EMS Technologies: Redefining airmail

People often complain that they can’t escape email, voicemail and all the other modes of modern communication, but in reality there remain quite a few places where you really still can get away from it all … or at least a lot of it.

Passengers on commercial airlines, personnel on military jets, as well as those at sea, usually exist in Internet-free zones, but email, text messaging and even online gaming are all on their way to an airplane near you, with EMS Technologies, Inc. (Nasdaq:ELMG) leading the push.

Aviation research group Freesky Research estimates that by 2011, some 40% of all commercial aircraft will have broadband connectivity, representing a 15-fold increase over today’s $32 million market for commercial aviation broadband gear and highly benefiting EMS in the future.

But the company has its hand in more than just email on planes: through its LXE division, it develops rugged handheld mobile communications gear to help workers track inventories from the field. It also installed the antenna system on JetBlue aircraft, enabling the carrier to offer live satellite television programming on its flights.

This diverse product mix and persistent investment in new technologies have produced numbers that show sustained growth. For the full year ended Dec. 31, 2007, revenues totaled $287.9 million, up from $261.1 million in 2006 and $225.9 million in 2005. Last year, despite strong growth in operating income, EMS’ GAAP net income fell to $18.7 million from $33 million the year before due to a hefty gain from discontinued operations the year before. In an apples to apples comparison, or pro forma basis, earnings from continuing operations, at $18.7 million in 2007, were 22% higher than the comparable figure of $15.8 million in 2006. On a per share basis, the same pro forma results show growth of 68%, to $1.24 per share in 2007, from $0.74 per share in 2006.

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