Ultralife Corporation Reports Third Quarter Results

Ultralife Corporation Reports Third Quarter Results

NEWARK, N.Y., Oct. 31, 2013 (GLOBE NEWSWIRE) -- Ultralife Corporation
(Nasdaq:ULBI) reported operating income from continuing operations of $0.7
million on revenue of $20.4 million for the quarter ended September 29, 2013.
For the third quarter of 2012, the company reported operating income from
continuing operations of $1.8 million on revenue of $26.2 million.

"On a sequential basis, revenue increased $3.1 million benefiting from closing
Communications Systems orders that had been delayed in the second quarter. As
a result of higher sales, improved gross margins and lower operating expenses,
we restored profitability this quarter improving operating income $2.5 million
from last quarter's operating loss," said Michael D. Popielec, Ultralife's
president and chief executive officer. "In the face of difficult market
conditions, we remain focused on protecting the P&L and maintaining a strong
balance sheet. On the strength of a $3.2 million inventory reduction, we ended
the quarter with a net cash balance of $10.8 million giving us ample liquidity
to support our growth initiatives."

Popielec continued, "Growing the top-line remains our highest priority. As we
expand our opportunities in commercial end markets, we are very encouraged by
the level of interest in the company's new products serving the medical cart
and emergency response markets. This validates our approach of leveraging our
proven military grade battery systems through multi-generational product
planning for use in applications in the commercial sector."

Third Quarter 2013 Financial Results

Discontinued operations reflect the operating results of RedBlack, which was
sold on September 28, 2012. All revenue, gross margin and operating expense
amounts presented below represent results from continuing operations.

Revenue was $20.4 million, compared to $26.2 million for the third quarter of
2012, a 22% decline. Battery & Energy Products sales declined by $3.1 million
to $13.5 million, primarily due to the continued slowdown in the government
and defense order rate for rechargeable and non-rechargeable batteries.
Communications Systems sales were $6.9 million, compared to $9.5 million for
the same period last year, a decrease of $2.7 million. Included in the prior
year Communications Systems' sales was $3.4 million related to the final
shipment of SATCOM systems units. Absent the SATCOM shipment, Communications
Systems sales increased 11% reflecting higher shipments of amplifiers to US
and international customers.

Gross profit was $6.1 million, or 30.1% of revenue, compared to $8.2 million,
or 31.4% of revenue, for the same quarter a year ago, a decrease of 130 basis
points. Battery & Energy Products' gross margin was 26.7%, compared to 28.7%
last year, a 200 basis point decrease reflecting lower overhead absorption as
a consequence of strict inventory control. Communications Systems' gross
margin was 36.9%, compared to 36.1% last year, an increase of 80 basis points
reflecting favorable mix.

Operating expenses declined $1.0 million or 15% to $5.5 million, compared to
$6.5 million a year ago, primarily due to reductions in general and
administrative expense and continued focus on controlling discretionary
spending. As a percent of revenue, operating expenses were 26.9%, compared to
24.7% a year ago.

Operating profit was $0.7 million, compared to $1.8 million for the same
period in 2012, reflecting lower gross profit including the impact of the
SATCOM shipment, partially offset by operating expense reductions. Operating
margin was 3.2%, compared to 6.7% for the year-earlier period.

Net income from continuing operations was $0.6 million, or $0.04 per share,
compared to net income of $1.5 million, or $0.09 per share, for the third
quarter of 2012. Net income from discontinued operations was $0.0 million, or
$0.00 per share, compared to $0.2 million, or $0.01 per share, for the same
quarter last year.

Outlook

For 2013, although the Company's pending project pipelines are growing, the
continuing U.S. Government budget challenges have muddled our predictability
of converting Communication Systems' sales opportunities in the timeframe
originally forecasted. Primarily for this reason, management now expects that
an overall year-over-year revenue decline could be approximately 20%, with
Communications Systems revenues down in a comparable range for the year versus
our prior expectations. Given the potential for reduced revenue, management
now expects to report operating results in the range of breakeven to a modest
operating loss for the year.

