Ultralife (ULBI) 10-Q 30 Jul 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Jun. 28, 2015	Jul. 29, 2015
Document And Entity Information
Entity Registrant Name	Ultralife Corporation
Entity Central Index Key	875,657
Document Type	10-Q
Document Period End Date	Jun. 28, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	No
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		15,642,015
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,015

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Jun. 28, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 15,789,000	$ 17,711,000
Restricted cash	143,000	155,000
Trade accounts receivable, net of allowance for doubtful account	11,293,000	11,295,000
Inventories, net	24,000,000	26,086,000
Prepaid expenses and other current assets	1,122,000	1,313,000
Due from insurance company	184,000	184,000
Deferred income taxes	106,000	106,000
Total current assets	52,637,000	56,850,000
Property, equipment and improvements, net	9,501,000	9,812,000
Goodwill	16,427,000	16,407,000
Other intangible assets, net	4,219,000	4,338,000
Security deposits and other non-current assets	151,000	235,000
Total assets	82,935,000	87,642,000
Current liabilities:
Accounts payable	6,353,000	6,996,000
Accrued compensation and related benefits	2,388,000	1,725,000
Accrued expenses and other current liabilities	1,738,000	2,421,000
Accrued income taxes	127,000	69,000
Total current liabilities	10,606,000	11,211,000
Deferred income taxes	4,572,000	4,462,000
Other non-current liabilities	56,000	56,000
Total liabilities	15,234,000	15,729,000
Shareholders' equity:
Preferred stock - par value $.10 per share; authorized 1,000,000 shares; none issued	0	0
Common stock - par value $.10 per share; authorized 40,000,000 shares; issued - 18,974,211 shares at June 28, 2015 and 18,941,544 shares at December 31, 2014	1,897,000	1,894,000
Capital in excess of par value	176,249,000	175,940,000
Accumulated deficit	(95,599,000)	(96,920,000)
Accumulated other comprehensive loss	(401,000)	(467,000)
Treasury stock - at cost; 3,090,225 shares at June 28, 2015 and 1,600,731 shares at December 31, 2014	(14,307,000)	(8,420,000)
Total Ultralife equity	67,839,000	72,027,000
Noncontrolling interest	(138,000)	(114,000)
Total shareholders' equity	67,701,000	71,913,000
Total liabiltiies and shareholders' equity	$ 82,935,000	$ 87,642,000

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	Jun. 28, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Trade accounts receivable allowance for doubtful accounts	$ 333,000	$ 340,000
Preferred stock - par value (in dollars per share)	$ 0.10	$ 0.10
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Common stock, par value (in dollars per share)	$ 0.10	$ 0.10
Common stock, shares authorized	40,000,000	40,000,000
Common stock, shares issued	18,974,211	18,941,544
Treasury stock shares	3,090,225	1,600,731

Consolidated Statements of Oper

Consolidated Statements of Operations and Comprehensive (Loss) Income (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 28, 2015	Jun. 29, 2014	Jun. 28, 2015	Jun. 29, 2014
Income Statement [Abstract]
Revenues	$ 18,955,000	$ 15,199,000	$ 38,132,000	$ 30,484,000
Cost of products sold	13,096,000	10,987,000	26,266,000	21,937,000
Gross profit	5,859,000	4,212,000	11,866,000	8,547,000
Operating expenses:
Research and development	1,334,000	1,560,000	2,693,000	2,996,000
Selling, general and administrative	3,708,000	3,976,000	7,534,000	7,971,000
Total operating expenses	5,042,000	5,536,000	10,227,000	10,967,000
Operating income (loss)	817,000	(1,324,000)	1,639,000	(2,420,000)
Other (expense) income:
Interest income	1,000	0	2,000	9,000
Interest and financing expense	(65,000)	(41,000)	(132,000)	(97,000)
Miscellaneous	92,000	46,000	(30,000)	30,000
Income (Loss) from continuing operations before income taxes	845,000	(1,319,000)	1,479,000	(2,478,000)
Income tax provision	71,000	57,000	182,000	117,000
Net income (loss) from continuing operations	774,000	(1,376,000)	1,297,000	(2,595,000)
Income (loss) from discontinued operations, net of tax	0	0	0	(61,000)
Net Income (loss)	774,000	(1,376,000)	1,297,000	(2,656,000)
Net loss attributable to noncontrolling interest	14,000	16,000	24,000	10,000
Net Income (loss) attributable to Ultralife	788,000	(1,360,000)	1,321,000	(2,646,000)
Other comprehensive income:
Foreign currency translation adjustments	44,000	69,000	66,000	135,000
Comprehensive loss attributable to Ultralife	$ 832,000	$ (1,291,000)	$ 1,387,000	$ (2,511,000)
Net income (loss) per share attributable to Ultralife common shareholders - Basic:
Continuing operations (in dollars per share)	$ .05	$ (.08)	$ .08	$ (.15)
Discontinued operations (in dollars per share)	0	0	0	0
Total (in dollars per share)	.05	(.08)	0.08	$ (0.15)
Net income per share attributable to Ultralife common shareholders - Diluted:
Continuing operations (in dollars per share)	.05	(0.08)	.08
Discontinued operations (in dollars per share)	0	0	0
Total (in dollars per share)	$ .05	$ (0.08)	$ .08
Weighted average shares outstanding - basic	16,557,000	17,533,000	16,945,000	17,523,000
Potential common shares	40,000	0	32,000	0
Weighted average shares outstanding - diluted	16,597,000		16,977,000

Condensed Consolidated Statemen

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 28, 2015	Jun. 29, 2014
OPERATING ACTIVITIES:
Net (loss) income	$ 1,297,000	$ (2,656,000)
Loss (gain) from discontinued operations, net of tax	0	61,000
Depreciation and amortization of financing fees	1,196,000	1,501,000
Amortization of intangible assets	119,000	154,000
Loss on long-lived asset impairment'	36,000	0
Foreign exchange loss	0	0
Stock-based compensation	304,000	483,000
Changes in deferred income taxes	110,000	110,000
Changes in operating assets and liabilities:
Accounts receivable	22,000	4,128,000
Inventories	2,331,000	(1,042,000)
Prepaid expenses and other assets	193,000	313,000
Accounts payable and other liabilities	(863,000)	(2,066,000)
Net cash provided by (used in) operating activities	4,745,000	986,000
INVESTING ACTIVITIES:
Cash paid for property, equipment and improvements	(884,000)	(398,000)
Change in restricted cash	12,000	0
Net cash used in investing activities	(872,000)	(398,000)
FINANCING ACTIVITIES:
Cash paid to repurchase treasury stock	(5,887,000)	(39,000)
Proceeds from the issuance of common stock	8,000	11,000
Return of security deposit	66,000	0
Net cash (used in) provided by financing activities	(5,813,000)	(28,000)
Effect of exchange rate changes on cash and cash equivalents	18,000	111,000
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(1,922,000)	671,000
Cash and cash equivalents, beginning of period	17,711,000	16,489,000
Cash and cash equivalents, end of period	$ 15,789,000	$ 17,160,000

