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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2002
Commission File #0-6072

EMS TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)

660 Engineering Drive
Norcross, Georgia 30092
(Address of principal executive offices) (Zip Code)

Registrant’s Telephone Number, Including Area Code: (770) 263-9200
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.10 par value
(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:      Yes   [X]      No   [   ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or amendment to this Form 10-K:      [X]

Indicate by check mark whether the registrant is an accelerated filer (as defined by Rule 12b-2 of the Act)      Yes   [X]      No   [   ]

The aggregate market value of voting stock held by persons other than directors or executive officers on June 29, 2002 was $217 million, based on a closing price of $20.69 per share. The basis of this calculation does not constitute a determination by the registrant that all of its directors and executive officers are affiliates as defined in Rule 405.

As of March 3, 2003, the number of shares of the registrant’s common stock outstanding was 10,658,038 shares.

DOCUMENTS INCORPORATED BY REFERENCE

Certain information contained in the Company’s definitive proxy statement for the 2003 Annual Meeting of Shareholders of the registrant is incorporated herein by reference in Parts II, III and IV of this Annual Report on Form 10-K.

AVAILABLE INFORMATION

EMS Technologies, Inc. makes available free of charge, on or through its website at www.ems-t.com, its annual, quarterly and current reports, and any amendments to those reports, as soon as reasonably practicable after electronically filing such reports with the Securities and Exchange Commission. Information contained on the Company’s website is not part of this report.

ITEM 1. BUSINESS

GENERAL

SUMMARY

EMS Technologies, Inc. (the “Company”) designs, manufactures and markets products that are important in many kinds of wireless communications. The Company focuses on the needs of the mobile information user, with an increasing emphasis on broadband applications for high-data-rate, high-capacity wireless communications.

The Company is organized into four reportable business segments: Space & Technology, LXE, EMS Wireless and SATCOM. Each segment is separately managed and comprises a range of products and services that share distinct operating characteristics. However, the Company believes that one of its competitive strengths is the technological and marketing synergy that occurs among the segments, as well as among the Company’s various product lines. The Company believes that this synergy creates a path for highly advanced technologies developed for narrow space and defense markets to migrate to products for broader markets.

1. Space & Technology

This segment manufactures custom-designed, highly engineered hardware for use in space (both commercial and defense satellite electronics), aerospace (defense electronics), and ground (commercial broadband hubs and terminals) applications. Orders in this segment typically involve long-term contracts with production schedules that can extend a year or more, and most revenues are recognized under percentage-completion accounting. Space & Technology products are sold primarily to space and aerospace prime contractors or commercial communication system integrators, rather than to end-users. The Space & Technology segment accounted for 43%, 45%, and 42% of consolidated net sales in 2002, 2001, and 2000, respectively.

A major source of business is the defense market. Orders in this market were strong in 2002, with defense sales doubling from the prior year. The Company believes that military applications for secure communications, surveillance, and electronic counter-measures will continue to offer opportunities well-suited for the Company’s unique technology base and its considerable experience on such programs.

A major strategic emphasis in this segment is the development of broadband technologies for use in high-data-rate, high-capacity satellite communication systems. This strategic emphasis has resulted in the formation, in mid-2002, of the “EMS Satellite Networks” business group within the Space & Technology/Montreal operations. This business group is focused on high speed, two-way Internet via satellite hubs and terminals that use the DVB-RCS open standard pioneered by EMS. EMS Satellite Networks has supplied DVB-RCS hubs and terminals to eight of the world’s ten largest satellite operators, several of which have begun commercial deployment.

2. LXE

The LXE segment is conducted through a wholly owned subsidiary, LXE Inc., and manufactures wireless mobile computers and other wireless local area network (“LAN”) products for logistics and other enterprise applications. Typical uses include real-time data communications on inventory movement in a large warehouse, manufacturing facility, or seaport. The manufacturing cycle for each order is generally just a few days, and revenues are recognized upon shipment of hardware. Hardware is marketed to end-users and to third parties that incorporate their products and services with the Company’s hardware for delivery to end-users. The LXE segment accounted for 28%, 30% and 27% of consolidated net sales in 2002, 2001 and 2000, respectively.

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3. EMS Wireless

The EMS Wireless segment manufactures base-station antennas and repeaters for PCS/cellular communications systems. The manufacturing cycle for each order is generally just a few days, and revenues are recognized upon shipment of hardware. Hardware is marketed to wireless service providers and to original equipment manufacturers (“OEMs”) for mobile voice/paging services, as well as for other emerging high-speed wireless systems. The EMS Wireless segment accounted for 15%, 15% and 22% of consolidated net sales in 2002, 2001 and 2000, respectively.

4. SATCOM

The SATCOM segment is a division of the Company’s wholly owned Canadian subsidiary, EMS Technologies Canada, Ltd. (“EMS Canada”), and manufactures earth-based antennas, terminals and other hardware for communications via satellite link. Typical applications include voice/data communications aboard corporate jets, search-and-rescue systems that use satellite surveillance, and tracking/messaging for long-haul trucks. The manufacturing cycle for most orders is generally just a few days, and revenues are recognized upon shipment of hardware. Hardware is marketed to third parties who incorporate their products and services with the Company’s hardware for delivery to end-users. The SATCOM segment accounted for 11%, 8% and 6% of consolidated net sales in 2002, 2001 and 2000, respectively.

The discussion of the Company’s business set forth in this Item 1 is qualified by the materials appearing below under the headings “Risk Factors” and “Forward-Looking Statements.”

BACKGROUND

In its Space & Technology segment, the Company has developed strong expertise in components and subsystems. In the mid-1970’s, the Company pioneered the use of ferrite materials for electronic beam-forming. Electronic beam-forming networks (“BFNs”) allow a satellite to steer and adjust the shape of its antenna pattern. BFN technology was originally used in military communication satellites to combat interference from the ground, but this technology has important new applications in both commercial and defense satellite communication systems. For example, BFN technology enables a ‘spot-beam’ approach, in which a satellite focuses its transmit-and-receive capabilities to a specific geographic area of the earth. When coupled with the use of high frequencies, such as the Ka-band, this ‘spot-beam’ technology allows for increased data-rates and capacities.

The Company also produced the first all-electronic switch matrix to provide flexible interconnectivity between uplink and downlink channels in communication satellites. These switch matrices have found application in a number of commercial and military satellite systems. This technology has also evolved and is providing enhanced capabilities in today’s latest radar imaging and communication satellites.

The core technologies required to accomplish space-based BFNs are directly applicable to a range of defense applications, including line-of-sight communications, radar, signal intelligence, and electronic countermeasure systems. Further, the Company has produced highly-engineered antenna, signal-management, and signal processing hardware that are used in many critical weapon systems.

In 1999, the Company added expertise in space systems, payload integration and ground terminal technologies by acquiring the Space Systems and Products Division of Spar Aerospace Limited, based in Montreal. This division (now the Space & Technology/Montreal division of EMS Canada) has long been a leading participant in the Canadian and international space industries. It has produced payloads and full antenna systems for major communications and remote sensing satellites, as well as robotics for NASA’s Space Shuttle and the International Space Station, and is leading the Company’s broadband initiatives.

In the early 1980’s, the Company sought to diversify its predominantly defense-related business base by moving into commercial markets. As a result, the Company used its expertise in wireless technologies to develop the LXE product line of wireless mobile computers and network products. By communicating with the host computer network in real-time, these LXE products enhance the productivity of mobile workers

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and improve the accuracy and timeliness of transaction-processing data. LXE’s principal market is for material management functions in warehouses and distribution centers (the “logistics” market), including seaports. A major factor in the long-term growth of the logistics market and the LXE product line has been expanding use by many industries of more advanced information technologies, including wireless networking, enterprise software and auto-identification (such as barcoding).

The EMS Wireless segment includes PCS/cellular base station antennas and repeaters. The leading product in this line (marketed under the “DualPol” trademark) employs polarization-diversity technology. These antennas allow cell-site tower structures that are much simpler and less obtrusive than conventional antenna towers. In addition, these antennas offer superior coverage and resistance to signal-fading, as compared with networks with conventional vertically-polarized antennas. The Company also offers a line of repeaters and in-building products, as well as a full line of lower-priced, conventional antennas for both cellular and PCS networks. These infrastructure products, along with a family of accessory products, are marketed to service providers and to OEMs domestically and internationally.

The Company has also established an industry-leading position in the market for mobile earth-based SATCOM (satellite communications) antennas and terminals. Initially these products were developed for international search and rescue, in which satellite technology helps locate downed aircraft or ocean-going ships in distress. The most successful component of the Company’s SATCOM product lines was developed for advanced communications by corporate jets. In these aeronautical applications, the Company’s antennas are mounted atop the jet’s tail fin and are automatically steered to remain pointed at a communications satellite during flight; these systems provide voice, data and video communications via satellite. The Company has introduced other SATCOM products, including (1) a high-speed data product to provide both voice and data connections with speeds up to 128 kbps, (2) a packet-data terminal to provide two-way real-time data communications for messaging, tracking and monitoring in the transportation, public safety and remote industrial controls markets, and (3) a maritime high-speed terminal for digital communications at sea. SATCOM has also made initiatives with software products used for incident management for search and rescue applications with customers around the world.

MARKETS AND PRODUCTS

Space & Technology Markets

In the U.S., satellite technology was historically funded by the military for defense applications. Commercial use was cost-effective only for specialized high-capacity applications in the telecommunications and broadcast industries. However, satellite-based voice and data networks are increasingly being used for a variety of lower-cost, high-volume commercial applications as a result of improvements in satellite technology. New commercial applications include mobile telephony and data communications.

Satellites provide a number of advantages over terrestrial facilities for many high-speed communications service applications:

1.		Satellites enable high-speed communications service where a terrestrial alternative is not available or is not adequate.
2.		Unlike the cost of terrestrial networks, the cost to provide services by satellite does not increase with the distance between sending and receiving stations.
3.		In contrast to the installation of fiber optic cable, satellite networks can be rapidly and cost-effectively deployed, once the satellite is in orbit.

Demand for commercial satellites will be determined by several factors, including:

1.		growth in demand for new satellite-based applications, such as mobile communications or data services;
2.		growth in business networking;

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3.		growth in direct-to-home television and related voice, video and data systems; and
4.		development of new satellite-based communications architectures to provide basic telephone and television services in developing regions of the world.

The Company believes that its Space & Technology business will be able to make significant contributions in defense systems of increasing national importance, such as secure satellite communications, secure intelligence and imagery collection satellite, advanced electronic warfare, and secure line-of-sight communications. EMS’s base of technologies, including ferrite ceramics for radio frequency management and advanced antennas for low-observable aircraft, are well suited to many advanced defense applications. As a result, EMS continues to supply hardware to important U.S. and international military satellites for communication, sensing and surveillance. In addition, EMS is applying its technologies to a number of significant weapon systems such as F/A-22 (intra-flight datalink antennas), CV-22 (suite of integrated RF countermeasures subsystems), JSTARS (synthetic aperture radar phase shifters), and Predator Unmanned Aerial Vehicle (common data link antenna switching).

