Ultralife Corporation Reports Second Quarter Results

Ultralife Corporation Reports Second Quarter Results

NEWARK, N.Y., Aug. 1, 2013 (GLOBE NEWSWIRE) -- Ultralife Corporation
(Nasdaq:ULBI) reported an operating loss from continuing operations of $1.9
million on revenue of $17.3 million for the quarter ended June 30, 2013. For
the second quarter of 2012, the company reported an operating loss from
continuing operations of $2.9 million on revenue of $18.7 million.

"Delays in closing several funded projects resulted in Communications Systems'
sales coming in below last year's second quarter, and the first quarter of
2013. These delays were the primary source of our second quarter operating
loss," said Michael D. Popielec, Ultralife's president and chief executive
officer. "Our strategy to widen the aperture of opportunities by investing in
new product development ahead of revenue generation has significantly
increased the dollar value of our sales funnel of large projects over the past
twelve months. However, the ongoing reductions in U.S. Department of Defense
spending have made the timing of converting these opportunities to sales more
difficult to predict. Since the end of the second quarter, approximately $3
million of the delayed orders have closed which illustrates this dynamic."

Popielec continued, "In Battery & Energy Products, our strategy to diversify
our customer base by investing in new products and sales resources and
penetrate new market segments is gradually bearing fruit. Sales increased over
the first quarter by 12% with new products accounting for 44% of second
quarter sales, and with sales to commercial customers accounting for 50% of
the mix. As the year-over-year decrease shrinks, we are starting to see
indications of revenue stabilization.

"Despite the second quarter operating loss, we maintained strict cash
management discipline such that we ended the quarter with $11.6 million of
cash on hand, our highest level in over five years, and no debt."

Second Quarter 2013 Financial Results

Discontinued operations for the second quarter of 2013 reflect the final
post-closing working capital adjustment relating to the sale transaction of
RedBlack in the third quarter of 2012.For the second quarter of 2012
discontinued operations include the operating results of RedBlack.All
revenue, gross margin and operating expense amounts presented below represent
results from continuing operations.

Revenue was $17.3 million, compared to $18.7 million for the second quarter of
2012, a 7.6% decline, reflecting a $0.9 million, or 5.6%, decrease in Battery
& Energy Products sales and a $0.6 million, or 17.6%, decrease in
Communications Systems sales. Battery & Energy Products sales were $14.7
million, compared to $15.5 million last year.The decrease resulted from lower
shipments of rechargeable batteries due to the timing of certain commercial
and international defense orders which have been shifted to the second half of
2013.The continued slowdown in U.S. government and defense order rate for
rechargeable and non-rechargeable batteries and charger systems also impacted
Battery & Energy Products sales.Communications Systems sales were $2.6
million, compared to $3.2 million for the same period last year reflecting
delays in finalizing several large, funded orders for amplifiers and new
products from U.S. and international defense customers.

Gross profit was $4.5 million, or 26.2% of revenue, compared to $4.5 million,
or 23.9% of revenue, for the same quarter a year ago. The 230 basis point
increase reflects favorable product mix of Communications Systems sales and
the impact of a rework reserve recorded in the year earlier period.Battery &
Energy Products' gross margin was 23.8%, compared to 24.2% last year, a
decrease of 40 basis points due primarily to lower overhead absorption on
sales volume declines. Communications Systems' gross margin was 39.3%, an
increase of 1,720 basis points over the 22.1% gross margin reported last year,
resulting from a stronger product mix, productivity improvements and the
recording of a reserve for approximately $0.2 million related to the request
by a strategically important customer to rework and upgrade certain McDowell
products.

Operating expenses decreased by $1.0 million, or 13.6%, to $6.4 million,
compared to $7.4 million a year ago, reflecting ongoing general &
administrative expense reductions and sharpened focus on research &
development offset by sales force increases. Despite the lower revenue,
operating expenses as a percent of revenue decreased from 39.6% for the year
earlier period to 37.0%.

Although gross margin improved by 230 basis points and operating expenses
decreased by 13.6%, the low sales volume resulted in an operating loss of $1.9
million.Compared to the second quarter of 2012, the net loss narrowed by $1.1
million due to the gross margin improvements and reductions in operating
expenses.

Net loss from continuing operations was $2.0 million, or $0.11 per share,
compared to a net loss of $3.2 million, or $0.18 per share, for the second
quarter of 2012.Net loss from discontinued operations was $0.1 million, or
$0.01 per share, for the second quarter of 2013 versus net income of $0.0
million, or $0.00 per share, for the second quarter of 2012.

Outlook

For 2013, although the Company's pending funded project pipelines remain
strong, given the slower than expected contracting rate for current U.S.
government and defense opportunities, management now expects an overall
year-over-year revenue decline in the range of 10% to 12%. Driven by the
potential for continued softness in government spending and contracting delays
for funded projects, management expects Battery & Energy Products' revenues to
decline in the range of 15% to 20% and Communication Systems' revenues to be
in the flat to low-single digit growth range for the full year. However, with
additional second half discretionary spending reductions and ongoing
productivity improvements, management still expects to be profitable for the
year and to generate a low-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.