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($)	6 Months Ended
	Jun. 28, 2015	Jun. 29, 2014
Statement of Cash Flows [Abstract]
Construction in progress included in accounts payable	$ 0	$ 790,000

Note 1 - Basis of Presentation

Note 1 - Basis of Presentation	6 Months Ended
	Jun. 28, 2015
Note 1 - Basis Of Presentation
Basis of Presentation	1. BASIS OF PRESENTATION The accompanying unaudited Condensed Consolidated Financial Statements of Ultralife Corporation (the “Company”) and subsidiaries have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals and adjustments) considered necessary for a fair presentation of the Condensed Consolidated Financial Statements have been included. Results for interim periods should not be considered indicative of results to be expected for a full year. Reference should be made to the Consolidated Financial Statements and related notes thereto contained in our Form 10-K for the year ended December 31, 2014. The December 31, 2014 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. Certain items previously reported in specific financial statement captions have been reclassified to conform to the current presentation. Our quarters end on the last Sunday of the third month in the quarter, as opposed to a calendar month-based cycle for each fiscal quarter. While the actual dates for the quarter-ends will change slightly each year, we believe that there are not any material differences when making quarterly comparisons.

Note 2 - Share Repurchase Progr

Note 2 - Share Repurchase Program	6 Months Ended
	Jun. 28, 2015
Note 2 - Share Repurchase Program
Share Repurchase Program	2. SHARE REPURCHASE PROGRAM On April 28, 2014, the Company’s Board of Directors approved a share repurchase program (the “Share Repurchase Program”) which became effective on May 1, 2014, under which the Company was authorized to repurchase up to 1.8 million shares of its outstanding common stock over a period not to exceed twelve months. On April 28, 2015, the Board of Directors authorized an extension of the Share Repurchase Program for an additional twelve month period beginning May 1, 2015 and ending April 30, 2016, subject, for the entire period as extended, to the 1.8 million share aggregate limit established in the initial authorization. On June 2, 2015, the Board of Directors approved an expansion and extension of the Share Repurchase Program, authorizing the repurchase of up to an additional 1.6 million shares through June 2, 2016. Share repurchases under this program are made in accordance with SEC Rule 10b-18 using a variety of methods, which may include open market purchases, privately negotiated transactions and block trades, or any combination of such methods, in compliance with applicable insider trading and other securities laws and regulations. With the exception of repurchases made during stock trading black-out periods under a 10b5-1 Plan, the timing, manner, price and amount of any repurchase are determined at the Company’s discretion. The Share Repurchase Program may be suspended, terminated or modified by the Company at any time and for any reason. The Share Repurchase Program does not obligate the Company to repurchase any specific number of shares. During the three month period ended June 28, 2015, the Company repurchased 1,398,454 shares under this program for a total cost (excluding fees and commissions) of $5,509. During the six month period ended June 28, 2015, the Company repurchased 1,476,855 shares under this program for a total cost (excluding fees and commissions) of $5,805. From the inception of the Share Repurchase Program on May 1, 2014 through July 29, 2015, the Company has repurchased 1,941,691 shares for an aggregate cost (excluding fees and commissions) of $7,525. The total remaining balance of shares authorized for repurchase under the Share Repurchase Program is 1,458,309

Note 3 - Relocation

Note 3 - Relocation	6 Months Ended
	Jun. 28, 2015
Note 3 - Relocation
Relocation	3. CHINA FACILITY RELOCATION During 2014, we were informed by local government authorities in Shenzhen, China that the lease for our facility there would not be extended, and we commenced a search for an alternate site to relocate our facility. In July 2014, our subsidiary in China entered into a lease for a replacement facility, also located in Shenzhen. During the fourth quarter of 2014, our subsidiary in China vacated its former facility premises and substantially completed a move and transition to this new facility. The Company received compensation from the local government authorities for leasehold improvements and moving-related costs totaling $815, of which $596 was recognized as a reduction of expenses incurred during 2014, which were $841. It is the Company’s policy to recognize this compensation as a reduction of expenses as the expenses are recognized. Additional amounts totaling $158 and $219 of this government compensation were recognized as reductions of expenses during the three- and six-month periods ended June 28, 2015, respectively. The related expenses incurred during the three- and six-month periods ended June 28, 2015 were $112 and $221, respectively. The relocation payments were complete as of June 28, 2015.

Note 4 - Inventories

Note 4 - Inventories	6 Months Ended
	Jun. 28, 2015
Note 4 - Inventories
Inventories	4. INVENTORIES Inventories are stated at the lower of cost or market with cost determined under the first-in, first-out (FIFO) method. The composition of inventories was: June 28, December 31, 2015 2014 Raw materials $ 13,595 $ 15,100 Work in process 1,814 1,489 Finished goods 8,591 9,497 Total $ 24,000 $ 26,086

Note 5 - Property, Equipment an

Note 5 - Property, Equipment and Improvements	6 Months Ended
	Jun. 28, 2015
Note 5 - Property Equipment And Improvements
Property, Equipment and Improvements	5. PROPERTY, EQUIPMENT AND IMPROVEMENTS Major classes of property, equipment and improvements consisted of the following: June 28, December 31, 2015 2014 Land $ 123 $ 123 Buildings and leasehold improvements 7,475 7,437 Machinery and equipment 48,395 48,054 Furniture and fixtures 1,993 1,811 Computer hardware and software 4,525 4,452 Construction in process 1,390 1,351 63,901 63,228 Less-accumulated depreciation (54,400 ) (53,416 ) Net property, equipment and improvements $ 9,501 $ 9,812 Depreciation expense for property, equipment and improvements was as follows: Three-month periods ended Six-month periods ended June 28, June 29, June 28, June 29, 2015 2014 2015 2014 Depreciation expense $ 582 $ 754 $ 1,178 $ 1,465

Note 6 - Goodwill, Intangible A

Note 6 - Goodwill, Intangible Assets and Long Term Assets	6 Months Ended
	Jun. 28, 2015
Note 6 - Goodwill Intangible Assets And Long Term Assets
Goodwill, Intangible Assets and Long Term Assets	6. GOODWILL, INTANGIBLE ASSETS AND LONG TERM ASSETS a. Goodwill The following table summarizes the goodwill activity by segment for the six-month periods ended June 28, 2015 and June 29, 2014: Battery & Energy Communi- cations Products Systems Total Balance - December 31, 2013 $ 4,926 $ 11,493 $ 16,419 Effect of foreign currency translation (16 ) — (16 ) Balance – June 29, 2014 4,910 11,493 16,403 Effect of foreign currency translation 4 — 4 Balance - December 31, 2014 4,914 11,493 16,407 Effect of foreign currency translation 20 — 20 Balance – June 28, 2015 $ 4,934 $ 11,493 $ 16,427 b. Intangible Assets The composition of intangible assets was: at June 28, 2015 Accumulated Cost amortization Net Trademarks $ 3,568 $ — $ 3,568 Patents and technology 4,514 (4,184 ) 330 Customer relationships 4,037 (3,738 ) 299 Distributor relationships 394 (372 ) 22 Total intangible assets $ 12,513 $ (8,294 ) $ 4,219 at December 31, 2014 Accumulated Cost amortization Net Trademarks $ 3,567 $ — $ 3,567 Patents and technology 4,509 (4,114 ) 395 Customer relationships 4,029 (3,679 ) 350 Distributor relationships 391 (365 ) 26 Total intangible assets $ 12,496 $ (8,158 ) $ 4,338 Amortization expense for intangible assets was as follows: Three-month periods ended Six-month periods ended June 28, June 29, June 28, June 29, 2015 2014 2015 2014 Amortization included in: Research and development $ 33 $ 45 $ 65 $ 87 Selling, general and administrative 26 35 54 67 Total amortization expense $ 59 $ 80 $ 119 $ 154 The change in the cost value of total intangible assets from December 31, 2014 to June 28, 2015 is a result of the effect of foreign currency translations.