Space & Technology Products

The Company designs and manufactures innovative satellite communications products. These products include satellite systems, subsystems and components that address the need for reliable, high-speed communications. The products developed by the Company for the Space & Technology segment comprise six main lines:

1.		Space systems
2.		Antenna products
3.		Electronic products for space
4.		Ferrite subsystems and components for space and defense
5.		Electronics and subsystems for defense, and
6.		Ground products for satellite broadband networks.

• Space Systems

The Company designs and builds payloads and payload equipment for a wide variety of fixed, mobile and broadband communications satellites. For example, EMS is building an advanced active-array radar antenna for RADARSAT-2 (a remote sensing satellite) that can capture images on earth with three-meter resolution. We are also constructing specialized payloads such as S-Band transponders for the Japanese HTV unmanned supply spacecraft. In 2002, EMS completed the redesign of a repeater for the SARR 2000 search and rescue satellite, and our work on the next phase of this important program will focus on telemetry control and power design. In addition, the Company has developed scientific instruments such as the MAESTRO spectrometer for Canada’s SCISAT program.

• Antenna Products

For over thirty years, EMS has been providing innovative products for satellite antennas. The Company has experience in a variety of frequency ranges, including the UHF, S, C, X, Ku, Ka, Q, V and W bands. The Company’s antenna products use a wide variety of technologies and architectures for fixed, mobile and broadcast applications. They include shaped reflectors, dual aperture shaped reflectors, direct radiating arrays, steerable antennas, omni antennas, Gregorian and Cassegrain antennas, lens antennas, deployable reflectors, dual polarized antennas, and phased arrays.

The Company’s antenna products are believed to be well-positioned in potential growth markets such as broadband service systems (with Company antennas being used on Telesat’s Anik-F2 and Eutelsat’s W3A satellite), and mobile telephony systems (with antennas on the Inmarsat IV satellites). Varying by frequency or market served, EMS’s antennas pace industry standards by maximizing available spacecraft power and reducing radio interference between beams.

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EMS is pursuing new commercial opportunities for terrestrial antennas, such as the recently awarded contract for high-frequency antennas for helicopter obstacle avoidance systems. The Space & Technology segment also manufactures an aeronautical antenna for a multi-channel video system used in commercial aircraft. The video system combines the Company’s antennas with electronics and small flat-panel video screens installed in each seat back, and is installed and marketed by the Company’s customer. The Company’s antennas for video systems are now mainly deployed with an airline based in New York.

• Electronic Products for Space

Microwave products and subsystems are an integral part of many space systems. They control the microwave communications signals processed in a spacecraft, and include low-noise amplifiers, repeaters, transponders and solid-state power amplifiers.

Power products provide highly efficient (up to 95%) conditioning of electric power aboard a spacecraft. In addition to their efficiency, the Company’s power products have low mass and very low noise levels, and are hardened against the radiation that spacecraft experience at various orbit levels. Recent contracts include electronic power conditioners for Superbird 6 and the S-Band Transponder for the Japanese HTV vehicle.

Certain of the Company’s microwave and power products, such as crystal oscillators, electronic power conditioners, transponders and low-noise amplifiers, have become industry standards. The same microwave technologies are being used to build the next generation of international search-and-rescue satellite (SARSAT) signal repeater panels to be installed on selected civil government satellites to allow immediate location of distress signals from planes, ships and lost hikers.

The Company also has a long heritage of supplying space-qualified computers, controllers and digital signal processors. This equipment is used for antenna-pointing mechanism electronics, payload control, attitude control, power switching, command decoding and telemetry gathering. EMS-built processors and digital products are critical elements on-board the International Space Station. The significant advancements EMS has made in spacecraft data-processing capacity are being applied to the next generation of space computers and processors for both manned and unmanned systems, promising a 100-fold improvement in on-board computation power.

• Ferrite Subsystems and Components

EMS pioneered the use of ferrite materials in space and defense systems. Ferrite products provide phase and amplitude control of communications signals. The design, development and manufacture of ferrite products require considerable specialized in-house capabilities. These products include ferrite circulators, isolators, phase shifters, switches and switching networks, and transmit-receive networks. Ferrite products are integrated into satellite, shipboard, ground-based and airborne applications, including direct broadcast, direct audio, commercial and military communications, earth observation, multimedia, and defense systems. The Company’s ferrite products have been utilized in such programs as XM Radio, GEOSAT, ENVISAT, TDRSS, MILSTAR/AEHF and ACTS.

• Electronics and Subsystems for Defense

Electronic warfare is increasingly important to modern defense strategy. Electronic warfare systems perform many crucial military operations, such as targeting for weapons systems, disrupting enemy communications, and jamming enemy attempts to track or target aircraft. The Company has developed unique signal processing capabilities that are key to advanced electronic warfare systems. These capabilities, combined with our antenna, ferrite, and microwave products, create significant subsystems in aircraft electronic protection suites. Major programs that use these products include AN/ALQ-172 Low Band, and AN/ALQ-211 SIRFC. The Company believes that there will also be significant opportunities to apply these capabilities in unmanned aerial vehicle systems and the newest generation of tactical aircraft.

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• Ground Products for Satellite Broadband Networks

The new EMS Satellite Networks business group is establishing itself as a major brand in the high-speed, two-way satellite communications market, and deliveries have been completed to SES/Satlynx and to key customers in Russia, Europe, Canada, the United States and Japan. EMS has been a pioneer in the development of the DVB-RCS world-wide open standard for communicating high-speed, two-way Internet data. The proven commercial stability of the Company’s DVB-RCS hub is one of the key differentiators in the market place for this product. The latest generation of terminals was launched in 2002, with significant reductions in cost from the preceding generation. These new lower-priced terminals are expected to encourage a more rapid rate of adoption and deployment of commercial broadband services via satellite.

LXE Markets

Major technological advances and changes in the regulatory environment have led to the development and proliferation of wireless data networks that extend the reach of existing hard-wired networks. Wireless local area networks (“LANs”) now accommodate notebook, pen-based, and other handheld computers, as well as rugged computers mounted on vehicles, such as forklifts. By providing network connectivity for mobile users, these products increase the accuracy, timeliness and convenience of data collection and information access. In the past, these wireless LAN systems were developed for operation using proprietary narrow-band UHF radios at 450 MHz. Current wireless LAN systems comply with open system (IEEE 802.11) standards and operate at data rates of 11 Mbps at 2.4 GHz. Evolving 802.11-based products increase data transmission rates to 54 Mbps in both the 2.4 GHz and 5.7 GHz bands. The development of these advanced products and widespread adoption of the 802.11 wireless LAN standard is creating new applications in established industrial markets and in other vertical markets, such as transportation and service applications.

The Company’s rugged computers and wireless LANs have been installed at more than 6,500 sites world-wide, including the facilities of many Fortune 500 companies and some of the world’s largest materials-handling installations.

LXE Products

The Company’s wireless data systems, which generally incorporate bar-code scanning or other auto-identification capabilities, are increasingly based on the IEEE 802.11 open system standard and feature rugged mobile computers specifically designed for demanding industrial environments. A typical system consists of mobile computers which incorporate wireless LAN radios and auto-identification capabilities, network access points which provide a radio link to the wired network and host computers, and software that manages and facilitates the communications process.

• Mobile Computers

The Company offers several types of mobile computers, all of which utilize radio frequency technology:

1.		Hand-held mobile computers are small and lightweight, and are available in a number of form factors with varying degrees of ruggedization; and
2.		Vehicle-mounted mobile computers are larger, heavy-duty products for use on forklifts, cranes and other mobile materials handling equipment. These can also be used in fixed positions where network cabling is impractical, or in cart-mounted solutions using a self-contained battery and power supply.

All mobile computers incorporate built-in radios that operate on wireless networks using either the IEEE 802.11 network standard at 2.4 GHz, or a licensed, narrowband frequency. The Company’s mobile computers incorporate Intel® processors that allow support for terminal emulation, client-server, or browser-based applications.

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The Company’s latest generation of mobile computers has significantly more computing power than previous models, as well as improved power-management features and superior ergonomics. The MX3 mobile handheld computer supports the Windows CE operating system and offers many of the performance features of a desktop PC in a handheld computer. New handheld product introductions include the Windows CE-based MX4 and MX5, both designed for extremely demanding environmental conditions in the warehouse and intermodal yard. The “VX” series of vehicle-mounted computers feature even better environmental specifications and ruggedization, and includes two Pentium-class models that support the Windows 98, 2000, and XP operating systems.

• Wireless Networks

The wireless communications link between a mobile computer and a host network consists of: (1) a series of access points that are attached to a customer’s hardwired network at appropriate locations, and (2) wireless transceivers located in each mobile computer. The access points connect the wireless network to the hardwired network. The wireless transceivers act as wireless LAN interface cards.

LXE provides and supports wireless network equipment compatible with the existing 802.11 standards, as well as its proprietary system at 900 MHz. LXE also offers a complete suite of supporting products and services for its wireless networks, including wireless network management tools, wireless security tools, facility analysis, installation and support.

• Host Connectivity Software

LXE also provides terminal emulation software and communications gateways that allow any of LXE’s mobile computers to interface seamlessly to a customer’s legacy applications. LXE’s host connectivity software supports UNIX, IBM midrange, and IBM mainframe legacy systems.

• Other Products and Services

In addition to the basic system hardware and software, the Company offers a wide range of accessory products and services, including bar-code scanners, battery chargers, portable printers, pre- and post-sale professional services, and repair and maintenance services.

EMS Wireless Markets

National and international infrastructure for terrestrial-based wireless communications has expanded since the mid 1990’s to support growing worldwide demand, although infrastructure build-out has slowed substantially during the past two years. This demand has been fueled by:

•		decreasing prices for wireless handsets,
•		a more favorable regulatory environment,
•		greater competition among service providers, and
•		more availability of services and RF spectrum.

In addition, many developing countries are installing wireless telephone networks as an alternative to installing, expanding or upgrading traditional hard-wired networks. Emerging wireless data applications may also expand the market by allowing service providers to increase revenue-generating traffic on their networks.

Specific technological trends have also affected the wireless industry. For example, in the late 1990’s the continuing growth of the wireless communications market strained the capacity of traditional analog cellular systems that can carry only one call per channel of radio spectrum. As a result, many service providers have installed new digital equipment to increase per-channel capacity by factors ranging from three to eight. In addition, service providers have constructed PCS digital networks that operate at twice the frequency level of cellular systems; this provides the greater bandwidth necessary for an expanded range of voice and data services. However, PCS technology requires smaller cells than analog technology and, as a result, approximately four times the number of base stations to complete its geographical build-out.

