205Net earnings
    
    $
    20,471
    
    
    
    18,744
    
    
    
    33,008Net earnings (loss) per share:Basic:From continuing operations
    
    $
    1.32
    
    
    
    1.25
    
    
    
    1.08From discontinued operations
    
    
    
    
    
    
    (0.03
    )
    
    
    1.18Net earnings
    
    $
    1.32
    
    
    
    1.22
    
    
    
    2.26Diluted:From continuing operations
    
    $
    1.31
    
    
    
    1.24
    
    
    
    1.08From discontinued operations
    
    
    
    
    
    
    (0.03
    )
    
    
    1.17Net earnings
    
    $
    1.31
    
    
    
    1.21
    
    
    
    2.25Weighted-average number of shares:Basic
    
    
    15,452
    
    
    
    15,354
    
    
    
    14,621Diluted
    
    
    15,628
    
    
    
    15,482
    
    
    
    14,679
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EMS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 December 312008
    
    
    2007ASSETSCurrent assets:Cash and cash equivalents
    
    $
    86,979
    
    
    
    133,959Trade accounts receivable, net of allowance for doubtful account of
$856 in 2008 and $1,104 in 2007
    
    
    65,831
    
    
    
    61,084Costs and estimated earnings in excess of billings
    
    
    30,485
    
    
    
    24,001Inventories
    
    
    35,670
    
    
    
    28,949Deferred income taxes
    
    
    1,632
    
    
    
    1,868Other current assets
    
    
    12,184
    
    
    
    7,196Total current assets
    
    
    232,781
    
    
    
    257,057Property, plant and equipment:Land
    
    
    1,150
    
    
    
    1,150Buildings and leasehold improvements
    
    
    16,238
    
    
    
    15,954Machinery and equipment
    
    
    92,100
    
    
    
    87,377Furniture and fixtures
    
    
    10,059
    
    
    
    9,665Total property, plant and equipment
    
    
    119,547
    
    
    
    114,146Less accumulated depreciation and amortization
    
    
    78,975
    
    
    
    74,223Net property, plant and equipment
    
    
    40,572
    
    
    
    39,923Deferred income taxes
    
    
    7,318
    
    
    
    5,490Goodwill
    
    
    31,402
    
    
    
    9,982Other intangible assets, net of accumulated amortization
of $8,219 in 2008 and $7,256 in 2007
    
    
    11,166
    
    
    
    5,837Other assets
    
    
    4,126
    
    
    
    5,511Total assets
    
    $
    327,365
    
    
    
    323,800
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EMS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS,
 December 312008
    
    
    2007LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Current installments of long-term debt
    
    $
    1,302
    
    
    
    3,174Accounts payable
    
    
    25,361
    
    
    
    20,689Billings in excess of contract costs and estimated earnings
    
    
    8,172
    
    
    
    6,643Accrued compensation and retirement costs
    
    
    14,456
    
    
    
    13,725Deferred service revenue
    
    
    7,998
    
    
    
    8,578Other current liabilities
    
    
    10,073
    
    
    
    5,757Total current liabilities
    
    
    67,362
    
    
    
    58,566Long-term debt, excluding current installments
    
    
    9,250
    
    
    
    10,546Other liabilities
    
    
    8,011
    
    
    
    7,562Total liabilities
    
    
    84,623
    
    
    
    76,674Shareholders 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 15,188 in 2008 and 15,581 in 2007
    
    
    1,519
    
    
    
    1,558Additional paid-in capital
    
    
    133,270
    
    
    
    139,727Accumulated other comprehensive (loss) income  foreign currency translation
adjustment
    
    
    (5,500
    )
    
    
    12,859Retained earnings
    
    
    113,453
    
    
    
    92,982Total shareholders equity
    
    
    242,742
    
    
    
    247,126Commitments and contingenciesTotal liabilities and shareholders equity
    
    $
    327,365
    
    
    
    323,800
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EMS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
 Years Ended December 312008
    
    
    2007
    
    
    2006Cash flows from operating activities:Net earnings
    
    $
    20,471
    
    
    
    18,744
    
    
    
    33,008Adjustments to reconcile net earnings to net cash provided by operating activities:Depreciation and amortization
    
    
    12,498
    
    
    
    9,666
    
    
    
    8,864Deferred income taxes
    
    
    (2,400
    )
    
    
    887
    
    
    
    (3,178
    )Gain on sale of assets
    
    
    (64
    )
    
