• Ultralife Corporation Reports Third Quarter Results

    Source: Nasdaq GlobeNewswire / 26 Oct 2023 07:00:00   America/New_York

    NEWARK, N.Y., Oct. 26, 2023 (GLOBE NEWSWIRE) -- Ultralife Corporation (NASDAQ: ULBI) reported operating results for the third quarter ended September 30, 2023 with the following highlights:

    • Sales of $39.5 million representing an 18.8% year-over-year increase
    • Operating income of $2.1 million versus a loss of $0.6 million for the 2022 third quarter
    • Adjusted EPS of $0.10 compared to a loss of $0.03 for the 2022 third quarter
    • Adjusted EBITDA of $3.5 million representing a 177.3% year-over-year increase
    • Backlog of $101.1 million exiting the 2023 third quarter

    “Driven by continuing strong demand from our government/defense and medical customers, sales grew 19% for both the 2023 third quarter and the first nine months to $39.5 million and $114.1 million, respectively, over the prior year periods. We continue to focus on recapturing gross margin through price realization, lean manufacturing initiatives and level-loaded production, which resulted in a year-over-year improvement in gross margin of 460 basis points to 24.8% for the third quarter. On the strength of higher sales, gross margin improvement and disciplined spending, operating profit of $2.1 million far exceeded the operating loss of $0.6 million from the year-earlier quarter. Finally, our efforts to strengthen our relationships with key customers using our global new product development resources are bearing fruit as we continue to sustain our backlog in excess of $100 million,” said Mike Manna, President and Chief Executive Officer. “As we close out 2023 with a strong backlog, we are well positioned to continue our profitable growth and to generate incremental cashflow to reduce our acquisition debt and further invest in our businesses, including new product development, strategic capital expenditures and accretive acquisitions.”

    Third Quarter 2023 Financial Results

    Revenue was $39.5 million, an increase of $6.3 million, or 18.8%, as compared to revenue of $33.2 million for the third quarter of 2022. Overall, government/defense sales increased 48.1% and commercial sales increased 5.6% over the 2022 period. Battery & Energy Products sales increased 11.7% to $31.9 million compared to $28.6 million last year, reflecting increases of 36.2% in government/defense sales and 37.9% in medical battery sales, partially offset by decreases of 1.8% in oil & gas market sales and 14.9% in other commercial sales. Communications Systems sales increased by 62.7% to $7.6 million compared to $4.7 million for the same period last year, primarily attributable to shipments of vehicle-amplifier adaptors to a global defense contractor for the U.S. Army and of integrated systems of amplifiers and radio vehicle mounts to a major international defense contractor under an ongoing allied country government/defense modernization program. Our total backlog exiting the 2023 third quarter was $101.1 million with over $35 million of the total backlog due to ship over the remaining three months of 2023.

    Gross profit was $9.8 million, or 24.8% of revenue, compared to $6.7 million, or 20.2% of revenue, for the same quarter a year ago. Battery & Energy Products gross margin was 24.2%, compared to 18.7% last year, primarily due to more efficiencies and higher cost absorption resulting from a concerted effort to level-load production more evenly across the 2023 quarter, as well as improved price realization. Communications Systems gross margin was 27.0% compared to 29.5% last year, primarily due to inefficiencies caused by component delays from suppliers, partially offset by higher factory volume.

    Operating expenses were $7.6 million, compared to $7.3 million for the 2022 third quarter. Operating expenses were 19.3% of revenue compared to 22.0% of revenue for the year-earlier period.

    The combination of higher gross profit and leveraging of operating expenses resulted in a $2.7 million increase in operating income to $2.1 million from an operating loss of $0.6 million last year.

    Net income was $1.3 million or $0.08 per diluted share on a GAAP basis, compared to a net loss of $0.2 million or $0.01 per diluted share for the third quarter of 2022. Adjusted EPS was $0.10 on a diluted basis for the third quarter of 2023, compared to a loss of $0.03 for the 2022 period. Adjusted EPS excludes the provision for deferred taxes of $0.4 million which primarily represents non-cash charges for U.S. taxes which we expect will be fully offset by net operating loss carryforwards and other tax credits for the foreseeable future.

    Adjusted EBITDA, defined as EBITDA including non-cash, stock-based compensation expense, was $3.5 million for the third quarter of 2023, or 8.8% of sales, compared to $1.3 million, or 3.8% of sales, for the year-earlier period.

    See the “Non-GAAP Financial Measures” section of this release for a reconciliation of adjusted EPS to EPS and adjusted EBITDA to net income attributable to Ultralife Corporation.