Note 7 - Revolving Credit Agree

Note 7 - Revolving Credit Agreement	6 Months Ended
	Jun. 28, 2015
Note 7 - Revolving Credit Agreement
Revolving Credit Agreement	7. REVOLVING CREDIT AGREEMENT We have financing through a Revolving Credit, Guaranty and Security Agreement, dated as of May 24, 2013, (the “Credit Agreement”) and related security agreements with PNC Bank, National Association (“PNC”), which provides a $20 million secured asset-based revolving credit facility that includes a $1 million letter of credit sub-facility (the “Credit Facility”). The Credit Agreement provides that the Credit Facility may be increased with PNC’s concurrence to an amount not to exceed $35 million, provided such increase must occur prior to the last six months of the term, which expires on May 24, 2017. Our available borrowing limit under the Credit Facility is based on a borrowing base formula equal to a percentage of accounts receivable, inventory and eligible foreign in-transit inventory. Interest is payable quarterly and accrues on outstanding indebtedness under the Credit Agreement at either a LIBOR-based rate or an alternate base rate, as defined in the Credit Agreement. We pay a quarterly fee on the Credit Facility’s unused availability at 0.375% per annum. As of June 28, 2015, we had approximately $11,409 of borrowing capacity in addition to our cash on hand of $15,789, and we had no outstanding borrowings or outstanding letters of credit under the Credit Facility at either June 28, 2015 or December 31, 2014. On June 5, 2015, the Company and PNC entered into a Fourth Amendment to the Credit Agreement, permitting the expansion and extension of the Company’s Share Repurchase Program, described in Note 2 above, subject to the same terms and conditions set forth in the previous amendments to the Credit Agreement.

Note 8 - Shareholders' Equity

Note 8 - Shareholders' Equity	6 Months Ended
	Jun. 28, 2015
Note 8 - Shareholders Equity
Shareholders' Equity	8. SHAREHOLDERS’ EQUITY We recorded non-cash stock compensation expense in each period as follows: Three-month periods ended Six-month periods ended June 28, June 29, June 28, June 29, 2015 2014 2015 2014 Stock options $ 136 $ 164 $ 256 $ 290 Restricted stock grants: Employee 24 — 48 — President and CEO — 34 — 83 Board of Directors compensation – stock grant — 55 — 110 Total $ 160 $ 253 $ 304 $ 483 These are more fully discussed as follows: a. Stock Options We have stock options outstanding from various stock-based employee compensation plans for which we record compensation cost relating to share-based payment transactions in our financial statements. As of June 28, 2015, there was $461 of total unrecognized compensation cost related to outstanding stock options, which is expected to be recognized over a weighted average period of 1.2 years. The following table summarizes stock option activity for the six-month period ended June 28, 2015: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value Outstanding at January 1, 2015 2,056,122 $ 6.66 Granted 277,000 3.72 Exercised (2,667 ) 3.22 Forfeited or expired (67,499 ) 12.30 Outstanding at June 28, 2015 2,262,956 6.13 3.81 $ 369 Vested and expected to vest at June 28, 2015 2,115,226 6.30 3.67 $ 314 Exercisable at June 28, 2015 1,337,295 $ 5.16 2.88 $ 153 Cash received from stock option exercises under our stock-based compensation plans for the three-month periods ended June 28, 2015 and June 29, 2014 was $0 and $11, respectively. Cash received from stock option exercises for the six-month periods ended June 28, 2015 and June 29, 2014 was $9 and $11, respectively. b. Restricted Stock Awards Our President and Chief Executive Officer holds 60,000 unearned, unvested restricted stock units at June 28, 2015. In addition, 49,200 shares of restricted stock were awarded to certain of our employees in September, 2014. There is $82 of unrecognized compensation cost related to these restricted shares at June 28, 2015.

Note 9 - Income Taxes

Note 9 - Income Taxes	6 Months Ended
	Jun. 28, 2015
Note 9 - Income Taxes
Income Taxes	9. INCOME TAXES We use the asset and liability method in accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. For the three-month periods ended June 28, 2015 and June 29, 2014, we recorded $71 and $57, respectively, in income tax expense. For the six-month periods ended June 28, 2015 and June 29, 2014, we recorded $182 and $117, respectively, in income tax expense. These are detailed as follows: Three-month periods ended Six-month periods ended June 28, June 29, June 28, June 29, 2015 2014 2015 2014 Current income tax provision: Foreign $ (8 ) $ — $ 43 $ — Federal 22 — 22 — State 2 2 7 7 Deferred income tax provision 55 55 110 110 Total $ 71 $ 57 $ 182 $ 117 Deferred income tax provision is primarily due to the recognition of deferred tax liabilities generated from goodwill and certain intangible assets that cannot be predicted to reverse for book purposes during our loss carryforward periods. The remaining expense in 2014 was due to state income taxes, and in 2015 was primarily due to the income reported for our China operations during the period. Our overall effective tax rate is the result of the combination of income and losses in each of our tax jurisdictions, which is particularly influenced by the fact that we have recorded a full reserve against our deferred tax assets pertaining to cumulative historical losses for our U.S. operations and our U.K. subsidiary, as management does not believe, at this time, that it is more likely than not that we will realize the benefit of these losses. Our tax rate for the six-month period ended June 28, 2015 was 12.3%, which was different from the federal statutory rate due to the effect of the utilization of fully reserved net operating loss carryforwards (“NOL”) as well as the effect of differing foreign income tax rates, principally in China. Our tax rate for the six-month period ended June 29, 2014 was (4.7%), which was different from the federal statutory rate due to the loss incurred and our full reserve against our NOLs, and the effect of differing foreign income tax rates, principally in China. We have substantial NOLs available to offset taxable income in the United States. However, we remain subject to the alternative minimum tax in the United States. The alternative minimum tax limits the amount of NOL available to offset taxable income to 90% of the current year income. We recorded a provision of $22 for U.S. alternative minimum tax for both the three and six months ended June 30, 2015, and no alternative minimum tax in either the three or six months ended June 29, 2014. The payment of the alternative minimum tax normally results in the establishment of a deferred tax asset; however, we have established a full valuation allowance for this related deferred tax asset. As of June 28, 2015, we have foreign and domestic NOL and credit carryforwards totaling approximately $86,200 and $1,400 available to reduce future taxable income. Included in our NOL carryforwards are foreign loss carryforwards of approximately $12,400 that can be carried forward indefinitely. The domestic NOL carryforward of $73,800 expires from 2019 through 2035. The domestic NOL carryforward includes approximately $2,900 for which a benefit will be recorded in capital in excess of par value when realized. Our unrecognized tax benefits related to uncertain tax positions at June 28, 2015 pertain to foreign tax jurisdictions. The following table summarizes the activity related to our unrecognized tax benefits: Six month periods ended June 28, June 29, 2015 2014 Balance – beginning of period $ 7,296 $ 7,296 Increases related to current year tax positions — — Increases related to prior year tax positions — — Decreases related to prior year tax positions — — Expiration of statute of limitations for assessment of taxes — — Settlements of examinations (6,778 ) — Balance – end of period $ 518 $ 7,296 The release of uncertain tax positions in 2015 relates to the successful conclusion of a federal tax examination, resulting in a $19.9 million increase in the amount of our reported domestic NOL carryforward. We file income tax returns in various jurisdictions including U.S. federal, U.S. state and foreign jurisdictions. We are routinely subject to examination by taxing authorities in these various jurisdictions. Our U.S. tax matters for the years 2000 through 2014 remain subject to examination by the Internal Revenue Service (“IRS”) and by various state and local tax jurisdictions due to our NOL carryforwards. Our tax matters for the years 2007 through 2014 remain subject to examination by the respective foreign tax jurisdiction authorities. The IRS has now completed its examination of our 2011, 2012 and 2013 U.S. federal income tax returns, with no resulting material effect to our financial position or results of operations.