    
    (1
    )
    
    
    (352
    )Loss (gain) from discontinued operations
    
    
    
    
    
    
    503
    
    
    
    (17,205
    )Stock-based compensation expense
    
    
    2,339
    
    
    
    1,727
    
    
    
    987Tax benefit for exercise of stock options
    
    
    203
    
    
    
    643
    
    
    
    213Excess tax benefits from stock-based compensation
    
    
    (75
    )
    
    
    (24
    )
    
    
    Changes in operating assets and liabilities, net of effects of acquisitions:Trade accounts receivable, net of allowance for doubtful accounts
    
    
    (5,584
    )
    
    
    14,259
    
    
    
    (14,638
    )Costs and estimated earnings in excess of billings
    
    
    (7,991
    )
    
    
    (989
    )
    
    
    4,288Inventories
    
    
    (7,801
    )
    
    
    (904
    )
    
    
    (4,880
    )Accounts payable
    
    
    1,076
    
    
    
    (7,113
    )
    
    
    2,029Other
    
    
    3,779
    
    
    
    4,665
    
    
    
    512Net cash provided by operating activities in continuing operations
    
    
    16,451
    
    
    
    42,063
    
    
    
    9,648Net cash (used in) provided by operating activities in discontinued
operations
    
    
    
    
    
    
    (3,329
    )
    
    
    657Net cash provided by operating activities
    
    
    16,451
    
    
    
    38,734
    
    
    
    10,305Cash flows from investing activities:Purchases of property, plant and equipment
    
    
    (13,869
    )
    
    
    (14,579
    )
    
    
    (8,502
    )Payments for acquisitions of businesses
    
    
    (32,354
    )
    
    
    (5,000
    )
    
    
    (188
    )Proceeds from sales of assets
    
    
    1,371
    
    
    
    907
    
    
    
    59,521Net cash (used in) provided by investing activities in continuing
operations
    
    
    (44,852
    )
    
    
    (18,672
    )
    
    
    50,831Net cash used in investing activities in discontinued operations
    
    
    
    
    
    
    
    
    
    
    (480
    )Net cash (used in) provided by investing activities
    
    
    (44,852
    )
    
    
    (18,672
    )
    
    
    50,351Cash flows from financing activities:Repayment of debt
    
    
    (3,159
    )
    
    
    (1,281
    )
    
    
    (27,990
    )Change in restricted cash
    
    
    
    
    
    
    81
    
    
    
    2,458Deferred financing costs paid
    
    
    (1,254
    )
    
    
    
    
    
    
    (85
    )Payments for repurchase and retirement of common shares
    
    
    (9,963
    )
    
    
    
    
    
    
    Excess tax benefits from stock-based compensation
    
    
    75
    
    
    
    24
    
    
    
    Proceeds from stock offering, net of expenses
    
    
    
    
    
    
    
    
    
    
    58,736Proceeds from exercise of stock options
    
    
    925
    
    
    
    4,332
    
    
    
    2,124Net cash (used in) provided by financing activities
    
    
    (13,376
    )
    
    
    3,156
    
    
    
    35,243Effect of exchange rates on cash and cash equivalents
    
    
    (5,203
    )
    
    
    1,310
    
    
    
    737Net change in cash and cash equivalents
    
    
    (46,980
    )
    
    
    24,528
    
    
    
    96,636Cash and cash equivalents at January 1
    
    
    133,959
    
    
    
    109,431
    
    
    
    12,795Cash and cash equivalents at December 31
    
    $
    86,979
    
    
    
    133,959
    
    
    
    109,431Supplemental disclosure of cash flow information:Cash paid for interest
    
    $
    1,094
    
    
    
    1,147
    
    
    
    1,483Cash paid for income taxes
    
    
    2,289
    
    
    
    357
    
    
    
    9,357
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EMS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY AND COMPREHENSIVE INCOME
 Three years ended December 31, 2008Accum-ulatedothercompre-
    
    
    
    
    
    
    TotalAdditional
    
    
    Compre-
    
    
    hensive
    
    
    
    
    
    
    share-Common Stock
    
    
    paid-in
    
    
    hensive
    
    
    income
    
    
    Retained
    
    
    holdersShares
    
    
    Amount
    
    
    capital
    
    
    income
    
    
    (loss)
    
    
    earnings
    
    
    equityBalance December 31, 2005
    
    
    11,343
    
    
    $
    1,134
    
    
    
