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UNITED STATES 
    SECURITIES AND EXCHANGE COMMISSION
    Washington, D.C. 20549FORM 10-KANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF
    THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31,
    2009
 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)   (770) 263-9200
   Title of Class

Exchange on Which
    RegisteredCommon Stock, $.10 par value

Nasdaq Global Select Market    o x
  o x
  x o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K: o
  Rule 12b-2 o x  Non-accelerated filer o o
  Rule 12b-2 o x
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K.




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##### 





EMS
    TECHNOLOGIES, INC. AND SUBSIDIARIES
 FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2009
 TABLE OF CONTENTS
  Item



PagePART I1.

Business

3Overview

3Competitive Strengths

4Our Markets and Products

6Acquisitions Completed in 2009

11Acquisitions Completed in 2008

12Sales and Marketing

13Research, Development and Intellectual
    Property

13Backlog

13Manufacturing

14Materials

14Competition

15Employees

15Regulatory Matters

15Executive Officers of the Registrant

171A.

Risk Factors

181B.

Unresolved Staff Comments

262.

Properties

263.

Legal Proceedings

264.

[Reserved]

27PART II5.

Market for Registrants Common Equity,
    Related Shareholder Matters and
    Issuer Purchases of Equity Securities

276.

Selected Financial Data

307.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations

317A.

Quantitative and Qualitative Disclosures About
    Market Risk

558.

Financial Statements and Supplementary
    Data

579.

Changes in and Disagreements with Accountants
    on Accounting and Financial Disclosure

579A.

Controls and Procedures

579B.

Other Information

60PART III10.

Directors, Executive Officers, and Corporate
    Governance

6011.

Executive Compensation

6012.

Security Ownership of Certain Beneficial
    Owners and Management and Related
    Shareholder Matters

6113.

Certain Relationships and Related Transactions
    and Director Independence

6114.

Principal Accountant Fees and Services

61PART IV15.

Exhibits, Financial Statement Schedules

61Signatures

66Index to Consolidated Financial
    Statements

67EX-3.2EX-4.1EX-10.1EX-18EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1




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FORWARD-LOOKING
    STATEMENTS
      2.
    statements about anticipated technological developments or
    anticipated market response to or impact of current or future
    technological developments or product offerings,      5.
    statements implying that the Companys technology or
    products are well-suited for particular markets, and     PART I  Item 1.
    Business Overview    communications-on-the-move,




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communication-on-the-move
      search-and-rescue
  e-mail,
 Competitive
    Strengths  Technological
    Leadership
    Commitment
    to Research and Development




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Technological
    Synergies
  e-mail
  Strong
    Customer Relationships
    Business Solutions
  Diverse
    Global Customer Base
    Strong
    Manufacturing Capabilities




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Our
    Markets and Products      Segment


Primary Operations


Percentage of Net Sales2009




2008




2007Communications & 
    Tracking


Satellite communications antennas, terminals and networking
    equipment for aircraft, rugged data storage, data
    recording/replay, end-to-end tracking and mapping equipment and
    services, and ground-based vehicles and satellite ground
    stations for search and rescue operations (majority commercial)



44.2




33.6




31.3LXE


Rugged mobile terminals and related equipment for wireless data
    collection (predominantly commercial)



30.4




43.5




48.2Defense & Space


Engineered hardware for satellites, defense and electronics
    applications (primarily defense)



25.4




22.9




20.5   Communications &
    Tracking
     New Segment


Primary Operations


Percentage of Net Sales2009




2008




2007Aviation


Connectivity and in-cabin infrastructure equipment for a broad
    range of commercial and military aircraft, including satellite
    communications antennas, terminals and networking equipment,
    rugged data storage and data recording/replay



34.5




27.7




24.6Global Tracking


End-to-end tracking and mapping equipment and services for
    security, land tracking, and maritime markets, as well as,
    satellite ground stations for search and rescue operations



9.7




5.9




6.7   Aviation
  air-to-ground




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tm e-mail,
  ®




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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, Boeing, Panasonic AvionicsAeronautical Tracking


Lightweight, autonomous tracking terminals provide GPS-based
    location and status reporting from anywhere on or in-flight over
    the globe.


Off-shore Oil, Air Medical Transport, Fire Patrol and
    Suppression, Paramilitary Drug Interdiction, Pipeline Patrol


Bristow, Air Methods, Chevron, U.S. Forest Service, U.S. State
    Department, MilitaryAeronautical 
    Telephony and E-mail 
    Services


Narrowband telephony provides in-flight voice and e-mail access
    to cabin telephones and cockpit interface devices


Corporate aircraft, Commercial airlines, helicopters, general
    aviation


El Al, Qantas, Pfizer, ALCOA, Merrill Lynch, OmniflightAeronautical 
    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, Northrop Grumman, L3 Communications, Boeing, Rockwell
    Collins, Honeywell, ThalesAvionics Data 
    Networking Products


Data servers, routers, switches, and storage devices to manage
    Internet, entertainment and operational data aboard aircraft


Corporate aircraft, government and military aircraft, commercial
    airlines


Airbus, Boeing, Rockwell Collins, AirCell, Row44, Northrop
    Grumman, L3   Global
    Tracking
    end-to-end multi-network




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Products/Services


Key Features/Benefits


Selected Applications


CustomersVery Low Data Rate:SAT202


Fourth-generation IsatM2M terminal, smaller, lighter, engineered
    in-house
    Near global operation


Tracking, M2M communications, fleet management, rapid alerting,
    ship ID and position


Maritime commercial and private trucking fleets, tuna fishing
    fleets, logistics securityOsprey Personnel 
    Tracking Terminal


Cost effective messaging for small data payloads


Lone worker, Corporate Duty of Care, Personnel Security


NGOs, Private Security Firms, Risk Management, Government,
    MilitaryLow Data Rate:Satellite Packet Data
    Terminals


Iridium, Skyterra, and Inmarsat-based, two-way messaging, micro telemetry, geo fencing, security/panic alarm, Both regional and global services available


Transportation, Public Safety, Workforce Automation, Oil and Gas
    Remote Monitoring and Control, Force Tracking


NGOs, Long-Haul Trucking Companies, NATO, EU, U.S. Department of
    DefenseEmergency 
    Management Products


Hardware and software for search and rescue  (SAR) systems


Rescue and Mission Control Centers


Over 18 Governments WorldwideServices and Support


24/7 global operations in 5 countries, lifecycle support
    maintenance, in-field subject-matter consulting expertise,
    network and airtime services   LXE




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® ® ®
  ®
      Products/Services


Key Features/Benefits


Selected Applications


CustomersHandheld 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, Third-party logistics providers,
    Retailers,Wearable Terminals


Very small and lightweight with ergonomic schemes for mounting
    on operators


Warehouse order picking


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   Defense &
    Space




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Products/Services


Key Features/Benefits


Selected Applications


ProgramsCommunications-
    On-The-Move
    Data Link and 
    Satcom Antenna 
    Systems


Low weight, low profile, low radar signature (stealth), high
    performance and agile beam antennas, RF electronics, and
    positioning systems


Military 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 DataLinks,
    Navy Airborne Data Links, Panasonic.Military and commercial  SATCOM communications (airborne, ground
    mobile, and soldier)


Manpack Portable GBS SuiteRadar Microwave 
    Systems


Low loss, high power ferrite components and electronic systems,
    and RF front end RADAR panels and conformal millimeter wave
    radar antenna systems that allow for co-boresighting of laser
    and EO/IR for tri-mode missile seekers


Defense electronic surveillance and countermeasure and Precision
    strike air-to-ground missiles


EW - F-16, AQL-211 Radar - Phalanx, JSTARS, TPQ-37 and
    Joint Air to Ground Missile (JAGM), Small Diameter Bomb IISpace Hardware 
    Systems


Microwave subsystems capable of high-frequency, low noise,
    high-power and fast switching, facilitating jam-resistant,
    secure mobile communications


High-rate commercial and secure military communications


Wideband Global SATCOM (WGS), Advanced EHF (AEHF), National
    Security Programs, W2A, Skynet 5, Hylas 2, Yahsat   Form 10-K.
 Acquisitions
    Completed in 2009  Formation




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Satamatics
  end-to-end
     Acquisitions
    Completed in 2008  Akerstroms
    Trux
    Sky
    Connect
    Machine-to-Machine




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Sales and
    Marketing      bid-and-proposal
   Research,
    Development and Intellectual Property    need-to-know
   Backlog




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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 quicker
    response for tasks that require 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      time-to-market, time-to-ship
 Employees   Regulatory
    Matters




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non-U.S. operations
  cap-and-trade
    AVAILABLE
    INFORMATION
  www.ems-t.com




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EXECUTIVE
    OFFICERS OF THE REGISTRANT    John B. Mowell (1981-1990) (1985-1989)
  Neilson A. Mackay
  Gary B. Shell, , (2004-2007),
  Timothy C. Reis, ,
  David M. Sheffield
  R. Nim Evatt, ,
  Stephen M. Newell, ,




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Adoption
    of Shareholder Rights Plan
    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 Operations
    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.
    Unfavorable
    economic or financial market conditions or other developments
    may affect the fair value of one or more of our business units
    and increase the potential for additional asset impairment
    charges that could adversely affect our earnings.
  and/or slower-than-expected




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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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Our
    products are subject to a variety of certification requirements
    of the Federal Aviation Administration (FAA) and the Federal
    Communications Commission (FCC), including stringent standards
    for performance, reliability and manufacturing processes. Our
    failure to meet any of these standards, which may involve
    complex testing and technical issues, could limit our ability to
    market these products and thereby reduce our sales and earnings.
    Our sales and earnings may also be adversely affected by the
    costs and delays associated with meeting these standards and
    obtaining the required certifications.
    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 our profits.
    Our
    transitions to new product offerings can be costly and
    disruptive, and could adversely affect our net sales or
    profitability.




