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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2007
 Commission File #0-6072
 EMS TECHNOLOGIES, INC.
  Georgia
    
    58-1035424(State or other jurisdiction of
    
    (IRS Employer ID Number)incorporation or organization)660 Engineering Drive, Norcross, Georgia
    
    30092(Address of principal executive offices)
    
    (Zip Code)
 
 Title of Class
    
    Exchange on Which RegisteredCommon Stock, $.10 par value
    
    The Nasdaq Stock Market LLC
  o þ
 o þ
 þ o
 o þ
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE
  AVAILABLE INFORMATION
 www.ems-t.com




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TABLE OF CONTENTS  PART IITEM 1. BusinessITEM 1A. Risk FactorsITEM 1B. Unresolved Staff CommentsITEM 2. PropertiesITEM 3. Legal ProceedingsITEM 4. Submission of Matters to a Vote of Security HoldersPART IIITEM 5. Market for Registrants Common Equity, Related Shareholder Matters and Issuer Purchases of Equity SecuritiesITEM 6. Selected Financial DataITEM 7. Managements Discussion and Analysis of Financial Condition and Results of OperationsITEM 7A. Quantitative and Qualitative Disclosures about Market RiskITEM 8. Financial Statements and Supplementary DataITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureITEM 9A. Controls and ProceduresITEM 9B. Other InformationPART IIIITEM 10. Directors, Executive Officers, and Corporate GovernanceITEM 11. Executive CompensationITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder MattersITEM 13. Certain Relationships and Related Transactions and Director IndependenceITEM 14. Principal Accountant Fees and ServicesPART IVITEM 15. Exhibits, Financial Statement SchedulesSIGNATURESEX-4.1 SHAREHOLDER RIGHTS PLANEX-4.22 AMENDMENT NO. 4 TO U.S. REVOLVING CREDIT AGREEMENTEX-4.23 AMENDMENT NO. 4 TO CANADIAN REVOLVING CREDIT AGREEMENTEX-10.9 FORM OF STOCK OPTION AGREEMENTEX-10.17 FORM OF STOCK OPTION AGREEMENTEX-10.18 FORM OF STOCK OPTION AGREEMENTEX-10.19 FORM OF STOCK OPTION AGREEMENTEX-10.22 SUPPLEMENTAL RETIREMENT INCOME AGREEMENTEX-21.1 SUBSIDIARIES OF THE REGISTRANTEX-23.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMEX-31.1 SECTION 302 CERTIFICATION OF THE CEOEX-31.2 SECTION 302 CERTIFICATION OF THE CFOEX-32 SECTION 906 CERTIFICATIONS OF THE CEO AND CFO    Table of Contents  FORWARD-LOOKING STATEMENTS
  1.
    
    statements about what the Company or management believes or expects,2.
    
    statements about anticipated technological developments or anticipated market
response to or impact of current or future technological developments or product
offerings,3.
    
    statements about trends in markets that are served or pursued by the Company,4.
    
    statements implying that the Companys technology or products are well-suited for
particular emerging markets, and5.
    
    statements about the Companys plans for product developments or market initiatives.
  
 PART I
 
 ITEM 1. Business
 Overview
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Competitive Strengths
 Technological Leadership
  Commitment to Research and Development
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Technological Synergies
  Strong Customer Relationships
  Diverse Global Customer Base
  Strong Manufacturing Capabilities
  Our Markets and Products
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Segment
    
    Primary Operations
    
    Percentage of Net Sales2007
    
    2006
    
    2005Defense & Space Systems
    
    Highly engineered
hardware for
satellites and
defense electronics
applications
(primarily defense)
    
    
    20.5
    
    
    
    20.1
    
    
    
    22.8LXE
    
    Rugged mobile
terminals and
related equipment
for wireless data
collection
(predominantly
commercial)
    
    
    48.2
    
    
    
    52.8
    
    
    
    54.5SATCOM
    
    Satellite
communications
antennas, terminals
and networking
equipment for
aircraft, and
ground-based
vehicles and
satellite ground
stations for search
and rescue
operations
(majority
commercial)
    
    
    31.3
    
    
    
    27.1
    
    
    
    22.7
 Defense & Space Systems
   Products
    

Key
Features/Benefits
    

Selected
Applications
    

ProgramsSpace Solutions
    
    Microwave subsystems capable of
high-frequency, low noise,
high-power and fast switching,
facilitating jam-resistant,
secure mobile communications and
surveillance
    
    High-rate commercial and secure
military communications
    
    Wideband Global SATCOM
(WGS), Advanced EHF (AEHF),
Transformational Satellite
(TSAT), National Security
Programs, W2A, Skynet 5Earth observation/ Environmental
sensing
    
    COSMO, SARLUPE, National
Polar- Orbiting Environmental Satellite Systems (NPOESS)Direct broadcast television
(incl. HDTV)
    
    DirecTV, Globalstar 2, YahsatDirect broadcast radio
    
    XMRadio, SIRIUSCommunications-On-
The Move RF 
Front End Systems
    
    Small, low profile, low radar
signature (stealth), high
performance, and agile beam
antenna, RF electronics, and
positioning systems
    
    Airborne commercial Live TV
receive product for in-flight
entertainment
    
    JetBlue, Frontier, WestJet,
Virgin Blue AirlinesMilitary 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 DataLinksMilitary SATCOM communications
(airborne, ground mobile, and
soldier)
    
    B2 Satellite CommunicationsRadar and Electronic
Warfare Microwave
Systems
    
    Low loss, high power ferrite
components and electronic
systems,
and precision positioners
    
    Defense electronic surveillance
and countermeasure
    
    EW - F-16, AQL-211
Radar-Phalanx, JSTARSLaunch vehicle precision tracking
    
    Positioners - Trident II,
NASA Shuttle Return to
Flight, Sea LaunchSmart Weapons
    
    Small, flat, conformal millimeter
wave radar antenna systems that
allow for co-boresighting of
laser and EO/IR for tri-mode
missile
seekers
    
    Precision strike air-to-ground
missiles
    
    Joint Air to Ground Missile
(JAGM), Small Diameter Bomb
II
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LXE
    Ò Ò Ò
 ®
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Products
    
    Key Features/Benefits
    
    Selected Applications
    
    CustomersHand-Held Terminals
    
    Small, lightweight
and rugged,
providing true
mobility
    
    Warehousing, Logistics
    
    Consumer product
manufacturers,
Third-party
logistics
providers,
Retailers,
Container port
operatorsVehicle-Mounted Terminals
    
    Heavier-duty design
for use on
forklifts, cranes,
and other material
handling vehiclesWireless 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
 SATCOM
   ®
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Products
    
    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
    
    High-end corporate
jets, private jets,
military
helicopters,
military transport
and surveillance,
commercial airlines
    
    Gulfstream,
Bombardier,
Honeywell,
Dassault, ThalesAeronautical Terminals
    
    Provide aircraft
operators with
two-way high-speed
data (broadband)
capability
    
    Corporate aircraft,
government and
military aircraft,
commercial airlines
    
    Corporate aircraft
modification
centers, U.S.
Department of
Defense,
Northrup-Grumman,
L3, Boeing,
Rockwell-Collins,
Honeywell, ThalesInmarsat High-Speed
Data Terminals
    
    Worldwide access to
corporate networks
and the Internet
using the Inmarsat
satellite system
    
    Military transport,
Peacekeeping, Media
    
    U.S. Army, Canadian
Department of
National Defense,
CNNSatellite Packet Data
Terminals
    
    Two-way messaging
and location
information in North
America, Mexico
Central America,
Afghanistan
    
    Transportation,
Public Safety,
Workforce
Automation, Oil and
Gas Remote
Monitoring and
Control, Force
Tracking
    
    Long-Haul Trucking
Companies, @Road,
NATOEmergency Management
Products
    
    Hardware and
software features
for search and
rescue (SAR) systems
    
    Rescue and Mission
Control Centers
    
    Over 18 Governments
Worldwide
  Sales and Marketing
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Research, Development and Intellectual Property
    Backlog
  Manufacturing
  
    
    to perform those functions for which we have special capabilities and that are most
critical to quality and timely performance,
    
    to equip ourselves with the modern tools we need to perform our manufacturing functions
efficiently,
    
    to use outside sources for functions requiring special skills that we do not have or
that do not offer attractive potential returns, and
    
