EMS Technologies Announces Fourth Quarter Financial Results; Quarterly Earnings in Line With Previously Announced Expectations - 1999 - Company Financial Information

Cambridge Telcom Report, Feb 21, 2000

EMS Technologies, Inc. (Nasdaq: ELMG) reported revenues of $65 million for the fourth quarter of 1999 and earnings of $262,000, or $.03 per share, compared with revenues of $41 million for the same period last year and breakeven results. These results are in line with previously revised expectations. For the year 1999, the Company had revenues of $242 million and earned $4.8 million, or $.55 per share, compared with $177 million in 1998 and earnings of $6.2 million, or $.70 per share.

"The strong revenue growth in 1999 was a direct benefit of our strategic investment in space initiatives, including major expansion of our Canadian business presence," said EMS Chairman and CEO Thomas E. Sharon. "And while we believe that this growth is helping to open numerous new opportunities, it has also added significantly to the demands of managing our ever-growing base of technologies and scope of operations. In this dynamic environment, we have been fortunate to add Al Hansen to our management team as President and COO. Al's proven leadership skills and his experience as an aerospace consultant, executive vice president of Lockheed Marietta Aeronautical Systems, and Commander of the Air Force Logistics Command should be invaluable as EMS pursues its long-term growth strategy."

Mr. Hansen commented, "The 1999 results reflect strong performance in the parts of our space operations with a healthy backlog of orders, as well as in our wireless infrastructure business, which had record revenues in the fourth quarter and year. But we also had to cope with the effects of slower-than- anticipated orders in other parts of our space operations and our wireless businesses. This experience in 1999 led us to begin a comprehensive review of our operations, with the goal of sharpening the focus on our strongest technological and marketing capabilities.

"Antenna technology is certainly one of the Company's greatest strengths. This expertise has helped establish us as a leading supplier in land-based markets, such as PCS/cellular communications and point-to-multipoint private networks, and it is opening the door to space-based markets for broadband communications. Our space businesses received several major contract awards late in the quarter, and we begin the new year with a much improved backlog position.

"Our line of wireless data network products has a well-established market presence. In the coming year, we will enhance this line by releasing several new terminals with enhanced architecture that not only offer top performance but also can be very efficiently manufactured. These new releases will include the first of our terminals to support the Windows CE operating system.

"We identified several niche efforts in space and in wireless products where we believe our energies could be more profitably re-directed. As a result, cost of sales in the fourth quarter absorbed $1.6 million of non- recurring charges to write-off certain inventories and intangibles. Other non-recurring items in the fourth quarter included $1.8 million of non- operating gain from an insurance settlement to compensate the Company for its tornado-caused business interruption in 1998. The review of our operations is ongoing, and we believe that by focusing the efforts of our product and (more) engineering teams on the Company's core competencies, we can achieve good financial performance in all of our operating groups."

Dr. Sharon continued, "In the near term, the review of our Company's operations should result in clear benefits. For the longer-term, we will continue to apply technology in markets that we believe will offer strong returns, such as the high-growth broadband market. This broadband strategy is a new strong thread running throughout almost all of our businesses. And it's at the heart of our decision to be involved in Ka-band service opportunities as we seek to deliver broadband solutions that provide wider, economical access to high-speed Internet and data communications."

EMS Technologies, Inc. (formerly Electromagnetic Sciences, Inc.) specializes in "the science of wireless communications." With a unique range of technologies developed from years of experience, the Company seeks to meet the needs of broadband and mobile information users. The Company's Space and Technology Group serves the markets for satellite communications (with both flight hardware and earth-based terminals), radar and other specialized applications. The Wireless Products Group supplies wireless networks and system integration for logistics and other applications, as well as wireless infrastructure products for public and private communications.

* successful completion of technological development programs by the Company and the effects of technology that may be developed by competitors,

* successful transition of products from development stages to an efficient manufacturing environment

* customer response to new products and services,

* the availability of financing for satellite data communications systems,