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Our
    products may inadvertently infringe third-party patents, which
    could create substantial liability to our customers or the
    third-party patent owners.
    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.




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Changes
    in regulations that limit the availability of licenses or
    otherwise result in increased expenses could cause our net sales
    or earnings to decline.
    Additional
    environmental regulation could increase costs and adversely
    affect our future earnings.
  cap-and-trade
  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.




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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.
    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.




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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.
    We may
    make acquisitions and investments that could adversely affect
    our earnings or otherwise fail to perform as
    expected.
  Business
    Combinations, tm




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We
    have residual liabilities under the terms of our sales of
    discontinued businesses.
    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.




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Provisions
    in our governing documents and law could prevent or delay a
    change of control not supported by our Board of
    Directors.
    
    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




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Item 4.
    [Reserved]




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PART II Item 5. Market
    for Registrants Common Equity, Related Shareholder Matters
    and Issuer Purchases of Equity Securities    2009 Price Range

2008 Price RangeHigh

Low

High

LowFirst Quarter

$
26.48



17.07


$
27.71



27.18Second Quarter


21.45



16.93



22.29



21.63Third Quarter


23.17



17.55



22.04



21.50Fourth Quarter


20.37



12.00



26.72



25.00       ISSUER
    PURCHASES OF EQUITY SECURITIES
  (c) Total Number


(d) Maximum Numberof Shares


( or ApproximatePurchased 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


Per Share


Program(1)


Programs(2)October 2009 (October 4 to October 31)


-







-November 2009 (November 1 to November 28)


-



-



-December 2009 (November 29 to December 31)


20,600



12.13



20,600Total


20,600


$
12.13



20,600


$
9.9 million   (1)
    
    This balance represents the number of shares that were
    repurchased under our $20 million repurchase program (the
    Program) which was initially announced on July 30, 2008.
    Unless terminated earlier by resolution of our Board of
    Directors, the Program will expire when we have purchased all
    shares authorized for repurchase. The Program does not obligate
    us to repurchase any particular amount of common shares, and may
    be suspended or discontinued at any time without notice.(2)
    
    This balance represents the value of shares that could be
    repurchased in the future under the Program as of
    December 31, 2009.




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Item 6.
    Selected
    Financial Data  Form 10-K.
  Years Ended December 312009


2008


2007


2006


2005Net sales

$
359,972



335,045



287,879



261,119



225,887Cost of sales


241,124



213,885



175,278



164,611



146,965Selling, general and administrative expenses


87,722



81,426



74,561



66,335



56,944Research and development expenses


18,662



20,110



18,773



15,816



11,754Impairment loss on goodwill


19,891



-



-



-



-Acquistion-related items


7,206



-



-



-



-Operating (loss) income


(14,633
)


19,624



19,267



14,357



10,224Interest income


207



2,430



5,403



2,254



588Interest expense


(2,181
)


(1,679
)


(1,953
)


(1,921
)


(3,304
)Foreign exchange loss, net


(808
)


(586
)


(1,390
)


(710
)


(288
)(Loss) earnings from continuing operations before income taxes


(17,415
)


19,789



21,327



13,980



7,220Income tax benefit (expense)


4,266



682



(2,080
)


1,823



(2,094
)(Loss) earnings from continuing operations


(13,149
)


20,471



19,247



15,803



5,126Discontinued operations:(Loss) earnings from discontinued operations before income taxes


(10,917
)


-



(585
)


24,427



(13,971
)Income tax benefit (expense)


4,001



-



82



(7,222
)


(2,598
)(Loss) earnings from discontinued operations


(6,916
)


-



(503
)


17,205



(16,569
)Net (loss) earnings

$
(20,065
)


20,471



18,744



33,008



(11,443
)Net (loss) earnings per share:Basic:From continuing operations

$
(0.87
)


1.32



1.25



1.08



0.46From discontinued operations


(0.45
)


-



(0.03
)


1.18



(1.48
)Net (loss) earnings

$
(1.32
)


1.32



1.22



2.26



(1.02
)Diluted:From continuing operations

$
(0.87
)


1.31



1.24



1.08



0.46From discontinued operations


(0.45
)


-



(0.03
)


1.17



(1.48
)Net (loss) earnings

$
(1.32
)


1.31



1.21



2.25



(1.02
)Weighted-average number of common shares outstanding:Basic


15,169



15,452



15,354



14,621



11,179Diluted


15,169



15,628



15,482



14,679



11,225As of December 312009


2008


2007


2006


2005Working capital related to continuing operations

$
98,147



165,419



198,491



176,570



67,580Total assets


374,145



327,365



323,800



291,684



225,341Long-term debt, including current installments


27,750



10,552



13,720



14,857



43,408Shareholders equity


237,091



242,742



247,126



213,083



113,656




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Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  We have included forward-looking statements in
    managements discussion and analysis of financial condition
    and results of operations. All statements, other than statements
    of historical fact, included in this report that address
    activities, events or developments that we expect or anticipate
    will or may occur in the future, or that necessarily depend upon
    future events, including such matters as our expectations with
    respect to future financial performance, future capital
    expenditures, business strategy, competitive strengths, goals,
    expansion, market and industry developments and the growth of
    our businesses and operations, are forward-looking
    statements.
  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.
    Actual results could differ materially from those anticipated in
    the forward-looking statements as a result of a variety of
    factors, including those addressed at the end of this item and
    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
  communications-on-the-move
    
    Communications &
    Tracking  Supplies a broad array of
    terminals and antennas that enable end-users in aircraft and
    other mobile platforms to communicate over satellite and
    air-to-ground
    links. This segment includes the previously reported Satellite
    Communications segment, and the newly acquired Formation, Inc.
    (Formation) and Satamatics Global Limited
    (Satamatics) product lines which include
    aeronautical wi-fi communications and data storage, aeronautical
    voice and tracking, and satellite-based
    machine-to-machine
    mobile communications (refer to Acquisitions Completed in
    2009 in Item 1 of this Annual Report and Note 2
    to the Consolidated Financial Statements for additional
    information);
    LXE  Provides rugged mobile terminals and
    wireless data networks used for logistics applications such as
    distribution centers, warehouses and container ports. LXE
    operates mainly in two markets: the Americas market, which is
    comprised of North, South and Central America; and the
    International market, which is comprised of all other geographic
    areas, with the highest concentration in Europe; and
    Defense & Space
    (D&S)   Supplies highly
    engineered subsystems for defense electronics and sophisticated
    satellite applications from military communications, radar,
    surveillance and countermeasures to commercial high-definition
    television, satellite radio, and live TV for innovative airlines.    
    Aviation- Includes SATCOMs aeronautical
    business, and the Sky Connect and Formation businesses, which
    were acquired in August 2008 and January 2009, respectively.
    Aviation designs and develops satellite-based communications
    solutions through a broad array of terminals and antennas for
    the aeronautical market that enable end-users in aircraft and
    other mobile platforms to communicate over satellite and
    air-to-ground
    links. This segment also builds in-cabin connection devices and
    computers to process data on board aircraft, including rugged
    data storage, airborne connectivity,
    air-to-ground
    connectivity, and data recording and replay.




