Ultralife Corporation Reports Fourth Quarter Results

Ultralife Corporation Reports Fourth Quarter Results

NEWARK, N.Y., Feb. 14, 2013 (GLOBE NEWSWIRE) -- Ultralife Corporation
(Nasdaq:ULBI) reported an operating profit from continuing operations of $2.4
million on revenue of $29.3 million for the quarter ended December 31, 2012.
For the fourth quarter of 2011, the company reported operating income from
continuing operations of $1.8 million on revenue of $29.5 million.

"Ultralife's fourth quarter results demonstrate the earnings power of our
business model. Although revenue was flat year-over-year with a sizeable
increase in Communications Systems sales neutralized by ongoing weakness in
U.S. government spending for Battery & Energy Products, we generated gross
margin above 30% for the second consecutive quarter and operating margin of
8%, a 200 basis point improvement. We achieved these margin gains while
continuing to invest in sales and new product development. In addition, we
continued to drive working capital efficiency, generating free cash flow and
ending the year with cash of $10 million," said Michael D. Popielec,
Ultralife's president and chief executive officer.

"During 2013 we intend to further invest in new product development and
broadening our sales reach ahead of revenue generation, and funding these
investments through continued manufacturing productivity gains and reductions
in discretionary spending.With a significantly lower cost infrastructure, an
expanding set of global project opportunities for our new products and new
sales leadership, we are looking forward to the further operating leverage
revenue growth will bring," concluded Popielec.

Fourth Quarter 2012 Financial Results

During the quarter, management elected not to renew the lease for its U.K.
manufacturing facility which expires on March 24, 2013, and to relocate its
sales and services operations to a smaller facility.As a result of this
decision, Ultralife is required to restore the facility back to its original
condition per a previous contractual commitment.The estimated costs
associated with the restoration total approximately $950,000 of which $200,000
has been recorded in fourth quarter general & administrative expenses and
$750,000 has been recorded as discontinued operations.In addition, Ultralife
expects to realize net savings of approximately $500,000 on an annualized
basis beginning in the second quarter of 2013.

Discontinued operations for the fourth quarter of 2011 include the operating
results of RedBlack which was sold in the third quarter of 2012 and the final
costs associated with exiting the Energy Services business.

All revenue, gross margin and operating expense amounts presented below
represent results from continuing operations.

Revenue was $29.3 million, compared to $29.5 million for the fourth quarter of
2011, reflecting an increase of $4.8 million in Communications Systems sales
offset by a $5.0 million decrease in Battery & Energy Products sales.Battery
& Energy Products sales were $18.8 million, compared to $23.9 million last
year, a 21% decline, reflecting for the most part the continued slowdown in
the government and defense order rate for rechargeable and non-rechargeable
batteries. Communications Systems sales were $10.4 million, compared to $5.6
million for the same period last year, an increase of 85%, reflecting the
fulfillment of large orders for amplifiers from international defense
customers and continued demand for amplifiers from the U.S. military.New
business development during the year has resulted in an increased mix of sales
from international customers from 5% to 40% for Communications Systems.

Gross profit was $9.5 million, or 32.3% of revenue, compared to $8.9 million,
or 30.0% of revenue, for the same quarter a year ago, an increase of 230 basis
points primarily attributable to a higher mix of Communications Systems sales.
Battery & Energy Products' gross margin was 27.0%, compared to 29.1% last
year, a 210 basis point decrease due to lower sales volumes partially offset
by improved 9-volt margins.Communications Systems' gross margin was 41.9%, an
increase of 790 basis points over the 34.0% gross margin reported last year,
which resulted from higher volumes and favorable sales mix.

Operating expenses were $7.1 million, compared to $7.1 million a year ago,
reflecting lower discretionary spending and headcount reductions completed in
the first half of 2012 offset by increases in selling and new product
development expenses. Included in the 2012 operating expenses is a $200,000
charge related to the non-renewal of the company's U.K. lease described
above.As a percent of revenue, operating expenses were 24.3%, compared to
24.0% a year ago.

Although revenue was flat year-over-year for the fourth quarter, operating
income increased 32% to $2.4 million from $1.8 million on the strength of
gross margin gains.Likewise, operating margin was 8.0%, compared to 6.0% for
the year-earlier period, an increase of 200 basis points.

Net income from continuing operations was $2.1 million, or $0.12 per share,
compared to net income of $1.3 million, or $0.08 per share, for the fourth
quarter of 2011.Net loss from discontinued operations was $0.7 million, or
$0.04 per share, compared to a net income of $0.4 million, or $0.02 per share,
for the same quarter last year.

Outlook

For 2013, management expects low- to mid-single digit organic revenue growth
reflecting strong growth in Communications Systems sales and modest gains in
the Battery & Energy Products business, despite continued constraints on U.S.
government spending.Based on this outlook for revenue growth, ongoing
productivity improvements and plans to continue prudently investing in new
product development, management expects to increase operating profitability
for the year and to generate a mid-single digit operating margin.

Management cautions that the timing of orders and shipments may cause
variability in quarterly results.