    71,389
    
    
    
    
    
    
    
    (97
    )
    
    
    41,230
    
    
    
    113,656Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33,008
    
    
    
    
    
    
    
    33,008
    
    
    
    33,008Income tax benefit from exercise of
non-qualified stock options
    
    
    
    
    
    
    
    
    
    
    213
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    213Exercise of common stock options
    
    
    215
    
    
    
    21
    
    
    
    3,387
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,408Redemption of shares upon exercise of
common stock options
    
    
    (64
    )
    
    
    (6
    )
    
    
    (1,248
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,254
    )Repurchases of stock
    
    
    (2
    )
    
    
    
    
    
    
    (30
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (30
    )Issuance of common stock
    
    
    3,795
    
    
    
    380
    
    
    
    58,356
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    58,740Stock-based compensation
    
    
    40
    
    
    
    4
    
    
    
    983
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    987Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,540
    
    
    
    2,540
    
    
    
    
    
    
    
    2,540Reclassification due to sale of
discontinued
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,819
    
    
    
    1,819
    
    
    
    
    
    
    
    1,819Comprehensive income for 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37,367Balance December 31, 2006
    
    
    15,327
    
    
    
    1,533
    
    
    
    133,050
    
    
    
    
    
    
    
    4,262
    
    
    
    74,238
    
    
    
    213,083Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,744
    
    
    
    
    
    
    
    18,744
    
    
    
    18,744Income tax benefit from exercise of
non-qualified stock options
    
    
    
    
    
    
    
    
    
    
    643
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    643Exercise of common stock options
    
    
    311
    
    
    
    31
    
    
    
    5,758
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,789Redemption of shares upon exercise of
common stock options
    
    
    (58
    )
    
    
    (6
    )
    
    
    (1,427
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,433
    )Repurchases of stock
    
    
    (1
    )
    
    
    
    
    
    
    (24
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (24
    )Stock-based compensation
    
    
    2
    
    
    
    
    
    
    
    1,727
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,727Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,597
    
    
    
    8,597
    
    
    
    
    
    
    
    8,597Comprehensive income for 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,341Balance December 31, 2007
    
    
    15,581
    
    
    
    1,558
    
    
    
    139,727
    
    
    
    
    
    
    
    12,859
    
    
    
    92,982
    
    
    
    247,126Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,471
    
    
    
    
    
    
    
    20,471
    
    
    
    20,471Income tax benefit from exercise of
non-qualified stock options
    
    
    
    
    
    
    
    
    
    
    203
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    203Exercise of common stock options
    
    
    56
    
    
    
    6
    
    
    
    989
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    995Redemption of shares upon exercise of
common stock options
    
    
    (3
    )
    
    
    
    
    
    
    (70
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (70
    )Repurchases of stock
    
    
    (480
    )
    
    
    (48
    )
    
    
    (9,915
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,963
    )Stock-based compensation
    
    
    34
    
    
    
    3
    
    
    
    2,336
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,339Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (18,359
    )
    
    
    (18,359
    )
    
    
    
    
    
    
    (18,359
    )Comprehensive income for 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,112Balance December 31, 2008
    
    
    15,188
    
    
    $
    1,519
    
    
    
    133,270
    
    
    
    
    
    
    
    (5,500
    )
    
    
    113,453
    
    
    
    242,742
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2008, 2007 and 2006
 (1) BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
   Accounting for the Impairment or Disposal of Long-Lived Assets,
    Revenue Recognition
 Revenue Arrangements with Multiple Deliverables, Software Revenue Recognition,
   61 of 82




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 Government Research Incentives
   Cash Equivalents
   Inventories
   Property, Plant and Equipment
  Buildings
    
    20 to 40 yearsMachinery and equipment
    
    3 to 8 yearsFurniture and fixtures
    
    10 years
  62 of 82




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 Long-Lived Assets
   Goodwill and Other Intangible Assets
 Goodwill and Other Intangible Assets
    Income Taxes
   Accounting for Uncertainty in Income Taxes  an Interpretation of FASB Statement No. 109,
 63 of 82




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 Earnings Per Share
   2008
    
    
    2007
    
    
    2006Basic weighted-average number of common shares
outstanding
    
    
    15,452
    
    
    
    15,354
    
    
    
    14,621Dilutive potential shares using the treasury stock method
    
    
    176
    
    
    
    128
    
    
    
    58Diluted weighted-average number of common shares
outstanding
    
    
    15,628
    
    
    