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
    Global Tracking- Includes the asset tracking and
    emergency management operations of our SATCOM business, and the
    Satamatics business, which was acquired in February 2009. Global
    Tracking provides aeronautical voice and tracking, and
    satellite-based
    machine-to-machine
    mobile communications equipment and services to track, monitor
    and control remote assets, regardless of whether they are fixed,
    semi-fixed or mobile. Additionally, Global Tracking provides
    equipment for the Cospas-Sarsat search and rescue system and
    incident management software for rescue coordination worldwide.        Financial
    and Performance Highlights of 2009
    
    We completed the acquisitions of Formation and Satamatics on
    January 9, 2009 and February 13, 2009, respectively.
    In 2009, these newly acquired product lines along with Sky
    Connect, LLC (Sky Connect), which was acquired in
    August of 2008, generated $68.9 million of net sales, and
    losses of $1.8 million before income taxes. The loss
    includes a charge of $7.8 million for amortization of
    intangible assets.
    Consolidated net sales were 7.4% higher in 2009 as compared with
    same period in 2008. Higher net sales at
    Communications & Tracking (reflected the newly
    acquired product lines), and D&S were partially offset in
    2009 by lower net sales at LXE (reflecting the challenging
    global economic climate). Net sales from
    Communications & Trackings organic product lines
    were down for 2009, as compared with 2008, due to lower net
    sales from aeronautical products and from the Inmarsat
    development project that concluded in 2008 and, therefore, was
    not included in the 2009 results.
    Our pre-tax loss from continuing operations of
    $17.4 million included a $19.9 million impairment loss
    on goodwill at LXE, $7.2 million of acquisition-related
    charges that are required to be reported as a current expense
    under the provisions of Statement of Financial Accounting
    Standards (SFAS) No. 141(R), Business
    Combinations (which is now included in Financial Accounting
    Standards Board (FASB) Accounting Standards
    Codificationtm

    (ASC) Topic 805, Business Combinations),
    $7.8 million of amortization of intangible assets related
    to our new acquisitions, and approximately $3.9 million of
    severance costs.
    Our markets continue to see the unfavorable impact of the
    economy and they are not immune to increasing pressures and
    risks. We expect that we will continue to be faced with these
    economic pressures through 2010. We recorded an impairment loss
    on goodwill of $19.9 million at our LXE segment in the
    fourth quarter of 2009. We concluded during our annual
    impairment evaluation that the carrying amount of LXEs
    goodwill exceeded its implied fair value reflecting the
    unfavorable affects of the global economic climate on the
    projected future cash flows of our LXE business. The economy and
    other factors could cause a decline in expected future cash
    flows for one or more of our other business units (including our
    recently acquired businesses) and it is reasonably possible that
    we may be required to recognize additional impairment losses
    related to goodwill or other long-lived assets.
    Our discontinued operations reported a loss before income taxes
    of $10.9 million in 2009. The loss was mainly a result of a $9.2
    million liability recorded in 2009 for costs awarded in an
    interim award by an arbitrator for warranty claims under the
    provisions of the sales agreement of our former EMS Wireless
    division, and for legal costs of $1.5 million associated with
    the defense of these claims.




---



##### Table of Contents



Description
    of Net Sales, Costs and Expenses
  Net
    sales
  605-25, Revenue Recognition-Multiple-Element Arrangements 985-605, Software-Revenue Recognition percentage-of-completion cost-at-completion cost-at-completion cost-at-completion
  percentage-of-completion
  Cost of
    sales
      cost-of-sales cost-of-sales cost-of-sales




---



##### Table of Contents



Selling,
    general and administrative expenses
    Research
    and development expenses
    Acquisition-related
    items
    Impairment
    loss on goodwill
  Intangibles-Goodwill and Other
  Interest
    income
    Interest
    expense
    Foreign
    exchange gains and losses




---



##### Table of Contents



Income
    taxes
    Discontinued
    operations
    Results
    of Operations
    Years Ended December 312009


2008


2007Product net sales


78.1
%


81.6
%


86.0
%Service net sales


21.9



18.4



14.0Net sales


100.0



100.0



100.0Product cost of sales as a percentage of product net sales


69.0



64.4



61.3Service cost of sales as a percentage of service net sales


59.9



61.2



58.6Cost of sales


67.0



63.8



60.9Selling, general and administrative expenses


24.4



24.3



25.9Research and development expenses


5.2



6.0



6.5Impairment loss on goodwill


5.5



-



-Acquisition-related charges


2.0



-



-Operating (loss) income


(4.1
)


5.9



6.7Interest income


0.1



0.7



1.9Interest expense


(0.6
)


(0.5
)


(0.7
)Foreign exchange loss, net


(0.2
)


(0.2
)


(0.5
)(Loss) earnings from continuing operations before income taxes


(4.8
)


5.9



7.4Income tax benefit (expense)


1.1



0.2



(0.7
)Net (loss) earnings from continuing operations


(3.7
)


6.1



6.7Discontinued operations:Loss from discontinued operations before income taxes


(3.0
)


-



(0.2
)Income tax benefit


1.1



-



-Loss from discontinued operations


(1.9
)


-



(0.2
)Net (loss) earnings


(5.6
) %


6.1
%


6.5
%




---



##### Table of Contents



Years
    ended December 31, 2009 and 2008:
      cost-of-sales cost-of-sales cost-of-sales cost-of-sales cost-of-sales




---



##### Table of Contents



Years
    ended December 31, 2008 and 2007:




---



##### Table of Contents



cost-of-sales cost-of-sales




---



##### Table of Contents



Segment
    Analysis
  cost-of-sales
  Years Ended December 312009


2008


2007Net sales:Communications & Tracking

$
158,952



112,517



89,968LXE


109,441



145,885



138,821Defense & Space


91,579



76,643



59,090Total

$
359,972



335,045



287,879Cost of sales percentage:Communications & Tracking


61.7
%


58.6
%


55.9
%LXE


63.6



60.3



58.0Defense & Space


80.1



77.0



75.4Total


67.0



63.8



60.9Operating income (loss):Communications & Tracking

$
11,383



14,187



12,189LXE


(26,531
)


2,861



7,067Defense & Space


7,314



6,381



4,876Corporate & Other


(6,799
)


(3,805
)


(4,865
)Total

$
(14,633
)


19,624



19,267Adjusted
    EBITDA(1)Communications and Tracking

$
24,326



19,122



15,244LXE


(3,379
)


6,724



9,508Defense & Space


10,682



9,410



7,503Corporate & Other


1,623



(1,290
)


691Total

$
33,252



33,966



32,946   (1)
  Communications & Tracking:




---



##### Table of Contents



cost-of-sales
      LXE:
  cost-of-sales cost-of-sales
  cost-of-sales cost-of-sales




---



##### Table of Contents



Defense & Space:
        Adjusted
    EBITDA




---



##### Table of Contents



Corp &C&T


LXE


D&S


Other


TotalYear Ended December 31, 2009Net loss

















$
(20,065
)Loss from discontinued operations


















6,916Income tax benefit from continuing operations


















(4,266
)Earnings (loss) from continuing operations before income taxes

$
12,141



(26,708
)


7,315



(10,163
)


(17,415
)Interest expense


68



93



-



2,020



2,181Depreciation and amortization


12,117



3,345



3,367



1,160



19,989Impairment loss on goodwill


-



19,891



-



-



19,891Acquisition-related items


-



-



-



7,206



7,206Acquisition-related foreign exchange adjustment


-



-



-



1,400



1,400Adjusted EBITDA

$
24,326



(3,379
)


10,682



1,623


$
33,252Year Ended December 31, 2008Net earnings

















$
20,471Income tax benefit from continuing operations


















(682
)Earnings (loss) from continuing operations before income taxes

$
13,971



2,955



6,347



(3,485
)


19,789Interest expense


62



406



40



1,171



1,679Depreciation and amortization


5,089



3,363



3,023



1,023



12,498Adjusted EBITDA

$
19,122



6,724



9,410



(1,291
)

$
33,966Year Ended December 31, 2007Net earnings

















$
18,744Loss from discontinued operations


















503Income tax expense from continuing operations


















2,080Earnings (loss) from continuing operations before income taxes

$
11,504



6,955



4,742



(1,874
)


21,327Interest expense


121



348



141



1,343



1,953Depreciation and amortization


3,619



2,205



2,620



1,222



9,666Adjusted EBITDA

$
15,244



9,508



7,503



691


$
32,946




---



##### Table of Contents



Discontinued
    Operations:




---



##### Table of Contents



Backlog
    December 312009


2008Communications & Tracking

$
66.6



58.4LXE


22.0



12.6Defense & Space


89.6



114.9Total

$
178.2



185.9     Liquidity
    and Capital Resources




---



##### Table of Contents








---



##### Table of Contents



Off-Balance
    Sheet Arrangements




---



##### Table of Contents



Commitments
    and Contractual Obligations
    Payments due by periodLess than


1-3


4-5


After 5Total


1 year


years


years


yearsPurchase commitments (1)

$
34,028



33,946



82



-



-Long-term debt, excluding capital lease obligations (2)


27,748



1,396



3,052



21,359



1,941Operating lease obligations


24,963



5,160



8,281



5,630



5,892Acquisition costs for earn-out provisions


13,729



13,729



-



-



-License to acquire satellite service


8,000



2,000



2,000



2,000



2,000FIN 48-Uncertain
    tax positions


2,019



2,019



-



-



-Deferred compensation agreements


709



156



198



34



321   (1)
    
    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.(2)
    
    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 in the above table. Interest
    payments in 2009 were approximately $1.5 million. There was
    no accrued interest as of December 31, 2009.  Critical
    Accounting Policies
    Revenue
    recognition
  (percentage-of-completion
  recognized-to-date percentage-of-completion cost-at-completion




