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.

In the release, EMS noted that in the fourth quarter of 2007 its operating income doubled in both its Defense Solutions and Satcom businesses, and that Air France became the latest carrier to begin testing its in-flight email and voice communications technologies.

The LXE division that makes the rugged inventory tracking gear fared less well. Fourth-quarter operating income at LXE fell 41% from the year-ago quarter, which otherwise optimistic Boenning & Scattergood analyst Michael Ciarmoli said was a point of concern given that LXE is the largest division at EMS and has traditionally been a “model of consistency.”

In January, Ciarmoli initiated coverage of EMS with a “market outperform” rating, noting the company was poised to take advantage of the emerging trend of “aeronautical broadband access,” a fancy way of saying email on planes.
 
“Obviously, the stock is moving in sync with the rest of the market right now. But it has two key drivers of growth,” Ciarmoli said in an interview, citing the company’s Defense Solutions business, which develops wireless communications products for the military, and its Satcom unit, which makes technology to deliver Internet access in airplanes.

Ciarmoli has a $35 target price on EMS and other analysts who follow the company are also optimistic. Four analysts who follow the company are, on average, forecasting it will earn $1.34 per share in fiscal 2008 and $1.60 per share in fiscal 2009, compared with $1.24 per share last year. They see the company’s revenues growing to $328.3 million in 2008 and $361.6 million in 2009, compared with $287.9 million last year.

In its recent earnings report, EMS said it was confident for a swift rebound in LXE, but Ciarmoli said he was not so certain about that, in light of the weakening U.S. economy.
On the other hand, given the strong outlook for in-flight Internet communications, LXE may not remain the company’s largest division in future years. Multiple air carriers including Air France, Virgin America and KLM are aiming to begin offering in-flight email, text messaging and gaming by the end of this year.

Shares of the 40-year-old Norcross, Ga.-based company closed at $24.94 on Monday, down from a 52-week high of $33.23, but analysts say that softness reflects generally weak market conditions and not weak company fundamentals.

If broadband Internet access takes to the skies the way it has already spread across the land — and there is little reason to suggest that it won’t — the company’s Satcom business could start to grow at rates beyond the year-over-year doubling seen in the most recent quarter, and its stock could start to defy gravity just like the airplanes it equips.