Ultralife Corporation (NASDAQ: ULBI) reported operating income of $0.9 million on revenue of $38.5 million for the quarter ended March 28, 2010. For the first quarter of 2009, the company reported an operating loss of $2.3 million on revenue of $39.8 million.
Gross margin for the first quarter of 2010 was $9.8 million, or 25.3% of revenue, compared to $7.8 million, or 19.5% of revenue, for the same quarter a year ago, primarily reflecting improved manufacturing efficiencies in the company’s Battery & Energy Products segment and improved mix of high-margin communications systems revenue partially offset by a negative gross margin in the Energy Services segment. Operating expenses for the first quarter of 2010 totaled $8.9 million inclusive of $0.7 million of expenses for AMTI, which was acquired on March 20, 2009, compared to $10.0 million a year ago. Net income for the first quarter of 2010 was $0.3 million, or $0.02 per share, compared to a net loss of $2.5 million, or $0.15 per share, for the same quarter in 2009.
“Improving gross margin is a key goal for the company in 2010, and for the first quarter we delivered a six percentage point gain over last year’s first quarter. The investments we have made to improve manufacturing processes and move up the value chain from components to advanced batteries and communications systems with greater engineered content are yielding desired returns,” said John D. Kavazanjian, Ultralife’s president and chief executive officer. “While gross margin in our Energy Services segment continues to negatively impact the total company gross margin, we are starting to see evidence of a recovery in customer spending. This should alleviate project delays and pricing pressures that have weighed on the industry and the segment’s financial results.
“On the strength of gross margin gains and ongoing operating expense discipline, we generated positive operating cash flow for the quarter. Increased operating cash flow combined with improved working capital management strengthened the balance sheet, and we ended the quarter with an outstanding balance under our revolving credit facility of $8.0 million and $4.1 million of cash and cash equivalents on our balance sheet,” added Kavazanjian.