Note 10 - Earnings Per Share

Note 10 - Earnings Per Share	6 Months Ended
	Jun. 28, 2015
Note 10 - Earnings Per Share
Earnings Per Share	10. EARNINGS PER SHARE Basic earnings per share (“EPS”) is computed by dividing earnings attributable to the Company’s common shareholders by the weighted-average shares outstanding during the period. Diluted EPS includes the dilutive effect of securities, if any, and is calculated using the treasury stock method. For the three-month period ended June 28, 2015, 358,034 stock options and 34,200 restricted stock units were included in the calculation of Diluted EPS as such securities are dilutive. Inclusion of these securities resulted in 39,426 additional shares in the calculation of fully diluted earnings per share. For the six-month period ended June 28, 2015, 257,534 stock options and 34,200 restricted stock units were included in the calculation of Diluted EPS as such securities are dilutive. Inclusion of these securities resulted in 31,903 additional shares in the calculation of fully diluted earnings per share. D There were 1,904,922 and 2,271,923 outstanding stock options for the three-month periods ended June 28, 2015 and June 29, 2014, respectively, that were not included in EPS as the effect would be anti-dilutive. There were 2,005,422 and 2,271,923 outstanding stock options for the six-month periods ended June 28, 2015 and June 29, 2014, respectively, that were not included in EPS as the effect would be anti-dilutive.

Note 11 - Commitments and Conti

Note 11 - Commitments and Contingencies	6 Months Ended
	Jun. 28, 2015
Note 11 - Commitments And Contingencies
Commitments and Contingencies	11. COMMITMENTS, CONTINGENCIES AND SUBSEQUENT EVENT a. Purchase Commitments As of June 28, 2015, we have made commitments to purchase approximately $338 of production machinery and equipment. b. Product Warranties We estimate future costs associated with expected product failure rates, material usage and service costs in the development of our warranty obligations. Warranty reserves are based on historical experience of warranty claims and generally will be estimated as a percentage of sales over the warranty period. In the event the actual results of these items differ from the estimates, an adjustment to the warranty obligation would be recorded. Changes in our product warranty liability during the first six months of 2015 and 2014 were as follows: Six month periods ended June 28, 2015 June 29, 2014 Accrued warranty obligations – beginning $ 376 $ 513 Accruals for warranties issued 13 66 Settlements made (13 ) (50 ) Accrued warranty obligations – ending $ 376 $ 529 c. Contingencies and Legal Matters We are subject to legal proceedings and claims that arise from time to time in the normal course of business. We believe that the final disposition of such matters, other than the matters described below, will not have a material adverse effect on our financial position, results of operations or cash flows. Dreamliner Litigation In July 2013, an unoccupied Boeing 787 Dreamliner aircraft operated by Ethiopian Airlines was damaged by a fire while parked at London Heathrow Airport. We participated in and provided technical assistance in support of an investigation of this incident conducted by U.K. and U.S. regulatory authorities as well as by the manufacturer of the aircraft, as we are one of many downstream suppliers to that manufacturer. While a final report has not been issued by the regulatory authorities, preliminary findings indicate that the fire may have been caused by circumstances related to the plane’s emergency locator transmitter (“ELT”) manufactured by another company. We continue to provide support and comment as required to the ongoing investigation. On May 4, 2015, we were notified of a lawsuit in which we were named, along with other suppliers to the aircraft manufacturer, concerning that 2013 fire. The suit was filed by Ethiopian Airlines Enterprise in the Commercial Court, Queen’s Bench Division of the High Court of Justice, London. The suit seeks as damages USD 42 million plus other unspecified amounts, including those for loss of use and diminution in value of the aircraft. We maintain liability and products liability insurance through reputable providers, and in accordance with our corporate practices, immediately advised and referred this matter to our insurers. We are working with those insurers and their counsel to respond to and actively defend against this action. A component of the ELT is a battery pack which incorporates Ultralife’s industry-standard lithium manganese dioxide non-rechargeable D-cell. Ultralife has had this cell in production since 2001, with millions of units produced and this cell is widely-used for global defense and commercial applications. This battery product has gone through rigorous safety and qualification testing, including United Nations Transport of Dangerous Goods, Manual of Tests and Criteria, and is authorized for use in aerospace applications under Technical Standard Order C142. At this time, we believe that there is not a reasonable possibility that this incident will result in a material financial exposure to the Company. Arista Power Litigation In September 2011, we initiated an action against Arista Power, Inc. (“Arista”) and our former employee, David Modeen (“Modeen”), in the State of New York Supreme Court, County of Wayne, in which we allege that Arista recruited all but one of the members of its executive team from us, subsequently changed and redirected its business to compete directly with us by using our confidential information, and during the summer of 2011, recruited Modeen to become an Arista employee. As more fully disclosed in our Annual Report on Form 10-K for the year ended December 31, 2014, we allege that both Arista and Modeen breached agreements with us, that Arista’s employment of Modeen will inevitably lead to the disclosure and use of our trade secrets by Arista. We seek damages as determined at trial and preliminary and permanent injunctive relief. The defendants answered the allegations set forth in the Complaint and asserted claims against us , We initiated the September 2011 Complaint against Arista Power to protect our shareholders, customers Discovery in this action is ongoing, and we plan to continue to pursue our complaint against Arista. It is not possible to predict the outcome of this action, whether we will be granted the injunctive relief we seek, nor the monetary amount, if any, which we may be awarded should we prevail.