Conference Call Information

Ultralife will hold its second 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 in the Events & Presentations section of the company's website at
http://investor.ultralifecorporation.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.

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.


ULTRALIFE CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Per Share Amounts)
(unaudited)
                                                               
                                                               
                                                      June 30,  December 31,
ASSETS                                               2013      2012
                                                               
Current assets:                                                 
Cash and cash equivalents                              $11,572 $10,078
Trade accounts receivable, net                         12,401   20,913
Inventories                                           31,021   30,370
Prepaid expenses and other current assets              2,183    2,461
Total current assets                                   57,177    63,822
                                                               
Property and equipment                                 11,249   12,415
                                                               
Other assets:                                                   
Goodwill, intangible and other assets                  22,709    21,481
                                                               
Total Assets                                           $91,135 $97,718
                                                               
LIABILITIES AND SHAREHOLDERS' EQUITY                            
                                                               
Current liabilities:                                            
Short-term debt and current portion of long-term debt $--    $--
Accounts payable                                       9,400    11,357
Other current liabilities                              4,976    8,535
Total current liabilities                              14,376    19,892
                                                               
Long-term liabilities:                                          
Other long-term liabilities                            4,493    4,370
                                                               
Shareholders' equity:                                           
Ultralife equity:                                               
Common stock, par value $0.10 per share                1,886     1,886
Capital in excess of par value                         174,233   173,791
Accumulated other comprehensive loss                   (599)     (620)
Accumulated deficit                                    (95,522)  (93,878)
                                                      79,998    81,179
Less -- Treasury stock, at cost                        7,658     7,658
Total Ultralife equity                                 72,340    73,521
Noncontrolling interest                                (74)     (65)
Total shareholders' equity                             72,266    73,456
                                                               
Total Liabilities and Shareholders' Equity             $91,135 $97,718
                                                               


ULTRALIFE CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands, Except Per Share Amounts)
(Unaudited)
                                                               
                           Three-Month Periods Ended Six-Month Periods Ended
                           June 30,      July 1,      June 30,    July 1,
                           2013          2012         2013        2012
                                                               
Revenues:                                                       
Battery & energy products   $14,656     $15,523    $27,709   $35,605
Communications systems      2,623        3,183       10,589     10,602
Total revenues              17,279        18,706       38,298      46,207
                                                               
Cost of products sold:                                          
Battery & energy products   11,166       11,760      21,119     27,899
Communications systems      1,591        2,479       6,278      7,248
Total cost of products sold 12,757       14,239      27,397     35,147
                                                               
Gross profit                4,522        4,467       10,901     11,060
                                                               
Operating expenses:                                             
Research and development    1,669        1,970       3,038      4,109
Selling, general, and       4,727        5,429       9,362      11,172
administrative
Total operating expenses    6,396        7,399       12,400     15,281
                                                               
Operating loss              (1,874)      (2,932)     (1,499)    (4,221)
                                                               
Other income (expense):                                         
Interest income             12           2           14         3
Interest expense            (43)         (115)       (133)      (219)
Miscellaneous               2            (20)        (23)       32
Loss from continuing
operations before income    (1,903)       (3,065)      (1,641)     (4,405)
taxes
                                                               
Income tax                  23           188         61         267
provision-current
Income tax provision        30           (17)        90         (5)
(benefit)-deferred
Total income taxes          53           171         151        262
                                                               
Net loss from continuing    (1,956)      (3,236)     (1,792)    (4,667)
operations
                                                               
Discontinued operations:                                        
Income (loss) from
discontinued operations,    (120)        49          144        (22)
net of tax
                                                               
Net loss                    (2,076)      (3,187)     (1,648)    (4,689)
                                                               
Net loss attributable to    3            20          9          20
noncontrolling interest
                                                               
Net loss attributable to    $(2,073)    $(3,167)   $(1,639)  $(4,669)
Ultralife
                                                               
Other comprehensive income                                      
(loss):
Foreign currency            148          (25)        21         123
translation adjustments
                                                               
Comprehensive loss          $(1,925)    $(3,192)   $(1,618)  $(4,546)
attributable to Ultralife
                                                               
                                                               
Net income (loss)
attributable to Ultralife                                       
common shareholders - basic
Continuing operations       $(0.11)     $(0.18)    $(0.10)   $(0.27)
Discontinued operations     $(0.01)     $0.00      $0.01     $(0.00)
Total                       $(0.12)     $(0.18)    $(0.09)   $(0.27)
Net income (loss)
attributable to Ultralife                                       
common shareholders -
diluted
Continuing operations       $(0.11)     $(0.18)    $(0.10)   $(0.27)
Discontinued operations     $(0.01)     $0.00      $0.01     $(0.00)
Total                       $(0.12)     $(0.18)    $(0.09)   $(0.27)
                                                               
                                                               
Weighted average shares     17,459       17,396      17,458     17,376
outstanding - basic
Weighted average shares     17,459       17,396      17,458     17,376
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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