About Ultralife Corporation

Ultralife Corporation serves its markets with products and services ranging
from portable 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 and Communications Systems. 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: potential reductions in U.S. military spending, uncertain global
economic conditions and acceptance of our new products on a global basis. 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 BALANCE SHEETS
(In Thousands, Except Per Share Amounts)
(unaudited)

                                                                
                                                    December 31, December 31,
ASSETS                                               2012         2011
                                                                
Current assets:                                                  
Cash and cash equivalents                            $10,078    $5,486
Trade accounts receivable, net                       20,913      19,903
Inventories                                         30,370      34,967
Prepaid expenses and other current assets            2,461       3,877
Total current assets                                 63,822       64,233
                                                                
Property and equipment                               12,415      12,588
                                                                
Other assets:                                                    
Goodwill, intangible and other assets                21,481       23,994
                                                                
Total Assets                                         $97,718    $100,815
                                                                
LIABILITIES AND SHAREHOLDERS' EQUITY                             
                                                                
Current liabilities:                                             
Short-term debt and current portion of long-term     $--       $--
debt
Accounts payable                                     11,357      13,766
Other current liabilities                            8,540       9,392
Total current liabilities                            19,897       23,158
                                                                
Long-term liabilities:                                           
Other long-term liabilities                          4,370       4,431
                                                                
Shareholders' equity:                                            
Ultralife equity:                                                
Common stock, par value $0.10 per share              1,886        1,874
Capital in excess of par value                       173,791      172,309
Accumulated other comprehensive loss                 (620)        (985)
Accumulated deficit                                  (93,883)     (92,280)
                                                    81,174       80,918
Less --- Treasury stock, at cost                     7,658        7,658
Total Ultralife equity                               73,516       73,260
Noncontrolling interest                              (65)        (34)
Total shareholders' equity                           73,451       73,226
                                                                
Total Liabilities and Shareholders' Equity           $97,718    $100,815



ULTRALIFE CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands, Except Per Share Amounts)
(Unaudited)

                                                              
                         Three-Month Periods       Twelve-Month Periods Ended
                          Ended
                         December 31, December 31, December 31,  December 31,
                         2012         2011         2012          2011
                                                              
Revenues:                                                      
Battery & energy products $18,846    $23,882    $71,084     $108,203
Communications systems    10,423      5,624       30,573       27,534
Total revenues            29,269       29,506       101,657       135,737
                                                              
Cost of products sold:                                         
Battery & energy products 13,760      16,936      53,522       83,034
Communications systems    6,058       3,713       19,405       18,512
Total cost of products    19,818      20,649      72,927       101,546
sold
                                                              
Gross profit              9,451       8,857       28,730       34,191
                                                              
Operating expenses:                                            
Research and development  1,511       1,680       7,216        8,593
Selling, general, and     5,587       5,401       21,628       23,186
administrative
Total operating expenses  7,098       7,081       28,844       31,779
                                                              
Operating income (loss)   2,353       1,776       (114)        2,412
                                                              
Other income (expense):                                        
Interest income           --          1           4            5
Interest expense          (124)       (115)       (440)        (559)
Miscellaneous             (41)        (168)       (24)         171
Income (loss) from
continuing operations     2,188        1,494        (574)         2,029
before income taxes
                                                              
Income tax                152         (101)       539          32
provision-current
Income tax provision -    (35)        297         15           448
deferred
Total income taxes        117         196         554          480
                                                              
Net income (loss) from    2,071       1,298       (1,128)      1,549
continuing operations
                                                              
Discontinued operations:                                       
Income (loss) from
discontinued operations,  (680)       440         (501)        (3,819)
net of tax
                                                              
Net income (loss)         1,391       1,738       (1,629)      (2,270)
                                                              
Net loss attributable to  --         19          31           58
noncontrolling interest
                                                              
Net income (loss)         $1,391     $1,757     $(1,598)    $(2,212)
attributable to Ultralife
                                                              
Other comprehensive                                            
income (loss):
Foreign currency          446         9           365          277
translation adjustments
                                                              
Comprehensive income
(loss) attributable to    $1,837     $1,766     $(1,233)    $(1,935)
Ultralife
                                                              
                                                              
Net income (loss)
attributable to Ultralife                                      
common shareholders -
basic
Continuing operations     $0.12      $0.08      $(0.06)     $0.09
Discontinued operations   $(0.04)    $0.02      $(0.03)     $(0.22)
Total                     $0.08      $0.10      $(0.09)     $(0.13)
Net income (loss)
attributable to Ultralife                                      
common shareholders -
diluted
Continuing operations     $0.12      $0.08      $(0.06)     $0.09
Discontinued operations   $(0.04)    $0.02      $(0.03)     $(0.22)
Total                     $0.08      $0.10      $(0.09)     $(0.13)
                                                              
Weighted average shares   17,443      17,331      17,403       17,304
outstanding - basic
Weighted average shares   17,443      17,347      17,403       17,336
outstanding - diluted

CONTACT: Company Contact:
         Ultralife Corporation
         Philip Fain
         (315) 210-6110
         pfain@ulbi.com
        
         Investor Relations Contact:
         Lippert/Heilshorn & Associates
         Jody Burfening
         (212) 838-3777
         jburfening@lhai.com

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