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In 2002 and 2001, EMS Wireless product sales were substantially lower than during 2000 due to a slowdown in capital spending by the telecommunications industry across all product types, and slower-than-expected sales for repeater products typically associated with more complex networks. However, the Company is a preferred supplier to the leading wireless service providers in North America, and based on industry analysts’ reports, and information from customers and other distribution-channel participants, the Company believes that it is, for North American PCS/cellular communications systems, the leading supplier of base station antennas of the types designed and manufactured by the Company. The Company has manufacturing facilities in Brazil, from which it is also exporting to other South American countries and to Eastern Europe.

In addition to technical performance of the antennas, key competitive factors in this market are manufacturing capacity and ability to provide quick turnaround time in response to an order. The Company believes its turnaround times are the fastest in the industry.

EMS Wireless Products

The Company has developed several advanced base station antennas for the PCS/cellular wireless infrastructure market, and has a new line of repeaters and other wireless signal distribution products.

• Dual Polarization Antenna Products

The Company’s DualPol™ antenna utilities polarization diversity to combine the functionality of three vertically polarized antennas (two receive and one transmit) into a single, compact device. With fewer antennas required, DualPol™ technology allows the supporting antenna tower to be much smaller and less expensive than for a traditional PCS/cellular antenna site, which must support the weight and wind-loading of a large mounting structure atop the tower. An increasingly important factor in establishing the location of a cell site is the aesthetics of the tower structure. Unlike traditional vertical-polarization cellular antennas, the Company’s DualPol™ antennas can be mounted in a very compact configuration that can fit on top of existing utility poles, or be disguised, for example, in a clock tower. The mounting flexibility not only benefits the service provider in obtaining site approvals, but also results in lower installation and structure costs. Further, these antennas offer superior coverage and resistance to signal-fading, as compared with networks with conventional vertical-polarization antennas.

The Company’s AcCELLerator™ antenna combines multiple DualPol™ antennas pre-packaged in a compact cylindrical enclosure that provides the same multi-sector coverage as a large, nine-antenna, spatially diverse base station, yet with a less visually obtrusive structure.

The Company’s Micro AcCELLerator™ antenna is a much smaller version of the AcCELLerator™, and was originally designed to help a Houston service provider gain zoning approval for new cell sites. Micro AcCELLerator™ antennas provide a complete, three-sector cell site in a highly integrated package as small as six inches in diameter, which is mounted atop an unobtrusive monopole. This configuration led to a new line of Custom Site Solutions consisting of the micro version of the AcCELLerator™ in an aesthetically pleasing mounting fixture (most often atop a light pole) that has application in shopping malls and office centers.

• Vertical-Polarization Antenna Products

The Company’s lower-cost vertically polarized antennas apply “beam-shaping” techniques of amplitude and phase weighting to achieve the most effective antenna performance for specific applications. The Company’s OptiFill™ antennas are designed for use in a typical crowded coverage area. These antennas utilize null filling, upper sidelobe suppression and electronic down-tilt to lower co-channel interference, reduce the number of dropped calls, and improve sound quality. The Company’s OptiRange™ antennas are designed to maximize “gain,” and are

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useful in systems that have large cells, such as rural areas or initial urban system roll-outs with a small number of base stations.

• Repeaters and Other Wireless Signal Distribution Products

During 2001, the Company acquired a small manufacturer of repeaters and other wireless signal distribution products. This acquisition provided two new product lines. The first product line enables carriers to extend indoor RF coverage through the use of indoor repeaters and fiberoptic-based RF distribution systems. The second product line helps carriers extend their coverage in rural areas or uneven terrain through the use of outdoor repeaters.

SATCOM Markets

The first aeronautical systems for telephony utilized a ground-based network. These networks were not only limited in the voice-quality of their communications, but they were unable to provide coverage over water for international travel. Evolution of aeronautical telephony involved a special antenna aboard the aircraft that allowed the use of satellite transmissions, not only for voice but also for limited data and fax capabilities. Reflecting the need for mobile communications in the business world, aeronautical satellite communications systems of some type are now commonly used in corporate jets around the world. Current developments are directed towards higher-speed satellite-based video and Internet-access applications. The market acceptance of the Company’s HSD-64 and HSD-128 high speed data products has positioned EMS as a market leader in this segment, serving both military and commercial applications.

The Company believes that it is the top supplier of antennas for voice/data communications aboard corporate aircraft, with an over-90% share of this market. To date, there are more than 1,000 EMS installations on over 50 different types of aircraft. The Company has major contracts with Gulfstream, Honeywell and Bombardier — the industry’s largest users of general aviation communications equipment.

The Company has also pursued opportunities in the land mobile market. Customers in this market use small SATCOM terminals for such functions as tracking and two-way messaging for transportation or public safety, or remote monitoring of industrial process controls. A growing concern in this market is that terminals utilize an open architecture that would be compatible with other communications systems. The Company’s PDT-100 terminal addresses many of this market’s needs, with its compact size, strong and reliable performance, and open architecture.

For over two decades, satellite-based surveillance systems have saved lives and led to the safe recovery of thousands of disaster and accident victims. One of the world’s largest search-and-rescue systems is COSPAS-SARSAT, sponsored by Canada, France, Russia and the U.S. The COSPAS-SARSAT satellites continuously listen for distress transmissions, determine the location of those transmissions, and provide alerts to worldwide search-and-rescue operations. The Company believes that it is a leading provider to COSPAS-SARSAT search-and-rescue systems of ground station equipment, including high-performance terminals that handle a system’s vital communications function.

SATCOM Products

The Company’s SATCOM line of products include the following:

• Aeronautical Antennas

The Company has developed a family of aeronautical communications products, including an industry-leading Inmarsat antenna, the AMT-50, which is a mechanically-steered antenna that is connected to an aircraft’s navigational system and automatically remains directed toward a geostationary communications satellite for voice and low data-rate communications. This antenna is either mounted within the aircraft’s tail or under a small, unobtrusive radome atop an aircraft’s tail. The Company believes that this product has the leading market share in the

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high-end corporate jet market. The Company has also developed its CALQUEST™ product, which is a complete satellite telephone system for use over North and Central America on a wide range of turbo-prop and jet aircraft.

EMS has an aeronautical product, called the HSD-128, that provides aircraft operators with high-speed data capability using the new Aeronautical Swift64 and Mobile Packet Data Services from Inmarsat. These services, which have been operational in the land transportable market for nearly two years, will support data rates of up to 64 Kbps (which the HSD-128’s two-channel capability increases to 128 Kbps), a considerable advance on other service offerings currently available in the market. These new services can provide economical airborne access to the business support services typically found in a ground-based office, including voice, data, e-mail, Internet and corporate Intranet products.

The Company has also developed a steerable antenna system designed to provide live television to jet aircraft from a broadcast satellite. The system includes a mechanically steerable antenna system, mechanical positioner, and a beam-steering unit to keep the antenna properly pointed at the satellite during the motion associated with flight. This DBS antenna and the AMT-50 Inmarsat antenna can be mounted together under a single radome (designed and supplied by the Company) atop a jet’s tail fin. These products are sold by the Company as part of a full system for delivery of live video service to aircraft, provided by Honeywell.

• Other Mobile Terminals

EMS’s packet-data terminal provides fail-safe, two-way messaging and location information anywhere in North America. The PDT-100 terminal features GPS technology and combines what the Company believes are the fastest response times with the lowest terminal and airtime prices currently offered in this market. The PDT-100 is commercially available and in use throughout North and Central America providing tracking and messaging to the transportation industry.

The PDT-100 also serves as a valuable tool for the public safety market, offering communications to police, enforcement officers and other public safety employees who must travel outside of traditional wireless coverage maps. This terminal can also be used to monitor industrial controls in remote areas (such as controls on an oil or gas pipeline).

In 2002, the Company added a maritime high-speed terminal to complement its land-mobile and industry-leading aeronautical products. The maritime terminal delivers clear digital voice communications, as well as e-mail and Internet capabilities, through Inmarsat’s global maritime service.

• Emergency Management Products

The Company is a leading provider of the ground-station equipment associated with satellite-based “search-and-rescue” systems, including the local-user terminals (“LUTs”) that process information received from satellites. Using a low-earth-orbit satellite system, a LUT can determine the location of the maritime or aviation beacons that transmit distress signals, and display the results for intervention by emergency authorities. This terminal technology can also be adapted for routine tracking and management of aviation and maritime fleets.

Another LUT model uses satellites in geostationary orbit, which reduces the critical time needed to detect and identify distress beacon signals. This system is PC-based and can be efficiently managed through Internet protocols. In addition to satellite ground stations for search-and-rescue, EMS offers software for incident management and rescue coordination. The Company has also combined new communications technologies with Web-based geographic information systems and graphical tools. The Company believes that fast, widespread distribution of graphical data via the Web will allow for more effective coordination of rescue efforts.

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SALES AND MARKETING

The Company’s sales and marketing strategy varies depending upon the segment. Due to the technical nature of the Company’s products, internal personnel with strong engineering backgrounds must conduct some of these sales efforts. Particularly in the Space & Technology segment, many of these personnel have other engineering or management responsibilities within the Company. The Company also utilizes independent marketing representatives, both in the U.S. and internationally. These individuals are selected for their knowledge of the local markets and their ability to provide technical support and ongoing, direct contact with the Company’s current and potential customers.

In the Space & Technology segment, the development of major business opportunities often involves significant bid-and-proposal efforts; this work can include complex engineering to determine the technical feasibility and cost-effectiveness of various design approaches. Most of the Company’s bid-and-proposal costs are reported in cost of sales, although a portion of these costs is classified as selling, general and administrative expense. Total bid-and-proposal costs were $5.0 million in 2002, $4.4 million in 2001 and $3.6 million in 2000.

The markets for space and satellite communications comprise a relatively small number of customers, which are typically well known large corporations. The Company’s Space & Technology marketing efforts rely on ongoing communications with this base of potential customers, both to determine the customers’ future needs and to inform customers of the Company’s capabilities. Because the Company can often receive multiple orders from many of these customers, technical support and service after the sale are also crucial to maintaining a strong supply relationship.

The Company’s sales and marketing strategy for its other business segments involves:

1.		direct sales to end users, and
2.		indirect sales through third parties that often incorporate their products and services with the Company’s hardware for delivery to end-users. Third parties include:

	a.		strategic partners,
	b.		value-added resellers,
	c.		original equipment manufacturers, and
	d.		distributors, including representatives in 35 countries.