    About Ultralife Corporation

    Ultralife Corporation serves its markets with products and services ranging from 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.ultralifecorporation.com.

    Conference Call Information

    Ultralife will hold its third quarter earnings conference call today at 8:30 AM ET.

    To ensure a fast and reliable connection to our investor conference call, we now require participants dialing in by phone to register using the following link prior to the call: https://register.vevent.com/register/BI7f14d2264d2242c1adb217d21d75ab21. This will eliminate the need to speak with an operator. Once registered, dial-in information will be provided along with a personal identification number. Should you register early and misplace your details, you can simply click back on this same link at any time to register and view this information again. A live webcast of the conference call will be available to investors in the Events & Presentations section of the Company's website at http://investor.ultralifecorporation.com. For those who cannot listen to the live broadcast, 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 the impact of COVID-19 and related supply chain disruptions, potential reductions in revenues from key customers, acceptance of our new products on a global basis and uncertain global economic conditions. 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 AND SUBSIDIARIES
    CONSOLIDATED BALANCE SHEETS

    (Dollars in Thousands)
    (Unaudited)
        
    ASSETS
        
     September 30,
    2023
     December 31,
    2022
    Current Assets:   
    Cash$9,301  $5,713 
    Trade Accounts Receivable, Net 27,189   27,779 
    Inventories, Net 46,634   41,192 
    Prepaid Expenses and Other Current Assets 6,429   4,304 
    Total Current Assets 89,553   78,988 
        
    Property, Plant and Equipment, Net 21,166   21,716 
    Goodwill 37,357   37,428 
    Other Intangible Assets, Net 15,270   15,921 
    Deferred Income Taxes, Net 10,728   12,069 
    Other Non-Current Assets 2,035   2,308 
    Total Assets$176,109  $168,430 
         
    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current Liabilities:   
    Accounts Payable$13,470  $16,074 
    Current Portion of Long-Term Debt 2,000   2,000 
    Accrued Compensation and Related Benefits 2,467   2,890 
    Accrued Expenses and Other Current Liabilities 8,449   7,949 
    Total Current Liabilities 26,386   28,913 
    Long-Term Debt, Net 24,108   19,310 
    Deferred Income Taxes 1,825   1,917 
    Other Non-Current Liabilities 2,032   1,887 
    Total Liabilities 54,351   52,027 
        
    Shareholders' Equity:   
    Common Stock 2,075   2,057 
    Capital in Excess of Par Value 188,852   187,405 
    Accumulated Deficit (43,627)   (47,951) 
    Accumulated Other Comprehensive Loss (4,176)   (3,750) 
    Treasury Stock (21,484)   (21,484) 
    Total Ultralife Equity 121,640   116,277 
    Non-Controlling Interest 118   126 
    Total Shareholders’ Equity 121,758   116,403 
        
    Total Liabilities and Shareholders' Equity$176,109  $168,430 

                                                                            


    ULTRALIFE CORPORATION AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF INCOME
    (In Thousands Except Per Share Amounts)
    (Unaudited)

            
     Three-Month Period Ended Nine-Month Period Ended
     September 
    30,
     September
    30,
     September
    30,
     September 
    30,
      2023   2022   2023   2022 
    Revenues:       
    Battery & Energy Products$31,919  $28,583  $94,250  $87,873 
    Communications Systems 7,569   4,651   19,846   7,860 
    Total Revenues 39,488   33,234   114,096   95,733 
            
    Cost of Products Sold:       
    Battery & Energy Products 24,191   23,238   72,467   68,656 
    Communications Systems 5,523   3,281   13,831   5,758 
    Total Cost of Products Sold 29,714   26,519   86,298   74,414 
            
    Gross Profit 9,774   6,715   27,798   21,319 
            
    Operating Expenses:       
    Research and Development 1,869   1,896   5,679   5,425 
    Selling, General and Administrative 5,770   5,405   16,293   15,982 
    Total Operating Expenses 7,639   7,301   21,972   21,407 
            
    Operating Income (Loss) 2,135   (586)   5,826   (88) 
            
    Other Income (Expense) (386)   254   178   22 
    Income (Loss) Before Income Taxes 1,749   (332)   6,004   (66)
     
            
    Income Tax Provision (Benefit) 446   (90)   1,688   (171) 
            
    Net Income (Loss) 1,303   (242)   4,316   105 
            
    Net (Loss) Income Attributable to Non-Controlling Interest (27)   (3)   (8)   - 
            
    Net Income (Loss) Attributable to Ultralife Corporation$1,330   ($239)  $4,324  $105 
            