    to further improve the cost-effectiveness and time-to-market of our manufacturing
operations.
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Materials
     Competition
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Employees
  Government Regulation
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EXECUTIVE OFFICERS OF THE REGISTRANT
  Paul B. Domorski
 Don T. Scartz
 Timothy C. Reis, ,
 Gary B. Shell, ,
 Perry D. Tanner, ,
 Neilson
A. Mackay
 David A. Smith
 James S. Childress
 Gary M. Hebb
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ITEM 1A. Risk Factors
 We believe the risks and uncertainties described below are the most significant risks we face. If
any of the following risks actually materialize, our business could be harmed. Additional risks and
uncertainties not presently known to us, or that we currently consider immaterial, may also impair
our operations or results. In all of those cases, the trading price of our common stock could
decline, and investors could lose all or part of their investments.
 Risks Related to Our Business
  Decisions by our customers about the timing and scope of capital spending, particularly on major
programs, can have a significant effect on our net sales and earnings
  If our commercial customers fail to find adequate funding for major potential programs, or our
government customers do not receive necessary funding approvals, our net sales would decline.
  We may encounter technical problems or contractual uncertainties, which can cause delays, added
costs, lost sales, and liability to customers.
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If we cannot continue to rapidly develop, manufacture and market innovative products and services
that meet customer requirements for performance and reliability, we may incur development costs
that we cannot recover and our net sales and earnings will suffer.
  Competing technology could be superior to ours, and could cause customer orders and net sales to
decline.
  Our competitors marketing and pricing strategies could make their products more attractive than
ours. This could cause reductions in customer orders or company profits.
  Our transitions to new product offerings can be costly and disruptive, and could adversely affect
our net sales or profitability.
  Our products may inadvertently infringe third party patents, which could create substantial
liability to our customers or the third-party patent owners.
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We may not be successful in protecting our intellectual property.
  Our success depends on our ability to attract and retain a highly skilled workforce.
  We depend on highly skilled suppliers, who may become unavailable or fail to achieve desired levels
of technical performance.
  Changes in regulations that limit the availability of radio frequency licenses or otherwise result
in increased expenses could cause our net sales or earnings to decline.
  The export license process for space products has become uncertain, increasing the chance that we
may not obtain required export licenses in a timely or cost-effective manner.
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Export controls on space technology restrict our ability to hold technical discussions with foreign
customers, suppliers and internal engineering resources, which reduces our ability to obtain sales
from foreign customers or to perform contracts with the desired level of efficiency or
profitability.
  Economic or political conditions in other countries could cause our net sales or earnings to
decline.
  Unfavorable currency exchange rate movements could result in foreign exchange losses and cause our
earnings to decline.
  Our net sales in certain markets depend on the availability and performance of other companies with
which we have marketing relationships.
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Customer orders in backlog may not result in sales.
  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 business.
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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.
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Future sales of our common stock may cause our stock price to decline.
  Provisions in our governing documents and law could prevent or delay a change of control not
supported by our Board of Directors.
  
    
    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.
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ITEM 1B. Unresolved Staff Comments
  
 ITEM 2. Properties
    
 ITEM 3. Legal Proceedings
  
 ITEM 4. Submission of Matters to a Vote of Security Holders
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PART II
 
 ITEM 5. Market for Registrants Common Equity, Related Shareholder Matters and Issuer Purchases of
Equity Securities
  2007 Price Range
    
    2006 Price RangeHigh
    
    Low
    
    High
    
    LowFirst Quarter
    
    $
    21.65
    
    
    
    18.72
    
    
    $
    18.65
    
    
    
    16.14Second Quarter
    
    
    22.89
    
    
    
    18.00
    
    
    
    20.51
    
    
    
    17.78Third Quarter
    
    
    25.89
    
    
    
    19.62
    
    
    
    19.31
    
    
    
    14.53Fourth Quarter
    
    
    33.23
    
    
    
    23.85
    
    
    
    21.17
    
    
    
    17.58
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ITEM 6. Selected Financial Data
 Years ended December 31(in thousands, except earnings (loss) per share)
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003Net sales
    
    $
    287,879
    
    
    
    261,119
    
    
    
    225,887
    
    
    
    201,100
    
    
    
    192,473Cost of sales
    
    
    175,278
    
    
    
    164,611
    
    
    
    146,965
    
    
    
    130,623
    
    
    
    124,885Selling, general and administrative expenses
    
    
    74,561
    
    
    
    66,335
    
    
    
    56,944
    
    
    
    49,346
    
    
    
    45,644Research and development expenses
    
    
    18,773
    
    
    
    15,816
    
    
    
    11,754
    
    
    
    12,034
    
    
    
    11,192Operating income
    
    
    19,267
    
    
    
    14,357
    
    
    
    10,224
    
    
    
    9,097
    
    
    
    10,752Interest income
    
    
    5,403
    
    
    
    2,254
    
    
    
    588
    
    
    
    1,085
    
    
    
    16Interest expense
    
    
    (1,953
    )
    
    
    (1,921
    )
    
    
    (3,304
    )
    
    
    (1,791
    )
    
    
    (1,534
    )Foreign exchange loss
    
    
    (1,390
    )
    
    
    (710
    )
    
    
    (288
    )
    
    
    (187
    )
    
    
    (260
    )Earnings from continuing operations before
income taxes
    
    
    21,327
    
    
    
    13,980
    
    
    
    7,220
    
    
    
    8,204
    
    
    
    8,974Income tax (expense) benefit
    
    
    (2,080
    )
    
    
    1,823
    
    
    
    (2,094
    )
    
    
    (2,134
    )
    
    
    (1,974
    )Earnings from continuing operations
    
    
    19,247
    
    
    
    15,803
    
    
    
    5,126
    
    
    
    6,070
    
    
    
    7,000Discontinued operations:(Loss) earnings from discontinued operations
before income taxes
    
    
    (585
    )
    
    
    24,427
    
    
    
    (13,971
    )
    
    
    (6,016
    )
    
    
    (46,481
    )Income tax benefit (expense)
    
    
    82
    
    
    
    (7,222
    )
    
    
    (2,598
    )
    
    
    138
    
    
    
    2,089(Loss) earnings from discontinued operations
    
    
    (503
    )
    
    
    17,205
    
    
    
    (16,569
    )
    
    
    (5,878
    )
    
    
    (44,392
    )Net earnings (loss)
    
    $
    18,744
    
    
    
    33,008
    
    
    
    (11,443
    )
    
    
    192
    
    
    
    (37,392
    )Net earnings (loss) per share:Basic:From continuing operations
    
    $
    1.25
    
    
    
    1.08
    
    
    
    0.46
    
    
    
    0.55
    
    
    
    0.65From discontinued operations
    
    
    (0.03
    )
    
    
    1.18
    
    
    
    (1.48
    )
    
    
    (0.53
    )
    
    
    (4.15
    )Net earnings (loss)
    
    $
    1.22
    
    
    
    2.26
    
    
    
    (1.02
    )
    
    
    0.02
    
    
    
    (3.50
    )Diluted:From continuing operations
    
    $
    1.24
    
    
    
    1.08
    
    
    
    0.46
    
    
    
    0.54
    
    
    
    0.65From discontinued operations
    
    
    (0.03
    )
    
    
    1.17
    
    
    
    (1.48
    )
    
    
    (0.52
    )
    
    
    (4.12
    )Net earnings (loss)
    
    $
    1.21
    
    
    
    2.25
    
    
    
    (1.02
    )
    
    
    0.02
    
    
    
    (3.47
    )Weighted average number of shares:Basic
    
    
    15,354
    
    
    
    14,621
    
    
    
    11,179
    
    
    
    11,094
    
    
    
    10,702Diluted
    
    
    15,482
    
    
    
    14,679
    
    
    
    11,225
    
    
    
    11,237
    
    
    
    10,785
 As of December 312007
    
    2006
    
    2005
    
    2004
    
    2003Working capital related to continuing operations
    
    $
    198,491
    
    
    
    176,570
    
    
    
    67,580
    
    
    
    68,835
    
    
    
    22,608Total assets
    
    
    323,800
    
    
    
    291,684
    
    
    
    225,341
    
    
    
    256,953
    
    
    
    230,968Long-term debt, including current installments
    
    
    13,720
    
    
    
    14,857
    
    
    
    43,408
    
    
    
    61,454
    
    
    
    53,569Shareholders equity
    
    
    247,126
    
    
    
    213,083
    
    
    
    113,656
    
    
    
    126,021
    
    
    
    120,042
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ITEM 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
  
    
    Defense & Space Systems (D&SS)- Highly engineered hardware for satellites and defense
electronics applications;
    
    LXE- Rugged mobile computer terminals and related equipment for wireless local area
networks; and
    
    SATCOM- Satellite communications antennas and terminals for aircraft and ground-based
vehicles, and satellite ground stations for search and rescue operations.
    For continuing operations:
 
    
    Net sales reached an all-time high of $287.9 million in 2007, mainly due to record sales
recorded at SATCOM and D&SS.
    