Direct sales of LXE systems are performed by an internal sales support staff, by 20 regional sales persons in North America, and by nine international subsidiaries (seven in Europe). For EMS Wireless, an internal staff and three regional sales offices in North America perform sales and marketing. For marketing of SATCOM products, the Company relies on its relationships with major airframe manufacturers, avionics manufacturers, a network of completion centers that install aeronautical products, and value-added resellers.

BACKLOG

The backlog of consolidated orders at December 31, 2002, was $108 million, compared with $157 million one year earlier. EMS Wireless, LXE and many SATCOM customers typically require short delivery cycles; as a result these segments usually convert orders into revenues within a few weeks, and they do not build up an order backlog that extends substantially beyond one fiscal quarter. However, backlog is very important in the Space & Technology segment, due to the long-term nature of that business. The backlog for Space & Technology at December 31, 2002 was $73 million compared with $111 million one year earlier. This reduction is due to a reduction in the backlog for commercial space applications.

MATERIALS

Materials used in the Company’s Space & Technology products consist of magnetic microwave ferrites, metals such as aluminum and brass, permanent magnet materials and electronic components such as transistors, diodes, IC’s, resistors, capacitors and printed circuit boards.

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Most of the magnetic microwave ferrite materials are purchased from two suppliers, and permanent magnet materials are purchased from a limited number of suppliers. Electronic components and metals are available from a larger number of suppliers and manufacturers.

The electronic components and supplies, printed circuit assemblies, and molded parts needed for the Company’s various standard products are generally available from a variety of sources. However, LXE systems include bar code scanners in almost all orders, and a significant number of the scanners are purchased from Symbol Technologies, Inc. (“Symbol”), which is also a competitor of the Company; however, there are alternative suppliers that manufacture and sell bar code scanners under license agreements with Symbol. The Company believes that LXE’s competitors also rely on scanning equipment purchased from or licensed by Symbol. In addition, Symbol and the Company have a license agreement, which allows the Company to utilize Symbol’s patented integrated scanning technology in certain products.

The Company’s advanced technology products often require sophisticated subsystems supplied or cooperatively developed by third parties having specialized expertise, production skills and economies of scale. Important examples include critical specialized components and subsystems required for successful completion of particular Space & Technology programs, and application-specific integrated circuitry and computers incorporated in LXE products. In such cases, the performance, reliability and timely delivery of the Company’s products can be heavily dependent on the effectiveness of those third parties.

The Company believes that its present sources of required materials are adequate. The Company does not believe that the loss of any supplier or subassembly manufacturer would have a material adverse effect on its business. In the past, shortages of supplies and delays in the receipt of necessary components have not had a material adverse effect on shipments of the Company’s products. However from time to time, the Company’s rollout of new standard products or its performance on Space & Technology programs has been affected by quality and scheduling problems with developers/suppliers of critical subsystems.

COMPETITION

The Company believes itself to be, in sales, a major independent supplier of (1) satellite components, subsystems and systems, (2) wireless local-area computer network products for logistics systems, (3) base station antennas and other wireless infrastructure products for cellular and PCS mobile networks, and (4) aeronautical SATCOM communications systems for voice, telephony and video. However, the Company’s markets are highly competitive. Some of the Company’s competitors have substantial resources and facilities that exceed those of the Company, but the Company also competes against smaller, specialized firms.

In the Space & Technology segment, the Company competes with divisions of certain large U.S. industrial concerns, such as Raytheon, Hughes, Loral, M/A-Com, and Rockwell, as well as non-U.S. companies such as COMDEV and RACAL. Some of these companies, as well as others, are both potential competitors of the Company for certain contracts and potential customers on other contracts. Certain major customers could also elect to internally develop and manufacture the products that they presently purchase from the Company.

In the LXE market, the Company’s principal competitors are Unova, Symbol (which holds patents protecting the barcode scanning devices supplied to LXE for incorporation in these products), and Psion Teklogix. In the EMS Wireless segment, the Company competes with divisions of certain large U.S. and international companies, including Allen Telecom, Andrew Corporation and Alcatel. In the SATCOM market, the company competes with Honeywell, Thales, Thrane & Thrane, Qualcomm and TSI.

The Company believes that the key competitive factors in all of its segments continue to be product performance, technical expertise and support to customers, adherence to delivery schedules, and price.

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RESEARCH AND DEVELOPMENT

The Space & Technology segment conducts most of its research and development in direct response to the unique technical requirements of a customer’s order, and most of these costs are included with the overall manufacturing costs for specific orders. The remaining segments conduct substantial internally funded research and development activities. In 2002, 2001 and 2000, the Company spent $26.1 million, $27.1 million and $27.7 million, respectively, on internally sponsored research and development.

EMPLOYEES

As of December 31, 2002, the Company and its subsidiaries employed a total of approximately 1,700 persons. Over 70% of the Company’s employees are directly involved in engineering or manufacturing activities.

RISK FACTORS

The business operations of EMS Technologies, Inc. involve significant risks and uncertainties that could adversely affect its financial condition, results of operations, and future development. In addition to domestic economic conditions, which can change unexpectedly and generally affect U.S. businesses, these risks and uncertainties include the following:

Competing technology could be superior to ours, and could cause customer orders and revenues to decline.

The markets in which we compete are very sensitive to technological advances. As a result, technological developments by competitors can cause our products to be less desirable to customers, or even to become obsolete. Those developments could cause our customer orders to diminish, which would have an adverse impact on our revenues and could cause the market value of our shares to decline.

Our competitors’ marketing and pricing strategies could make their products more attractive than ours. This could cause reductions in customer orders or profits.

We operate in highly competitive technology markets. Our competition may pursue aggressive marketing strategies, such as significant price discounting. These competitive activities could cause our customers to purchase our competitors’ products rather than ours, and reduce our sales and profit margins below expected levels.

If our customers fail to find adequate funding for major potential programs, our sales could decline.

Major communications infrastructure programs, such as proposed satellite communications systems or PCS/cellular systems for large urban areas, are important sources of our current and anticipated future revenues. We also participate in a number of large defense programs. Programs of these types cannot proceed unless the customer can raise adequate funds, from either governmental or private sources. As a result, our expected revenues can be adversely affected by political developments or by conditions in private capital markets. Expected revenues can also be adversely affected if private capital markets are not receptive to a customer’s proposed business plans.

Slow public acceptance of new communications systems could limit purchases by our customers.

Construction and expansion of new communications systems depend on public demand for the new services. As a result, growth rates in our revenues from wireless infrastructure products and proposed high-speed satellite communications systems are likely to be heavily affected by the timing and extent of public willingness to buy mobile and/or broadband communications services. If public acceptance of the new systems does not develop as expected, our customers are unlikely to place the levels of orders we expect, and our revenues and profits would also fall short of expectations.

Among the factors that could affect the growth of markets for new wireless communications systems is the potential concern about alleged health risks relating to radio frequency (RF) emissions. Media reports and some studies have suggested that RF emissions from wireless handsets and cell sites may be associated with various health problems, including cancer, and may interfere with electronic medical devices,

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including hearing aids and pacemakers. In addition, lawsuits have been filed against participants in the wireless industry alleging various adverse health consequences as a result of wireless equipment emissions. Additional studies of radio frequency emissions are ongoing. Consumers may be discouraged from purchasing new wireless services if consumers’ health concerns over radio frequency emissions increase. In addition, concerns over RF emissions could lead government authorities to increase restrictions on the location and operation of wireless-related hardware, or could result in wireless companies being held liable for costs or damages associated with these concerns.

We can encounter technical problems or contractual uncertainties, which can cause delays, added costs, lost sales, and liability to customers.

Technical difficulties can cause delays and additional costs in our technology development efforts. We are particularly exposed to this risk in new product development efforts, and in fixed-price contracts on technically advanced programs in our Space & Technology segment that require novel approaches and solutions. Technical difficulties could cause us to miss expected delivery dates for new product offerings, which could cause customer orders to fall short of expectations. Our products may perform mission-critical functions in space applications. If we experience technical problems and are unable to adhere to a customer’s schedule, the customer could experience costly launch delays or re-procurements from other vendors. The customer may then be contractually entitled to substantial financial damages from us. The customer would also be entitled to cancel future deliveries, which would reduce our future revenues and could make it impossible for us to recover our design, tooling or inventory costs, or our remaining commitments to third-party suppliers.

Due to technological uncertainties in new or unproven applications of technology, a contract may be broadly defined in its early stages, with a structure to accommodate future changes in the scope of work or contract value as technical development progresses. In such cases, management must evaluate these contract uncertainties and estimate the future expected levels of scope of work and likely contract value changes to determine the appropriate level of revenue associated with costs incurred. Actual changes may vary from expected changes, resulting in a reduction of revenues and earnings recognized in future periods.

Our transitions to new product offerings can be costly and disruptive, and could adversely affect our revenues or profitability.

Because our businesses involve constant efforts to improve existing technology, we regularly introduce new generations of products. During these transitions, customers may reduce purchases of older equipment more rapidly than we expect, or may choose not to migrate to our new products, which can cause lower revenues and excessive inventories. In addition, product transitions create uncertainty about both production costs and customer acceptance. These potential problems are generally more severe if our product introduction schedule is delayed by technical development problems. These problems could cause our revenues or profitability to be less than expected.

Our products may unexpectedly infringe third party patents, which could cause us to have substantial liability to our customers or the patent owners.

As we regularly develop and introduce new technology, we have a risk that our new products or manufacturing techniques infringe on patents held or currently being processed by others. The U.S. Patent Office does not publish patents until 18 months after their initial filing. Thus, we may be unaware of a pending patent until well after we have introduced an infringing product. In addition, questions of whether a particular product infringes a particular patent can involve significant uncertainty. As a result of these factors, third-party patents may interfere with

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marketing plans, or may, from time to time, create significant expense to defend or pay damages on infringement claims or to respond to customer indemnification claims.

We depend on highly skilled employees, who could become unavailable.

Because our products and programs are technically sophisticated, we must attract and retain employees with advanced technical and program-management skills. Other employers also often recruit persons with these skills, both generally and in focused engineering fields. If skilled employees were to become unavailable to us, our performance obligations to our customers could be affected and our revenues could decline.

We depend on highly skilled suppliers, who may become unavailable or fail to achieve desired levels of technical performance.

In addition to our requirements for basic materials and electronic components, our advanced technological products often require sophisticated subsystems supplied or cooperatively developed by third parties. To meet those requirements, our suppliers must have specialized expertise, production skills and economies of scale. Our ability to perform according to contract requirements, or to introduce new products on the desired schedule, can be heavily dependent on our ability to identify and engage appropriate suppliers, and on the effectiveness of those suppliers in meeting our development and delivery objectives. If key suppliers were unavailable when we needed them, our ability to meet our performance obligations to our customers could be affected and our revenues and earnings could decline.