---



##### Table of Contents



percentage-of-completion percentage-of-completion
    percentage-of-completion
  605-25, Revenue Recognition-Multiple-Element Arrangements 985-605, Software-Revenue Recognition,
  Inventory
    valuation
    Evaluation
    of fair value measurements
  Fair Value Measurements and
    Disclosures
  
    Level 1  Observable inputs consisting of quoted
    prices in active markets;




---



##### Table of Contents




    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.  Business
    combinations
  Business Combinations Business
    Combinations
  Income Taxes
    Intangibles 
    Goodwill and Other
  Form 10-K.
  360-35, Impairment or Disposal of Long-Lived Assets




---



##### Table of Contents



Evaluation
    of long-lived assets for impairment
    Evaluation
    of goodwill for impairment
        EstimatedFair Value inReported


Excess ofGoodwill


Carrying AmountFormation

$
24,060



5.9
%Satamatics


23,429



2.5Sky Connect


11,048



11.0




---



##### Table of Contents



Evaluation
    of contingencies related to discontinued
    operations
      Income
    taxes
    Accounting for Uncertainty in
    Income Taxes  an Interpretation of FASB Statement
    No. 109 740-10-05, Income Taxes




---



##### Table of Contents



Stock-based
    compensation




---



##### Table of Contents



Risk
    Factors and Forward-Looking Statements
    
    economic conditions in the U.S. and abroad and their effect
    on capital spending in our principal markets;
    difficulty predicting the timing of receipt of major customer
    orders, and the effect of customer timing decisions on our
    results;
    our successful completion of technological development programs
    and the effects of technology that may be developed by, and
    patent rights that may be held or obtained by, competitors;
    U.S. defense budget pressures on near-term spending
    priorities;
    uncertainties inherent in the process of converting contract
    awards into firm contractual orders in the future;
    volatility of foreign currency exchange rates relative to the
    U.S. dollar and their effect on purchasing power by
    international customers, and on the cost structure of our
    operations outside the U.S., as well as the potential for
    realizing foreign exchange gains and losses associated with
    assets or liabilities denominated in foreign currencies;
    successful resolution of technical problems, proposed scope
    changes, or proposed funding changes that may be encountered on
    contracts;
    changes in our consolidated effective income tax rate caused by
    the extent to which actual taxable earnings in the U.S., Canada
    and other taxing jurisdictions may vary from expected taxable
    earnings and the extent to which determined tax assets are
    considered realizable;
    successful transition of products from development stages to an
    efficient manufacturing environment;
    changes in the rate at which our products are returned for
    repair or replacement under warranty;
    customer response to new products and services, and general
    conditions in our target markets (such as logistics and
    space-based communications) and whether these responses and
    conditions develop according to our expectations;
    the increased potential for asset impairment charges as
    unfavorable economic or financial market conditions, or other
    developments might affect the estimated fair value of one or
    more of our business units;
    the success of certain of our customers in marketing our line of
    high-speed commercial airline communications products as a
    complementary offering with their own lines of avionics products;
    the continued availability of financing for various mobile and
    high-speed data communications systems;
    risk that the unsettled conditions in the credit markets may
    make it more difficult for some customers to obtain financing
    and adversely affect their ability to pay, which in turn could
    have an adverse impact on our business, operating results and
    financial condition;
    development of successful working relationships with local
    business and government personnel in connection with the
    distribution and manufacture of products in foreign countries;
    the demand growth for various mobile and high-speed data
    communications services;
    our ability to attract and retain qualified senior management
    and other personnel, particularly those with key technical
    skills;
    our ability to effectively integrate our acquired businesses,
    products or technologies into our existing businesses and
    products, and the risk that any such acquired businesses,
    products or technologies do




---



##### Table of Contents



not perform as expected, are subject to undisclosed or
    unanticipated liabilities, or are otherwise dilutive to our
    earnings;  
    the potential effects, on cash and results of discontinued
    operations, of final resolution of potential liabilities under
    warranties and representations that we made, and obligations
    assumed by purchasers, in connection with our dispositions of
    discontinued operations;
    the availability, capabilities and performance of suppliers of
    basic materials, electronic components and sophisticated
    subsystems on which we must rely in order to perform according
    to contract requirements, or to introduce new products on the
    desired schedule; and
    uncertainties associated with U.S. export controls and the
    export license process, which restrict our ability to hold
    technical discussions with customers, suppliers and internal
    engineering resources and can reduce our ability to obtain sales
    from customers outside the U.S. or to perform contracts
    with the desired level of efficiency or profitability.  Form 10-K
  Effect of
    New Accounting Pronouncements
   
    Recently Issued Pronouncements Not Yet Adopted
    2009-13, Revenue Recognition  Multiple-Deliverable Revenue
    Arrangements, 2009-13:
 
    Eliminates the requirement for objective evidence of fair value
    of an undelivered item for treatment of the delivered item as a
    separate unit of accounting;
    Requires use of the relative selling price method for allocating
    total consideration to elements of the arrangement instead of
    the relative-fair-value method or the residual method;
    Allows the use of an estimated selling price for any element
    within the arrangement to allocate consideration to individual
    elements when vendor-specific objective evidence or other third
    party evidence of selling price do not exist; and
    Expands the required disclosures.  2009-14, Software  Certain Revenue Arrangements That
    Include Software Elements 2009-14
  2009-14 2009-13.
  Improving Disclosures About Fair
    Value Measurements




---



##### Table of Contents



2010-06
    Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk    Government-obligations money market funds, other money market
    instruments, and interest-bearing time deposits, with maturity
    dates of less than 3 months interest payable monthly at
    variable rates (a weighted-average rate of 0.2% at
    December 31, 2009)

$
18,165Revolving credit agreement with U.S. and Canadian banks,
    maturing in February 2013, interest payable quarterly at a
    variable rate (3.75% at December 31, 2009)

$
18,500         Exchange Rate


USD(USD per unit of


in thousandslocal currency)


(reporting currency)Australia


0.8983 /AUD


$
2,246Canada


0.9515 /CAD



1,482Sweden


0.1397 /SEK



1,382France


1.4316 /EUR



375Italy


1.4316 /EUR



272Netherlands


1.4316 /EUR



224Total amount subject to foreign currency risk





$
5,981




---



##### Table of Contents



Exchange RateFunctionalCurrency per


USDCurrency

Functional


Denominated


EquivalentDenomination

Currency


Currency


(in thousands)Accounts ReceivableUSD


CAD



1.0510


$
14,951USD


EUR



0.6985



634EUR


SEK



10.2529



173EUR


GBP



0.8866



150Other currencies










205$
16,113Accounts PayableGBP


CAD



1.6918


$
1,154USD


CAD



1.0510



847EUR


SEK



10.2529



686EUR


GBP



0.8866



531GBP


USD



1.6163



284AUD


CAD



0.9395



142Other currencies










268$
3,912     Exchange RateFunctionalCurrency per


USDCurrency

Functional


Denominated


EquivalentDenomination

Currency


Currency


(in thousands)USD


CAD



1.0510


$
2,876GBP


CAD



1.6918



1,909GBP


USD



1.6163



1,787EUR


SEK



10.2529



504AUD


CAD



0.9395



292Other currencies










566$
7,934




---



##### Table of Contents



Average


FairNotional


Contract


ValueAmount


Rate


(USD)Foreign currency forward contracts:U.S. dollars (sell for Canadian dollars)


15,000 USD



1.0509


$
40Euros (sell for U.S. dollars)


250 EUR



1.4259



(1
)$
39   Item 8.
    Financial
    Statements and Supplementary Data  Form 10-K
  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    Rules 13a-15(e) 15d-15(e)
  (b)
    Managements
    Annual Report on Internal Control Over Financial
    Reporting  Rule 13a-15(f) 15d-15(f)




---



##### Table of Contents



Report of Independent
    Registered Public Accounting Firm
  (c)
    Changes
    in Internal Control Over Financial Reporting    (d)
    Report
    of Independent Registered Public Accounting Firm




---



##### Table of Contents



KPMG
    LLP




---



##### Table of Contents



Item 9B.
    Other
    Information.   PART III  Item 10.
    Directors,
    Executive Officers, and Corporate Governance    www.ems-t.com
    Item 11.
    Executive
    Compensation




---



##### Table of Contents



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


832,761


$
20.82



1,631,600Equity compensation plans not approved by security holders


161,525



19.64



201,517
(i)Total


994,286


$
20.63



1,833,117       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    Form 10-K.