    Each of the three segments reported strong operating income in 2007. Consolidated
operating income was 34.2% higher for 2007 than for 2006.
 For discontinued operations:
 
    
    Discontinued operations had no material net effect on the Companys 2007 financial
results. The net loss before income taxes of $585,000 mainly related to resolution of
various contingencies under the asset-sale agreements.
 Description of Net Sales, Costs and Expenses
 Net sales
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Cost of sales
      Selling, general and administrative expenses
  Research and development expenses
  Interest income
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Interest expense
  Foreign exchange gains and losses
   Income taxes
    Discontinued operations
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Results of Operations
 Years ended December 312007
    
    2006
    
    2005Product net sales
    
    
    86.0
    %
    
    
    85.6
    %
    
    
    85.1
    %Service net sales
    
    
    14.0
    
    
    
    14.4
    
    
    
    14.9Net sales
    
    
    100.0
    
    
    
    100.0
    
    
    
    100.0Product cost of sales, as a percentage of product
net sales
    
    
    61.3
    
    
    
    62.4
    
    
    
    64.9Service cost of sales, as a percentage of service
net sales
    
    
    58.6
    
    
    
    66.7
    
    
    
    66.2Cost of sales
    
    
    60.9
    
    
    
    63.0
    
    
    
    65.1Selling, general and administrative expenses
    
    
    25.9
    
    
    
    25.4
    
    
    
    25.2Research and development expenses
    
    
    6.5
    
    
    
    6.1
    
    
    
    5.2Operating income
    
    
    6.7
    
    
    
    5.5
    
    
    
    4.5Interest income
    
    
    1.9
    
    
    
    0.9
    
    
    
    0.3Interest expense
    
    
    (0.7
    )
    
    
    (0.7
    )
    
    
    (1.5
    )Foreign exchange loss
    
    
    (0.5
    )
    
    
    (0.3
    )
    
    
    (0.1
    )Earnings from continuing operations before
income taxes
    
    
    7.4
    
    
    
    5.4
    
    
    
    3.2Income tax (expense) benefit
    
    
    (0.7
    )
    
    
    0.7
    
    
    
    (0.9
    )Earnings from continuing operations
    
    
    6.7
    
    
    
    6.1
    
    
    
    2.3Discontinued operations:Earnings (loss) from discontinued operations before
income taxes
    
    
    (0.2
    )
    
    
    9.3
    
    
    
    (6.2
    )Income tax (expense) benefit
    
    
    
    
    
    
    (2.8
    )
    
    
    (1.2
    )(Loss) earnings from discontinued operations
    
    
    (0.2
    )
    
    
    6.5
    
    
    
    (7.4
    )Net earnings (loss)
    
    
    6.5
    %
    
    
    12.6
    %
    
    
    (5.1
    )%
 Years ended December 31, 2007 and 2006:
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Years ended December 31, 2006 and 2005:
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Net Sales, Cost of Sales, and Operating Income (Loss) by Segment
  Years ended December 312007
    
    
    2006
    
    
    2005Net sales:Defense & Space Systems
    
    $
    59,090
    
    
    
    52,416
    
    
    
    51,394LXE
    
    
    138,821
    
    
    
    138,001
    
    
    
    123,140SATCOM
    
    
    89,968
    
    
    
    70,702
    
    
    
    51,353Total
    
    $
    287,879
    
    
    
    261,119
    
    
    
    225,887Cost-of-sales percentage:Defense & Space Systems
    
    
    75.4
    %
    
    
    79.1
    %
    
    
    80.0
    %LXE
    
    
    58.0
    
    
    
    58.5
    
    
    
    60.3SATCOM
    
    
    55.9
    
    
    
    59.4
    
    
    
    60.3Total
    
    
    60.9
    
    
    
    63.0
    
    
    
    65.1Operating income (loss):Defense & Space Systems
    
    $
    4,876
    
    
    
    2,572
    
    
    
    3,186LXE
    
    
    7,067
    
    
    
    11,043
    
    
    
    7,520SATCOM
    
    
    12,189
    
    
    
    6,170
    
    
    
    3,524Corporate and other
    
    
    (4,865
    )
    
    
    (5,428
    )
    
    
    (4,006
    )Total
    
    $
    19,267
    
    
    
    14,357
    
    
    
    10,224
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Defense & Space Systems:
  LXE:
    SATCOM:
   Discontinued Operations:
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Liquidity and Capital Resources
       30 of 80




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Off-Balance Sheet Arrangements
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Commitments and Contractual Obligations
  Payments due by periodLess
    
    1-3
    
    4-5
    
    After 5Total
    
    1 year
    
    years
    
    years
    
    yearsLong-term debt, excluding capital lease
obligations
    
    $


    13,704
    
    
    
    3,162
    
    
    
    2,624
    
    
    
    3,118
    
    
    
    4,800Interest on outstanding long-term debt
    
    
    4,014
    
    
    
    909
    
    
    
    1,443
    
    
    
    1,005
    
    
    
    657Capital lease obligations
    
    
    16
    
    
    
    12
    
    
    
    4
    
    
    
    
    
    
    
    Operating lease obligations
    
    
    22,098
    
    
    
    3,544
    
    
    
    4,735
    
    
    
    4,359
    
    
    
    9,460Deferred compensation agreements
    
    
    571
    
    
    
    116
    
    
    
    220
    
    
    
    120
    
    
    
    115FIN 48-Uncertain tax positions (1)
    
    
    2,591
    
    
    
    2,591
    
    
    
    
    
    
    
    
    
    
    
    Agreement to acquire satellite service
sub-license
    
    
    8,000
    
    
    
    1,000
    
    
    
    2,000
    
    
    
    2,000
    
    
    
    3,000Purchase commitments (2)
    
    
    24,774
    
    
    
    24,539
    
    
    
    235
    
    
    
    
    
    
    
    
 
 (1)
    
    The Company adopted the provisions of FASB Interpretation No. 48 (FIN 48), Accounting
for Uncertainty in Income Taxes  an Interpretation of FASB Statement No. 109 on January 1,
2007. FIN 48 prescribes a recognition threshold and measurement attribute for financial
statement recognition and measurement of tax positions taken or expected to be taken in a
tax return, and also provides guidance on derecognition, classification, interest and
penalties, accounting in interim periods, disclosure, and transition. As a result of the
adoption of FIN 48, the Company recognized no material adjustment in the liability for
unrecognized income tax benefits. Upon adoption on January 1, 2007, the Company had
$2,560,000 of unrecognized tax benefits, as adjusted to $2,714,000 to reflect the
reclassification of amounts in discontinued operations and accrued interest on unrecognized
benefits. At December 31, 2007, the Company had $2,591,000 of unrecognized tax benefits,
$2,105,000 of which would affect the Companys effective tax rate if recognized.(2)
    
    Purchase commitments primarily represent existing commitments under purchase orders or
contracts to purchase inventory and raw materials for our products. Most of these purchase
orders and contracts can be terminated for a fee that is either fixed or based on when
termination occurs. 32 of 80




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Critical Accounting Policies
  Revenue recognition on long-term contracts
      Inventory valuation
  33 of 80




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Evaluation of long-lived assets for impairment
   Evaluation of contingencies related to discontinued operations
   Establishment of reserves for deferred income tax assets
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Risk Factors and Forward-Looking Statements
  §
    
    economic conditions in the U.S. and abroad and their effect on capital spending in the
Companys principal markets;§
    
    difficulty predicting the timing of receipt of major customer orders, and the effect of
customer timing decisions on the Companys quarterly results;§
    
    successful completion of technological development programs by the Company and the
effects of technology that may be developed by, and patent rights that may be held or
obtained by, competitors;§
    
    U.S. defense budget pressures on near-term spending priorities;§
    
    uncertainties inherent in the process of converting contract awards into firm
contractual orders in the future;§
    
    volatility of foreign exchange rates relative to the U.S. dollar and their effect on
purchasing power by international customers, and the cost structure of the Companys
non-U.S. operations, as well as the potential for realizing foreign exchange gains and
losses associated with non-U.S. assets or liabilities held by the Company;§
    
    successful resolution of technical problems, proposed scope changes, or proposed funding
changes that may be encountered on contracts;§
    
    changes in the Companys consolidated effective income tax rate caused by the extent to
which actual taxable earnings in the U.S., Canada and other taxing jurisdictions may vary
from expected taxable earnings;§
    
    successful transition of products from development stages to an efficient manufacturing
environment;§
    
    changes in the rate at which the Companys products are returned for repair or
replacement under warranty;§
    
    customer response to new products and services, and general conditions in the Companys
target markets (such as logistics, and space-based communications), and whether these
responses and conditions develop according to our expectations;§
    
    the success of certain of the Companys customers in marketing our line of high-speed
commercial airline communications products as a complementary offering with their own lines
of avionics products;§
    
    the availability of financing for our customers major
programs, such as satellite data communications systems;§
    
    development of successful working relationships with local business and government
personnel in connection with distribution and manufacture of products in foreign countries;§
    
    the demand growth for various mobile and high-speed data communications services;§
    
    the Companys ability to attract and retain qualified personnel, particularly those with
key technical skills;
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§
    
    our ability to negotiate successfully with potential acquisition candidates, finance
acquisitions, or effectively integrate the acquired businesses, products or technologies
into the Companys existing businesses and products, and the risk that any such acquired
businesses, products or technologies do not perform as expected, are subject to undisclosed
or unanticipated liabilities, or are otherwise dilutive to our earnings;§
    
    the potential effects, on cash and results of discontinued operations, of final
resolution of potential liabilities under warranties and representations made by the
Company, and obligations assumed by purchasers, in connection with the Companys
dispositions of discontinued operations;§
    
    the availability, capabilities and performance of suppliers of basic materials,
electronic components and sophisticated subsystems on which the Company must rely in order
to perform according to contract requirements, or to introduce new products on the desired
schedule; and§
    
    uncertainties associated with U.S. export controls and the export license process, which
restrict the Companys ability to hold technical discussions with customers, suppliers and
internal engineering resources and can reduce the Companys ability to obtain sales from
foreign customers or to perform contracts with the desired level of efficiency or
profitability.
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Effect of New Accounting Pronouncements
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ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk
  Revolving credit loan with a bank in the United Kingdom,
maturing in April 2008, interest payable monthly at a variable
rate (6.50% at December 31, 2007)
    
    $
    1,962Government obligations money-market funds, other money market
instruments, and interest-bearing deposits, with
maturity dates of less than 3 months, interest payable month
at variable rates (an average rate of 4.41% at December 31,
2007)
    
    
    115,307
   Exchange Rate
    
    $U.S.($U.S. per unit of
    
    in thousandslocal currency)
    