Note 12 - Business Segment Info

Note 12 - Business Segment Information	6 Months Ended
	Jun. 28, 2015
Note 12 - Business Segment Information
Business Segment Information	12. BUSINESS SEGMENT INFORMATION We report our results in two operating segments: Battery & Energy Products and Communications Systems. The Battery & Energy Products segment includes: lithium 9-volt, cylindrical and various other non-rechargeable batteries, in addition to rechargeable batteries, uninterruptable power supplies, charging systems and accessories, such as cables. The Communications Systems segment includes: power supplies, cable and connector assemblies, RF amplifiers, amplified speakers, equipment mounts, case equipment, integrated communication system kits and communications and electronics systems design. We believe that reporting performance at the gross profit level is the best indicator of segment performance. As such, we report segment performance at the gross profit level and operating expenses as Corporate charges . The components of segment performance were as follows: Three-Month Period Ended June 28, 2015: Battery & Energy Products Communi- cations systems Discontinued operations Corporate Total Revenues $ 15,972 $ 2,983 $ — $ — $ 18,955 Segment contribution 4,542 1,317 — (5,042 ) 817 Interest, financing and miscellaneous expense, net 27 28 Tax provision (71 ) (71 ) Discontinued operations Noncontrolling interest 14 14 Net income attributable to Ultralife $ 788 Total assets $ 37,084 $ 27,906 $ — $ 17,945 $ 82,935 Three-Month Period Ended June 29, 2014: Battery & Energy Products Communi- cations systems Discontinued operations Corporate Total Revenues $ 12,165 $ 3,034 $ — $ — $ 15,199 Segment contribution 2,876 1,336 — (5,536 ) (1,324 ) Interest, financing and miscellaneous expense, net 5 5 Tax provision (57 ) (57 ) Noncontrolling interest 16 16 Net loss attributable to Ultralife $ (1,360 ) Total assets $ 37,586 $ 29,866 $ — $ 19,479 $ 86,931 Six-Month Period Ended June 28, 2015: Battery & Energy Products Communi- cations systems Discontinued operations Corporate Total Revenues $ 32,248 $ 5,884 $ — $ — $ 38,132 Segment contribution 9,326 2,540 — (10,227 ) 1,639 Interest, financing and miscellaneous expense, net (160 ) (160 ) Tax provision (182 ) (182 ) Noncontrolling interest 24 24 Net income attributable to Ultralife $ 1,321 Six-Month Period Ended June 29, 2014: Battery & Energy Products Communi- cations systems Discontinued operations Corporate Total Revenues $ 26,087 $ 4,397 $ — $ — $ 30,484 Segment contribution 6,677 1,870 — (10,967 ) (2,420 ) Interest, financing and miscellaneous expense, net (58 ) (58 ) Tax provision (117 ) (117 ) Discontinued operations (61 ) (61 ) Noncontrolling interest 10 10 Net loss attributable to Ultralife $ (2,646 )

Note 13 - Fair Value of Financi

Note 13 - Fair Value of Financial Instruments	6 Months Ended
	Jun. 28, 2015
Note 13 - Fair Value Of Financial Instruments
Fair Value of Financial Instruments	13. FAIR VALUE OF FINANCIAL INSTRUMENTS FASB’s guidance for the disclosure regarding fair value of financial instruments requires disclosure of an estimate of the fair value of certain financial instruments. The fair value of financial instruments pursuant to FASB’s guidance for the disclosure regarding fair value of financial instruments approximated their carrying values at June 28, 2015 and December 31, 2014. The fair value of cash, trade accounts receivable, trade accounts payable and accrued liabilities approximates carrying value due to the short-term nature of these instruments.

Note 14 - Fire at Manufacturing

Note 14 - Fire at Manufacturing Facility	6 Months Ended
	Jun. 28, 2015
Note 14 - Fire At Manufacturing Facility
Fire at Manufacturing Facility	14. FIRE AT MANUFACTURING FACILITY In June 2011, we experienced a fire that damaged certain inventory and machinery and equipment at our facility in China. The total amount of the loss pertaining to assets and the related expenses was approximately $1,589. We have pursued a claim against our insurance policy, with the majority of our insurance claim related to the recovery of damaged inventory. We have received payments in June 2012 and April 2013 totaling approximately $1,286 as a partial payment on our insurance claim, which resulted in no gain or loss being recognized. As of June 28, 2015 and December 31, 2014, we reflect a receivable from the insurance company relating to this claim of $184, which is net of our deductible of approximately $132, and represents additional proceeds expected to be received.

Note 15 - Recent Accounting Pro

Note 15 - Recent Accounting Pronouncements and Developments	6 Months Ended
	Jun. 28, 2015
Note 15 - Recent Accounting Pronouncements And Developments
Recent Accounting Pronouncements and Developments	15. RECENT ACCOUNTING PRONOUNCEMENTS AND DEVELOPMENTS In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, “Revenue from Contracts with Customers.” This ASU amends the existing accounting standards for revenue recognition and is based on the principle that revenue should be recognized to depict the transfer of goods or services to a customer at an amount that reflects the consideration a company expects to receive in exchange for those goods or services. In April 2015, the FASB proposed a one year delay in the effective date of ASU 2014-09. This standard currently becomes effective for the Company on January 1, 2017, and the one-year delay, if promulgated as proposed, will make this standard effective for the Company on January 1, 2018. The Company is currently evaluating the potential impact of this new guidance as well as the available transition methods.

Note 4 - Inventories (Tables)

Note 4 - Inventories (Tables)	6 Months Ended
	Jun. 28, 2015
Note 4 - Inventories Tables
Inventories Tables	June 28, December 31, 2015 2014 Raw materials $ 13,595 $ 15,100 Work in process 1,814 1,489 Finished goods 8,591 9,497 Total $ 24,000 $ 26,086

Note 5 - Property, Equipment 23

Note 5 - Property, Equipment and Improvements (Tables)	6 Months Ended
	Jun. 28, 2015
Note 5 - Property Equipment And Improvements Tables
Property, Equipment and Improvements Tables	Major classes of property, equipment and improvements consisted of the following: June 28, December 31, 2015 2014 Land $ 123 $ 123 Buildings and leasehold improvements 7,475 7,437 Machinery and equipment 48,395 48,054 Furniture and fixtures 1,993 1,811 Computer hardware and software 4,525 4,452 Construction in process 1,390 1,351 63,901 63,228 Less-accumulated depreciation (54,400 ) (53,416 ) Net property, equipment and improvements $ 9,501 $ 9,812
Depreciation expense	Depreciation expense for property, equipment and improvements was as follows: Three-month periods ended Six-month periods ended June 28, June 29, June 28, June 29, 2015 2014 2015 2014 Depreciation expense $ 582 $ 754 $ 1,178 $ 1,465