    15,482
    
    
    
    14,679Shares that were not included in dilutive earnings per
share
that could potentially dilute future basic earnings per
share because their effect on the periods were
antidilutive
    
    
    341
    
    
    
    44
    
    
    
    504
  Stock-Based Compensation
 Share-Based Payment, Accounting for Stock-Based Compensation
  Foreign Currency Translation
  64 of 82




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 Comprehensive Income
   Derivative Financial Instruments
    Warranties
   Effect of New Accounting Pronouncements
 Fair Value Measurements
 Application of FASB Statement No. 157 to FASB
Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for
Purposes of Lease Classification or Measurement under Statement 13, Effective
Date of FASB Statement No. 157 Accounting for Leases
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Business Combinations Business Combinations
 Noncontrolling Interests in Consolidated Financial
Statements
 Disclosures about Derivative Instruments and Hedging
Activities-An Amendment of SFAS No. 133
 Determination of the Useful Life of Intangible
Assets Goodwill and Other Intangible Assets
 66 of 82




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(2) DISCONTINUED OPERATIONS
        67 of 82




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2008
    
    
    2007
    
    
    2006Net sales
    
    $
    
    
    
    
    
    
    
    
    46,294Expenses
    
    
    
    
    
    
    
    
    
    
    (45,499
    )Gain on sale of assets
    
    
    
    
    
    
    
    
    
    
    26,856Loss on sale of assets
    
    
    
    
    
    
    
    
    
    
    (3,224
    )Estimated loss on disposal
    
    
    
    
    
    
    (585
    )
    
    
    Earnings (loss) before income taxes
    
    
    
    
    
    
    (585
    )
    
    
    24,427Income tax benefit (expense)
    
    
    
    
    
    
    82
    
    
    
    (7,222
    )Earnings (loss) from discontinued operations
    
    $
    
    
    
    
    (503
    )
    
    
    17,205
  (3) ACQUISITIONS
      68 of 82




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SatelliteLXE
    
    
    Communications
    
    
    TotalBalance as of January 1, 2008
    
    $
    9,982
    
    
    
    
    
    
    
    9,982Goodwill acquired during year
    
    
    12,395
    
    
    
    11,007
    
    
    
    23,402Foreign currency translation adjustment
    
    
    (1,982
    )
    
    
    
    
    
    
    (1,982
    )Impairment losses
    
    
    
    
    
    
    
    
    
    
    Balance as of December 31, 2008
    
    $
    20,395
    
    
    
    11,007
    
    
    
    31,402
  (4) INVENTORIES
  December 31
    
    
    December 312008
    
    
    2007Parts and materials
    
    $
    26,730
    
    
    
    18,864Work-in-process
    
    
    2,404
    
    
    
    3,733Finished goods
    
    
    6,536
    
    
    
    6,352$
    35,670
    
    
    
    28,949
 (5) OTHER INTANGIBLE ASSETS
    69 of 82




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(6) LONG-TERM DEBT
  2008
    
    
    2007Promissory note, secured by a first mortgage
on the Companys headquarters facility,
maturing in 2016, principal and interest
payable in equal monthly installments of $104
with a fixed interest rate of 8.0%
    
    $
    7,076
    
    
    
    7,730Term loan with an insurance company, secured
by a U.S. building, maturing in February 2014,
principal and interest payable in equal
monthly installments of $68 with a fixed
interest rate of 7.1%
    
    
    3,466
    
    
    
    4,012Capital lease agreements, secured by machinery
and equipment, computer hardware, software and
peripherals, with various terms through 2010,
due in quarterly installments with implicit
interest rates of 3.0% to 4.2%
    
    
    10
    
    
    
    16Revolving credit loan with a bank in the
United Kingdom, which matured on April 2008,
interest payable monthly at a variable rate
(6.5% at the end of 2007)
    
    
    
    
    
    
    1,962Total long-term debt
    
    
    10,552
    
    
    
    13,720Less current installments of long-term debt
    
    
    1,302
    
    
    
    3,174Long-term debt, excluding current installments
    
    $
    9,250
    
    
    