---



##### Table of Contents



SCHEDULE II 
    VALUATION AND QUALIFYING
    ACCOUNTS (in thousands):
  Years Ended December 31, 2009, 2008 and 2007AdditionsBalance at


charged to








Balancebeginning


costs and








at endClassification

of year


expenses


Deductions


Other


of yearAllowance for Doubtful Accounts:2007

$
741



1,404



(1,041
)(a)


-



1,1042008


1,104



333



(653
)(a)


72
(b)


8562009


856



921



(679
)(a)


110
(b)


1,208Valuation Allowance for Deferred Tax Assets:2007

$
32,921



16,222
(c)


(49
)


-



49,0942008


49,094



-



(20,545
)(d)


-



28,5492009


28,549



-



-



9,302
(e)


37,851         beginning-of-the-year
        Form 8-K
  Form 8-K
  Form 8-K




---



##### Table of Contents



Form 8-K
  Form 10-Q
      Form 10-Q
  Form 8-K
    Form 10-Q
  Form 8-K
  Form 10-Q
  Form 10-Q
  Form 10-Q
  Form 10-K
  change-of-control Form 10-K
  change-of-control Form 10-K
  Form 10-K




---



##### Table of Contents



Form 10-K
  Form 10-Q
  Form 10-Q
  Form 1/25/01 Form 10-K
  Form 1/25/01 Form 10-K
  Form 10-K
  Form 10-K
  Form 02/16/00 Form 10-K
  Form 02/16/00 Form 10-K
  Form 5-02-08 Form 10-K
  Form 10-K
  Form 10-Q




---



##### Table of Contents



Form 5-18-07 Form 10-K
  Form 5/18/07 Form 10-K
  Form 10-K
  Form 10-K
  Form 10-Q
  Form 10-Q
  Form 10-K
  Form 10-Q
  Form 10-Q
  Form 10-K
  Form 10-K




---



##### Table of Contents



SIGNATURES    EMS TECHNOLOGIES, INC.By: /s/ Neilson A. Mackay
    President and Chief Executive Officer

Date: 3/31/10      Signature

Title

Date/s/  Neilson
    A. MackayNeilson
    A. Mackay

President and Chief Executive Officer (Principal Executive
    Officer)

3/31/10/s/  Gary
    B. ShellGary
    B. Shell

Senior Vice President, Chief Financial Officer, and Treasurer
    (Principal Financial Officer)

3/31/10/s/  David
    M. SheffieldDavid
    M. Sheffield

Vice President, Finance and Chief Accounting Officer (Principal
    Accounting Officer)

3/31/10/s/  John
    R. BoltonJohn
    R. Bolton

Director

3/31/10/s/  Hermann
    BuergerHermann
    Buerger

Director

3/31/10/s/  Francis
    J. ErbrickFrancis
    J. Erbrick

Director

3/31/10/s/  John
    R. KreickJohn
    R. Kreick

Director

3/31/10/s/  John
    B. MowellJohn
    B. Mowell

Director, Chairman of the Board

3/31/10/s/  Thomas
    W. OConnellThomas
    W. OConnell

Director

3/31/10/s/  Bradford
    W. ParkinsonBradford
    W. Parkinson

Director

3/31/10/s/  Norman
    E. ThagardNorman
    E. Thagard

Director

3/31/10/s/  John
    L. Woodward, Jr.John
    L. Woodward, Jr.

Director

3/31/10




---



##### Table of Contents



INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS  PageReport of Independent Registered Public
    Accounting Firm


68Consolidated Statements of Operations 
    Years ended December 31, 2009, 2008 and 2007


69Consolidated Balance Sheets 
    December 31, 2009 and 2008


70Consolidated Statements of Cash Flows 
    Years ended December 31, 2009, 2008 and 2007


72Consolidated Statements of Shareholders
    Equity and Comprehensive Income (Loss)  Years
    ended December 31, 2009, 2008 and 2007


73Notes to Consolidated Financial Statements


74




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM           Business Combinations Business Combinations




---



##### Table of Contents



EMS
    TECHNOLOGIES, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF
    OPERATIONS (in
    thousands, except per share data)
  Years Ended December 312009


2008


2007Product net sales

$
281,153



273,268



247,504Service net sales


78,819



61,777



40,375Net sales


359,972



335,045



287,879Product cost of sales


193,888



175,837



151,611Service cost of sales


47,236



38,048



23,667Cost of sales


241,124



213,885



175,278Selling, general and administrative expenses


87,722



81,426



74,561Research and development expenses


18,662



20,110



18,773Impairment loss on goodwill


19,891



-



-Acquistion-related items


7,206



-



-Operating (loss) income


(14,633
)


19,624



19,267Interest income


207



2,430



5,403Interest expense


(2,181
)


(1,679
)


(1,953
)Foreign exchange loss, net


(808
)


(586
)


(1,390
)(Loss) earnings from continuing operations before income taxes


(17,415
)


19,789



21,327Income tax benefit (expense)


4,266



682



(2,080
)(Loss) earnings from continuing operations


(13,149
)


20,471



19,247Discontinued operations:Loss from discontinued operations before income taxes


(10,917
)


-



(585
)Income tax benefit


4,001



-



82Loss from discontinued operations


(6,916
)


-



(503
)Net (loss) earnings

$
(20,065
)


20,471



18,744Net (loss) earnings per share:Basic:From continuing operations

$
(0.87
)


1.32



1.25From discontinued operations


(0.45
)


-



(0.03
)Net (loss) earnings

$
(1.32
)


1.32



1.22Diluted:From continuing operations

$
(0.87
)


1.31



1.24From discontinued operations


(0.45
)


-



(0.03
)Net earnings

$
(1.32
)


1.31



1.21Weighted-average number of common shares outstanding:Basic


15,169



15,452



15,354Diluted


15,169



15,628



15,482




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##### Table of Contents



EMS
    TECHNOLOGIES, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS (in
    thousands)
  December 312009


2008ASSETSCurrent assets:Cash and cash equivalents

$
47,174



86,979Trade accounts receivable, net of allowance for doubtful account
    of$1,208 in 2009 and $856 in 2008


60,959



65,831Costs and estimated earnings in excess of billings on long-term
    contracts


25,290



30,485Inventories


40,655



35,670Deferred income taxes


4,306



1,632Other current assets


19,117



12,184Total current assets


197,501



232,781Property, plant and equipment:Land


1,150



1,150Buildings and leasehold improvements


18,792



16,238Machinery and equipment


107,712



92,100Furniture and fixtures


10,542



10,059Total property, plant and equipment


138,196



119,547Less accumulated depreciation


90,256



78,975Net property, plant and equipment


47,940



40,572Deferred income taxes


9,421



7,318Goodwill


60,336



31,402Other intangible assets, net of accumulated amortization of
    $18,817 in 2009 and $8,219 in 2008


49,256



11,166Other assets


9,691



4,126Total assets

$
374,145



327,365




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##### Table of Contents



EMS
    TECHNOLOGIES, INC. AND SUBSIDIARIES
    CONSOLIDATED BALANCE SHEETS, continued
    (in thousands, except share data)
  December 312009


2008LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Current installments of long-term debt

$
1,398



1,302Accounts payable


27,333



25,361Billings in excess of contract costs and estimated earnings on
    long-term contracts


9,597



8,172Accrued compensation and retirement costs


13,946



14,456Deferred service revenue


9,588



7,998Acquisition costs for earn-out provisions


13,729



-Other current liabilities


23,763



10,073Total current liabilities


99,354



67,362Long-term debt, excluding current installments


26,352



9,250Deferred income taxes


5,757



461Other liabilities


5,591



7,550Total liabilities


137,054



84,623Shareholders 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 15,249 in 2009 and
    15,188 in 2008


1,525



1,519Additional paid-in capital


136,112



133,270Accumulated other comprehensive income (loss) - foreign
    currency translation adjustment


6,066



(5,500
)Retained earnings


93,388



113,453Total shareholders equity


237,091



242,742Commitments and contingenciesTotal liabilities and shareholders equity

$
374,145



327,365




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##### Table of Contents



EMS
    TECHNOLOGIES, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH
    FLOWS
  Years Ended December 31(in thousands)

2009


2008


2007Cash flows from operating activities:Net (loss) earnings

$
(20,065
)


20,471



18,744Adjustments to reconcile net earnings (loss) to net cash
    provided by operating activities:Depreciation and amortization


19,989



12,498



9,666Impairment loss on goodwill


19,891



-



-Deferred income taxes


(4,629
)


(2,400
)


887Gain (loss) on sale of assets


78



(64
)


(1
)Loss from discontinued operations


6,916



-



503Stock-based compensation expense


2,470



2,339



1,727Tax benefit for exercise of stock options


133



203



643Change in fair value of contingent consideration liability


3,229



-



-Excess tax benefits from stock-based compensation


(23
)


(75
)


(24
)Changes in operating assets and liabilities, net of effects of
    acquisitions:Trade accounts receivable


12,575



(5,584
)


14,259Costs and estimated earnings in excess of billings on long-term
    contracts


1,628



(7,991
)


(989
)Inventories


6,957



(7,801
)


(904
)Accounts payable


(5,026
)


1,076



(7,113
)Accrued compensation and retirement costs


(1,994
)


819



1,167Other


138



2,960



3,498Net cash provided by operating activities in continuing
    operations


42,267



16,451



42,063Net cash used in operating activities in discontinued operations


(555
)


-



(3,329
)Net cash provided by operating activities


41,712



16,451



38,734Cash flows from investing activities:Purchases of property, plant and equipment