Note 6 - Goodwill, Intangible24

Note 6 - Goodwill, Intangible Assets and Long Term Assets (Tables)	6 Months Ended
	Jun. 28, 2015
Note 6 - Goodwill Intangible Assets And Long Term Assets Tables
Schedule of Goodwill Activity by Segment	The following table summarizes the goodwill activity by segment for the six-month periods ended June 28, 2015 and June 29, 2014: Battery & Energy Communi- cations Products Systems Total Balance - December 31, 2013 $ 4,926 $ 11,493 $ 16,419 Effect of foreign currency translation (16 ) — (16 ) Balance – June 29, 2014 4,910 11,493 16,403 Effect of foreign currency translation 4 — 4 Balance - December 31, 2014 4,914 11,493 16,407 Effect of foreign currency translation 20 — 20 Balance – June 28, 2015 $ 4,934 $ 11,493 $ 16,427
Schedule of Intangible Assets	The composition of intangible assets was: at June 28, 2015 Accumulated Cost amortization Net Trademarks $ 3,568 $ — $ 3,568 Patents and technology 4,514 (4,184 ) 330 Customer relationships 4,037 (3,738 ) 299 Distributor relationships 394 (372 ) 22 Total intangible assets $ 12,513 $ (8,294 ) $ 4,219 at December 31, 2014 Accumulated Cost amortization Net Trademarks $ 3,567 $ — $ 3,567 Patents and technology 4,509 (4,114 ) 395 Customer relationships 4,029 (3,679 ) 350 Distributor relationships 391 (365 ) 26 Total intangible assets $ 12,496 $ (8,158 ) $ 4,338
Schedule of Amortization of Intangible Assets	Amortization expense for intangible assets was as follows: Three-month periods ended Six-month periods ended June 28, June 29, June 28, June 29, 2015 2014 2015 2014 Amortization included in: Research and development $ 33 $ 45 $ 65 $ 87 Selling, general and administrative 26 35 54 67 Total amortization expense $ 59 $ 80 $ 119 $ 154

Note 8 - Shareholders' Equity (

Note 8 - Shareholders' Equity (Tables)	6 Months Ended
	Jun. 28, 2015
Note 8 - Shareholders Equity Tables
Components of Stock Compensation Expense	Three-month periods ended Six-month periods ended June 28, June 29, June 28, June 29, 2015 2014 2015 2014 Stock options $ 136 $ 164 $ 256 $ 290 Restricted stock grants: Employee 24 — 48 — President and CEO — 34 — 83 Board of Directors compensation – stock grant — 55 — 110 Total $ 160 $ 253 $ 304 $ 483
Schedule of Stock Option Activity	Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value Outstanding at January 1, 2015 2,056,122 $ 6.66 Granted 277,000 3.72 Exercised (2,667 ) 3.22 Forfeited or expired (67,499 ) 12.30 Outstanding at June 28, 2015 2,262,956 6.13 3.81 $ 369 Vested and expected to vest at June 28, 2015 2,115,226 6.30 3.67 $ 314 Exercisable at June 28, 2015 1,337,295 $ 5.16 2.88 $ 153

Note 9 - Income Taxes (Tables)

Note 9 - Income Taxes (Tables)	6 Months Ended
	Jun. 28, 2015
Note 9 - Income Taxes Tables
Schedule of tax provision components	Three-month periods ended Six-month periods ended June 28, June 29, June 28, June 29, 2015 2014 2015 2014 Current income tax provision: Foreign $ (8 ) $ — $ 43 $ — Federal 22 — 22 — State 2 2 7 7 Deferred income tax provision 55 55 110 110 Total $ 71 $ 57 $ 182 $ 117
Schedule of Unrecognized Tax Benefits	Six month periods ended June 28, June 29, 2015 2014 Balance – beginning of period $ 7,296 $ 7,296 Increases related to current year tax positions — — Increases related to prior year tax positions — — Decreases related to prior year tax positions — — Expiration of statute of limitations for assessment of taxes — — Settlements of examinations (6,778 ) — Balance – end of period $ 518 $ 7,296

Note 11 - Commitments and Con27

Note 11 - Commitments and Contingencies (Tables)	6 Months Ended
	Jun. 28, 2015
Note 11 - Commitments And Contingencies Tables
Rollforward of Accrued Warranty Obligations	Six month periods ended June 28, 2015 June 29, 2014 Accrued warranty obligations – beginning $ 376 $ 513 Accruals for warranties issued 13 66 Settlements made (13 ) (50 ) Accrued warranty obligations – ending $ 376 $ 529

Note 12 - Business Segment In28

Note 12 - Business Segment Information (Tables)	3 Months Ended		6 Months Ended
	Jun. 28, 2015	Jun. 29, 2014	Jun. 28, 2015	Jun. 29, 2014
Note 12 - Business Segment Information Tables
Segment disclosure	Three-Month Period Ended June 28, 2015: Battery & Energy Products Communi- cations systems Discontinued operations Corporate Total Revenues $ 15,972 $ 2,983 $ — $ — $ 18,955 Segment contribution 4,542 1,317 — (5,042 ) 817 Interest, financing and miscellaneous expense, net 27 28 Tax provision (71 ) (71 ) Discontinued operations Noncontrolling interest 14 14 Net income attributable to Ultralife $ 788 Total assets $ 37,084 $ 27,906 $ — $ 17,945 $ 82,935	Three-Month Period Ended June 29, 2014: Battery & Energy Products Communi- cations systems Discontinued operations Corporate Total Revenues $ 12,165 $ 3,034 $ — $ — $ 15,199 Segment contribution 2,876 1,336 — (5,536 ) (1,324 ) Interest, financing and miscellaneous expense, net 5 5 Tax provision (57 ) (57 ) Noncontrolling interest 16 16 Net loss attributable to Ultralife $ (1,360 ) Total assets $ 37,586 $ 29,866 $ — $ 19,479 $ 86,931	Six-Month Period Ended June 28, 2015: Battery & Energy Products Communi- cations systems Discontinued operations Corporate Total Revenues $ 32,248 $ 5,884 $ — $ — $ 38,132 Segment contribution 9,326 2,540 — (10,227 ) 1,639 Interest, financing and miscellaneous expense, net (160 ) (160 ) Tax provision (182 ) (182 ) Noncontrolling interest 24 24 Net income attributable to Ultralife $ 1,321	Six-Month Period Ended June 29, 2014: Battery & Energy Products Communi- cations systems Discontinued operations Corporate Total Revenues $ 26,087 $ 4,397 $ — $ — $ 30,484 Segment contribution 6,677 1,870 — (10,967 ) (2,420 ) Interest, financing and miscellaneous expense, net (58 ) (58 ) Tax provision (117 ) (117 ) Discontinued operations (61 ) (61 ) Noncontrolling interest 10 10 Net loss attributable to Ultralife $ (2,646 )