    10,546
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2009
    
    $
    1,3022010
    
    
    1,3322011
    
    
    1,5002012
    
    
    1,6182013
    
    
    1,745Thereafter
    
    
    3,055Total principal maturities
    
    $
    10,552
  (7) STOCK-BASED COMPENSATION
     Outstanding
    
    ExercisableNumber
    
    Weighted
    
    Weighted Average
    
    Number
    
    Weighted
    
    Weighted AverageRange of
    
    of
    
    Average
    
    Remaining
    
    of
    
    Average
    
    RemainingExercise Prices
    
    Shares
    
    Exercise Price
    
    Contractual Life
    
    Shares
    
    Exercise Price
    
    Contractual Life$11.63 - 13.89
    
    
    76
    
    
    $
    13.00
    
    
    
    
    
    
    
    70
    
    
    $
    12.9813.90 - 14.93
    
    
    69
    
    
    
    14.22
    
    
    
    
    
    
    
    69
    
    
    
    14.2214.94 - 15.80
    
    
    62
    
    
    
    15.63
    
    
    
    
    
    
    
    57
    
    
    
    15.6315.81 - 18.98
    
    
    130
    
    
    
    18.13
    
    
    
    
    
    
    
    93
    
    
    
    18.1418.99 - 20.00
    
    
    180
    
    
    
    19.35
    
    
    
    
    
    
    
    82
    
    
    
    19.1920.01 - 22.74
    
    
    191
    
    
    
    21.08
    
    
    
    
    
    
    
    142
    
    
    
    21.2822.75 - 28.67
    
    
    200
    
    
    
    26.85
    
    
    
    
    
    
    
    96
    
    
    
    25.8011.63 - 28.67
    
    
    908
    
    
    
    20.02
    
    
    3.9 years
    
    
    609
    
    
    
    18.95
    
    
    3.7 years
  71 of 82




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Options with service-based vesting only
   WeightedAverageWeighted
    
    RemainingNumber
    
    Average
    
    Contractual
    
    Aggregateof
    
    Exercise
    
    Life
    
    IntrinsicShares
    
    Price
    
    (in years)
    
    ValueOptions outstanding
at December 31,
2007
    
    
    680
    
    
    $
    18.22Granted
    
    
    144
    
    
    
    28.06Exercised
    
    
    (56
    )
    
    
    17.75Forfeited or expired
    
    
    6
    
    
    
    29.17Options outstanding
at December 31,
2008
    
    
    774
    
    
    
    20.16
    
    
    
    4.0
    
    
    $
    2,502Options exercisable
at December 31,
2008
    
    
    546
    
    
    
    18.91
    
    
    
    3.7
    
    
    
    2,137
  2008
    
    2007
    
    2006Expected volitility
    
    
    45% - 46
    %
    
    
    53% - 59
    %
    
    
    54% - 61
    %Expected term (in years)
    
    
    4.8 - 5.0
    
    
    
    4.7 - 8.3
    
    
    
    5.0 - 8.3Risk-free rate
    
    
    2.9% - 3.0
    %
    
    
    4.5% - 4.9
    %
    
    
    4.7% - 5.1
    %Expected dividend yield
    
    None
    
    None
    
    None
   Options with performance-based and service-based vesting
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WeightedAverageWeighted
    
    RemainingNumber
    
    Average
    
    Contractual
    
    Aggregateof
    
    Exercise
    
    Life
    
    IntrinsicShares
    
    Price
    
    (in years)
    
    ValueOptions outstanding
at December 31,
2007
    
    
    154
    
    
    $
    19.06Granted
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    18.05Forfeited or expired
    
    
    (20
    )
    
    
    18.05Options outstanding
at December 31,
2008
    
    
    134
    
    
    
    19.21
    
    
    
    3.3
    
    
    $
    399Options exercisable
at December 31,
2008
    
    
    64
    
    
    
    19.28
    
    
    
    3.3
    
    
    
    185
  2008
    
    2007
    
    2006Expected volitility
    
    40%
    
    55% - 56%
    
    56%Expected term (in years)
    
    3.0
    
    4.0
    
    5.0Risk-free rate
    
    2.2% - 2.4%
    
    4.7%
    
    4.8% - 5.0%Expected dividend yield
    
    None
    
    None
    
    None
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Nonvested stock
  WeightedNumber
    
    Averageof
    
    Grant-DateShares
    
    Fair ValueNonvested stock outstanding at December 31, 2007
    
    
    39
    
    
    $
    18.26Granted
    
    
    38
    
    
    
    28.35Vested
    
    
    (18
    )
    
    
    19.49Forefeited
    
    
    (4
    )
    
    
    15.74Nonvested stock outstanding at December 31, 2008
    
    
    55
    
    
    