(13,433
)


(13,869
)


(14,579
)Payments for acquisitions of businesses, net of cash acquired


(87,264
)


(32,354
)


(5,000
)Proceeds from sales of assets


58



1,371



907Net cash used in investing activities


(100,639
)


(44,852
)


(18,672
)Cash flows from financing activities:Net borrowings under revolving credit facility


18,500



-



-Repayment of other debt


(1,294
)


(3,159
)


(1,281
)Change in restricted cash


-



-



81Deferred financing costs paid


(251
)


(1,254
)


-Payments for repurchase and retirement of common shares


(374
)


(9,963
)


-Excess tax benefits from stock-based compensation


23



75



24Proceeds from exercise of stock options


620



925



4,332Net cash provided by (used in) financing activities


17,224



(13,376
)


3,156Effect of changes in exchange rates on cash and cash equivalents


1,898



(5,203
)


1,310Net change in cash and cash equivalents


(39,805
)


(46,980
)


24,528Cash and cash equivalents at beginning of period


86,979



133,959



109,431Cash and cash equivalents at end of period

$
47,174



86,979



133,959Supplemental disclosure of cash flow information:Cash paid for interest

$
1,839



1,094



1,147Cash paid for income taxes


983



2,289



357




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##### Table of Contents



EMS
    TECHNOLOGIES, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF
    SHAREHOLDERS EQUITY AND COMPREHENSIVE INCOME
    (LOSS) (in
    thousands)
  Three Years Ended December 31, 2009Accum-ulatedotherCompre-


compre-





TotalAdditional


hensive


hensive





share-Common Stock


paid-in


income


income


Retained


holdersShares


Amount


capital


(loss)


(loss)


earnings


equityBalance December 31, 2006


15,327


$
1,533



133,050







4,262



74,238



213,083Net earnings


-



-



-



18,744



-



18,744



18,744Tax benefit for exercise of 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 common 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



20,471Tax benefit for exercise of 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 common 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



242,742Net loss


-



-



-



(20,065
)


-



(20,065
)


(20,065
)Tax benefit for exercise of stock options


-



-



133



-



-



-



133Exercise of common stock options


48



5



663



-



-



-



668Redemption of shares upon exercise of common stock options


(2
)


-



(47
)


-



-



-



(47
)Repurchases of common stock


(27
)


(3
)


(373
)


-



-



-



(376
)Stock-based compensation


42



4



2,466



-



-



-



2,470Foreign currency translation adjustment


-



-



-



11,566



11,566



-



11,566Comprehensive income (loss) for 2009














(8,499
)Balance December 31, 2009


15,249


$
1,525



136,112







6,066



93,388



237,091




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##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2009, 2008 and 2007  (1)
    BASIS OF
    PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
    POLICIES      Regulation S-X Form 10-K.
     Revenue
    Recognition
  tm 605-25, Revenue Recognition-Multiple-Element Arrangements 985-605, Software-Revenue Recognition percentage-of-completion
  percentage-of-completion cost-at-completion




---



##### Table of Contents



percentage-of-completion
  percentage-of-completion
     Government
    Research Incentives
     Cash
    Equivalents
     Inventories
  (first-in, Work-in-process




---



##### Table of Contents



 Property,
    Plant and Equipment
    Buildings

20 to 40 yearsMachinery and equipment

3 to 8 yearsFurniture and fixtures

4 to 10 years      Long-Lived
    Assets
     Goodwill
    and Other Intangible Assets
      Form 10-K.
  360-10-05, Impairment or Disposal of Long-Lived




---



##### Table of Contents



Assets
  and/or slower-than-expected
   Loss
    Contingencies
     Income
    Taxes
      Accounting for Uncertainty in Income Taxes  an
    Interpretation of FASB Statement No. 109 740-10-05, Income Taxes),




---



##### Table of Contents



 Earnings
    Per Share
      2009


2008


2007Basic weighted-average number of common shares outstanding


15,169



15,452



15,354Dilutive potential shares using the treasury share method


-



176



128Diluted weighted-average number of common shares outstanding


15,169



15,628



15,482Shares that were not included in computation of diluted earnings
    per share that could potentially dilute future basic earnings
    per share because their effect on the periods were antidilutive


1,045



341



44    Stock-Based
    Compensation
     Foreign
    Currency Translation




---



##### Table of Contents



 Comprehensive
    Income
     Derivative
    Financial Instruments
       Warranties
     Accounting
    Changes Recently Adopted
  FASB Accounting Standards Codification and Hierarchy of
    GAAP The Hierarchy of Generally Accepted
    Accounting Principles
  Fair Value Measurements Fair Value Measurements and
    Disclosures
  Business Combinations Business Combinations.
  
    An acquiring entity must recognize all the assets acquired and
    liabilities assumed in a business combination at the
    acquisition-date fair value, as determined under the provisions
    in ASC Topic 820;
    Transaction costs are expensed as incurred, and are classified
    within cash flows from operating activities in the consolidated
    statement of cash flows. Such costs were previously capitalized
    as part




---



##### Table of Contents



of the cost of an acquisition, and were classified within cash
    flows from investing activities in the consolidated statement of
    cash flows;  
    Contingent consideration is recognized at fair value at the
    acquisition date as a liability or as equity. Subsequent
    adjustments of an amount recognized as a liability are
    recognized in the statement of operations. Contingent
    consideration was previously accounted for as an adjustment to
    the cost of the acquisition when the results of the contingency
    were determined;
    Subsequent changes to valuation allowances against deferred tax
    assets after the measurement period are recognized as an
    adjustment to income tax expense. Such changes were previously
    reflected as an adjustment to goodwill. This provision of
    SFAS No. 141(R) also applies to acquisitions completed
    prior to the effective date;
    Acquired in-process research and development
    (IPR&D) is recognized as an asset at fair value
    at the acquisition date, with the fair value recognized as an
    expense as the asset is realized or abandoned. IPR&D was
    previously expensed at the acquisition date; and
    Costs associated with restructuring or exit activities of an
    acquired entity are expensed when incurred. Previously, such
    costs were recorded as liabilities at the acquisition date if
    specified criteria were met.  Business Combinations
  Subsequent Events Subsequent Events
  2009-05, Fair Value Measurements and Disclosures - Measuring
    Liabilities at Fair Value 2009-05 2009-05




---



##### Table of Contents



2009-05 2009-05
   Recently
    Issued Pronouncements Not Yet Adopted
    2009-13, Revenue Recognition - Multiple-Deliverable Revenue
    Arrangements, 2009-13:
 
    Eliminates the requirement for objective evidence of fair value
    of an undelivered item for treatment of the delivered item as a
    separate unit of accounting;
    Requires use of the relative selling price method for allocating
    total consideration to elements of the arrangement instead of
    the relative-fair-value method or the residual method;
    Allows the use of an estimated selling price for any element
    within the arrangement to allocate consideration to individual
    elements when vendor-specific objective evidence or other third
    party evidence of selling price do not exist; and
    Expands the required disclosures.  2009-14, Software - Certain Revenue Arrangements That Include
    Software Elements 2009-14
  2009-14 2009-13.
  ASU 2010-6, Improving Disclosures About Fair Value Measurements 2010-06
  (2)
    BUSINESS
    COMBINATIONS




---



##### Table of Contents








---



##### Table of Contents



Acquisition Date Fair Value MeasurementsMeasurement


As ofAs of


Period


December 31,April 4, 2009


Adjustments


2009Cash

$
5.0



-



5.0Receivables


4.7



-



4.7Inventories


10.4



(0.1
)


10.3Developed technology


21.2



2.1



23.3Customer relationships


11.8



3.7



15.5Other identifiable intangible assets


8.2



(0.6
)


7.6Other assets


4.1



0.7



4.8Payables and accrued expenses


(8.5
)


(0.3
)


(8.8
)Deferred tax liabilities


(9.9
)


1.2



(8.7
)47.0



6.7



53.7Goodwill


54.2



(6.7
)


47.5$
101.2



-



101.2     
    Cash and cash equivalents, trade accounts receivable,
    accounts payable and accrued expenses  The
    carrying amounts of each of these items approximated fair value
    because of the short-term maturity of these instruments.
    Inventorieswere valued on the basis of estimated selling
    prices less the sum of (a) costs of disposal and
    (b) reasonable profit allowances on the selling effort. The
    inventory values were established separately for raw materials,
    work-in-process,
    and finished goods. The fair value of materials was based on the
    carrying amounts at current replacement cost. The fair value of
    work-in-process
    and finished goods was determined so that the Company would not
    generate a profit on the ultimate disposition of the acquired
    inventory based on value added in the manufacturing process
    prior to the acquisition date.
    Property, plant and equipment assets(included in the
    other assets category above) were valued based on a cost and
    market approach. The cost approach quantifies value by examining
    either the historical cost to reproduce it or the estimated
    current cost to replace it at a given level of functionality and
    estimated physical deterioration. A physical deterioration
    factor was considered for the loss in value brought about by
    wear and tear of the elements, disintegration, use in service,
    and all physical factors that reduce the life and serviceability
    of the property. An obsolescence factor was considered to adjust
    for the economic and functional obsolescence created by the
    passage of time. The market approach measures the value of an
    asset through an analysis of recent sales or offerings of
    comparable property. Once the cost and market approaches were
    completed, an analysis of the overall validity of each approach
    was performed based on the resources used to arrive at a fair
    value of each asset.
    Developed technology assetscan be defined as proprietary
    knowledge or processes that have been developed or purchased and
    are recognized as providing or having the potential to provide,
    significant competitive advantages or product differentiation. A
    developed technology intangible asset can be identified as the
    end product, such as in high-tech companies, or can be an
    internally developed system or software package that enhances
    the process of producing other products, delivering a