Note 2 - Share Repurchase Pro29

Note 2 - Share Repurchase Program (Details Narrative) - USD ($)	3 Months Ended	6 Months Ended	12 Months Ended		15 Months Ended	24 Months Ended
	Jun. 28, 2015	Jun. 28, 2015	Jun. 02, 2016	Apr. 30, 2016	Jul. 29, 2015	Apr. 30, 2016
Note 2 - Share Repurchase Program Details Narrative
Maximum number of shares the Company is authorized to repurchase				1,800,000		1,800,000
Additional number of shares the Company is authorized to repurchase			1,600,000
Shares repurchased	1,398,454	1,476,855			1,941,691
Cost of shares repurchased	$ 5,509,000	$ 5,805,000			$ 7,525,000
Balance - shares authorized to be repurchased					1,458,309

Note 3 - Relocation (Details Na

Note 3 - Relocation (Details Narrative) - USD ($)	3 Months Ended	6 Months Ended	12 Months Ended
	Jun. 28, 2015	Jun. 28, 2015	Dec. 31, 2014
Note 3 - Relocation Details Narrative
Government reimbursement received - China factory move			$ 815,000
Government reimbursement recognized - China factory move	$ 158,000	$ 219,000	596,000
Expenses recognized - China factory move	$ 112,000	$ 221,000	$ 841,000

Note 4 - Inventories (Detail)

Note 4 - Inventories (Detail) - USD ($)	Jun. 28, 2015	Dec. 31, 2014
Note 4 - Inventories Detail
Raw materials	$ 13,595,000	$ 15,100,000
Work in process	1,814,000	1,489,000
Finished products	8,591,000	9,497,000
Total	$ 24,000,000	$ 26,086,000

Note 5 - Property, Equipment 32

Note 5 - Property, Equipment and Improvements (Details) - USD ($)	Jun. 28, 2015	Dec. 31, 2014
Note 5 - Property Equipment And Improvements Details
Land	$ 123,000	$ 123,000
Buildings and leasehold improvements	7,475,000	7,437,000
Machinery and equipment	48,395,000	48,054,000
Furniture and fixtures	1,993,000	1,811,000
Computer hardware and software	4,525,000	4,452,000
Construction in progress	1,390,000	1,351,000
Total	63,901,000	63,228,000
Less-Accumulated depreciation	(54,400,000)	(53,416,000)
Total	$ 9,501,000	$ 9,812,000

Note 5 - Property, Equipment 33

Note 5 - Property, Equipment and Improvements (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 28, 2015	Jun. 29, 2014	Jun. 28, 2015	Jun. 29, 2014
Note 5 - Property Equipment And Improvements Details Narrative
Depreciation expense	$ 582,000	$ 754,000	$ 1,178,000	$ 1,465,000

Note 6 - Goodwill, Intangible34

Note 6 - Goodwill, Intangible Assets and Long Term Assets Goodwill Activity (Details) - USD ($)	6 Months Ended
	Jun. 28, 2015	Dec. 31, 2014	Jun. 29, 2014
Goodwill - beginning	$ 16,407,000	$ 16,403,000	$ 16,419,000
Effect of foreign currency translation	20,000	4,000	(16,000)
Goodwill - ending	16,427,000	16,407,000	16,403,000
Battery & Energy Products
Goodwill - beginning	4,914,000	4,910,000	4,926,000
Effect of foreign currency translation	20,000	4,000	(16,000)
Goodwill - ending	4,934,000	4,914,000	4,910,000
Communications Systems
Goodwill - beginning	11,493,000	11,493,000	11,493,000
Effect of foreign currency translation	0	0	0
Goodwill - ending	$ 11,493,000	$ 11,493,000	$ 11,493,000

Note 6 - Goodwill, Intangible35

Note 6 - Goodwill, Intangible Assets and Long Term Assets Composition of Intangible Assets (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 28, 2015	Jun. 29, 2014	Jun. 28, 2015	Jun. 29, 2014
Amortization expense	$ 59,000	$ 80,000	$ 119,000	$ 154,000
Research and Development Expense
Amortization expense	33,000	45,000	65,000	87,000
Selling, General and Administrative Expenses
Amortization expense	$ 26,000	$ 35,000	$ 54,000	$ 67,000

Note 6 - Goodwill, Intangible36

Note 6 - Goodwill, Intangible Assets and Long Term Assets (Details Narrative) - USD ($)	Jun. 28, 2015	Dec. 31, 2014
Cost	$ 12,513,000	$ 12,496,000
Accumulated Amortization	(8,294,000)	(8,158,000)
Net	4,219,000	4,338,000
Trademarks [Member]
Cost	3,568,000	3,567,000
Accumulated Amortization	0	0
Net	3,568,000	3,567,000
Patents and Technology
Cost	4,514,000	4,509,000
Accumulated Amortization	(4,184,000)	(4,114,000)
Net	330,000	395,000
Customer Relationships
Cost	4,037,000	4,029,000
Accumulated Amortization	(3,738,000)	(3,679,000)
Net	299,000	350,000
Distributor Relationships
Cost	394,000	391,000
Accumulated Amortization	(372,000)	(365,000)
Net	$ 22,000	$ 26,000

Note 7 - Revolving Credit Agr37

Note 7 - Revolving Credit Agreement (Details Narrative) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 28, 2015	May. 24, 2017	Dec. 31, 2014	Jun. 29, 2014	Dec. 31, 2013
Note 7 - Revolving Credit Agreement Details Narrative
Line of Credit Facility, Maximum Borrowing Capacity	$ 20,000,000
Letter of credit sub-facility	$ 1,000,000
Line of Credit Maximum Borrowing Capacity may be increased in the last six months of the term		$ 35,000,000
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	0.375%
Line of Credit Facility, Amount Outstanding	$ 0
Line of Credit Facility, Remaining Borrowing Capacity	11,409,000
Unrestricted Cash on hand	$ 15,789,000		$ 17,711,000	$ 17,160,000	$ 16,489,000

Note 8 - Shareholders' Equity38

Note 8 - Shareholders' Equity (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 28, 2015	Jun. 29, 2014	Jun. 28, 2015	Jun. 29, 2014
Stock compensation expense	$ 160,000	$ 253,000	$ 304,000	$ 483,000
Stock Options
Stock compensation expense	136,000	164,000	256,000	290,000
Employee Restricted Stock
Stock compensation expense	24,000	0	48,000	0
CEO Restricted Stock expense
Stock compensation expense	0	34,000	0	83,000
Board of Directors Stock Grant
Stock compensation expense	$ 0	$ 55,000	$ 0	$ 110,000

Note 8 - Shareholders' Equity O

Note 8 - Shareholders' Equity Option Rollforward (Details Narrative) - USD ($)	6 Months Ended
	Jun. 28, 2015	Dec. 31, 2014
Note 8 - Shareholders Equity Option Rollforward Details Narrative
Options outstanding	2,262,956	2,056,122
Options outstanding - weighted average exercise price	$ 6.13	$ 6.66
Options outstanding - weighted average remaining contractual term (years)	3 years 296 days
Options outstanding - aggregate intrinsic value	$ 369,000
Options granted	277,000
Options granted - weighted average exercise price	$ 3.72
Options exercised	2,667
Options exercised - weighted average exercise price	$ 3.22
Options forfeited or expired	67,499
Options forfeited or expired - weighted average exercise price	$ 12.3
Options vested and expected to vest	2,115,226
Options vested and expected to vest - weighted average exercise price	$ 6.3
Options vested and expected to vest - weighted average remaining contractual term (years)	3 years 245 days
Options vested and expected to vest - aggregate intrinsic value	$ 314,000
Options Exercisable	1,337,295
Options exercisable - weighted average exercise price	$ 5.16
Options exercisable - weighted average remaining contractual term (years)	2 years 288 days
Options exercisable - aggregate intrinsic value	$ 153,000

