Exhibit 99.1

Ultralife Batteries, Inc. And Its U.K. Subsidiary Win Entire Next Gen II, Phase
IV Army Battery Award; Combined Contracts Valued at up to $286 Million over Five
Years

    NEWARK, N.Y.--(BUSINESS WIRE)--Dec. 23, 2004--Ultralife Batteries,
Inc. (NASDAQ: ULBI) and its U.K. subsidiary have been awarded the 60
percent and the 40 percent shares, respectively, of the Next Gen II,
Phase IV five-year battery production contracts by the U.S. Defense
Department. These contracts, which could reach a maximum value of $286
million, are for the production of five types of primary
(non-rechargeable) lithium-manganese dioxide batteries for the U.S.
Military. Production shipments of each battery type will commence
following qualification. Consistent with its previous guidance, the
Company expects to recognize some revenue under these contracts in the
second quarter of 2005, with substantial revenues anticipated in the
second half.
    "We have achieved another great milestone with this largest
contract win in our company's history," said John D. Kavazanjian,
Ultralife's president and chief executive officer. "This award
supports the U.S. Military's goal of converting from lithium-sulfur
dioxide to lithium-manganese dioxide batteries, as most of the major
lithium battery types used by the military will now be available in
this high-performance chemistry. It is also a powerful validation of
our strategy of applying our leadership technology to markets in which
it is advantaged. Combined with the award of the Next Gen II Small
Cylindrical Battery contract, which we received in 2002, this new
multi-year contract solidifies our position in the military market,
one element of our strategic plan to achieve annual revenues of $200
million within the next three to five years."
    NextGen II is the U.S. Military's five-year battery procurement
strategy. The Phase IV production contracts were awarded to
Ultralife's U.S. and U.K. operations to provide five types of primary
(non-rechargeable) lithium-manganese dioxide batteries. The five
battery types - BA-5390/U, BA-5312/U, BA-5398/U, BA-5388/U and
BA-5357/U - comprise the Rectangular Lithium Manganese Dioxide Battery
Group. A major objective of this five-year procurement strategy is to
establish and maintain a production base of a sufficient capacity to
timely meet peacetime demands and have the ability to surge quickly to
meet deployment demands.
    The BA-5390/U, the most widely used of the five battery types, is
a 15 or 30-volt battery used to power the PRC-119 SINCGARS (Single
Channel Ground and Airborne Radio System), as well as more than 50
other applications. The BA-5312/U is a 12-volt battery used in the
PRC-112 survival radio. The BA-5398/U is a 15-volt battery used in the
PRC-77 radio and other applications. The BA-5388 is a 15-volt battery
used in the PRC-126 and other handheld radios, and the BA-5357 is a 15
or 30-volt battery used in the PSG-2A message device and other
applications.

    About Ultralife Batteries, Inc.

    Ultralife is a leading developer, manufacturer, and marketer of
standard and customized lithium primary (non-rechargeable), lithium
ion and lithium polymer rechargeable batteries. Ultralife's
high-energy batteries use advanced lithium technology and are used in
military, industrial and consumer portable electronic products.
Through its range of standard products and ability to customize for a
wide range of applications, Ultralife is able to provide the next
generation of battery solutions. OEM, retail and government customers
include Energizer, Kidde Safety, Philips Medical Systems, Radio Shack
and the national defense agencies of the United States and United
Kingdom, among others.
    Ultralife's headquarters, principal manufacturing and research
facilities are in Newark, New York, near Rochester. Ultralife (UK)
Ltd., a second manufacturing facility, is located in Abingdon, U.K.
Both facilities are ISO-9001 certified. Detailed information about
Ultralife is available at www.ultralifebatteries.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: worsening global economic conditions,
increased competitive environment and pricing pressures, disruptions
related to restructuring actions and delays. 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(R) is a registered trademark of Ultralife Batteries,
Inc.

    CONTACT: Ultralife Batteries, Inc.
             Peter Comerford, 315-332-7100
             pcomerford@ulbi.com
                            or
             Investor Relations:
             Lippert/Heilshorn & Associates, Inc.
             Jody Burfening, 212-838-3777
             jburfening@lhai.com
                            or
             Media:
             Lippert/Heilshorn & Associates, Inc.
             Chenoa Taitt, 212-201-6635
             ctaitt@lhai.com