    24.99
  (8) INCOME TAXES
  2008
    
    
    2007
    
    
    2006Income tax benefit (expense), continuing operations
    
    $
    682
    
    
    
    (2,080
    )
    
    
    1,823Income tax
benefit (expense), discontinued operations
    
    
    
    
    
    
    82
    
    
    
    (7,222
    )Income tax benefit resulting from exercise of stock
options credited to shareholders equity
    
    
    203
    
    
    
    643
    
    
    
    213Total
    
    $
    885
    
    
    
    (1,355
    )
    
    
    (5,186
    )
  2008
    
    
    2007
    
    
    2006Current:Federal
    
    $
    (1,460
    )
    
    
    (1,483
    )
    
    
    395State
    
    
    (176
    )
    
    
    (332
    )
    
    
    (506
    )Foreign
    
    
    (689
    )
    
    
    (1,274
    )
    
    
    (1,806
    )Total
    
    
    (2,325
    )
    
    
    (3,089
    )
    
    
    (1,917
    )Deferred:Federal
    
    
    1,569
    
    
    
    878
    
    
    
    2,457State
    
    
    9
    
    
    
    35
    
    
    
    42Foreign
    
    
    1,429
    
    
    
    96
    
    
    
    1,241Total
    
    
    3,007
    
    
    
    1,009
    
    
    
    3,740Total income tax benefit (expense)
    
    $
    682
    
    
    
    (2,080
    )
    
    
    1,823
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2008
    
    
    2007
    
    
    2006Expense computed at the federal statutory rate
    
    $
    (6,728
    )
    
    
    (7,251
    )
    
    
    (4,893
    )Effect of:State income taxes, net of federal income tax effects
    
    
    (110
    )
    
    
    (196
    )
    
    
    (321
    )Tax credits from research activities
    
    
    1,716
    
    
    
    936
    
    
    
    4,181Difference in effective foreign tax rates
    
    
    4,544
    
    
    
    4,127
    
    
    
    1,494Valuation allowance
    
    
    1,195
    
    
    
    49
    
    
    
    1,881Foreign permanent differences
    
    
    (55
    )
    
    
    (177
    )
    
    
    (366
    )Other
    
    
    120
    
    
    
    432
    
    
    
    (153
    )Income tax benefit (expense)
    
    $
    682
    
    
    
    (2,080
    )
    
    
    1,823
  2008
    
    
    2007Deferred tax assets:Inventories
    
    $
    602
    
    
    
    892Accrued compensation costs
    
    
    769
    
    
    
    835Accrued warranty costs
    
    
    779
    
    
    
    821Foreign research expense and tax credit carry forward
    
    
    33,721
    
    
    
    53,895Foreign net operating loss carry forward
    
    
    1,272
    
    
    
    575Credit for corporate minimum tax
    
    
    408
    
    
    
    675Research and development credit carry forward
    
    
    1,427
    
    
    
    387Stock-based compensation
    
    
    1,594
    
    
    
    721Other
    
    
    1,843
    
    
    
    950Total gross deferred tax assets
    
    
    42,415
    
    
    
    59,751Valuation allowance
    
    
    (28,549
    )
    
    
    (49,094
    )13,866
    
    
    
    10,657Deferred tax liabilities:Property, plant and equipment
    
    
    3,993
    
    
    
    3,079Other
    
    
    923
    
    
    
    220Total gross deferred tax liabilities
    
    
    4,916
    
    
    
    3,299Net deferred tax assets
    
    $
    8,950
    
    
    
    7,358
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2008
    
    
    2007Balance as of January 1
    
    $
    2,591
    
    
    
    2,714Increases related to current year tax positions
    
    
    194
    
    
    
    472Increases related to prior year tax positions
    
    
    270
    
    
    
    31Decreases related to lapsing of statute of limitations
    
    
    (14
    )
    
    
    (23
    )Decreases related to settlements with taxing authorities
    
    
    
    
    
    
    (788
    )Foreign exchange
    
    
    (92
    )
    
    
    185Balance as of December 31
    
    $
    2,949
    
    
    
    2,591
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(9) RETIREMENT PLANS
    (10) FAIR VALUE OF FINANCIAL INSTRUMENTS
  
    
    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.
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Fair Value Measurements of Assets (Liabilities) UsingQuoted Pricesin Active
    
    SignificantMarkets for
    
    Other
    
    SignificantIdentical Assets
    
    Observable
    
    Unobservable(Liabilities)
    