            
    Net Income (Loss) Per Share Attributable to Ultralife Common Shareholders – Basic$.08 ($.01) $.27 $.01
            
    Net Income (Loss) Per Share Attributable to Ultralife Common Shareholders – Diluted$.08 ($.01) $.27 $.01
            
    Weighted Average Shares Outstanding – Basic 16,238   16,133   16,172   16,122 
            
    Weighted Average Shares Outstanding – Diluted 16,303   16,133   16,174   16,144 


    Non-GAAP Financial Measures


    Adjusted EBITDA

    In evaluating our business, we consider and use adjusted EBITDA, a non-GAAP financial measure, as a supplemental measure of our operating performance in addition to U.S. Generally Accepted Accounting Principles (“GAAP”) financial measures. We define adjusted EBITDA as net income attributable to Ultralife Corporation before net interest expense, provision (benefit) for income taxes, depreciation and amortization, and stock-based compensation expense, plus/minus expense/income that we do not consider reflective of our ongoing continuing operations. We reconcile adjusted EBITDA to net income attributable to Ultralife Corporation, the most comparable financial measure under GAAP. Neither current nor potential investors in our securities should rely on adjusted EBITDA as a substitute for any GAAP measures and we encourage investors to review the following reconciliation of adjusted EBITDA to net income attributable to Ultralife Corporation.

     
    ULTRALIFE CORPORATION AND SUBSIDIARIES
    CALCULATION OF ADJUSTED EBITDA
    (Dollars in Thousands)
    (Unaudited)


     Three-Month Period Ended Nine-Month Period Ended
     September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022
            
    Net Income (Loss) Attributable to Ultralife Corporation$1,330 ($239) $4,324 $105
    Adjustments:       
    Interest Expense, Net586 272 1,450 583
    Income Tax Provision (Benefit)446 (90) 1,688 (171)
    Depreciation Expense760 815 2,282 2,450
    Amortization Expense227 318 663 969
    Stock-Based Compensation Expense131 179 424 552
    Cyber-Insurance Policy Deductible- - 100 -
    Non-Cash Purchase Accounting Adjustment- - - 55
    Adjusted EBITDA$3,480 $1,255 $10,931 $4,543


    Adjusted Earnings Per Share

    In evaluating our business, we consider and use adjusted EPS, a non-GAAP financial measure, as a supplemental measure of our business performance. We define adjusted EPS as net income attributable to Ultralife Corporation excluding the provision (benefit) for deferred income taxes divided by our weighted average shares outstanding on both a basic and diluted basis. We believe that this information is useful in providing period-to-period comparisons of our results by reflecting the portion of our tax provision that we expect will be predominantly offset by our U.S. net operating loss carryforwards and other tax credits for the foreseeable future. We reconcile adjusted EPS to EPS, the most comparable financial measure under GAAP. Neither current nor potential investors in our securities should rely on adjusted EPS as a substitute for any GAAP measures and we encourage investors to review the following reconciliation of adjusted EPS to EPS and net income attributable to Ultralife Corporation.

     
    ULTRALIFE CORPORATION AND SUBSIDIARIES
    CALCULATION OF ADJUSTED EPS
    (In Thousands Except Per Share Amounts)
    (Unaudited)


     Three-Month Period Ended
     September 30, 2023 September 30, 2022
     Amount Per Basic Share Per Diluted Share Amount Per Basic Share Per Diluted Share
    Net Income (Loss)$1,330 $.08 $.08 ($239) ($.01) ($.01)
    Attributable to Ultralife Corporation           
    Deferred Tax Provision (Benefit)357 .02 .02 ( 308) (.02) (.02)
    Adjusted Net Income (Loss)$1,687 $.10 $.10 ($547) ($.03) ($.03)
                
    Weighted Average Shares Outstanding  16,238 16,303   16,133 16,133
                


     Nine-Month Period Ended
     September 30, 2023 September 30, 2022
     Amount Per Basic Share Per Diluted Share Amount Per Basic Share Per Diluted Share
    Net Income Attributable to Ultralife Corporation$4,324 $.27 $.27 $105 $.01 $.01
    Deferred Tax Provision (Benefit)1,245 .07 .07 (683) (.05) (.05)
    Adjusted Net Income (Loss)$5,569 $.34 $.34 ($578) ($.04) ($.04)
                
    Weighted Average Shares Outstanding  16,172 16,174   16,122 16,144
                


      
    Company Contact:   Investor Relations Contact:
    Ultralife CorporationLHA
    Philip A. Fain   Jody Burfening
    (315) 210-6110   (212) 838-3777
    pfain@ulbi.com jburfening@lhai.com 

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