Note 8 - Shareholders' Equity40

Note 8 - Shareholders' Equity (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended		6 Months Ended
	Sep. 28, 2014	Jun. 28, 2015	Jun. 29, 2014	Jun. 28, 2015	Jun. 29, 2014
Note 8 - Shareholders Equity Option Rollforward Details Narrative
Unrecognized stock option compensation cost		$ 461,000		$ 461,000
Weighted average period over which unrecognized stock option compensation cost will be recognized (in years)		1 year 73 days
Cash received upon the exercise of stock options		$ 0	$ 11,000	11,000	$ 9,000
Unrecognized compensation cost related to restricted stock awards		$ 82,000		$ 82,000
Unvested restricted stock units - President & CEO		60,000		60,000
Shares of restricted stock awarded to certain employees	49,200

Note 9 - Income Taxes (Details)

Note 9 - Income Taxes (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 28, 2015	Jun. 29, 2014	Jun. 28, 2015	Jun. 29, 2014
Note 9 - Income Taxes Details
Foreign tax provision	$ (8,000)	$ 0	$ 43,000	$ 0
Federal tax provision	22,000	0	22,000	0
State tax provision	2,000	2,000	7,000	7,000
Deferred tax provision	55,000	55,000	110,000	110,000
Total income tax provision	$ 71,000	$ 57,000	$ 182,000	$ 117,000

Note 9 - Income Taxes Unrecogni

Note 9 - Income Taxes Unrecognized Tax Benefits (Details) - USD ($)	6 Months Ended
	Jun. 28, 2015	Jun. 29, 2014
Note 9 - Income Taxes Unrecognized Tax Benefits Details
Unrecognized tax benefits - beginning	$ 7,296,000	$ 7,296,000
Settlements of examinations	(6,778,000)	0
Unrecognized tax benefits - ending	$ 518,000	$ 7,296,000

Note 9 - Income Taxes (Details

Note 9 - Income Taxes (Details Narrative) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 28, 2015	Jun. 28, 2015	Jun. 29, 2014
Note 9 - Income Taxes Details Narrative
Net operating loss carryforward	$ 86,200,000	$ 86,200,000
Net operating loss carryforward - domestic	73,800,000	73,800,000
Net operating loss carryforward - foreign	12,400,000	12,400,000
Tax credit carryforwards	1,400,000	1,400,000
Net operating loss carryforward for which a benefit will be recorded in capital when realized	2,900,000	$ 2,900,000
Income tax rate		12.30%	(4.70%)
Alternative minimum tax provision recorded	$ 22,000	$ 22,000

Note 10 - Earnings Per Share (D

Note 10 - Earnings Per Share (Details Narrative) - shares	3 Months Ended		6 Months Ended
	Jun. 28, 2015	Jun. 29, 2014	Jun. 28, 2015	Jun. 29, 2014
Note 10 - Earnings Per Share Details Narrative
Employee stock options excluded from calculation of diluted earnings per share	1,904,922	2,271,923	2,005,422	2,271,923
Incremental shares included in EPS denominator due to share based payment arrangements	40,000	0	32,000	0
Number of Employee stock options included in calculation of diluted earnings per share	358,034	0	257,534	0
Number of restricted shares included in calculation of diluted earnings per share	34,200	0	34,200	0

Note 11 Commitments and Conting

Note 11 Commitments and Contingencies Warranty Obligations (Details) - USD ($)	6 Months Ended
	Jun. 28, 2015	Jun. 29, 2014
Note 11 Commitments And Contingencies Warranty Obligations Details
Accrued warranty obligations - beginning	$ 376,000	$ 513,000
Accrual for warranties issued	13,000	66,000
Settlements made	(13,000)	(50,000)
Accrued warranty obligations - ending	$ 376,000	$ 529,000

Note 11 Commitments and Conti46

Note 11 Commitments and Contingencies (Detail Narrative)	Jun. 28, 2015USD ($)
Note 11 Commitments And Contingencies Detail Narrative
Unrecorded Unconditional Purchase Obligation	$ 338,000

Note 12 - Business Segment In47

Note 12 - Business Segment Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 28, 2015	Jun. 29, 2014	Jun. 28, 2015	Jun. 29, 2014	Dec. 31, 2014
Revenue	$ 18,955,000	$ 15,199,000	$ 38,132,000	$ 30,484,000
Segment contribution	817,000	(1,324,000)	1,639,000	(2,420,000)
Interest, financing and miscellaneous expense, net	28,000	5,000	(160,000)	(58,000)
Income tax provision	(71,000)	(57,000)	(182,000)	(117,000)
Income (loss) from discontinued operations		0	0	(61,000)
Noncontrolling interest	14,000	16,000	24,000	10,000
Net loss attributable to Ultralife	788,000	(1,360,000)	1,321,000	(2,646,000)
Total assets	82,935,000	86,931,000	82,935,000	86,931,000	$ 87,642,000
Battery & Energy Products
Revenue	15,972,000	12,165,000	32,248,000	26,087,000
Segment contribution	4,542,000	2,876,000	9,326,000	6,677,000
Total assets	37,084,000	37,586,000	37,084,000	37,586,000
Communications Systems
Revenue	2,983,000	3,034,000	5,884,000	4,397,000
Segment contribution	1,317,000	1,336,000	2,540,000	1,870,000
Total assets	27,906,000	29,866,000	27,906,000	29,866,000
Discontinued Operations
Revenue	0	0	0	0
Segment contribution	0	0	0	0
Income (loss) from discontinued operations	0	0		(61,000)
Corporate
Revenue	0		0	0
Segment contribution	(5,042,000)	(5,536,000)	(10,227,000)	(10,967,000)
Interest, financing and miscellaneous expense, net	28,000	5,000	(160,000)	(58,000)
Income tax provision	(71,000)	(57,000)	(182,000)	(117,000)
Noncontrolling interest			24,000	10,000
Total assets	$ 17,945,000	$ 19,479,000	$ 17,945,000	$ 19,479,000

Note 14 - Fire at Manufacturi48

Note 14 - Fire at Manufacturing Facility (Details Narrative) - USD ($)	1 Months Ended		3 Months Ended
	Apr. 30, 2013	Jun. 30, 2011	Jun. 28, 2015	Dec. 31, 2014
Note 14 - Fire At Manufacturing Facility Details Narrative
Business Interruption Loss, Gross		$ 1,589,000
Proceeds from Insurance Settlement, Operating Activities	$ 1,286,000
Gain on Business Interruption Insurance Recovery	$ 0
Insurance Settlements Receivable			$ 184,000	$ 184,000
Business Interruption, Insurance Deductible			$ 132,000