    (reporting currency)Australia
    
    0.8774 /Dollar
    
    $
    2,358Italy
    
    1.4602 /Euro
    
    
    2,022Germany
    
    1.4602 /Euro
    
    
    1,751France
    
    1.4602 /Euro
    
    
    1,237Netherlands
    
    1.4602 /Euro
    
    
    720United Kingdom
    
    1.9836 /Pound
    
    
    651Sweden
    
    0.1548 /Krona
    
    
    268Belgium
    
    1.4602 /Euro
    
    
    200Canada
    
    1.0120 /Dollar
    
    
    (445
    )Total intercompany payable (receivable) subject to
foreign currency risk
    
    
    
    $
    8,762
  Average
    
    
    ($U.S.)Notional
    
    Contract
    
    
    FairAmount
    
    Rate
    
    
    ValueForeign currency forward contractsU.S. dollars (sell for Canadian dollars)
    
    
    25,600
    
    
    USD
    
    
    1.0039
    
    
    $
    335British pounds (sell for U.S. dollars)
    
    
    300
    
    
    GBP
    
    
    2.0152
    
    
    
    10Swedish Krona (sell for U.S. dollars)
    
    
    1,450
    
    
    SEK
    
    
    6.4360
    
    
    
    Euros (sell for U.S. dollars)
    
    
    4,300
    
    
    EURO
    
    
    1.4585
    
    
    
    (3
    )Australian dollars (sell for U.S. dollars)
    
    
    1,850
    
    
    AUD
    
    
    0.8391
    
    
    
    (46
    )British pounds (buy with Canadian dollars)
    
    
    1,000
    
    
    GBP
    
    
    2.0351
    
    
    
    (77
    )$
    219Embedded derivativesQualifying for U.S. dollar contracts at
Canadian subsidiary
    
    
    11,198
    
    
    USD
    
    
    1.0120
    
    
    $
    19
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ITEM 8. Financial Statements and Supplementary Data
  
 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
  
 ITEM 9A. Controls and Procedures
 (a) Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
   (b) Managements Annual Report on Internal Control Over Financial Reporting
   (c) Changes in Internal Control Over Financial Reporting
  (d) Report of Independent Registered Public Accounting Firm
 
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ITEM 9B. Other Information.
  
 PART III
 
 ITEM 10. Directors, Executive Officers, and Corporate Governance
  www.ems-t.com
  
 ITEM 11. Executive Compensation
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ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder
Matters
  (c)(a)
    
    
    
    
    
    Number of securitiesNumber of securities
    
    (b)
    
    remaining available forto be issued upon
    
    Weighted average
    
    future issuance underexercise of
    
    exercise price of
    
    equity compensation plansoutstanding options,
    
    outstanding options,
    
    (excluding securitiesPlan Category
    
    warrants and rights
    
    warrants and rights
    
    reflected in column(a))Equity compensation plans approved
by security holders
    
    
    648,605
    
    
    $
    18.07
    
    
    
    1,945,000Equity compensation plans not
approved by security holders
    
    
    185,075
    
    
    $
    19.44
    
    
    
    74,732Total
    
    
    833,680
    
    
    $
    18.37
    
    
    
    2,019,732
  
 ITEM 13. Certain Relationships and Related Transactions and Director Independence
  
 ITEM 14. Principal Accountant Fees and Services
  
 PART IV
 
 ITEM 15. Exhibits, Financial Statement Schedules
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SCHEDULE II  VALUATION AND QUALIFYING ACCOUNTS
 Years ended December 31, 2007, 2006 and 2005AdditionsBalance at
    
    charged to
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balancebeginning
    
    costs and
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    at endClassification
    
    of year
    
    expenses
    
    
    
    
    
    Deductions
    
    
    
    
    
    Other
    
    of yearAllowance for Doubtful Accounts:2005
    
    $
    892
    
    
    
    565
    
    
    
    
    
    
    
    (869
    )
    
    
    (a
    )
    
    
    
    
    
    
    5882006
    
    
    588
    
    
    
    500
    
    
    
    
    
    
    
    (347
    )
    
    
    (a
    )
    
    
    
    
    
    
    7412007
    
    
    741
    
    
    
    1,404
    
    
    
    
    
    
    
    (1,041
    )
    
    
    (a
    )
    
    
    
    
    
    
    1,104Valuation Allowance for Deferred Tax Assets:2005
    
    $
    36,835
    
    
    
    10,134
    
    
    
    (b
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    46,9692006
    
    
    46,969
    
    
    
    307
    
    
    
    (b
    )
    
    
    (14,355
    )
    
    
    (c
    )
    
    
    
    
    
    
    32,9212007
    
    
    32,921
    
    
    
    16,222
    
    
    
    (b
    )
    
    
    (49
    )
    
    
    
    
    
    
    
    
    
    
    49,094Valuation Allowance for Assets Held for Sale:2005
    
    $
    15,200
    
    
    
    16,200
    
    
    
    (d
    )
    
    
    (25,200
    )
    
    
    (e
    )
    
    
    
    
    
    
    6,2002006
    
    
    6,200
    
    
    
    
    
    
    
    
    
    
    
    (6,200
    )
    
    
    (e
    )
    
    
    
    
    
    
    2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 
 (a)
    
    Deductions represent receivables that were charged off to the
allowance or recovered during the year.(b)
    
    The 2005 and 2007 increases in the valuation allowance for deferred tax assets related
primarily to the net changes in the underlying deferred tax assets associated with the Companys
operations in Canada. In 2006, the Company increased the valuation allowance by $307,000 net,
mainly for the benefits associated with certain foreign net operating losses. This increase in
valuation allowance was based on managements assessment that, due to changing business conditions
and the limitation of tax planning strategies, the Company was not likely to fully realize these
deferred tax assets.(c)
    
    In 2006, the decrease in valuation allowance for deferred tax assets reflects: 1)
adjustments of $8.2 million with a corresponding reduction in the Canadian deferred tax assets; 2)
utilization of a $3.3 million capital loss; 3) change in judgment of $1.7 million related to
Canadian estimated future taxable income; and 4) utilization/change in judgment/sale of operations
of $1.2 million related to non-Canadian foreign operations.(d)
    
    The 2005 charge was an adjustment to write down to estimated fair value the S&T/Montreal and
SatNet assets held for sale.(e)
    
    The 2006 and 2005 reductions in the allowance were a result of the sale of the Companys SatNet
and S&T/Montreal divisions. 43 of 80




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*
    
    Filed herewith 48 of 80




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SIGNATURES
  EMS TECHNOLOGIES, INC.By: /s/ Paul B. Domorski
    
    Date: 3/17/08President and Chief Executive Officer
  Signature
    
    Title
    
    Date/s/ Paul B. Domorski
    
    President and Chief Executive Officer, and Director
    
    3/17/08Paul B. Domorski
    
    (Principal
Executive Officer)/s/ Don T. Scartz
    
    Executive Vice President, Chief Financial Officer, and Treasurer
    
    3/17/08Don T. Scartz
    
    (Principal
Financial Officer)/s/ Gary B. Shell
    
    Vice President, Finance
    
    3/17/08Gary B. Shell
    
    (Principal
Accounting Officer)/s/ Hermann Buerger
    
    Director
    
    3/17/08Hermann Buerger/s/ Francis J. Erbrick
    
    Director
    
    3/17/08Francis J. Erbrick/s/ John R. Kreick
    
    Director
    
    3/17/08John R. Kreick/s/ John B. Mowell
    
    Director, Chairman of the Board
    
    3/17/08John B. Mowell/s/ Thomas W. OConnell
    
    Director
    
    3/17/08Thomas W. OConnell/s/ Bradford W. Parkinson
    
    Director
    
    3/17/08Bradford W. Parkinson/s/ Norman E. Thagard
    
    Director
    
    3/17/08Norman E. Thagard/s/ John L. Woodward, Jr.
    
    Director
    
    3/17/08John L. Woodward, Jr.
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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 PageReport of Independent Registered Public Accounting Firm
    
    
    51Consolidated Statements of Operations  Years ended December 31, 2007, 2006 and 2005
    
    
    52Consolidated Balance Sheets  December 31, 2007 and 2006
    
    
    53Consolidated Statements of Cash Flows  Years ended December 31, 2007, 2006 and 2005
    
    
    55Consolidated Statements of Shareholders Equity and Comprehensive Income (Loss) 
Years ended December 31, 2007, 2006 and 2005
    
    
    56Notes to Consolidated Financial Statements
    
    
    57
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
       
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EMS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
 Years ended December 312007
    
    
    2006
    
    
    2005Product net sales
    
    $
    247,504
    
    
    
    223,512
    
    
    
    192,275Service net sales
    
    
    40,375
    
    
    
    37,607
    
    
    
    33,612Net sales (note 12)
    
    
    287,879
    
    
    
    261,119
    
    
    
    225,887Product cost of sales
    
    
    151,611
    
    
    
    139,517
    
    
    
    124,701Service cost of sales
    
    
    23,667
    
    
    
    25,094
    
    
    
    22,264Cost of sales
    
    
    175,278
    
    
    
    164,611
    
    
    
    146,965Selling, general and administrative expenses
    
    
    74,561
    
    
    
    66,335
    
    
    
    56,944Research and development expenses
    
    
    18,773
    
    
    
    15,816
    
    
    
    11,754Operating income
    
    
    19,267
    
    
    