---



##### Table of Contents



service, or facilitates general business management. The
    developed technology acquired is inclusive of patented
    technology, proprietary software and trade secrets. For a
    portion of the developed technology acquired, a variation of the
    income approach known as the excess earnings method was used to
    value this developed technology. The income approach measures
    the future economic income that can be attributed to the
    developed technology based on its expected remaining useful
    life. The excess earnings method requires an analysis of the
    following two key inputs: 1) the average remaining useful
    lives of the developed technologies, and 2) the debt-free
    net cash flow expected to be generated by the developed
    technology over its average remaining useful life after
    deducting charges for contributory assets. Key assumptions and
    inputs used to develop the debt-free cash flow for developed
    technologies were projected revenue growth, the average
    remaining useful life and decay curve, the base earnings before
    income tax, depreciation, and amortization (EBITDA)
    margin, an adjustment to account for the R&D expenses
    related to maintenance of the existing developed technology, an
    estimated income tax rate, required return for the use of other
    contributory assets, an appropriate discount rate, and the
    incremental value of the tax savings generated by the
    amortization of intangible assets. The Relief from Royalty
    (RFR) method under the income approach was used to
    value the remaining portion of the developed technology
    acquired. This approach provides an estimate of the value of the
    developed technology based on the present value of the projected
    cost savings attributable to the ownership of the developed
    technology. This method is based on the theory that the owner of
    the developed technology is relieved of paying a royalty for
    license fee for the use of the developed technology. The method
    is a function of: 1) projected sales from products or
    services attributable to the developed technology, 2) a
    reasonable market royalty rate that would otherwise be charged
    to a licensor of the developed technology to a licensee of the
    developed technology, and 3) an appropriate discount rate
    to reflect the risk of achieving the projected royalty savings
    attributable to the developed technology. Key assumptions and
    inputs used to develop the debt-free cash flow for developed
    technologies value using the RFR method were projected revenue
    growth, the average remaining useful life and decay curve, a
    royalty rate, an estimated income tax rate and an appropriate
    discount rate.  
    A customer relationshipexists between an entity and its
    customer if the following conditions are met: 1) the entity
    has information about the customer and has regular contact with
    the customer; and 2) the customer has the ability to make
    direct contact with the entity. Relationships may arise from
    contracts, such as supplier contracts and service contracts.
    However, customer relationships may arise through means other
    than contracts, such as through regular contact by sales or
    service representatives. The income approach known as the excess
    earnings method was used to value customer relationships. The
    income approach measures the future economic income that can be
    attributed to the customer relationships based on their expected
    remaining useful lives. The income approach requires an analysis
    of the following two key inputs: 1) the remaining useful
    lives of the customer relationships, considering current
    contracted terms and renewal probabilities based on historical
    customer attrition analysis; and 2) the debt-free net cash
    flow expected to be generated by the customer relationships over
    their remaining useful lives. Key assumptions and inputs used to
    develop the debt-free cash flow for developed technologies were
    projected revenue growth, the average remaining useful life and
    decay curve, the base EBITDA margin, a sales and marketing
    adjustment to account for expenses related to attracting new
    customers, an estimated income tax rate, required return for the
    use of other contributory assets, and an appropriate discount
    rate.
    The other identifiable intangible assetsinclude trade
    names and trademarks, order backlog, noncompete agreements, and
    in-process research and development assets, the most significant
    of which are the trade names and trademarks. Trade names and
    trademarks are developed through years of advertising,
    consistent packaging, promotional campaigns, and customer
    satisfaction. A recognized trade name or trademark leads to a
    positive pre-existing disposition on the part of potential
    purchasers toward purchasing goods and services. A trade name is
    the name of a business, association or other organization used
    to identify it. Trade names and trademarks have three basic
    values to an owner. First is the publicizing value, which is the
    impact on a customer, a retailer or an industrial




---



##### Table of Contents



user, based on exposure, advertising, etc. Second is the
    educational value, implying product attributes, etc. Third is
    the psychological or heritage value, which implies comfort and
    induces sales. The RFR method under the income approach was used
    to estimate the value of the acquired trade names and
    trademarks. The key assumptions and inputs used are listed above
    under developed technology assets.  
    Deferred tax assets and liabilitieswere determined in
    accordance with ASC Topic 740, Income Taxes. Since both
    of these business combinations were nontaxable transactions, the
    assets are not adjusted to fair value for income tax reporting
    purposes. Therefore, deferred tax liabilities are reflected for
    the tax effects of the difference in bases for financial
    reporting and income tax purposes that result from applying the
    acquisition method of accounting for financial reporting
    purposes.          Years EndedDecember 31

December 312009

2008Net sales

$
362,970



383,584(Loss) earnings from continuing operations


(19,475
)


6,397




---



##### Table of Contents



15-year
      (3)
    GOODWILL
    AND OTHER INTANGIBLE ASSETS      Communication& Tracking


LXE


TotalBalance as of December 31, 2007

$
-



9,982



9,982Goodwill acquired during year


11,007



12,395



23,402Foreign currency translation adjustment


-



(1,982
)


(1,982
)Balance as of December 31, 2008


11,007



20,395



31,402Goodwill acquired during year


47,530



-



47,530Foreign currency translation adjustment


-



1,295



1,295Impairment loss


-



(19,891
)


(19,891
)Balance as of December 31, 2009

$
58,537



1,799



60,336




---



##### Table of Contents



EstimatedFair Value inReported


Excess ofGoodwill


Carrying AmountFormation

$
24,060



5.9
%Satamatics


23,429



2.5Sky Connect


11,048



11.0




---



##### Table of Contents



As of December 31, 2009Gross





NetCarrying


Accumulated


CarryingAmount


Amortization


AmountDeveloped technology

$
40,385



13,460



26,925Customer relationships


19,052



2,493



16,559Trade names and trademarks


6,208



1,052



5,156Other


2,428



1,812



616$
68,073



18,817



49,256   As of December 31, 2008Gross





NetCarrying


Accumulated


CarryingAmount


Amortization


AmountDeveloped technology

$
15,002



7,621



7,381Customer relationships


3,405



351



3,054Trade names and trademarks


830



217



613Other


148



30



118$
19,385



8,219



11,166       (4)
    FAIR
    VALUE MEASUREMENTS  Fair Value Measurements
    and Disclosures three-tier
  
    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.




---



##### Table of Contents



Assets
    and Liabilities Measured at Fair Value on a Recurring
    Basis
              Year EndedDecember 31,
    2009Balance at the beginning of the period

$
-Acquisitions


10,500Fair value adjustment, including accretion


3,229Balance at the end of the period

$
13,729     Assets
    and Liabilities Measured at Fair Value on a Nonrecurring Basis
    Subsequent to the Initial Recognition




---



##### Table of Contents



(5)
    BUSINESS
    SEGMENT AND GEOGRAPHIC AREA INFORMATION    percentage-of-completion
    percentage-of-completion




---



##### Table of Contents



Years Ended December 312009


2008


2007Net sales:Communications & Tracking

$
158,952



112,517



89,968LXE


109,441



145,885



138,821Defense & Space


91,579



76,643



59,090Total

$
359,972



335,045



287,879Operating (loss) income:Communications & Tracking

$
11,383



14,187



12,189LXE


(26,531
)


2,861



7,067Defense & Space


7,314



6,381



4,876Corporate & Other


(6,799
)


(3,805
)


(4,865
)Total

$
(14,633
)


19,624



19,267Interest income, net of foreign exchange losses:Communications & Tracking

$
826



(154
)


(564
)LXE


(84
)


500



236Defense & Space


1



6



7Corporate & Other


(1,344
)


1,492



4,334Total

$
(601
)


1,844



4,013Interest expense:Communications & Tracking

$
68



62



121LXE


93



406



348Defense & Space


-



40



141Corporate & Other


2,020



1,171



1,343Total

$
2,181



1,679



1,953(Loss) earnings from continuing operations before income taxes:Communications & Tracking

$
12,141



13,971



11,504LXE


(26,708
)


2,955



6,955Defense & Space


7,315



6,347



4,742Corporate & Other


(10,163
)


(3,484
)


(1,874
)Total

$
(17,415
)