Changes in government regulations that limit the availability of radio frequency licenses or cause us to incur increased expenses could cause our revenues or profitability to decline.

Many of our products are incorporated into wireless communications systems that are regulated in the U.S. by the Federal Communications Commission (FCC) and internationally by other government agencies. Changes in government regulations could reduce the growth potential of our markets by limiting either the access to or availability of frequency spectrum. Changes in government regulations could make the competitive environment more difficult by restricting our customers’ efforts to develop or introduce new technologies and products. Finally, changes in government regulations could substantially increase the difficulty and cost of compliance with government regulations for both our customers and us. All of these factors could result in reductions in our profits and revenues.

The export license process for space products has become uncertain, increasing the chance that we may not obtain required export licenses in a timely or cost-effective manner.

As a result of 1998 legislation, products for use on commercial satellites are included on the U.S. Munitions List and are subject to State Department licensing requirements. The licensing process is time-consuming, and political considerations can increase the time and difficulty of obtaining licenses for export of technically advanced products. The license process may prevent particular sales, and in general has created schedule uncertainties that are encouraging foreign customers, such as those in Western Europe, to develop internal or other foreign sources rather than use U.S. suppliers. If we are unable to obtain required export licenses when we expect them or at the costs we expect, our revenues and profits could be harmed.

Export controls on space technology restrict our ability to hold technical discussions with customers, suppliers and internal engineering resources, which reduces our ability to obtain sales from foreign customers or to perform contracts with the desired level of efficiency or profitability.

U.S. export controls severely limit unlicensed technical discussions with any persons who are not U.S. citizens. As a result, we are restricted in our ability to hold technical discussions between U.S. personnel and current or prospective non-U.S. customers or suppliers, between Canadian

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personnel and current or prospective U.S. customers or suppliers, and between U.S. employees and non-U.S. (including Canadian) employees. These restrictions reduce our ability to win cross-border space work, to utilize cross-border supply sources, to deploy technical expertise in the most effective manner, and to pursue cooperative development programs involving our U.S. and Canadian space facilities.

Economic or political conditions in other countries could cause our revenues or profitability to decline.

International sales significantly affect our financial performance. Almost $84 million in revenues for fiscal year 2002, or 27% of consolidated revenues, were derived from customers residing outside of North America. Adverse economic conditions in our customers’ countries, mainly in Western Europe, Latin America and the Pacific Rim, have affected us in the past, and could adversely affect future international revenues in all of our businesses, especially from our wireless local-area network and PCS/cellular infrastructure businesses. Unfavorable currency exchange rate movements could result in foreign exchange losses, or could adversely affect the marketability of our products by increasing the local-currency cost. In addition to these economic factors directly related to our markets, there are risks and uncertainties inherent in doing business internationally that could have an adverse effect on us, such as potential adverse effects from changes in foreign income tax laws, as well as unfavorable changes in laws and regulations governing a broad range of business concerns, including proprietary rights, legal liability and employee relations. All of these factors could cause significant harm to our revenues or profitability.

The level and profitability of our sales in certain markets depend on the availability and performance of other companies with which we have marketing relationships.

In some applications, including mobile satellite communications, we are seeking to develop marketing relationships with other companies that have, for example, specialized software and established customer service systems. In other markets, such as wireless local-area networks, a major element of our distribution channels is a network of value-added retailers and independent distributors. If we are unable to identify and structure effective relationships with other companies that are able to market our products, our revenues could fail to grow in the ways we expect.

Customer orders in backlog may not result in sales.

Our order backlog represents firm orders for products and services. However, our customers may cancel or defer orders for wireless products, in most cases without penalty. Cancellation or deferral of an order in our Space & Technology business typically involves penalties and termination charges for costs incurred to date, but these termination penalties would still be considerably less than what we would have expected to earn if the order could have been completed. We make management decisions based on our backlog, including hiring of personnel, purchasing of materials, and other matters that may increase our production capabilities and costs. Cancellations, delays or reductions of orders could adversely affect our results of operations and financial condition.

We could incur an impairment loss on certain long-term inventory.

In the Space & Technology segment, we have capitalized $4 million of costs for certain long-term inventory. We believe that this quantity of inventory will be used to meet expected demand for this product over the next several years. However, if actual orders are much less than expected, then the value of this inventory would be impaired, resulting in an earnings charge.

Our business and revenue growth could be limited by our inability to obtain additional financing.

Our current cash and available credit facilities are not large enough to finance either potential growth in certain business areas, or synergistic

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acquisitions to complement our technical and product capabilities. We may not be able to secure sufficient additional credit or other financing, on acceptable terms, to support our growth objectives.

We may not effectively manage possible future growth, which could result in reduced earnings.

Historically, we have experienced broad fluctuations in demand for our products and services. These changes in demand have depended on many factors and have been difficult to predict. In recent years, there has been a general growth trend in certain of our businesses, as well as increasing complexity in the technologies and applications involved. These changes in our businesses place significant demands on both our management personnel and our management systems for information, planning and control. If we are to achieve further strong growth on a profitable basis, our management must identify and exploit potential market opportunities for our products and technologies, while continuing to manage our current businesses effectively. Furthermore, our management systems must support the changes to our operations resulting from our business growth.

We may make acquisitions and investments that could adversely affect our business.

To support growth, we may continue in the future to make acquisitions of and investments in businesses, products and technologies that could complement or expand our businesses. However, if we should be unable to successfully negotiate with a potential acquisition candidate, finance the acquisition, or effectively integrate the acquired businesses, products or technologies into our existing business and products, we could be adversely affected. Furthermore, to complete future acquisitions, we may issue equity securities, incur debt, assume contingent liabilities, or have amortization expenses and writedowns of acquired assets, which could cause our earnings per share to decline.

***************************

In addition to risks and uncertainties related to our operations, there are investment risks that could adversely affect the return to an investor in our common stock, and also could adversely affect our ability to raise capital for financing future operations.

Our quarterly results are volatile and difficult to predict. If our quarterly performance results fall short of market expectations, the market value of our shares are likely to decline.

The quarterly earnings contributions of some of our segments are heavily dependent on customer orders or product shipments in the final weeks or days of the quarter. This can create volatility in quarterly results, and hinders our ability to determine in advance whether quarterly earnings will meet prevailing analyst expectations. The market price for our shares is likely to be adversely affected by quarterly earnings results that are below analyst and market expectations.

Our share price may fluctuate significantly, and an investor may not be able to sell our shares at a price that would yield a favorable return on investment.

The market price of our stock will fluctuate in the future, and such fluctuations could be substantial. Price fluctuations may occur in response to a variety of factors, including:

1.		actual or anticipated operating results,
2.		announcements of technological innovations, new products or new contracts by us, our customers, our competitors or our customers’ competitors,
3.		government regulatory action,
4.		developments with respect to wireless and satellite communications, and
5.		general market conditions.

In addition, the stock market has from time to time experienced significant price and volume fluctuations that have particularly affected the market prices for the stocks of technology companies and that have been unrelated to the operating performance of particular companies.

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Future sales of our common stock may cause our stock price to decline.

Our outstanding shares are freely tradable without restriction or further registration, and shares reserved for issuance upon exercise of stock options will also be freely tradable upon issuance. Sales of substantial amounts of common stock by our shareholders, including those who have acquired a significant number of shares in connection with business acquisitions or private investments, or even the potential for such sales, may depress the market price of our common stock and could impair our ability to raise capital through the sale of our equity securities.

FORWARD-LOOKING STATEMENTS

The discussions of the Company’s business in this Report, and in other public documents or statements that may from time to time incorporate or refer to these disclosures, contain various statements that are or may be deemed to be forward-looking. Forward-looking statements include, but are not limited to:

1.		statements about what the Company or management believes or expects,
2.		statements about anticipated technological developments or anticipated market response to or impact of current or future technological developments or product offerings,
3.		statements about trends in markets that are served or pursued by the Company,
4.		statements implying that the Company’s technology or products are well suited for particular emerging markets, and
5.		statements about the Company’s plans for product developments or market initiatives.

These forward-looking statements may differ materially from actual results due to the variety of risks and uncertainties that affect the Company, including those set forth under the foregoing “Risk Factors” heading.

EXECUTIVE OFFICERS OF THE REGISTRANT

Information concerning the executive officers of the Company is set forth below:

Alfred G. Hansen, age 69, became President and Chief Executive Officer in January 2001. Mr. Hansen joined the Company as President and Chief Operating Officer in January 2000. He became a Director in 1999. From 1998 through 1999, Mr. Hansen was President of A.G. Hansen Associates, Inc., Marietta, Georgia, an aerospace marketing and manufacturing consultant. From 1995 to 1998, Mr. Hansen served as Executive Vice President of Lockheed Martin Aeronautical Systems, with broad operational responsibilities for its aerospace business, and as a Vice President of its parent company, Lockheed Martin Corporation. Mr. Hansen retired from the U.S. Air Force in 1989 as a four-star general, serving in his last assignment as commander of the Air Force Logistics Command.

Don T. Scartz, age 60, was elected Executive Vice President of the Company in February 2003, and is also Chief Financial Officer (since 1995) and Treasurer (since 1981). He served as Senior Vice President since 1995, as Vice President-Finance from 1981 to 1995, and as Secretary from 1982 to 1991. He joined the Company as Controller in 1978. He also serves as the Chief Financial Officer of each of the Company’s operating subsidiaries. He became a Director of the Company in 1995.

William S. Jacobs, age 57, became General Counsel and Secretary of the Company in 1992, and Vice President in 1993. He is also responsible for the legal affairs of the operating subsidiaries. Previously, he was engaged in the private practice of law, and in such capacity had served as the Company’s principal corporate legal counsel since 1982.

Gerald S. Bush, age 46, is Senior Vice President of the Company, and President of its Space & Technology/Montreal operations. He joined the Company in January 1999, when the Company acquired the Satellite Products business of Spar Aerospace Limited (Spar), where Dr. Bush had been Vice President and General Manager since 1998. Dr. Bush joined Spar in 1981 and served in various engineering and program management positions until 1995, when he became Director of Manufacturing for the Spar Satellite Products business, and in 1996 he became Vice President of Operations for that business.

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James S. Childress, age 58, was appointed as a Vice President of the Company, and as President and General Manager of the LXE subsidiary, in 2001. He joined the Company in August 2000 as Vice President of Business Development at LXE. Prior to joining EMS, he served as Vice President of EG&G Technical Services, Inc., a leading provider of technical and support services to the U.S. Departments of Defense, Energy, Transportation, Treasury, Justice and Commerce, and to the National Aeronautics and Space Administration. He joined EG&G in 1998 following a career in the U.S. Air Force focused on logistics and systems acquisition. In the Air Force, he attained the rank of major general, and last served as commander of the San Antonio Air Logistics Center.