    14,357
    
    
    
    10,224Interest income
    
    
    5,403
    
    
    
    2,254
    
    
    
    588Interest expense
    
    
    (1,953
    )
    
    
    (1,921
    )
    
    
    (3,304
    )Foreign exchange loss
    
    
    (1,390
    )
    
    
    (710
    )
    
    
    (288
    )Earnings from continuing operations before income taxes
    
    
    21,327
    
    
    
    13,980
    
    
    
    7,220Income tax (expense) benefit (note 9)
    
    
    (2,080
    )
    
    
    1,823
    
    
    
    (2,094
    )Earnings from continuing operations
    
    
    19,247
    
    
    
    15,803
    
    
    
    5,126Discontinued operations (note 2):(Loss) earnings from discontinued operations before income taxes
    
    
    (585
    )
    
    
    24,427
    
    
    
    (13,971
    )Income tax benefit (expense)
    
    
    82
    
    
    
    (7,222
    )
    
    
    (2,598
    )(Loss) earnings from discontinued operations
    
    
    (503
    )
    
    
    17,205
    
    
    
    (16,569
    )Net earnings (loss)
    
    $
    18,744
    
    
    
    33,008
    
    
    
    (11,443
    )Net earnings (loss) per share (note 1):Basic:From continuing operations
    
    $
    1.25
    
    
    
    1.08
    
    
    
    0.46From discontinued operations
    
    
    (0.03
    )
    
    
    1.18
    
    
    
    (1.48
    )Net earnings (loss)
    
    $
    1.22
    
    
    
    2.26
    
    
    
    (1.02
    )Diluted:From continuing operations
    
    $
    1.24
    
    
    
    1.08
    
    
    
    0.46From discontinued operations
    
    
    (0.03
    )
    
    
    1.17
    
    
    
    (1.48
    )Net earnings (loss)
    
    $
    1.21
    
    
    
    2.25
    
    
    
    (1.02
    )Weighted average number of shares (note 1):Basic
    
    
    15,354
    
    
    
    14,621
    
    
    
    11,179Diluted
    
    
    15,482
    
    
    
    14,679
    
    
    
    11,225
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EMS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 December 312007
    
    
    2006ASSETSCurrent assets:Cash and cash equivalents
    
    $
    133,959
    
    
    
    109,431Restricted cash
    
    
    81
    
    
    
    162Trade accounts receivable, net (note 4)
    
    
    85,085
    
    
    
    93,720Inventories, net (note 5)
    
    
    28,949
    
    
    
    26,042Deferred income taxes, net (note 9)
    
    
    1,868
    
    
    
    1,963Other current assets
    
    
    7,115
    
    
    
    7,697Total current assets
    
    
    257,057
    
    
    
    239,015Property, plant and equipment:Land
    
    
    1,150
    
    
    
    1,150Buildings and leasehold improvements
    
    
    15,954
    
    
    
    15,361Machinery and equipment
    
    
    87,377
    
    
    
    72,569Furniture and fixtures
    
    
    9,665
    
    
    
    7,763Total property, plant and equipment
    
    
    114,146
    
    
    
    96,843Less accumulated depreciation and amortization
    
    
    74,223
    
    
    
    65,108Net property, plant and equipment
    
    
    39,923
    
    
    
    31,735Deferred income taxes, net  non-current (note 9)
    
    
    5,490
    
    
    
    6,282Intangible assets, net of accumulated amortization of $7,256 in 2007 and $5,018 in
2006 (note 6)
    
    
    5,837
    
    
    
    2,084Goodwill
    
    
    9,982
    
    
    
    9,982Other assets
    
    
    5,511
    
    
    
    2,586Total assets
    
    $
    323,800
    
    
    
    291,684
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EMS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS,
 December 312007
    
    
    2006LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Current installments of long-term debt (note 7)
    
    $
    3,174
    
    
    
    3,102Accounts payable
    
    
    22,389
    
    
    
    29,285Billings in excess of contract costs
    
    
    6,643
    
    
    
    7,899Accrued compensation costs
    
    
    9,553
    
    
    
    8,042Accrued retirement costs (note 10)
    
    
    2,472
    
    
    
    2,666Deferred service revenue
    
    
    8,578
    
    
    
    6,289Other current liabilities
    
    
    5,757
    
    
    
    5,162Total current liabilities
    
    
    58,566
    
    
    
    62,445Long-term debt, excluding current installments (note 7)
    
    
    10,546
    
    
    
    11,755Other liabilities
    
    
    7,562
    
    
    
    4,401Total liabilities
    
    
    76,674
    
    
    
    78,601Shareholders equity (note 8):Preferred stock of $1.00 par value per shareAuthorized 10,000,000 shares; none issued
    
    
    
    
    
    
    Common stock of $.10 par value per shareAuthorized 75,000,000 shares, issued and outstanding 15,581,000 in 2007 and
15,327,000 in 2006
    
    
    1,558
    
    
    
    1,533Additional paid-in capital
    
    
    139,727
    
    
    
    133,050Accumulated other comprehensive income  foreign currency translation adjustment
    
    
    12,859
    
    
    
    4,262Retained earnings
    
    
    92,982
    
    
    
    74,238Total shareholders equity
    
    
    247,126
    
    
    
    213,083Commitments and contingencies (notes 2, 3, 7, 9, 14, 15, and 16)Total liabilities and shareholders equity
    
    $
    323,800
    
    
    
    291,684
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EMS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
 Years ended December 312007
    
    
    2006
    
    
    2005Cash flows from operating activities:Net earnings (loss)
    
    $
    18,744
    
    
    
    33,008
    
    
    
    (11,443
    )Adjustments to reconcile net earnings (loss) to net cash provided by
operating activities:Depreciation
    
    
    7,988
    
    
    
    7,249
    
    
    
    6,519Intangible
amortization
    
    
    1,678
    
    
    
    1,615
    
    
    
    2,404Deferred income taxes
    
    
    887
    
    
    
    (3,178
    )
    
    
    899Tax benefit for exercise of stock options
    
    
    643
    
    
    
    213
    
    
    
    383Excess tax benefits from stock-based compensation
    
    
    (24
    )
    
    
    
    
    
    
    Provisions for receivables
    
    
    279
    
    
    
    132
    
    
    
    (293
    )(Gain) loss on sale of assets
    
    
    (1
    )
    
    
    (352
    )
    
    
    394(Gain) loss from discontinued operations
    
    
    503
    
    
    
    (17,205
    )
    
    
    16,569Stock-based compensation expense
    
    
    1,727
    
    
    
    987
    
    
    
    Changes in operating assets and liabilities, net of effects of acquisition:Trade accounts receivable
    
    
    12,991
    
    
    
    (10,482
    )
    
    
    (13,907
    )Billings in excess of contract costs
    
    
    (1,703
    )
    
    
    2,042
    
    
    
    4,006Inventories
    
    
    (904
    )
    
    
    (4,880
    )
    
    
    349Accounts payable
    
    
    (6,849
    )
    
    
    2,234
    
    
    
    7,159Income taxes payable
    
    
    (1,556
    )
    
    
    (1,807
    )
    
    
    (369
    )Non-trade foreign government receivable
    
    
    1,495
    
    
    
    (408
    )
    
    
    434Deferred revenue
    
    
    2,629
    
    
    
    2,061
    
    
    
    785Accrued compensation and retirement costs
    
    
    903
    
    
    
    (857
    )
    
    
    3,203Accrued costs, and other
    
    
    2,633
    
    
    
    (724
    )
    
    
    (914
    )Net cash provided by operating activities in continuing operations
    
    
    42,063
    
    
    
    9,648
    
    
    
    16,178Net cash (used in) provided by operating activities in discontinued operations
    
    
    (3,329
    )
    
    
    657
    
    
    
    (11,355
    )Net cash provided by operating activities
    
    
    38,734
    
    
    
    10,305
    
    
    
    4,823Cash flows from investing activities:Purchase of property, plant and equipment
    
    
    (14,579
    )
    
    
    (8,502
    )
    
    
    (9,102
    )Payments for asset acquisitions
    
    
    (5,000
    )
    
    
    (188
    )
    
    
    (125
    )Proceeds from sale of assets
    
    
    907
    
    
    
    59,521
    
    
    
    21,931Net cash (used in) provided by investing activities in continuing operations
    
    
    (18,672
    )
    
    
    50,831
    
    
    
    12,704Net cash used in investing activities in discontinued operations
    
    
    
    
    
    
    (480
    )
    
    
    (1,822
    )Net cash (used in) provided by investing activities
    
    
    (18,672
    )
    
    
    50,351
    
    
    
    10,882Cash flows from financing activities:Net decrease in revolving debt
    
    
    (170
    )
    
    
    (26,683
    )
    
    
    (16,882
    )Repayment of term debt
    
    
    (1,111
    )
    
    
    (1,307
    )
    
    
    (1,342
    )Decrease in restricted cash
    
    
    81
    
    
    
    2,458
    
    
    
    2,095Deferred financing costs paid
    
    
    
    
    
    
    (85
    )
    
    
    (98
    )Excess tax benefits from stock-based compensation
    
    
    24
    
    
    
    
    
    
    
    Proceeds from stock offering, net of expenses
    
    
    
    
    
    
    58,736
    
    
    
    Proceeds from exercise of stock options, net of withholding taxes paid
    
    
    4,332
    
    
    
