EMS Technologies, Inc. (ELMG)
Q1 2010 Earnings Call Transcript
May 5, 2010 9:30 am ET
Perry Tanner – VP, Corporate Marketing
Neil Mackay – President and CEO
Gary Shell – SVP, CFO and Treasurer
Chris Quilty – Raymond James
Kevin Ciabattoni – Boenning & Scattergood
John Powers – Millbrook Capital
Rich Valera – Needham & Company
Previous Statements by ELMG
» EMS Technologies, Inc. Q4 2009 Earnings Call Transcript
» EMS Technologies Inc. Q3 2009 Earnings Call Transcript
» EMS Technologies, Inc. Q1 2009 Earnings Call Transcript
Good morning, ladies and gentlemen, and welcome to your EMS Technologies first quarter 2010 earnings release call. All lines have been placed on a listen-only mode and the floor will be open for your questions and comments following the presentation. (Operator instructions) At this time, it is my pleasure to turn the floor over to Perry Tanner. Sir, the floor is yours.
Thank you, Christina. Good morning, everyone. Thank you for joining us today on EMS Technologies first quarter 2010 earnings call. This is Perry Tanner, Vice President of Marketing, and with us today is Dr. Neil Mackay, EMS Technologies' President and CEO, and Gary Shell, our Chief Financial Officer.
Neil will provide brief introductory comments and then Gary will review the financials. After the financial overview, Neil will offer more highlights on the company's operating segments and market conditions before providing an update on the company's 2010 outlook. After that, Neil and Gary will take any questions you might have.
Before we go further, any statements made during the course of this call regarding product expectations, program opportunities and schedules, and future financial results are forward-looking statements. Actual events and results could of course differ materially. I refer you to the statement of Risk Factors in our Annual Report on Form 10-K for the year ending December 31st, 2009, and to our press release. These documents identify important factors that could cause such a variance.
Our remarks will also include certain non-GAAP measures of financial performance. Please refer to our press release, which is available on the company’s website at the Press Room page for a discussion of any non-GAAP measures. During the course of this call, we will take questions from participants. Under SEC rules, we cannot provide material information in subsequent private settings, but we will continue this public call as needed to respond to appropriate questions.
At this time, I will turn the call over to Dr. Neil Mackay, EMS Technologies' President and CEO.
Thank you, Perry. And good morning to everyone on this call. I'd like to start by revisiting three important points from last quarter’s call and then summarizing this year’s first quarter. After that, Gary will talk about the financials, and I’ll follow with some additional detail about the quarter. Once I finish, Gary and I will take your questions.
So here are those three points. On the last call, I said our recovery would be gradual. I also said the first quarter is typically modest and we did not anticipate the year 2010 being any different. This appeared to be true. Overall, first quarter results were down slightly from Q4 of ’09, the result of a slower recovery in Aviation and an extended recovery in Defense & Space.
Second, I said the fundamentals of our LXE Logistics business were continuing to improve, especially in North America. I also said that the launch of new products, the movement beyond the warehouse was supporting this. We have tangible evidence of this improvement. LXE’s Q1 results were up year-over-year as well as compared to Q4 of 2009.
And finally, I said that EMS is a mobile connectivity company with its focus on aviation, logistics and military. This can be seen several ways. Our new Aviation business is going to market with a large and attractive portfolio of connectivity offering. Global Tracking is capturing market share in the security, tracking the logistics market with the solutions model.
And our legacy logistics business LXE is expanding beyond the warehouse. And our Defense & Space business continued this realignment and moved to volume production from major defense programs. For the quarter, we reported revenues of $83 million, earnings of $0.07 a share, and adjusted EBITDA of $6.6 million. Our cash balance remained solid at $54 million.
I’ll now turn the call over to Gary to review the financials.
Thanks, Neil. 2010 kicks off a new look for the EMS financials, and this new look reflects the evolution of our mobile connectivity strategy. In previous quarters, our Aviation and Global Tracking businesses have been combined into a single reporting segment called Communications and Tracking. But this year, we began reporting those businesses as two separate segments along with our legacy LXE and Defense & Space segments.
Now for the results. The first quarter reflected the usual seasonal trend in our key markets. And so we were not surprised by the kind of start we had. Overall, the first quarter results were a mixed bag with consolidated revenues in 2010 down 10% from 2009, but LXE and Global Tracking, our businesses that focus on connectivity and logistics, both reported stronger performance in key markets as well as revenues from new products and services that help boost their top-line higher in 2010 than in prior quarters.
Aviation revenues, however, did not fare as well in comparison with earlier periods because our aviation markets are still in a slowdown that began affecting us in the second half of last year. Defense & Space revenues also were lower because 2009 benefited from a major program that was completed late in the year and had no effect on 2010.