EMS Technologies, Inc. (Nasdaq: ELMG) (“EMS” or the “Company”)
today filed its preliminary proxy statement with the Securities and
Exchange Commission for its 2011 Annual Meeting of Shareholders to
be held on May 12, 2011. The Board has nominated a slate of eight
incumbent and two new director candidates, Richard A. Beyer and
Russell G. Chew, for election to the Board at the meeting. Messrs.
Beyer and Chew are being nominated for the Board seats currently
held by Thomas W. O’Connell and John L. Woodward, who are not
standing for re-election. The Board unanimously recommends that,
upon receipt of the Company’s definitive proxy statement,
shareholders vote FOR the Company’s nominees.
The Board believes Mr. Beyer and Mr. Chew will bring broad
experience in important growth businesses to EMS’ already strong
and independent Board of Directors:
Richard A. Beyer is a veteran of the wireless
data and vehicle tracking industries. For the past eight years he
has served in senior positions at Trimble Navigation Ltd. and,
before that, at TracerNET Corporation, a wireless tracking company
acquired by Trimble. Mr. Beyer has also served as Division
President of NEXIQ Technology Holdings and as General Manager of
Rockwell International, Collins Avionics Division. Russell
G. Chew, a highly respected commercial aviation executive, served
as the President and Chief Operating Officer of JetBlue Airways
Corporation from 2007 until 2009, and the Chief Operating Officer
of the Federal Aviation Administration from 2003 until 2007, and
spent 18 years with American Airlines, most recently as Managing
Director of Systems Operations Control in 2003.
John B. Mowell, Chairman of the Board, stated, “The nominations
of Rick Beyer and Russ Chew underscore the Board’s determination
and continuing emphasis on providing effective, experienced
guidance to EMS in its principal business sectors: Aviation and
Global Resource Management. We believe these individuals are
uniquely qualified to help us evaluate the markets, understand
customer needs, and clearly recognize the impact of developing
technology in these very complex, critical businesses. We also
believe that their interest in joining the EMS Board reflects their
confidence that EMS’s Aero Connectivity and GRM sectors are
well-positioned to continue operating as leaders in their
fields.”
In addition to Mr. Beyer and Mr. Chew, the Board has nominated
eight of its incumbent directors, which include three new members
added in the last 19 months, to serve an additional one-year term.
The incumbent directors are Chairman John B. Mowell, President and
Chief Executive Officer Neilson A. Mackay, John R. Bolton, Hermann
Buerger, Joseph D. Burns, John R. Kreick, Bradley W. Parkinson and
Norman E. Thagard, who together bring a wealth of experience as
defense, aerospace and technology executives, and are subject
matter experts in the global tracking and aviation industries. EMS’
incumbent directors collectively have served as CEOs of high-tech
aerospace companies and defense companies, as Managing Director of
Technology and Flight Test at United Airlines, as director of
NASA's Gravity Probe-B spacecraft development project, and as a
NASA astronaut and aerospace consultant.
Mowell continued, “I want to acknowledge the years of service
and contributions of Thomas W. O’Connell and John L. Woodward, who
are not standing for re-election. We value their understanding of
markets related to our Defense & Space business and hope to be
able to tap into their expertise as that business works to meet its
growth plans and potential. I will deeply miss their participation
as members of our Board, and thank them for their dedication and
contributions.
“We have carefully evaluated the experience and capabilities
that are needed on our Board as EMS builds on the momentum
resulting from the strategic realignment of its business units and
other actions taken to drive growth and efficiency. I am very proud
to present this strong slate of nominees, each of whom we believe
brings critical perspectives and skills that will be important to
our future growth and success in creating increased value for
shareholders.”
Mowell concluded, “Our 2010 results and 2011 outlook are a
direct result of the steps we have taken and indicative of the
Company’s strong momentum. Over the past 17 months, since we named
Neil Mackay as our CEO, EMS has worked to simplify our corporate
structure, drive improved performance and position the business to
capitalize on the opportunities in our rapidly evolving
marketplace. Since making these changes, EMS has outperformed its
peers and the broader market by a significant margin, and we expect
to benefit from significant revenue-enhancing opportunities in 2011
and beyond.”
EMS recently announced record 2010 revenues and profits, and is
continuing to see strong demand and new opportunities for its
products. The Company’s guidance for 2011 of consolidated revenues
in the range of $385 – $405 million and Adjusted EBITDA in the
range of $43 – $46 million is indicative of its strong
momentum.