    2,124
    
    
    
    1,966Net cash provided by (used in) financing activities
    
    
    3,156
    
    
    
    35,243
    
    
    
    (14,261
    )Net change in cash and cash equivalents
    
    
    23,218
    
    
    
    95,899
    
    
    
    1,444Effect of exchange rates on cash and cash equivalents
    
    
    1,310
    
    
    
    737
    
    
    
    (2,983
    )Cash and cash equivalents at January 1
    
    
    109,431
    
    
    
    12,795
    
    
    
    14,334Cash and cash equivalents at December 31
    
    $
    133,959
    
    
    
    109,431
    
    
    
    12,795Supplemental disclosure of cash flow information:Cash paid for interest
    
    $
    1,147
    
    
    
    1,483
    
    
    
    4,869Cash paid for income taxes
    
    
    357
    
    
    
    9,357
    
    
    
    2,661
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EMS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY AND COMPREHENSIVE INCOME (LOSS)
 Three years ended December 31, 2007Accum-ulatedotherCompre-
    
    compre-
    
    
    
    
    
    TotalAdditional
    
    hensive
    
    hensive
    
    
    
    
    
    share-Common Stock
    
    paid-in
    
    income
    
    income
    
    Retained
    
    holdersShares
    
    Amount
    
    capital
    
    (loss)
    
    (loss)
    
    earnings
    
    equityBalance December 31, 2004
    
    
    11,164
    
    
    $
    1,116
    
    
    
    69,058
    
    
    
    
    
    
    
    3,174
    
    
    
    52,673
    
    
    
    126,021Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,443
    )
    
    
    
    
    
    
    (11,443
    )
    
    
    (11,443
    )Income tax benefit from exercise
of non- qualified stock options
(note 9)
    
    
    
    
    
    
    
    
    
    
    383
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    383Exercise of common stock options
    
    
    221
    
    
    
    22
    
    
    
    2,642
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,664Redemption of shares upon
exercise of common stock options
    
    
    (42
    )
    
    
    (4
    )
    
    
    (691
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (695
    )Foreign currency translation
adjustment gain
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,971
    
    
    
    1,971
    
    
    
    
    
    
    
    1,971Repurchases of stock
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3
    )Reclassification due to sale of
discontinued
operations (note 2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,242
    )
    
    
    (5,242
    )
    
    
    
    
    
    
    (5,242
    )Comprehensive loss for 2005
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14,714
    )Balance December 31, 2005
    
    
    11,343
    
    
    
    1,134
    
    
    
    71,389
    
    
    
    
    
    
    
    (97
    )
    
    
    41,230
    
    
    
    113,656Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33,008
    
    
    
    
    
    
    
    33,008
    
    
    
    33,008Income tax benefit from exercise
of non- qualified stock options
(note 9)
    
    
    
    
    
    
    
    
    
    
    213
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    213Exercise of common stock options
    
    
    215
    
    
    
    21
    
    
    
    3,387
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,408Redemption of shares upon
exercise of common stock options
    
    
    (64
    )
    
    
    (6
    )
    
    
    (1,248
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,254
    )Repurchases of stock
    
    
    (2
    )
    
    
    
    
    
    
    (30
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (30
    )Stock-based compensation
    
    
    40
    
    
    
    4
    
    
    
    983
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    987Issuance of common stock (note 13)
    
    
    3,795
    
    
    
    380
    
    
    
    58,356
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    58,736Foreign currency translation
adjustment gain
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,540
    
    
    
    2,540
    
    
    
    
    
    
    
    2,540Reclassification due to sale of
discontinued operations (note 2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,819
    
    
    
    1,819
    
    
    
    
    
    
    
    1,819Comprehensive income for 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37,367Balance December 31, 2006
    
    
    15,327
    
    
    
    1,533
    
    
    
    133,050
    
    
    
    
    
    
    
    4,262
    
    
    
    74,238
    
    
    
    213,083Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,744
    
    
    
    
    
    
    
    18,744
    
    
    
    18,744Income tax benefit from exercise
of non- qualified stock options
(note 9)
    
    
    
    
    
    
    
    
    
    
    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
    )Stock-based compensation
    
    
    2
    
    
    
    
    
    
    
    1,727
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,727Repurchases of stock
    
    
    (1
    )
    
    
    
    
    
    
    (24
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (24
    )Foreign currency translation
adjustment gain
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,597
    
    
    
    8,597
    
    
    
    
    
    
    
    8,597Comprehensive income for 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,341Balance December 31, 2007
    
    
    15,581
    
    
    $
    1,558
    
    
    
    139,727
    
    
    
    
    
    
    
    12,859
    
    
    
    92,982
    
    
    
    247,126
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2007, 2006 and 2005
 (1) BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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Buildings
    
    20 to 40 yearsMachinery and equipment
    
    3 to 8 yearsFurniture and fixtures
    
    10 years
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2007
    
    2006
    
    2005Weighted average common shares  basic
    
    
    15,354
    
    
    
    14,621
    
    
    
    11,179Assumed conversion of options into common shares
    
    
    128
    
    
    
    58
    
    
    
    46Weighted average number of shares  diluted
    
    
    15,482
    
    
    
    14,679
    
    
    
    11,225
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(2) DISCONTINUED OPERATIONS
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2007
    
    
    2006
    
    
    2005Net sales
    
    $
    
    
    
    
    46,294
    
    
    
    143,926Expenses
    
    
    
    
    
    
    (45,499
    )
    
    
    (141,697
    )Gain on sale of assets
    
    
    
    
    
    
    26,856
    
    
    
    Loss on sale of assets
    
    
    
    
    
    
    (3,224
    )
    
    
    Estimated loss on disposal
    
    
    (585
    )
    
    
    
    
    
    
    (16,200
    )Earnings (loss) before income taxes
    
    
    (585
    )
    
    
    24,427
    
    
    
    (13,971
    )Income tax benefit (expense)
    
    
    82
    
    
    
    (7,222
    )
    
    
    (2,598
    )Earnings (loss) from discontinued operations
    
    $
    (503
    )
    
    
    17,205
    
    
    
    (16,569
    )
    (3) ACQUISITIONS
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(4) TRADE ACCOUNTS RECEIVABLE
  Dec 31
    
    
    Dec 312007
    
    
    2006Amounts billed
    
    $
    62,188
    
    
    
    71,327Unbilled revenues under long-term contracts (1)
    
    
    24,001
    
    
    
    23,134Allowance for doubtful accounts
    
    
    (1,104
    )
    
    
    (741
    )Trade accounts receivable, net
    
    $
    85,085
    
    
    
    93,720
 
 (1)
    
    Unbilled net sales under long-term contracts are usually billed and collected within one year
(except $2.0 million has been included in long-term assets). (5) INVENTORIES
  Dec 31
    
    
    Dec 312007
    
    
    2006Parts and materials
    
    $
    18,864
    
    
    
    17,318Work-in-process
    
    
    3,733
    
    
    
    4,124Finished goods
    
    
    6,352
    
    
    
    4,600Inventories, net
    
    $
    28,949
    
    
    
    26,042
 (6) OTHER INTANGIBLE ASSETS
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(7) LONG-TERM DEBT
  2007
    
    
    2006Promissory note, secured by a first mortgage
on the Companys headquarters facility,
maturing in 2016, principal and interest
payable in equal monthly installments of $104
with a fixed interest rate of 8.0%
    
    $
    7,730
    
    
    
    8,332Term 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%
    
    
    4,012
    
    
    
    4,521Capital lease agreements, secured by machinery
and equipment, computer hardware, software and
peripherals, with various terms through 2009,
due in quarterly installments with implicit
interest rates of 3.0% to 4.2%
    
    
    16
    
    
    
    29Financing agreements, related to installation
of computer hardware and peripherals and
implementation of software, which matured in
April 2007, principal and interest payable in
equal quarterly installments of $155 with an
average fixed interest rate of 5.79%
    
    
    
    
    
    
    154Revolving credit loan with a bank in the
United Kingdom, maturing in April 2008,
interest payable monthly at a variable rate
(6.50% at the end of 2007 and 6.00% at the end
of 2006)
    
    
    1,962
    
    
    
    1,821Total long-term debt
    
    
    13,720
    
    
    
    14,857Less current installments of long-term debt
    
    
    3,174
    
    
    
    3,102Long-term debt, excluding current installments
    
    $
    10,546
    
    
    
    11,755
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2008
    
    $
    3,1742009
    
    
    1,2372010
    
    
    1,3912011
    
    
    1,5002012
    
    
    1,618Thereafter
    
    
    4,800Total principal maturities
    
    $
    13,720
   2008
    
    $
    122009
    
    
    4Total capital lease payments
    
    
    16Less: Interest payments
    
    
    Capital lease obligations
    
    $
    16
    (8) STOCK PLANS
 
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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
    
    
    78
    
    
    $
    13.00
    
    
    
    
    
    
    
    68
    
    
    $
    12.9713.90 - 14.93
    
    
    95
    
    
    
    14.20
    
    
    
    
    
    
    
    95
    
    
    
    14.2014.94 - 15.80
    
    
    66
    
    
    
    15.62
    
    
    
    
    
    
    
    50
    
    
    
    15.6515.81 - 17.87
    
    
    8
    
    
    
    17.48
    
    
    
    
    
    
    
    8
    
    
    