    Inputs
    
    Inputs
    
    Carrying(in thousands)
    
    (Level 1)
    
    (Level 2)
    
    (Level 3)
    
    AmountForeign currency
forward contracts
    
    $
    (1,159
    )
    
    
    
    
    
    
    
    
    
    
    (1,159
    )Mortgage debt
    
    
    
    
    
    
    (10,672
    )
    
    
    
    
    
    
    (10,542
    )
    (11) BUSINESS SEGMENT AND GEOGRAPHIC AREA INFORMATION
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Years Ended December 312008
    
    
    2007
    
    
    2006Net sales:Defense & Space
    
    $
    76,643
    
    
    
    59,090
    
    
    
    52,431Less sales to discontinued operations
    
    
    
    
    
    
    
    
    
    
    (15
    )Defense & Space external sales
    
    
    76,643
    
    
    
    59,090
    
    
    
    52,416LXE
    
    
    145,885
    
    
    
    138,821
    
    
    
    138,001Satellite Communications
    
    
    112,517
    
    
    
    89,968
    
    
    
    70,702Total
    
    $
    335,045
    
    
    
    287,879
    
    
    
    261,119Operating income (loss):Defense & Space
    
    $
    6,381
    
    
    
    4,876
    
    
    
    2,572LXE
    
    
    2,861
    
    
    
    7,067
    
    
    
    11,043Satellite Communications
    
    
    14,187
    
    
    
    12,189
    
    
    
    6,170Corporate
    
    
    (3,805
    )
    
    
    (4,865
    )
    
    
    (5,428
    )Total
    
    $
    19,624
    
    
    
    19,267
    
    
    
    14,357Interest income and other, net of foreign exchange losses:Defense & Space
    
    $
    6
    
    
    
    7
    
    
    
    28LXE
    
    
    500
    
    
    
    236
    
    
    
    8Satellite Communications
    
    
    (154
    )
    
    
    (564
    )
    
    
    (66
    )Corporate
    
    
    1,492
    
    
    
    4,334
    
    
    
    1,574Total
    
    $
    1,844
    
    
    
    4,013
    
    
    
    1,544Interest expense:Defense & Space
    
    $
    (40
    )
    
    
    (141
    )
    
    
    (444
    )LXE
    
    
    (406
    )
    
    
    (348
    )
    
    
    (405
    )Satellite Communications
    
    
    (62
    )
    
    
    (121
    )
    
    
    (117
    )Corporate
    
    
    (1,171
    )
    
    
    (1,343
    )
    
    
    (955
    )Total
    
    $
    (1,679
    )
    
    
    (1,953
    )
    
    
    (1,921
    )Earnings (loss) from continuing operations before income
taxes:Defense & Space
    
    $
    6,347
    
    
    
    4,742
    
    
    
    2,156LXE
    
    
    2,955
    
    
    
    6,955
    
    
    
    10,646Satellite Communications
    
    
    13,971
    
    
    
    11,504
    
    
    
    5,987Corporate
    
    
    (3,484
    )
    
    
    (1,874
    )
    
    
    (4,809
    )Total
    
    $
    19,789
    
    
    
    21,327
    
    
    
    13,980Capital expenditures:Defense & Space
    
    $
    6,105
    
    
    
    3,684
    
    
    
    2,391LXE
    
    
    2,957
    
    
    
    3,364
    
    
    
    2,467Satellite Communications
    
    
    4,573
    
    
    
    6,589
    
    
    
    3,227Corporate
    
    
    422
    
    
    
    942
    
    
    
    417Total
    
    $
    14,057
    
    
    
    14,579
    
    
    
    8,502Depreciation and amortization:Defense & Space
    
    $
    3,023
    
    
    
    2,620
    
    
    
    2,558LXE
    
    
    3,363
    
    
    
    2,205
    
    
    
    2,246Satellite Communications
    
    
    5,089
    
    
    
    3,619
    
    
    
    2,851Corporate
    
    
    1,023
    
    
    
    1,222
    
    
    
    1,209Total
    
    $
    12,498
    
    
    
    9,666
    
    
    
    8,864
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December 312008
    
    
    2007Assets:Defense & Space
    
    $
    47,417
    
    
    
    42,017LXE
    
    
    107,230
    
    
    
    94,613Satellite Communications
    
    
    99,323
    
    
    
    77,552Corporate
    
    
    73,395
    
    
    
