Ultralife Corporation Reports Fourth Quarter Results

Ultralife Corporation (NASDAQ: ULBI) reported operating income of $1.9 million, excluding a previously disclosed $13.8 million non-cash asset impairment charge, on revenue of $49.8 million for the quarter ended December 31, 2010. For the fourth quarter of 2009, the company reported operating income of $1.6 million on revenue of $50.4 million.

Gross profit for the fourth quarter of 2010 was $12.5 million, or 25.2% of revenue, compared to $11.9 million, or 23.7% of revenue, for the same quarter a year ago, reflecting a favorable mix of high-margin products and improved manufacturing efficiencies.

Operating expenses for the fourth quarter of 2010 totaled $24.4 million compared to $10.3 million a year ago. Included in operating expenses for the fourth quarter of 2010 was a $13.8 million non-cash asset impairment charge and certain one-time expenses. As a result, the company reported a net loss of $11.0 million, or $0.64 per share, for the fourth quarter of 2010, compared to net income of $0.8 million, or $0.05 per share, for the same quarter in 2009.

For the fiscal year ended December 31, 2010 revenue was $178.6 million, compared to $172.1 million for the same period a year ago. The operating loss for fiscal year 2010 was $5.9 million, including the above-mentioned asset impairment charge, compared to an operating loss of $7.4 million for fiscal year 2009. Net loss was $6.2 million for fiscal year 2010, or $0.36 per share, compared to a net loss of $9.2 million, or $0.54 per share, for the same period a year ago.

“Ultralife’s fourth quarter results build on the third quarter’s strong performance and cap a year of across-the-board operational and margin improvements, which resulted in a much stronger balance sheet,” said Michael D. Popielec, Ultralife’s president and chief executive officer.

“Revenue for the quarter illustrates the benefits of our diversified mix of military and commercial, domestic and international businesses,” added Popielec. “Benchmarked against last year, revenue for this year’s fourth quarter masks a 37% gain in Battery & Energy Products revenue, which was driven by sales increases across our portfolio of rechargeable and non-rechargeable batteries and occurred even without shipments for standard batteries to the U.S. Defense Logistics Agency. In Communications Systems, continued increasing demand for our amplifiers and chargers among allied militaries was more than offset by lower levels of shipments of SATCOM compared to last year’s fourth quarter. Finally, Energy Services revenue benefited from increased wireless tower business.

“As we enter 2011, we are leveraging the new products introduced and market opportunities created in 2010 to further drive profitable growth,” concluded Popielec. “Demand remains strong, particularly from allied militaries and in under-penetrated international commercial markets. Successful penetration of new markets and continued new product development will position the company for sustained revenue and earnings growth in the future.”

Outlook

Management expects year-over-year revenue growth of between 4% and 5% in 2011, taking into account lower than anticipated shipments of SATCOM units. Operating income growth is expected to significantly outpace revenue growth, adjusting for the $13.8 million non-cash impairment charge recorded in 2010. Driving the earnings leverage is the carryover of the cost actions taken previously and the implementation of Lean initiatives in 2011. Management cautions that the timing of orders and shipments may cause 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.

Headquartered in Newark, New York, the company’s business segments include: Battery & Energy Products, Communications Systems and Energy Services. Ultralife has operations 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 fourth 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 Twelve-Month Periods Ended
 
December 31, December 31, December 31, December 31,
  2010     2009     2010     2009  
 
Revenues:
Battery & energy products $ 28,203 $ 20,538 $ 94,643 $ 93,973
Communications systems 17,688 26,472 72,176 60,322
Energy services   3,874     3,340     11,758     17,814  
Total revenues 49,765 50,350 178,577 172,109
 
Cost of products sold:
Battery & energy products 21,032 16,411 72,990 76,494
Communications systems 12,173 18,852 47,173 42,492
Energy services   4,041     3,152     11,845     16,263  
Total cost of products sold   37,246     38,415     132,008     135,249  
 
Gross margin 12,519 11,935 46,569 36,860
 
Operating expenses:
Research and development 2,575 2,298 8,817 9,540
Selling, general, and administrative 8,013 8,013 29,840 34,682
Impairment of goodwill and long-lived assets   13,793     -     13,793     -  
Total operating expenses   24,381     10,311     52,450     44,222  
 
Operating income (loss) (11,862 ) 1,624 (5,881 ) (7,362 )
 
Other income (expense):
Interest income - 7 2 27
Interest expense (199 ) (490 ) (1,171 ) (1,492 )
Miscellaneous   (199 )   (165 )   171     (13 )
Income (loss) before income taxes   (12,260 )   976     (6,879 )   (8,840 )
 
Income tax provision (benefit)-current (719 ) 12 (555 ) 31
Income tax provision (benefit)-deferred   (521 )   88     (115 )   360  
Total income taxes   (1,240 )   100     (670 )   391  
 
Net income (loss) (11,020 ) 876 (6,209 ) (9,231 )
 
Net (income) loss attributable to noncontrolling interest   8     (36 )   30     (10 )
 
Net income (loss) attributable to Ultralife $ (11,012 ) $ 840   $ (6,179 ) $ (9,241 )
 
 
Net income (loss) attributable to Ultralife common shareholders - basic $ (0.64 ) $ 0.05   $ (0.36 ) $ (0.54 )
Net income (loss) attributable to Ultralife common shareholders - diluted $ (0.64 ) $ 0.05   $ (0.36 ) $ (0.54 )
 
 
Weighted average shares outstanding - basic   17,242     16,960     17,157     16,989  
Weighted average shares outstanding - diluted   17,242     16,963     17,157     16,989  
 
ULTRALIFE CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Per Share Amounts)
(unaudited)
 
 
December 31, December 31,
ASSETS

2010

2009
 
Current assets:
Cash and cash equivalents $ 5,105 $ 6,094
Trade accounts receivable, net 34,270 32,449
Inventories 33,122 35,503
Prepaid expenses and other current assets   3,157     1,912  
Total current assets 75,654 75,958
 
Property and equipment 14,485 16,648
 
Other assets
Goodwill, intangible and other assets   24,696     38,560  
 
Total Assets $ 114,835   $ 131,166  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
Current liabilities:
Short-term debt and current portion of long-term debt $ 8,717 $ 19,082
Accounts payable 16,409 19,177
Other current liabilities   11,219     9,875  
Total current liabilities   36,345     48,134  
 
Long-term liabilities:
Long-term debt and capital lease obligations 251 267
Other long-term liabilities   4,444     4,651  
Total long-term liabilities   4,695     4,918  
 
 
 
Shareholders' equity:
Ultralife equity:
Common stock, par value $0.10 per share 1,865 1,831
Capital in excess of par value 171,020 169,064
Accumulated other comprehensive loss (1,262 ) (1,256 )
Accumulated deficit   (90,200 )   (84,021 )
81,423 85,618
Less -- Treasury stock, at cost   7,652     7,558  
Total Ultralife equity 73,771 78,060
Noncontrolling interest   24     54  
Total shareholders' equity   73,795     78,114  
 
Total Liabilities and Shareholders' Equity $ 114,835   $ 131,166  

Copyright Business Wire 2010

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