    17.4817.88 - 18.98
    
    
    164
    
    
    
    18.25
    
    
    
    
    
    
    
    94
    
    
    
    18.3818.99 - 22.74
    
    
    366
    
    
    
    20.32
    
    
    
    
    
    
    
    160
    
    
    
    20.9522.75 - 23.88
    
    
    57
    
    
    
    23.87
    
    
    
    
    
    
    
    57
    
    
    
    23.8711.63 - 23.88
    
    
    834
    
    
    
    18.37
    
    
    4.6 years
    
    
    532
    
    
    
    18.04
    
    
    4.6 years
     Options with service-based vesting only
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2005Net loss:As reported (1)
    
    $
    (11,443
    )Stock-based employee compensation expense determined under
the fair
value method, net of tax
    
    
    (947
    )Pro forma net loss
    
    $
    (12,390
    )Basic net loss per share:As reported
    
    $
    (1.02
    )Pro forma
    
    
    (1.11
    )Diluted net loss per share:As reported
    
    $
    (1.02
    )Pro forma
    
    
    (1.10
    )
 
 (1)
    
    Stock compensation expense has not been recognized in net loss   WeightedAverageWeighted
    
    Weighted
    
    RemainingNumber
    
    Average
    
    Average
    
    Contractual
    
    Aggregateof
    
    Exercise
    
    Grant-Date
    
    Life
    
    IntrinsicShares
    
    Price
    
    Fair Value
    
    (in years)
    
    ValueOptions outstanding
at December 31,
2005
    
    
    1,243
    
    
    $
    18.08Granted
    
    
    52
    
    
    
    18.99
    
    
    $
    12.96Exercised
    
    
    (215
    )
    
    
    15.90
    
    
    
    
    
    
    
    
    
    
    $
    742Forfeited or expired
    
    
    (219
    )
    
    
    19.61Options outstanding
at December 31,
2006
    
    
    861
    
    
    
    18.28
    
    
    
    
    
    
    
    4.4
    
    
    
    2,260Granted
    
    
    175
    
    
    
    19.48
    
    
    $
    9.98Exercised
    
    
    (306
    )
    
    
    18.63
    
    
    
    
    
    
    
    
    
    
    
    2,257Forfeited or expired
    
    
    (50
    )
    
    
    21.25Options outstanding
at December 31,
2007
    
    
    680
    
    
    
    18.22
    
    
    
    
    
    
    
    4.7
    
    
    
    6,887Options exercisable
at December 31,
2007
    
    
    498
    
    
    $
    17.96
    
    
    
    
    
    
    
    4.5
    
    
    $
    5,180
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2007
    
    2006Expected volitility
    
    53% - 59%
    
    54% - 61%Expected term (in years)
    
    4.7 - 8.3
    
    5.0 - 8.3Risk-free rate
    
    4.5% - 4.9%
    
    4.7% - 5.1%Expected dividend yield
    
    None
    
    None
  Options with performance-based and service-based vesting
   WeightedWeighted
    
    AverageWeighted
    
    Average
    
    RemainingNumber
    
    Average
    
    Grant-Date
    
    Contractual
    
    Aggregateof
    
    Exercise
    
    Fair
    
    Life
    
    IntrinsicShares
    
    Price
    
    Value
    
    (in years)
    
    ValueOptions outstanding
at December 31,
2005
    
    
    
    
    
    $
    Granted
    
    
    183
    
    
    
    18.90
    
    
    $
    10.09Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    Forfeited or expired
    
    
    (9
    )
    
    
    18.05Options outstanding
at December 31,
2006
    
    
    174
    
    
    
    18.95
    
    
    
    
    
    
    
    5.3
    
    
    
    Granted
    
    
    
    
    
    
    
    
    
    $
    Exercised
    
    
    (5
    )
    
    
    18.05
    
    
    
    
    
    
    
    
    
    
    
    56Forfeited or expired
    
    
    (15
    )
    
    
    18.05Options outstanding
at December 31,
2007
    
    
    154
    
    
    
    19.06
    
    
    
    
    
    
    
    4.3
    
    
    
    1,431Options exercisable
at December 31,
2007
    
    
    33
    
    
    $
    19.22
    
    
    
    
    
    
    
    4.3
    
    
    $
    303
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2007
    
    2006Expected volitility
    
    55% - 56%
    
    56%Expected term (in years)
    
    4.0
    
    5.0Risk-free rate
    
    4.7%
    
    4.8% - 5.0%Expected dividend yield
    
    None
    
    None
  Nonvested stock
  WeightedNumber
    
    Averageof
    
    Grant-DateShares
    
    Fair ValueNonvested stock outstanding at December 31, 2005
    
    
    
    
    
    $
    Granted
    
    
    40
    
    
    
    17.92Vested
    
    
    
    
    
    
    Forefeited
    
    
    
    
    
    
    Nonvested stock outstanding at December 31, 2006
    
    
    40
    
    
    
    17.92Granted
    
    
    3
    
    
    
    19.37Vested
    
    
    (4
    )
    
    
    15.74Forefeited
    
    
    
    
    
    
    Nonvested stock outstanding at December 31, 2007
    
    
    39
    
    
    $
    18.26
  (9) INCOME TAXES
  2007
    
    
    2006
    
    
    2005Income tax benefit (expense), continuing operations
    
    $
    (2,080
    )
    
    
    1,823
    
    
    
    (2,094
    )Income tax benefit (expense), discontinued
    
    
    82
    
    
    
    (7,222
    )
    
    
    (2,598
    )operations
Income tax benefit resulting from exercise of stock
options credited to shareholders equity
    
    
    643
    
    
    
    213
    
    
    
    383Total
    
    $
    (1,355
    )
    
    
    (5,186
    )
    
    
    (4,309
    )
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2007
    
    
    2006
    
    
    2005Current:Federal
    
    $
    (1,483
    )
    
    
    395
    
    
    
    133State
    
    
    (332
    )
    
    
    (506
    )
    
    
    (373
    )Foreign
    
    
    (1,274
    )
    
    
    (1,806
    )
    
    
    (53
    )Total
    
    
    (3,089
    )
    
    
    (1,917
    )
    
    
    (293
    )Deferred:Federal
    
    
    878
    
    
    
    2,457
    
    
    
    (1,534
    )State
    
    
    35
    
    
    
    42
    
    
    
    129Foreign
    
    
    96
    
    
    
    1,241
    
    
    
    (396
    )Total
    
    
    1,009
    
    
    
    3,740
    
    
    
    (1,801
    )Total income tax benefit (expense)
    
    $
    (2,080
    )
    
    
    1,823
    
    
    
    (2,094
    )
  2007
    
    
    2006
    
    
    2005Computed expected income tax expense
    
    $
    (7,251
    )
    
    
    (4,893
    )
    
    
    (2,455
    )Reduction (increase) in income tax:State income taxes, net of federal income tax effect
    
    
    (196
    )
    
    
    (321
    )
    
    
    (130
    )Tax credits from research activities
    
    
    936
    
    
    
    4,181
    
    
    
    34Difference in effective foreign tax rates
    
    
    4,127
    
    
    
    1,494
    
    
    
    845Net decrease (increase) to valuation allowance for
deferred tax assets
    
    
    49
    
    
    
    1,881
    
    
    
    (242
    )Foreign permanent differences
    
    
    (177
    )
    
    
    (366
    )
    
    
    Other
    
    
    432
    
    
    
    (153
    )
    
    
    (146
    )Income tax benefit (expense)
    
    $
    (2,080
    )
    
    
    1,823
    
    
    
    (2,094
    )
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2007
    
    
    2006Deferred tax assets:Inventories
    
    $
    892
    
    
    
    884Accrued compensation costs
    
    
    835
    
    
    
    975Accrued warranty costs
    
    
    821
    
    
    
    626Foreign research expense and tax credit carry forward
    
    
    53,895
    
    
    
    38,077Foreign net operating loss carry forward
    
    
    575
    
    
    
    437Credit for corporate minimum tax
    
    
    675
    
    
    
    636Research and development credit carry forward
    
    
    387
    
    
    
    1,901Stock-based compensation
    
    
    721
    
    
    
    279Other
    
    
    950
    
    
    
    965Total gross deferred tax assets
    
    
    59,751
    
    
    
    44,780Valuation allowance
    
    
    (49,094
    )
    
    
    (32,921
    )Net deferred tax assets
    
    
    10,657
    
    
    
    11,859Deferred tax liabilities:Property, plant and equipment
    
    
    3,079
    
    
    
    3,319Other
    
    
    220
    
    
    
    295Total gross deferred tax liabilities
    
    
    3,299
    
    
    
    3,614Net deferred tax assets
    
    $
    7,358
    
    
    
    8,245
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Balance as of January 1, 2007
    
    $
    2,714Increases related to current year tax positions
    
    
    472Increases related to prior year tax positions
    
    
    31Decreases related to lapsing of statute of limitations
    
    
    (23
    )Decreases related to settlements with taxing authorities
    
    
    (788
    )Foreign exchange
    
    
    185Balance as of December 31, 2007
    
    $
    2,591
   (10) RETIREMENT PLANS
    (11) FAIR VALUE OF FINANCIAL INSTRUMENTS
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(12) BUSINESS SEGMENT AND GEOGRAPHIC AREA INFORMATION
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Years ended December 312007
    
    
    2006
    
    
    2005Net sales:Defense & Space Systems
    
    $
    59,090
    
    
    
