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.

“Business conditions are steadily improving, particularly for our battery and energy products, creating more opportunities for us to further penetrate international markets. In addition, demand for our advanced communications systems remains robust,” concluded Kavazanjian. “During the rest of 2010, we plan to increase research and development activities while holding quarterly operating expenses under $10 million. Above all, we remain keenly focused on delivering incremental returns on increased revenue.”

Outlook

The company’s 2010 operating plan calls for the company to generate revenue of $177 million and operating income of approximately $4.6 million on this base business. Management cautions that the timing of orders and shipments may cause some variability in quarterly results.

About Ultralife Corporation

Ultralife Corporation, which began as a battery company, serves its markets with products and services ranging from portable and standby power solutions to communications and electronics systems. Through its engineering and collaborative approach to problem solving, Ultralife serves government, defense and commercial customers across the globe.

Ultralife’s family of brands includes: Ultralife Batteries, Stationary Power Services, RPS Power Systems, ABLE, McDowell Research, RedBlack Communications and AMTI. Ultralife’s operations are in North America, Europe and Asia. For more information, visit www.ultralifecorp.com.

This press release may contain forward-looking statements based on current expectations that involve a number of risks and uncertainties. The potential risks and uncertainties that could cause actual results to differ materially include: worsening global economic conditions, increased competitive environment and pricing pressures, and the possibility of intangible asset impairment charges that may be taken should management decide to retire one or more of the brands of acquired companies. The Company cautions investors not to place undue reliance on forward-looking statements, which reflect the Company’s analysis only as of today’s date. The Company undertakes no obligation to publicly update forward-looking statements to reflect subsequent events or circumstances. Further information on these factors and other factors that could affect Ultralife's financial results is included in Ultralife's Securities and Exchange Commission (SEC) filings, including the latest Annual Report on Form 10-K.

Conference Call Information

Ultralife will hold its first quarter earnings conference call today at 10:00 AM ET. To participate, please call (800) 915-4836, identify yourself and ask for the Ultralife call. The conference call will also be broadcast live over the Internet at http://investor.ultralifecorp.com. To listen to the call, please go to the web site at least fifteen minutes early to download and install any necessary audio software. For those who cannot listen to the live webcast, a replay of the webcast will be available shortly after the call at the same location.
     
ULTRALIFE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
(Unaudited)
           
 
Three-Month Periods Ended
 
March 28, March 29,

2010

2009
 
Revenues:
Battery & energy products $ 23,403 $ 22,992
Communications systems 13,066 11,265
Energy services   2,038     5,546  
Total revenues 38,507 39,803
 
Cost of products sold:
Battery & energy products 18,467 19,192
Communications systems 8,163 7,649
Energy services   2,119     5,181  
Total cost of products sold   28,749     32,022  
 
Gross margin 9,758 7,781
 
Operating expenses:
Research and development 1,728 1,980
Selling, general, and administrative   7,176     8,058  
Total operating expenses   8,904     10,038  
 
Operating income (loss) 854 (2,257 )
 
Other income (expense):
Interest income 3 3
Interest expense (497 ) (182 )
Miscellaneous   41     11  
Income (loss) before income taxes   401     (2,425 )
 
Income tax provision-current 24 2
Income tax provision-deferred   81     89  
Total income taxes   105     91  
 
Net income (loss) 296 (2,516 )
 
Net (income) loss attributable to noncontrolling interest   (9 )   4  
 
Net income (loss) attributable to Ultralife $ 287   $ (2,512 )
 
 
Net income (loss) attributable to Ultralife common shareholders - basic $ 0.02   $ (0.15 )

Net income (loss) attributable to Ultralife common shareholders - diluted
$ 0.02   $ (0.15 )
 
 
Weighted average shares outstanding - basic   16,995     17,115  
Weighted average shares outstanding - diluted   16,999     17,115  
 

ULTRALIFE CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Per Share Amounts)
(unaudited)
     
 
March 28, December 31,
ASSETS

2010

2009
 
Current assets:
Cash and cash equivalents $ 4,147 $ 6,094
Trade accounts receivable, net 26,264 32,449
Inventories 34,009 35,503
Prepaid expenses and other current assets   2,136     1,912  
Total current assets 66,556 75,958
 
Property and equipment 15,879 16,648
 
Other assets
Goodwill, intangible and other assets   38,251     38,560  
 
Total Assets $ 120,686   $ 131,166  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
Current liabilities:
Short-term debt and current portion of long-term debt $ 11,502 $ 19,082
Accounts payable 14,622 19,177
Other current liabilities   11,218     9,875  
Total current liabilities   37,342     48,134  
 
Long-term liabilities:
Long-term debt and capital lease obligations 225 267
Other long-term liabilities   4,722     4,651  
Total long-term liabilities   4,947     4,918  
 
 
 
Shareholders' equity:
Ultralife equity:
Common stock, par value $0.10 per share 1,839 1,831
Capital in excess of par value 169,377 169,064
Accumulated other comprehensive loss (1,590 ) (1,256 )
Accumulated deficit   (83,734 )   (84,021 )
85,892 85,618
Less -- Treasury stock, at cost   7,558     7,558  
Total Ultralife equity 78,334 78,060
Noncontrolling interest   63     54  
Total shareholders' equity   78,397     78,114  
 
Total Liabilities and Shareholders' Equity $ 120,686   $ 131,166  

Copyright Business Wire 2010

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