Jay R. Grove, age 39, is a Vice President of the Company, and Senior Vice President and General Manager of its Space & Technology/Atlanta operations. He joined the Company in January 2001. Formerly he was a director of Mobile SATCOM Systems for ViaSat, Inc., an advanced digital satellite telecommunications and wireless signal processing equipment provider.

T. Gerald Hickman, age 61, is a Vice President of the Company, and Senior Vice President and General Manager, EMS Wireless (since March 2000). He joined the Company in 1988 as Vice President, Marketing, and prior to his current position was a Vice President in the Company’s EMS Wireless division.

Neilson A. Mackay, age 61, is a Vice President of the Company, and Senior Vice President and General Manager, SATCOM Products (since 2001). He joined the Company in January 1993, when the Company acquired an Ottawa, Ontario-based space satellite communications business of which he was serving as President.

Donald F. Osborne, age 42, is a Vice President of the Company, and since August 2002 has served as Senior Vice President and General Manager for the EMS Satellite Networks group, a part of the Space & Technology/Montreal operations. Prior to that position, he served as Senior Vice President and General Manager of the Space & Technology/Montreal operations. He joined the Company in January 1999, when the Company acquired the Spar Satellite Products business, where Mr. Osborne had been Vice President, Marketing since 1986. Mr. Osborne joined Spar in 1983 as a mechanical engineer.

ITEM 2. PROPERTIES

The Company’s corporate headquarters and its Georgia operations are located in two buildings owned by the Company (comprising 250,000 square feet of floor space on 21 acres), as well as in 142,000 square feet of leased office space (leases to expire prior to 2004) in three other buildings, all located in or near Technology Park, Norcross, Georgia, a suburb of Atlanta. The combined Georgia facilities comprise clean rooms, a microelectronics laboratory, materials storage and control areas, assembly and test areas, offices, engineering laboratories, a ferrites laboratory, drafting and design facilities, a machine shop, a metals finishing facility and painting facilities.

The Company’s Canadian operations include a 330,000 square-foot facility surrounded by 34 acres of undeveloped land in a suburb of Montreal. One-fourth of the facility comprises manufacturing, assembly and laboratory space, including advanced near-field and far-field test range areas and a subsystem and payload integration area. Three-fourths of the facility is used for engineering and administrative office space. The facility’s location in the province of Quebec affords it significant tax incentives and credits sponsored by the provincial government. The Company also leases approximately 63,000 square feet of office and manufacturing space for its operations located in Ottawa, Ontario; the lease on this facility expires in 2007.

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The Company’s EMS Wireless division leases an 11,000 square-foot manufacturing facility in Curitiba, Brazil, from its local industrial partner (a manufacturer of antenna towers for wireless telecommunications). The lease is annually renewable, and management expects to continue the lease on terms comparable to those of the current lease.

The Company has leased several small sites in the U.K., Europe and Australia for LXE sales offices and a SATCOM engineering facility. If any of these leases were terminated, the Company believes that it could arrange for comparable replacement facilities on favorable terms.

ITEM 3. LEGAL PROCEEDINGS

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The common stock of EMS Technologies, Inc. is traded in the over-the-counter market (NASDAQ symbol ELMG). At March 3, 2003, there were approximately 500 shareholders of record, and the Company believes that there were approximately 4,000 beneficial shareholders, based upon broker requests for distribution of Annual Meeting materials. The price range of the stock is shown below:

The Company has never paid a cash dividend with respect to shares of its common stock, and has retained its earnings to provide cash for the operation and expansion of its business. Future dividends, if any, will be determined by the Board of Directors in light of the circumstances then existing, including the Company’s earnings and financial requirements and general business conditions.

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ITEM 6. SELECTED FINANCIAL DATA

No cash dividends have been declared or paid during any of the periods presented.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Critical Accounting Policies

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which often require the judgment of management in the selection and application of certain accounting principles and methods. We consider the following policies to be critical to an understanding of our financial statements because their application requires significant judgment, and because differences, between actual future events and the expectations on which these judgments were based, can have significant effects on our financial results reported for future periods.

Revenue recognition on long-term contracts

Revenue recognition for fixed-price, long-term contracts in the Space & Technology and SATCOM segments is a critical accounting policy involving significant management estimates. These segments’ long-term contracts use the ratio of cost-incurred to total-estimated-cost as the measure of performance that determines how much revenue should be recognized. The calculation of total-estimated-cost relies on engineering estimates of the cost to complete the contract, with allowances for identifiable risks and uncertainties. These engineering estimates are frequently reviewed and updated. However, unforeseen problems can occur to substantially reduce the rate of future revenue recognition in relation to costs incurred.

Most of the Space & Technology segment’s contracts involve development of new or unproven applications of technology. Due to technological uncertainties, a contract may be broadly defined in its early stages, with a structure to accommodate future changes in the scope of work or contract value as technical development progresses. In such cases, management must estimate the future expected levels of scope of work and likely contract value changes to determine the appropriate level of current revenue associated with current costs incurred. Actual future changes may vary from expected changes, resulting in a reduction (or increase) in revenues recognized in future periods.

Accrual of government incentives for research

Our accrual of research incentives from the Canadian government is a critical accounting policy involving management estimates for our Space & Technology segment. These incentives are in the form of a cash reimbursement for a portion of certain qualified research expenditures. Incentives are recorded as a reduction of cost of sales, because the underlying research efforts primarily apply to development of technological capabilities for specific business opportunities. For the year ended December 31, 2002, total incentives earned were approximately $6.2 million, compared with $4.8 million for the year ended December 31, 2001. We have established procedures to identify qualified costs and to submit appropriate claims for reimbursement; all of these claims are subject to financial and scientific audits by the Canadian government concerning whether certain expenses qualified for incentive programs. Although there have historically been no significant disallowances of previously accrued incentives that resulted from these audits, such disallowances in the future would have an unfavorable effect on our statement of earnings.

Evaluation of long-lived assets for impairment

All long-lived assets on the balance sheet are periodically reviewed for impairment. The most significant long-lived asset is a less-than-5% equity investment in a limited partnership, SkyBridge LLP, with a carrying value on the balance sheet of $17.9 million at December 31, 2002. The goal of this investment is to enable us to participate in the development and implementation of a satellite network that will provide high-data-rate wireless services. The partnership is an active and financially viable entity, and management representatives attend partners meetings to receive updates on the entity’s progress. Since we acquired our equity investment four years ago, new equity partners have invested in the partnership at a higher subscription price than we paid. As a result, we believe that the asset is not impaired and that it is appropriately

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accounted for as of December 31, 2002. However, due to current difficult economic conditions in the commercial space market, the partnership has delayed construction of its satellite network, and is instead developing a new business strategy based on an architecture with GEO (geosynchronous earth orbit) satellites rather than LEO (low earth orbit) satellites. If the current difficult market conditions persist for commercial space ventures, we may determine at some future date that the asset has become impaired, which would require a charge to non-operating income.

Establishment of reserves for deferred income tax assets

It is management’s expectation that in the future our Canadian operations will earn more than enough research-related tax benefits each year to offset any Canadian federal tax liability for any given year. As a result, we have reserved substantially all the net deferred tax assets associated with these research-related tax benefits (totaling approximately $17 million at December 31, 2002), because they are unlikely to be realized. However, this reserve may be reduced — resulting in an income tax benefit to a future statement of earnings — if (1) the level of our qualified research in Canada decreases, which would lower the tax benefits earned in future years, or (2) our profitability in Canada increases, which would increase the tax liability incurred in future years.

Results of Operations

Most revenues were derived from commercial and international markets (86% in 2002, 91% in 2001 and 90% in 2000), as compared with sales for U.S. government end-use. More revenues were derived from sales to systems integrators, third-party manufacturers and distributors than from sales directly to end-users.

Net Sales

Consolidated net sales increased to $310 million in 2002, compared with $291 million in 2001 and $273 million in 2000. The most significant growth in 2002 was in the Company’s SATCOM segment, which benefited from the continued success of its aeronautical communications products (including a new high-speed terminal introduced during the year), as well as new contracts for its emergency management products. The net revenue growth in 2002 for the Space & Technology segment reflected much higher revenues recognized under new long-term defense contracts and lower revenues recognized from older commercial space contracts (which was expected, following the preceding year’s strong revenues and declining order rate in commercial space).

For 2001 compared with 2000, the most important factor in the Company’s sales growth was higher revenue in the Space & Technology segment related to long-term contracts for commercial space applications (in particular, antennas and power control products). Also contributing to growth was the LXE segment, which had a successful rollout of new products in North America and Europe, as well as the SATCOM segment, which experienced strong demand for its aeronautical communications products in the corporate jet market. EMS Wireless revenues were affected by a slowdown in capital spending by the telecommunications industry in North America.

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Net Sales and Operating Income By Segment

Our segment net sales and operating income (loss) were as follows (in thousands):

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Space & Technology: Increasingly difficult market conditions caused commercial space orders to decline over the three years ended December 31, 2002, with the result that commercial space revenues and profits peaked in 2001 and decreased significantly in 2002; furthermore, schedule delays and technical difficulties also contributed to lower profitability on commercial space contracts in 2002. However, orders for long-term defense contracts were very low in 2000 but increased substantially in 2001 and 2002, with the result that defense-related revenues and profits grew over the three-year period. We expect that difficult market conditions in commercial space will persist in 2003, but that defense markets will continue to improve. We also believe that we have reduced our continuing financial risk on most of the large long-term contracts that over recent years have presented serious technical, schedule and contractual challenges, but on a small number of programs we continue to address technical, schedule and contractual issues that, if not satisfactorily resolved, would materially affect our 2003 Space & Technology revenues under the percentage-completion method of accounting described in our critical accounting policies.

LXE: In 2000, LXE released the first models of a new generation of wireless products for logistics. Sales of these and other new products introduced over the next two years resulted in the modest growth of revenues and profits, despite generally sluggish conditions in capital goods markets, and we expect these trends to continue in 2003. The most active geographic markets for these products were in North America and Europe.

EMS Wireless: Sales and profits from EMS Wireless’ base-station antennas for PCS/cellular communications peaked in 2000, and declined in 2001 as capital spending in the telecommunications market slowed. The 2002 results compared favorably with 2001 despite continued tough conditions in the telecommunications market; management believes this improvement was due to continued introduction of new products, improved order delivery times, and the segment establishing itself as an approved vendor to all major wireless carriers in the U.S. We are uncertain whether the market for base-station antennas will significantly improve in 2003, but we are seeking to generate additional revenues through introduction of new products and broader market acceptance of our repeater products.