19,789



21,327




---



##### Table of Contents



Years Ended December 312009


2008


2007Capital expenditures:Communications & Tracking

$
3,076



4,385



6,589LXE


3,726



2,957



3,364Defense & Space


5,966



6,105



3,684Corporate & Other


665



422



942Total

$
13,433



13,869



14,579Depreciation and amortization:Communications & Tracking

$
12,117



5,089



3,619LXE


3,345



3,363



2,205Defense & Space


3,367



3,023



2,620Corporate & Other


1,160



1,023



1,222Total

$
19,989



12,498



9,666   December 312009


2008Assets:Communications & Tracking

$
220,405



99,323LXE


71,632



107,230Defense & Space


53,883



47,417Corporate & Other


28,225



73,395Total

$
374,145



327,365     Years Ended December 312009


2008


2007Net sales to customers in the following countries:United States

$
252,749



202,520



176,209Other foreign countries


107,223



132,525



111,670Total

$
359,972



335,045



287,879




---



##### Table of Contents



December 312009


2008Long-lived assets (excluding goodwill) are located in the
    following countries:United States

$
54,372



32,831United Kingdom


24,442



2,050Canada


8,820



7,609Other foreign countries


9,562



9,248Total

$
97,196



51,738Concentration of net assets by geographic region:United States

$
72,826



128,692Canada


62,239



53,252Europe


97,216



53,801Other


4,810



6,997Total

$
237,091



242,742     (6)
    INVENTORIES    December 312009


2008Parts and materials

$
25,221



26,730Work-in-process


5,142



2,404Finished goods


10,292



6,536$
40,655



35,670




---



##### Table of Contents



(7)
    LONG-TERM
    DEBT    2009


2008Revolving credit loan with a syndicate of banks in the U. S.,
    which matures in February 2013, interest payable monthly at a
    variable rate (3.75% at the end of 2009)

$
18,500



--Promissory 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%


6,370



7,076Term 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%


2,878



3,466Capital 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%


2



10Total long-term debt


27,750



10,552Less current installments of long-term debt


1,398



1,302Long-term debt, excluding current installments

$
26,352



9,250




---



##### Table of Contents



2010





$
1,3982011






1,4342012






1,6182013






20,2452014






1,114Thereafter






1,941Total principal maturities





$
27,750     8)
    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



51


$
13.14





51


$
13.1413.90 - 14.93



49



14.22





49



14.2214.94 - 15.80



62



15.63





62



15.6315.81 - 18.98



161



18.22





142



18.2318.99 - 20.00



171



19.34





127



19.2720.01 - 22.74



201



21.15





178



21.0422.75 - 28.67



299



25.67





180



25.97$
11.63 - 28.67



994


$
20.63


3.4 years


789


$
20.02



3.1 years




---



##### Table of Contents



Options with service-based vesting only
     WeightedAverageWeighted


RemainingNumber


Average


Contractual


Aggregateof


Exercise


Life


IntrinsicShares


Price


(in years)


ValueOptions outstanding at December 31, 2008


774


$
20.16Granted


188



22.43Exercised


(48
)


13.80Forfeited or expired


(46
)


23.67Options outstanding at December 31, 2009


868



20.82



3.5


$
163Options exercisable at December 31, 2009


677



20.11



2.9



163     2009

2008

2007Expected volitility

47%

45% - 46%

53% - 59%Expected term (in years)

4.6

4.8 - 5.0

4.7 - 8.3Risk-free rate

1.5% - 2.1%

2.9% - 3.0%

4.5% - 4.9%Expected dividend yield

None

None

None       Options with performance-based and service-based vesting




---



##### Table of Contents



WeightedAverageWeighted


RemainingNumber


Average


Contractual


Aggregateof


Exercise


Life


IntrinsicShares


Price


(in years)


ValueOptions outstanding at December 31, 2008


134


$
19.21Granted


-



-Exercised


-



-Forfeited or expired


(8
)


18.05Options outstanding at December 31, 2009


126



19.28



2.3


$
-Options exercisable at December 31, 2009


112



19.44



2.3



-         Nonvested
    stock
    Weighted-Number


Averageof


Grant-DateShares


Fair ValueNonvested stock outstanding at December 31, 2008


55


$
24.99Granted


44



18.86Vested


(25
)


23.03Forefeited


(3
)


28.00Nonvested stock outstanding at December 31, 2009


71


$
21.77




---



##### Table of Contents



9)
    INCOME
    TAXES    2009


2008


2007Income tax benefit (expense), continuing operations

$
4,266



682



(2,080
)Income tax benefit, discontinued operations


4,001



-



82Income tax benefit resulting from exercise of stock options
    credited to shareholders equity


133



203



643Total

$
8,400



885



(1,355
)     2009


2008


2007Current:Federal

$
(42
)


(1,460
)


(1,483
)State


(128
)


(176
)


(332
)Foreign


(193
)


(689
)


(1,274
)Total


(363
)


(2,325
)


(3,089
)Deferred:Federal


4,646



1,569



878State


5



9



35Foreign


(22
)


1,429



96Total


4,629



3,007



1,009Total income tax benefit (expense)

$
4,266



682



(2,080
)     2009


2008


2007Benefit (expense) computed at the federal statutory rate Effect
    of:

$
5,921



(6,728
)


(7,251
)State income taxes, net of federal income tax effects


(81
)


(110
)


(196
)Tax credits from research activities


3,563



1,716



936Difference in effective foreign tax rates


5,262



4,544



4,127Valuation allowance


(1,040
)


1,195



49Foreign permanent differences


(215
)


(55
)


(177
)Nondeductible goodwill impairment


(6,763
)






Nondeductible acquisition-related items


(2,450
)






Other


69



120



432Income tax benefit (expense)

$
4,266



682



(2,080
)




---



##### Table of Contents



2009


2008Deferred tax assets:Inventories

$
1,353



602Accrued compensation costs


2,499



769Accrued warranty costs


1,278



779Foreign research expense and tax credit carryforwards


40,241



33,721U.S. and foreign net operating loss carryforwards


4,932



1,272Credit for corporate minimum tax


709



408U.S. research and development credit carryforwards


7,714



1,427Stock-based compensation


2,283



1,594Other


2,388



1,843Total gross deferred tax assets


63,397



42,415Valuation allowance


(37,851
)


(28,549
)25,546



13,866Deferred tax liabilities:Property, plant and equipment


3,715



3,993Intangible Assets


13,132



-Other


729



92317,576



4,916Net deferred tax assets

$
7,970



8,950   beginning-of-the-year




---



##### Table of Contents



20-year
    Accounting for
    Uncertainty in Income Taxes  an Interpretation of
    FASB Statement No. 109 740-10 Income Taxes 740-10,




---



##### Table of Contents



2009


2008Balance as of January 1

$
2,949



2,591Increases related to current year tax positions


917



194Increases related to prior year tax positions


5



270Decreases related to lapsing of statute of limitations


(6
)


(14
)Decreases related to settlements with taxing authorities


(1,915
)


-Changes in foreign currency exchange rate


69



(92
)Balance as of December 31

$
2,019



2,949       (10)
    DISCONTINUED
    OPERATIONS




---



##### Table of Contents



2009


2008


2007Loss before income taxes

$
(10,917
)


-



(585
)Income tax benefit


4,001



-



82Loss from discontinued operations

$
(6,916
)


-



(503
)     (11)
    RETIREMENT
    PLANS  U.S.-based




---



##### Table of Contents



(12)
    OTHER
    EQUITY MATTERS      (13)
    COMMITMENTS
    AND CONTINGENCIES




---



##### Table of Contents



Years Ended December 312009


2008


2007Balance at beginning of the period

$
2,789



2,647



2,051Additions at dates of acquisition for businesses acquired during
    period


464



-



-Accruals for warranties issued during the period


3,866



3,308



3,175Settlements made during the period


(3,034
)


(3,166
)


(2,579
)Balance at end of period

$
4,085



2,789



2,647   (14)
    LITIGATION




---



##### Table of Contents



(15)
    SELECTED
    QUARTERLY FINANCIAL DATA (UNAUDITED)    2009 Quarters EndedApril 4


July 4


October 3


December 31Net sales

$
92,278



96,938



85,731



85,025Operating (loss) income


(1,942
)


3,355



2,566



(18,612
)(Loss) earnings from continuing operations


(2,968
)


3,186



5,989



(19,356
)Loss from discontinued operations


-



-



(709
)


(6,207
)Net (loss) earnings


(2,968
)


3,186



5,280



(25,563
)Net (loss) earnings per share:Basic:Continuing operations

$
(0.20
)


0.21



0.39



(1.27
)Discontinued operations


-



-



(0.05
)


(0.41
)Net (loss) earnings

$
(0.20
)


0.21



0.34



(1.68
)Diluted:Continuing operations

$
(0.20
)


0.21



0.39



(1.27
)Discontinued operations


-



-



(0.05
)


(0.41
)Net (loss) earnings

$
(0.20
)


0.21



0.34



(1.68
)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