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: uncertain global economic conditions, increased competitive
environment and pricing pressures, disruptions related to restructuring
actions and delays. 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 third 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)
                                                                
                                                                
                                                   September 29, December 31,
ASSETS                                              2013          2012
                                                                
Current assets:                                                  
Cash and cash equivalents                           $10,785     $10,078
Trade accounts receivable, net                      15,571       20,913
Inventories                                         27,829       30,370
Prepaid expenses and other current assets           1,955        2,461
Total current assets                                56,140        63,822
                                                                
Property and equipment                              10,836       12,415
                                                                
Other assets:                                                    
Goodwill, intangible and other assets               21,699        21,481
                                                                
Total Assets                                        $88,675     $97,718
                                                                
LIABILITIES AND SHAREHOLDERS' EQUITY                             
                                                                
Current liabilities:                                             
Short-term debt and current portion of long-term    $--         $--
debt
Accounts payable                                    6,057        11,357
Other current liabilities                           5,026        8,535
Total current liabilities                           11,083        19,892
                                                                
Long-term liabilities:                                           
Other long-term liabilities                         4,357        4,370
                                                                
Shareholders' equity:                                            
Ultralife equity:                                                
Common stock, par value $0.10 per share             1,888         1,886
Capital in excess of par value                      174,541       173,791
Accumulated other comprehensive loss                (567)         (620)
Accumulated deficit                                 (94,873)      (93,878)
                                                   80,989        81,179
Less -- Treasury stock, at cost                     7,658         7,658
Total Ultralife equity                              73,331        73,521
Noncontrolling interest                             (96)         (65)
Total shareholders' equity                          73,235        73,456
                                                                
Total Liabilities and Shareholders' Equity          $88,675     $97,718


ULTRALIFE CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands, Except Per Share Amounts)
(Unaudited)
                                                        
                                                                         
                                                
                             Three Month Periods Nine Month Periods
                              Ended              Ended
                                                        
                             September September September September
                              29,       30,       29,       30,
                             2013      2012      2013      2012
                                                        
Revenues:                                                
Battery & energy products     $13,507 $16,633 $41,216 $52,238
Communications systems        6,854    9,548    17,443   20,150
Total revenues                20,361    26,181    58,659    72,388
                                                        
Cost of products sold:                                   
Battery & energy products     9,906    11,863   31,025   39,762
Communications systems        4,328    6,099    10,606   13,347
Total cost of products sold   14,234   17,962   41,631   53,109
                                                        
Gross profit                  6,127    8,219    17,028   19,279
                                                        
Operating expenses:                                      
Research and development      1,418    1,596    4,456    5,706
Selling, general, and         4,057    4,869    13,419   16,041
administrative
Total operating expenses      5,475    6,465    17,875   21,747
                                                        
Operating income (loss)       652      1,754    (847)    (2,468)
                                                        
Other income (expense):                                  
Interest income               13       1        27       4
Interest expense              (66)     (97)     (199)    (316)
Miscellaneous                 (8)      (15)     (31)     17
Income (loss) from continuing
operations before income      591       1,643     (1,050)   (2,763)
taxes
                                                        
Income tax provision          (19)     120      42       387
(benefit)-current
Income tax provision-deferred 3        55       93       50
Total income taxes            (16)     175      135      437
                                                        
Net income (loss) from        607      1,468    (1,185)  (3,200)
continuing operations
                                                        
Discontinued operations:                                 
Income from discontinued     15       200      159      178
operations, net of tax
                                                        
Net income (loss)             622      1,668    (1,026)  (3,022)
                                                        
Net loss attributable to      22       11       31       31
noncontrolling interest
                                                        
Net income (loss)             $644    $1,679  $(995)  $(2,991)
attributable to Ultralife
                                                        
Other comprehensive income                               
(loss):
Foreign currency translation 32       (204)    53       (81)
adjustments
                                                        
Comprehensive income (loss)
loss attributable to          $676    $1,475  $(942)  $(3,072)
Ultralife
                                                        
                                                        
Net income (loss)
attributable to Ultralife                                
common shareholders - basic
Continuing operations        $0.04   $0.09   $(0.07) $(0.18)
Discontinued operations      $0.00   $0.01   $0.01   $0.01
Total                        $0.04   $0.10   $(0.06) $(0.17)
Net income (loss)
attributable to Ultralife                                
common shareholders - diluted
Continuing operations        $0.04   $0.09   $(0.07) $(0.18)
Discontinued operations      $0.00   $0.01   $0.01   $0.01
Total                        $0.04   $0.10   $(0.06) $(0.17)
                                                        
                                                        
Weighted average shares       17,467   17,418   17,461   17,390
outstanding - basic
Weighted average shares       17,532   17,418   17,461   17,390
outstanding - diluted

CONTACT: Company Contact:
         Ultralife Corporation
         Philip Fain
         (315) 332-7100
         pfain@ulbi.com
        
         Investor Relations Contact:
         Lippert/Heilshorn & Associates
         Jody Burfening
         (212) 838-3777
         jburfening@lhai.com

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