    109,618Total
    
    $
    327,365
    
    
    
    323,800
  Years Ended December 312008
    
    
    2007
    
    
    2006Net sales to customers in the following countries:United States
    
    $
    202,520
    
    
    
    176,209
    
    
    
    178,662United Kingdom
    
    
    28,445
    
    
    
    20,911
    
    
    
    13,542Other foreign countries
    
    
    104,080
    
    
    
    90,759
    
    
    
    68,915Total
    
    $
    335,045
    
    
    
    287,879
    
    
    
    261,119
  December 312008
    
    
    2007Long-lived assets are located in the following
countries:United States
    
    $
    32,831
    
    
    
    24,032Canada
    
    
    7,609
    
    
    
    10,621Other foreign countries
    
    
    11,298
    
    
    
    11,107Total
    
    $
    51,738
    
    
    
    45,760Concentration of net assets by geographic region:United States
    
    $
    131,949
    
    
    
    154,253Canada
    
    
    50,128
    
    
    
    48,476Europe
    
    
    49,511
    
    
    
    32,198Other
    
    
    11,154
    
    
    
    12,199Total
    
    $
    242,742
    
    
    
    247,126
  (12) ISSUANCE OF COMMON SHARES
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(13) REPURCHASE OF COMMON SHARES
  (14) COMMITMENTS AND CONTINGENCIES
      Years Ended December 312008
    
    
    2007
    
    
    2006Balance at beginning of the year
    
    $
    2,647
    
    
    
    2,051
    
    
    
    1,894Accruals for warranties issued during the year
    
    
    3,308
    
    
    
    3,175
    
    
    
    1,945Settlements made during the year
    
    
    (3,166
    )
    
    
    (2,579
    )
    
    
    (1,788
    )Balance at end of year
    
    $
    2,789
    
    
    
    2,647
    
    
    
    2,051
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(15) LITIGATION
  (16) SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
  2008 Quarters EndedMarch 29
    
    
    June 28
    
    
    September 27
    
    
    December 31Net sales
    
    $
    75,494
    
    
    
    81,279
    
    
    
    87,842
    
    
    
    90,430Operating income
    
    
    3,437
    
    
    
    3,407
    
    
    
    7,205
    
    
    
    5,575Net earnings
    
    
    4,160
    
    
    
    3,411
    
    
    
    6,077
    
    
    
    6,823Net earnings per share:Basic:Continuing operations
    
    $
    0.27
    
    
    
    0.22
    
    
    
    0.39
    
    
    
    0.45Discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net earnings
    
    $
    0.27
    
    
    
    0.22
    
    
    
    0.39
    
    
    
    0.45Diluted:Continuing operations
    
    $
    0.26
    
    
    
    0.22
    
    
    
    0.39
    
    
    
    0.44Discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net earnings
    
    $
    0.26
    
    
    
    0.22
    
    
    
    0.39
    
    
    
    0.44
 2007 Quarters EndedMarch 31
    
    
    June 30
    
    
    September 29
    
    
    December 31Net sales
    
    $
    66,574
    
    
    
    72,147
    
    
    
    73,145
    
    
    
    76,013Operating income
    
    
    3,078
    
    
    
    3,980
    
    
    
    5,242
    
    
    
    6,967Earnings from continuing operations
    
    
    2,880
    
    
    
    3,574
    
    
    
    5,606
    
    
    
    7,187(Loss) earnings from discontinued
operations
    
    
    (467
    )
    
    
    3
    
    
    
    11
    
    
    
    (50
    )Net earnings
    
    
    2,413
    
    
    
    3,577
    
    
    
    5,617
    
    
    
    7,137Net earnings (loss) per share:Basic:Continuing operations
    
    $
    0.19
    
    
    
    0.23
    
    
    
    0.37
    
    
    
    0.46Discontinued operations
    
    
    (0.03
    )
    
    
    
    
    
    
    
    
    
    
    Net earnings
    
    $
    0.16
    
    
    
    0.23
    
    
    
    0.37
    
    
    
    0.46Diluted:Continuing operations
    
    $
    0.19
    
    
    
    0.23
    
    
    
    0.36
    
    
    
    0.46Discontinued operations
    
    
    (0.03
    )
    
    
    
    
    
    
    
    
    
    
    Net earnings
    
    $
    0.16
    
    
    
    0.23
    
    
    
    0.36
    
    
    
    0.46
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