SATCOM: Most of SATCOM’s sales over the three years ended December 31, 2002 have related to the corporate jet market, for which management believes that SATCOM is the leading supplier of advanced aeronautical communications products. In 2001, SATCOM’s profits were reduced by additional costs to develop new products, including a highspeed data aeronautical terminal and enhanced land-mobile terminals. The rollout of these new products in 2002 helped increase sales and profits compared with 2001. The 2002 results also benefited from new contracts for emergency management products (in particular, satellite-based search and rescue systems). We expect that our corporate jet revenues will significantly slow down in 2003, but SATCOM’s overall revenues should continue to grow based on defense and security opportunities for both our land-mobile and aeronautical products.

Cost of Sales

Cost of sales, as a percentage of consolidated net sales, was 68% in 2002 and 2001 compared with 67% in 2000. The cost-of-sales percentage did not change in 2002 compared with 2001, because the mix of sales by segment was comparable in both years. In 2001 compared with 2000, the sales mix was different, with the effect of higher Space & Technology revenues (with a higher cost-of-sales percentage) slightly exceeding the effect of a decrease in EMS Wireless revenues (with a lower cost-of-sales percentage).

Selling, General and Administrative Expenses

Selling, general and administrative expenses (SG&A), as a percentage of consolidated net sales, remained relatively stable at 20% in 2002 compared with 19% in 2001 and 2000. The dollar value increases in SG&A for each of the past three years have related mainly to greater selling and marketing expenses to support geographic expansion and new product rollouts at the LXE, EMS Wireless and SATCOM segments.

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Research and Development Expenses

Research and development expenses (R&D) represent the cost of our internally funded efforts. Significant R&D efforts also occur under specific customer orders in the Space & Technology segment and, accordingly, are reflected in cost of sales. Consolidated R&D moderately decreased over the three-year period ended December 31, 2002. The decrease in 2002 compared with 2001 was across the board in all segments. The decrease in 2001 related mainly to the Space & Technology segment, which shifted development efforts to customer-funded initiatives; offsetting this decrease somewhat were increases at SATCOM to develop a high-speed aeronautical terminal and at EMS Wireless to develop repeater products.

Contract Reserve Adjustment

In December 2001, we accrued a $3.5 million contract reserve, which represented an estimate of the loss to be incurred in settlement of a Space & Technology contract. Under this contract, we were to develop and supply the crucial antenna technology for systems that provide multichannel, live television to commercial airline flights. Our customer was a partner in a joint venture that marketed these television systems to the airline industry. We had worked with our customer on the contract for over three years and invested considerable time and expense, and the expectations were that the product rollout to the airline industry would have substantially begun by 2001. However, the rollout had proceeded much slower than expected, and the airline industry faced difficult economic conditions that had deteriorated significantly in late 2001. There were also considerable uncertainties at the end of 2001 about the timing of the airline industry’s recovery and adoption of our technology. Based upon these factors, we concluded that sales under the contract were unlikely to develop at the previously expected rate, and we decided to seek a settlement of the contract with our customer, including possible use of the contract’s provisions for dispute resolution.

In 2002, while settlement negotiations were still in an early stage, the television-system joint venture was acquired by a new airline that had been the joint venture’s largest customer. Subsequently, we reached a new, long-term agreement to supply the airline with advanced antennas. Based on the terms of the agreement and the strong financial position and creditworthiness of the new airline, we concluded that we no longer needed the $3.5 million reserve. The elimination of this reserve resulted in a statement of earnings benefit in the fourth quarter of 2002.

Write-down of NetSat 28 Assets

Effective as of December 31, 2000, we wrote down the full $2.9 million value of certain receivables and inventories related to NetSat 28 Company, L.L.C. (“NetSat”), which proposed to offer broadband communications services via a high-capacity geostationary Ka-band satellite over the United States. In September 1999, we had negotiated an agreement to acquire control of NetSat. The acquisition was subject to approval by the Federal Communications Commission (FCC) to transfer control of NetSat’s license to launch and operate its services. In the first half of 2000, prior to gaining control, we recorded $2.9 million of receivables and inventory related to NetSat’s activities. In mid-2000, the FCC unexpectedly revoked NetSat’s license, based upon NetSat’s failure to begin satellite construction prior to a milestone date of May 1998. As a result, in 2000 we wrote down the full value of our NetSat-related receivables and inventories. Subsequent to an appeal by NetSat, the FCC reinstated NetSat’s license and approved the transfer of control to us. With other investors, we then established a new entity — Miraxis, L.L.C. — to pursue a broadband communications business plan. Due to continuing uncertainty about whether the new venture can secure enough capital to proceed with its business plan, we have not attributed any value on the balance sheet to our minority investment in Miraxis.

Foreign Exchange Gain (Loss)

We recognize foreign exchange gains and losses related to an asset or liability denominated in a foreign currency, and if applicable, any embedded derivatives. The most significant such gains and losses have been associated with U.S. dollar-denominated contracts from customers of our Canadian subsidiary. A stronger U.S. dollar against the Canadian dollar usually results in foreign exchange gains.

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We also recognize net gains and losses from translation of the LXE European subsidiaries’ short-term intercompany liabilities (payable in U.S. dollars). These liabilities arise when the subsidiaries’ buy LXE products from the parent for resale in Europe. A weaker U.S. dollar against the Euro usually results in foreign exchange gains.

In 2002, the net foreign currency gain of $1.2 million resulted primarily from a period during the year when the U.S. dollar strengthened against the Canadian dollar. Due to the volatility of applicable U.S. dollar exchange rates in 2002, we increased our hedging activities in the second half of 2002 to reduce our future exposure to foreign currency changes. Foreign currency losses of $22,000 in 2001 and $234,000 in 2000 were the result of various changes in the U.S. dollar against both the Canadian dollar and Euro.

Non-Operating Income

The most significant item in non-operating income was interest income of $152,000 in 2002, $287,000 in 2001 and $526,000 in 2000. These amounts vary with our level of cash on deposit.

Interest Expense

Interest expense decreased to $3.7 million in 2002, compared with $4.9 million in 2001 and $4.3 million in 2000. The decrease in 2002 was due to decreased debt levels that resulted from positive cash flow, and to lower interest rates. The increase in 2001 from 2000 was due to higher average levels of debt.

Income Tax (Expense) Benefit

The primary factor affecting our consolidated effective income tax rate each year is the relative proportion of taxable income that we earn in Canada, where we have a much lower effective rate than in the U.S. or other locations due to tax benefits for research-related expenditures. In 2002, we earned almost all of our taxable income in the U.S. and other locations, and the consolidated effective income tax rate was 33%. In 2001, we recognized a consolidated net tax benefit despite reporting consolidated taxable income because: (1) we incurred a loss in 2001 for our combined operations in the U.S., where we have a higher effective tax rate, and (2) we earned substantial taxable income in Canada, where we have a lower effective rate. Therefore, the net tax benefit on the loss in the U.S. exceeded the net tax expense on earnings in Canada, resulting in a consolidated net tax benefit in 2001. In 2000, we earned almost half of our taxable income in Canada, and the resulting 22% consolidated effective income tax rate compared very favorably with our effective tax rate outside of Canada. In 2003, we expect to earn most of our taxable income in the U.S. and other locations; as a result, the effective income tax rate in 2003 is expected to be approximately 35%.

Change in Accounting Principle

In 2001, we recorded an after-tax loss from the cumulative effect of a change in accounting principle of $351,000 related to Statement of Financial Accounting Standards (“SFAS”) No. 133, “Accounting for Derivative Instruments and Hedging Activities”, which requires us to recognize all derivatives on the balance sheet at fair value. SFAS No. 133 also establishes new accounting rules for hedging instruments which, depending on the nature of the hedge, require that changes in the fair value of derivatives must be either: (1) offset against the change in the fair value of the hedged assets, liabilities or firm commitments through earnings, or (2) recognized in other comprehensive income (a component of stockholders’ equity) until the hedged item is recognized in earnings. Any ineffective portion of a hedging instrument’s change in fair value must be immediately recognized in earnings. For derivative instruments that do not qualify as hedging instruments, any change in the value is recognized in current earnings.

Upon the adoption of the provisions of SFAS No. 133 on January 1, 2001, we recorded a resulting net liability for all derivatives totaling $1,135,000 of which, $352,000 ($351,000 after income taxes) was charged to the statement of earnings as a transition adjustment for the cumulative effect of the change in accounting principle. The remaining net liability for all derivatives was charged to the unbilled revenue

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component of accounts receivable ($375,000) and to the other comprehensive income component of stockholders’ equity ($408,000).

Liquidity and Capital Resources

During 2002, net cash provided by operating activities was $13.8 million, compared with $4.1 million in 2001 and $3.2 million in 2000. The Company purchased $13.0 million in fixed assets during 2002.

During 2002, the net repayment of long-term debt was $1.0 million. This change included a $1.6 million increase in the balances due under revolving credit arrangements and net repayments of term debt of approximately $2.6 million.

At December 31, 2002, the Company had $7.0 million available for borrowing under its U.S. revolving credit agreement and $2.8 million available for borrowing under its Canadian revolving credit agreement. These credit agreements mature in 2003, and the Company expects to renew these agreements on terms that are comparable with the existing terms.

We expect that capital expenditures in 2003 will range from $10 million to $15 million. These expenditures will be used primarily to purchase equipment that increases or enhances capacity and productivity.

The cash flow from operations during 2002 improved the Company’s cash position and its debt-to-equity ratio. Management believes that cash provided from operations and borrowings available under its credit agreements will provide sufficient liquidity to meet the operating and capital expenditure needs for existing operations during the next 12 months. To fund long-term growth, the Company may consider such measures as offerings of common stock or convertible securities.

Commitments and Contractual Obligations

The Company does not have any undisclosed off-balance sheet arrangements with an unconsolidated entity that are reasonably likely to materially affect liquidity, the availability of capital resources, or requirements for capital resources. However, the following summary information about contractual obligations and commitments is provided to assist financial statement users.

Following is the Company’s material contractual cash commitments as of December 31, 2002 (in thousands):

Following is the Company’s material other commercial commitments as of December 31, 2002 (in thousands):

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Risk Factors and Forward-Looking Statements

The Company has included forward-looking statements in management’s discussion and analysis of financial condition and results of operations. Actual results could differ materially from those suggested in any forward-looking statements as a result of a 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 the Company’s principal markets;
•		volatility of foreign exchange rates relative to the U.S. dollar and their effect on purchasing power by international customers, as well as the potential for realizing foreign exchange gains or losses associated with net foreign assets held by the Company;
•		successful resolution of technical problems, proposed scope changes, or proposed funding changes that may be encountered on contracts;
•		changes in the Company’s 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;
•		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, and general conditions in our target markets (such as logistics, PCS/cellular telephony and space-based communications);
•		the availability of financing for satellite data communications systems and for expansion of terrestrial PCS/ cellular phone systems;
•		the extent to which terrestrial systems succeed in providing extensive broadband Internet access on a dependable and economical basis;
•		development of successful working relationships with local business and government personnel in connection with the distribution and manufacture of products in foreign countries;
•		the growth rate of demand for various mobile and high speed data communications services;
•		the Company’s ability to attract and retain qualified personnel, particularly those with key technical skills; and
•		the availability of sufficient additional credit or other financing, on acceptable terms, to support the Company’s expected growth.