Additional Information and Where To Find It
In connection with the proxy contest initiated by MMI
Investments, L.P., EMS has filed a preliminary Proxy Statement for
the 2011 Annual Meeting of Shareholders with the Securities and
Exchange Commission (the “SEC”). Shareholders are urged to read the
Proxy Statement, as well as other documents filed with the SEC,
because they will contain important information. The definitive
Proxy Statement will be mailed to shareholders of the Company.
Shareholders may obtain free copies of these documents (when they
are available) and other documents filed with the SEC at the
Company’s website (www.ems-t.com)
under the heading “Investor Relations,” at the SEC’s website
(www.sec.gov), or by contacting the
Company at (770) 729-6512. Shareholders should read carefully
the definitive proxy statement and WHITE proxy card when they
become available before making any voting decision.
Information Regarding Participants
The Company, its directors and certain of its officers and
employees are participants in a solicitation of proxies in
connection with the Company’s 2011 Annual Meeting of Shareholders.
Information with respect to the identity of these participants in
the solicitation and a description of their direct or indirect
interest in the Company, by security holdings or otherwise, is
contained in the preliminary Proxy Statement filed by the Company
with the SEC on March 10, 2011. Shareholders may obtain free copies
of this information at the Company’s website (www.ems-t.com) under the heading “Investor
Relations,” the SEC’s website at (www.sec.gov), or by contacting the Company at
(770) 729-6512 or 660 Engineering Drive, Norcross, Georgia
30092, Attention: Secretary. As of the date hereof, the Company’s
directors, officer and employees who are participants collectively
own an aggregate of: (1) 564,488 shares of common stock of the
Company, including options that are currently exercisable or will
be exercisable within 60 days, and (2) 61,193 nonvoting
phantom-share units.
Forward-Looking Statements
Statements contained in this press release regarding the
Company’s expectations for its financial results for 2011 and the
potential for various businesses and products are forward-looking
statements. Actual results could differ materially from those
statements as a result of a wide variety of factors. Such factors
include, but are not limited to 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 the our operations outside the U.S., as well as
the potential for realizing foreign exchange gains and losses
associated with assets and 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, changes in tax laws, and the extent to which
deferred tax assets are considered realizable; successful
transition of products from development stages to an efficient
manufacturing environment; changes in the rates 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 availability of financing
for various mobile and high-speed data communications systems; risk
that 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 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
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; 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; our ability to maintain compliance with the
requirements of the Federal Aviation Administration and the Federal
Communications Commission, and with other government regulations
affecting our products and their production, service and
functioning; and costs associated with a recent announcement by one
of shareholders that it intends to nominate four directors to our
Board. Further information concerning relevant factors and risks
are identified under the caption “Risk Factors” in our Annual
Report on Form 10-K for the year ended December 31, 2009.
Non-GAAP Financial Measures
This press release contains information regarding our projected
range for earnings before interest expense, income taxes,
depreciation and amortization and stock-based compensation and
excluding impairment loss related charges and acquisition-related
items (“Adjusted EBITDA”) for 2011. The Company believes that this
non-GAAP financial measure provides useful information to
investors, lenders and financial analysts because (i) this measure
is more comparable with the results for prior fiscal periods, and
(ii) by excluding the potential volatility related to the timing
and extent of nonoperating activities, such as acquisitions or
revisions of the estimated value of post-closing earn-outs, it
provides a useful means of evaluating the success of the Company’s
ongoing operating activities. The Company uses Adjusted EBITDA,
together with other appropriate metrics, to set goals for and
measure the performance of its operating businesses, to determine
management’s incentive compensation, and to assess the Company’s
compliance with debt covenants. Management further considers
Adjusted EBITDA an important indicator of operational strengths and
performance of its businesses. EBITDA measures are used
historically by investors, lenders and financial analysts to
estimate the value of a company, to make informed investment
decisions and to evaluate performance. Management believes that
Adjusted EBITDA facilitates comparisons of our results of
operations with those of companies having different capital
structures. In addition, a measure similar to Adjusted EBITDA is a
component of our bank lending agreement, which requires certain
levels of Adjusted EBITDA to be achieved by the Company. This
information should not be considered in isolation or in lieu of the
Company’s operating and other financial information determined in
accordance with GAAP. In addition, because EBITDA and adjustments
to EBITDA are not determined consistently by all entities, Adjusted
EBITDA as presented may not be comparable to similarly titled
measures of other companies. We have not provided a quantitative
reconciliation of projected Adjusted EBITDA for 2011. Not all
of the information necessary for quantitative reconciliation is
available to us at this time without unreasonable efforts; this is
due primarily to variability and difficulty in making accurate
detailed forecasts and projections. Accordingly, we do not believe
that reconciling information for such projected figures would be
meaningful.
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