    52,431
    
    
    
    51,409Less sales to discontinued operations
    
    
    
    
    
    
    (15
    )
    
    
    (15
    )Defense & Space Systems external sales
    
    
    59,090
    
    
    
    52,416
    
    
    
    51,394LXE
    
    
    138,821
    
    
    
    138,001
    
    
    
    123,140SATCOM
    
    
    89,968
    
    
    
    70,702
    
    
    
    51,353Total
    
    $
    287,879
    
    
    
    261,119
    
    
    
    225,887Operating income (loss):Defense & Space Systems
    
    $
    4,876
    
    
    
    2,572
    
    
    
    3,186LXE
    
    
    7,067
    
    
    
    11,043
    
    
    
    7,520SATCOM
    
    
    12,189
    
    
    
    6,170
    
    
    
    3,524Corporate
    
    
    (4,865
    )
    
    
    (5,428
    )
    
    
    (4,006
    )Total
    
    $
    19,267
    
    
    
    14,357
    
    
    
    10,224Interest income and other,
net of foreign exchange losses:Defense & Space Systems
    
    $
    7
    
    
    
    28
    
    
    
    (4
    )LXE
    
    
    236
    
    
    
    8
    
    
    
    148SATCOM
    
    
    (564
    )
    
    
    (66
    )
    
    
    (203
    )Corporate
    
    
    4,334
    
    
    
    1,574
    
    
    
    359Total
    
    $
    4,013
    
    
    
    1,544
    
    
    
    300Interest expense:Defense & Space Systems
    
    $
    (141
    )
    
    
    (444
    )
    
    
    (372
    )LXE
    
    
    (348
    )
    
    
    (405
    )
    
    
    (474
    )SATCOM
    
    
    (121
    )
    
    
    (117
    )
    
    
    (264
    )Corporate
    
    
    (1,343
    )
    
    
    (955
    )
    
    
    (2,194
    )Total
    
    $
    (1,953
    )
    
    
    (1,921
    )
    
    
    (3,304
    )Income tax (expense) benefit:Defense & Space Systems
    
    $
    (1,822
    )
    
    
    (823
    )
    
    
    (1,068
    )LXE
    
    
    (2,667
    )
    
    
    (4,056
    )
    
    
    (2,734
    )SATCOM
    
    
    224
    
    
    
    138
    
    
    
    443Other
    
    
    (93
    )
    
    
    (517
    )
    
    
    (233
    )Corporate
    
    
    2,278
    
    
    
    7,081
    
    
    
    1,498Total
    
    $
    (2,080
    )
    
    
    1,823
    
    
    
    (2,094
    )
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Years ended December 312007
    
    
    2006
    
    
    2005Net earnings (loss):Defense & Space Systems
    
    $
    2,920
    
    
    
    1,333
    
    
    
    1,742LXE
    
    
    4,288
    
    
    
    6,590
    
    
    
    4,460SATCOM
    
    
    11,728
    
    
    
    6,125
    
    
    
    3,500Other
    
    
    (93
    )
    
    
    (517
    )
    
    
    (233
    )Corporate
    
    
    404
    
    
    
    2,272
    
    
    
    (4,343
    )Earnings from continuing operations
    
    
    19,247
    
    
    
    15,803
    
    
    
    5,126Discontinued operations, net
    
    
    (503
    )
    
    
    17,205
    
    
    
    (16,569
    )Total
    
    $
    18,744
    
    
    
    33,008
    
    
    
    (11,443
    )Capital expenditures:Defense & Space Systems
    
    $
    3,684
    
    
    
    2,391
    
    
    
    2,735LXE
    
    
    3,364
    
    
    
    2,467
    
    
    
    2,243SATCOM
    
    
    6,589
    
    
    
    3,227
    
    
    
    2,743Corporate
    
    
    942
    
    
    
    417
    
    
    
    1,381Total
    
    $
    14,579
    
    
    
    8,502
    
    
    
    9,102Depreciation and amortization:Defense & Space Systems
    
    $
    2,620
    
    
    
    2,558
    
    
    
    2,631LXE
    
    
    2,205
    
    
    
    2,246
    
    
    
    2,419SATCOM
    
    
    3,619
    
    
    
    2,851
    
    
    
    2,832Corporate
    
    
    1,222
    
    
    
    1,209
    
    
    
    1,041Total
    
    $
    9,666
    
    
    
    8,864
    
    
    
    8,923
 As of December 312007
    
    
    2006Assets:Defense & Space Systems
    
    $
    42,017
    
    
    
    48,517LXE
    
    
    94,613
    
    
    
    88,925SATCOM
    
    
    77,552
    
    
    
    54,828Other
    
    
    3,466
    
    
    
    3,809Corporate
    
    
    106,152
    
    
    
    95,605Total
    
    $
    323,800
    
    
    
    291,684Goodwill  LXE
    
    $
    9,982
    
    
    
    9,982
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Years ended December 312007
    
    
    2006
    
    
    2005Net sales to customers in the following countries:United States
    
    $
    176,209
    
    
    
    178,662
    
    
    
    150,522United Kingdom
    
    
    20,911
    
    
    
    13,542
    
    
    
    14,171Other foreign countries
    
    
    90,759
    
    
    
    68,915
    
    
    
    61,194Total
    
    $
    287,879
    
    
    
    261,119
    
    
    
    225,887
 As of December 312007
    
    
    2006Long-lived assets are located in the following
countries:United States
    
    $
    24,032
    
    
    
    23,821Canada
    
    
    18,219
    
    
    
    8,743Other foreign countries
    
    
    3,509
    
    
    
    1,255Total
    
    $
    45,760
    
    
    
    33,819
  (13) ISSUANCE OF COMMON STOCK
  (14) COMMITMENTS AND CONTINGENCIES
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Years ended December 312007
    
    
    2006
    
    
    2005Balance at beginning of the year
    
    $
    2,051
    
    
    
    1,894
    
    
    
    1,613Accruals for warranties issued during the year
    
    
    3,175
    
    
    
    1,945
    
    
    
    1,132Settlements made during the year
    
    
    (2,579
    )
    
    
    (1,788
    )
    
    
    (851
    )Balance at end of year
    
    $
    2,647
    
    
    
    2,051
    
    
    
    1,894
 (15) LITIGATION
  (16) SUBSEQUENT EVENTS
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(17) SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
  2007 Quarters endedMarch 31
    
    
    June 30
    
    
    Sept 29
    
    
    Dec 31Net sales
    
    $
    66,574
    
    
    
    72,147
    
    
    
    73,145
    
    
    
    76,013Operating income
    
    
    3,078
    
    
    
    3,980
    
    
    
    5,242
    
    
    
    6,967Earnings from continuing operations
    
    
    2,880
    
    
    
    3,574
    
    
    
    5,606
    
    
    
    7,187(Loss) earnings from discontinued
operations
    
    
    (467
    )
    
    
    3
    
    
    
    11
    
    
    
    (50
    )Net earnings
    
    
    2,413
    
    
    
    3,577
    
    
    
    5,617
    
    
    
    7,137Net earnings (loss) per share:Basic:Continuing operations
    
    $
    0.19
    
    
    
    0.23
    
    
    
    0.37
    
    
    
    0.46Discontinued operations
    
    
    (0.03
    )
    
    
    
    
    
    
    
    
    
    
    Net earnings
    
    $
    0.16
    
    
    
    0.23
    
    
    
    0.37
    
    
    
    0.46Diluted:Continuing operations
    
    $
    0.19
    
    
    
    0.23
    
    
    
    0.36
    
    
    
    0.46Discontinued operations
    
    
    (0.03
    )
    
    
    
    
    
    
    
    
    
    
    Net earnings
    
    $
    0.16
    
    
    
    0.23
    
    
    
    0.36
    
    
    
    0.46
 2006 Quarters endedApril 1
    
    
    July 1
    
    
    Sept 30
    
    
    Dec 31Net sales
    
    $
    59,045
    
    
    
    65,046
    
    
    
    64,661
    
    
    
    72,367Operating income
    
    
    2,378
    
    
    
    3,365
    
    
    
    2,740
    
    
    
    5,874Earnings from continuing operations
    
    
    1,264
    
    
    
    2,241
    
    
    
    5,490
    
    
    
    6,808(Loss) earnings from discontinued
operations
    
    
    (1,036
    )
    
    
    (569
    )
    
    
    82
    
    
    
    18,728
    (1)Net earnings
    
    
    228
    
    
    
    1,672
    
    
    
    5,572
    
    
    
    25,536Net earnings (loss) per share:Basic:Continuing operations
    
    $
    0.10
    
    
    
    0.15
    
    
    
    0.36
    
    
    
    0.45Discontinued operations
    
    
    (0.08
    )
    
    
    (0.04
    )
    
    
    0.01
    
    
    
    1.23Net earnings
    
    $
    0.02
    
    
    
    0.11
    
    
    
    0.37
    
    
    
    1.68Diluted:Continuing operations
    
    $
    0.10
    
    
    
    0.15
    
    
    
    0.36
    
    
    
    0.44Discontinued operations
    
    
    (0.08
    )
    
    
    (0.04
    )
    
    
    0.01
    
    
    
    1.23Net earnings
    
    $
    0.02
    
    
    
    0.11
    
    
    
    0.37
    
    
    
    1.67
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