Effect of New Accounting Pronouncements

In July 2001, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 143, “Accounting for Asset Retirement Obligations.” This standard requires entities to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred. Over time, the liability is adjusted to its present value each period, and the capitalized cost is depreciated over the useful life of the related asset. SFAS No. 143 is effective for fiscal years beginning after June 15, 2002, with earlier application encouraged. The Company does not have any asset retirement obligations, and the adoption of this pronouncement will have no material impact on the Company’s consolidated financial statements.

In August 2001, the FASB issued SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” which supersedes both SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of and the accounting and reporting provisions of APB Opinion No. 30, “Reporting the Results of Operations — Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions,” for the disposal of a segment of a business (as previously defined in that Opinion). SFAS No. 144 retains the fundamental provisions in SFAS No. 121 for recognizing and measuring impairment losses on long-lived assets held for use and long-lived assets to be disposed of by sale, while also resolving significant implementation issues associated with SFAS No. 121. For example, SFAS No. 144 provides guidance on how a long-lived asset that is used as part of a group should be evaluated for impairment, establishes criteria for when a long-lived asset is held for sale, and prescribes the accounting for a long-lived asset that will be disposed of other than by sale. SFAS No. 144 retains the basic provisions of Opinion No. 30 on how to present discontinued operations in the statement of earnings, but it broadens that presentation to include a component of an entity (rather than a segment of a business). The Company adopted the provisions of SFAS No. 144 for the quarter ending March 31, 2002.

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The adoption of SFAS No. 144 did not have a material impact on the Company’s financial statements because the impairment assessment under this statement is largely unchanged from SFAS No. 121.

In April 2002, the FASB issued SFAS No. 145, “Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections.” SFAS No. 145 rescinds SFAS No. 4, “Reporting Gains and Losses from Extinguishment of Debt,” and an amendment of that statement, SFAS No. 64, “Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements.” This statement amends SFAS No. 13, “Accounting for Leases,” to eliminate an inconsistency between the required accounting for sale-leaseback transactions and the required accounting for certain lease modifications that have economic effects that are similar to sale-leaseback transactions. In addition, this statement amends other existing authoritative pronouncements to make various technical corrections, clarify meanings, or describe their applicability under changed conditions. SFAS No. 145 is effective for the Company’s fiscal year beginning in 2003 with earlier application encouraged. Adoption will not have a material impact on the consolidated financial statements of the Company.

In June 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities.” SFAS No. 146 addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force Issue No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring).” SFAS No. 146 requires that a liability for costs associated with an exit or disposal activity be recognized when the liability is incurred rather than when a company commits to such an activity and also establishes fair value as the objective for initial measurement of the liability. The adoption of SFAS No. 146 during the fourth quarter of 2002 did not have a material impact on the consolidated financial statements of the Company.

In November 2002, the FASB issued Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others,” which requires the guarantor to: (1) recognize a liability for the fair value of the “obligation to stand ready to perform” under a guarantee, and (2) provide disclosure information concerning specified other guarantees, such as product warranties. The recognition and measurement provisions of Interpretation No. 45 apply to guarantees entered into or modified after December 31, 2002, and the implementation of these provisions is not expected to have a material impact on the Company’s consolidated financial statements. The Company has adopted the disclosure requirements of Interpretation No. 45 for specified guarantees, including product warranties, contingent consideration from a business combination, and a parent’s guarantee of a portion of a subsidiary’s debt to a third party.

In December 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure.” SFAS No. 148 amends SFAS No. 123, “Accounting for Stock-Based Compensation,” to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS No. 148 amends the disclosure requirements of SFAS No. 123 to require prominent disclosure in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reporting results. The transition guidance and annual disclosure provisions of SFAS No. 148 are effective for fiscal years ending after December 15, 2002. The interim disclosure provisions are effective for financial reports containing financial statements for interim periods beginning after December 15, 2002. The disclosure requirements of SFAS No. 148 are included in Note 1. The Company currently has no plans to adopt the fair value based method of accounting for stock-based employee compensation.

In January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities.” The Interpretation provides guidance on consolidating variable interest entities and applies immediately to variable interests created after January 31, 2003. The interpretation requires variable interest entities to be consolidated if the equity investment at risk is not sufficient to permit an entity to finance its activities without support from other parties, or if the equity investors lack certain specified characteristics. Adoption of Interpretation No. 46 will not have a material impact on the Company’s consolidated financial statements.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

At December 31, 2002, the Company had the following market risk sensitive instruments (in thousands):

At December 31, 2002, the Company also had intercompany accounts that eliminate in consolidation but that are considered market risk sensitive instruments.

Short-term due to parent, payable by European and Australian subsidiaries in the following countries and arising from purchase of the parent’s products for sale in Europe and Australia at December 31, 2002 are:

At December 31, 2002, the Company had foreign currency risks associated with forward contracts as follows (in thousands, except average contract rate):

The Company enters into foreign currency forward contracts in order to mitigate the risks associated with currency fluctuations on future cash flows.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Information required for this item is in the Consolidated Financial Statements and Notes to Consolidated Financial Statements included immediately after the Signature Page and Certifications of this Annual Report on Form 10-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information concerning directors called for by this Item is contained in the Company’s definitive Proxy Statement for its 2003 Annual Meeting of Shareholders and is incorporated herein by reference. The information concerning executive officers called for by this Item is set forth under the caption “Executive Officers of the Registrant” in Item 1 hereof.

ITEM 11. EXECUTIVE COMPENSATION

The information called for by this Item is contained in the Company’s definitive Proxy Statement for its 2003 Annual Meeting of Shareholders and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information about the Company’s equity compensation plans as of December 31, 2002:

All other information called for in this Item is contained in the Company’s definitive Proxy Statement for its 2003 Annual Meeting of Shareholders and is incorporated herein by reference.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information called for by this Item is contained in the Company’s definitive Proxy Statement for its 2003 Annual Meeting of Shareholders and is incorporated herein by reference.

ITEM 14. CONTROLS AND PROCEDURES

The Company has established and maintains disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14). The objective of these controls and procedures is to ensure that information relating to the Company, including its consolidated subsidiaries, and required to be filed by it in reports under the Securities Exchange Act, as amended, is effectively communicated to the Company’s CEO and CFO, and is recorded, processed, summarized and reported on a timely basis.

The CEO and CFO have evaluated the Company’s disclosure controls and procedures within 90 days prior to the filing date of this annual report. Based upon this evaluation, the CEO and CFO have concluded that the Company’s disclosure controls and procedures are adequate to accomplish their objective and are functioning effectively.

Subsequent to the most recent evaluations by the CEO and CFO, there have been no significant changes in the Company’s internal controls (including corrective actions for significant deficiencies or material weaknesses) or other factors that could significantly affect these internal controls.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) 1. Financial Statements

The consolidated financial statements listed in the accompanying Index to Financial Statements, appearing immediately after the Signature Page and Certifications, are filed as part of this Annual Report on Form 10-K.

(a) 2. Financial Statement Schedules Independent Auditors’ Report

Schedule II. Valuation and Qualifying Accounts — Years ended December 31, 2002, 2001 and 2000

All other schedules are omitted as the required information is inapplicable, or the information is presented in the financial statements or related notes.

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INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Stockholders
EMS Technologies, Inc.:

Under date of February 20, 2003, we reported on the consolidated balance sheets of EMS Technologies, Inc. and subsidiaries as of December 31, 2002 and 2001, and the related consolidated statements of earnings, stockholders’ equity and comprehensive income (loss), and cash flows for each of the years in the three-year period ended December 31, 2002, as contained in this annual report on Form 10-K for the year 2002. In our report specified above, we state that we did not audit the financial statements of EMS Technologies Canada, Ltd., a wholly owned subsidiary, which statements were audited by other auditors whose report has been furnished to us. Our opinion, insofar as it relates to the amounts included for EMS Technologies Canada, Ltd., is based solely on the report of the other auditors. In connection with our audits of the aforementioned consolidated financial statements, we also audited the related consolidated financial statement schedule as listed in the accompanying index. This financial statement schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion on this financial statement schedule based on our audits.

In our opinion, based on our audits and the report of other auditors, the financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

KPMG LLP

Atlanta, Georgia
February 20, 2003

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SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS (in thousands):

(a)  3. Exhibits

The following exhibits are filed as part of this report:

37

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(b).  Reports on Form 8-K.

No Reports on Form 8-K were filed by the Company during the quarter ended December 31, 2002.

*Filed herewith

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

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CERTIFICATIONS

I, Alfred G. Hansen, certify that:

1.		I have reviewed this annual report on Form 10-K of EMS Technologies, Inc.;
2.		Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3.		Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
4.		The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

	a)		Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
	b)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and
	c)		Presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

	a)		All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weakness in internal controls; and
	b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6.

The registrant’s other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

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I, Don T. Scartz, certify that:

1.		I have reviewed this annual report on Form 10-K of EMS Technologies, Inc.;
2.		Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3.		Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
4.		The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

	a)		Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
	b)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and
	c)		Presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

	a)		All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weakness in internal controls; and
	b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6.

The registrant’s other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

42

INDEX TO FINANCIAL STATEMENTS

43

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Stockholders
EMS Technologies, Inc.:

We have audited the accompanying consolidated balance sheets of EMS Technologies, Inc. and subsidiaries (the “Company”) as of December 31, 2002 and 2001, and the related consolidated statements of earnings, stockholders’ equity and comprehensive income (loss), and cash flows for each of the years in the three-year period ended December 31, 2002. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We did not audit the consolidated financial statements of EMS Technologies Canada, Ltd., a wholly-owned subsidiary, which statements reflect total assets constituting 35% and 27%, and total revenues constituting 36%, 40% and 31% in 2002, 2001 and 2000, respectively, of the related consolidated totals. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for EMS Technologies Canada, Ltd., is based solely on the report of the other auditors.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the report of the other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audits and the report of the other auditors, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of EMS Technologies, Inc. and subsidiaries as of December 31, 2002 and 2001, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 5 to the consolidated financial statements, the Company changed its method of accounting for goodwill and other intangible assets in 2002 and as discussed in Note 13, the Company changed its method of accounting for derivative instruments and hedging activities in 2001.

KPMG LLP

Atlanta, Georgia
February 20, 2003

44

EMS TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS