Exhibit 99.1
Ultralife Batteries Reports Fourth Quarter Results
NEWARK, N.Y.--(BUSINESS WIRE)--Feb. 9, 2006--Ultralife Batteries,
Inc. (NASDAQ: ULBI) reported results for the fourth quarter and full
year periods ended December 31, 2005. Operating income for the quarter
was $0.1 million on revenues of $17.8 million. In comparison, the
company reported an operating loss of $3.4 million on revenue of $18.4
million for the same period last year. The operating loss in the prior
year included a non-cash impairment charge of $1.8 million related to
polymer rechargeable production equipment.
The fourth quarter revenue reflects an increase in sales of
high-rate battery products offset by lower shipments of BA-5390
batteries to the U.S. military, as anticipated. Revenues associated
with technology contracts declined $0.8 million due to the timing of
development activity with various contracts. As a percentage of
revenues, gross margins were 21% compared to 11% in the same quarter
last year, mainly as a result of improved manufacturing efficiencies
in the U.K operation. Operating expenses were $3.5 million compared
with $3.7 million last year, excluding the $1.8 million impairment
charge last year. Income taxes in the fourth quarter of 2005 amounted
to a benefit of $0.2 million. The net loss for the fourth quarter of
2005 was $40,000, or less than $.01 per share, compared with net
income of $18.1 million, or $1.20 per diluted share, for the same
period a year ago. The results in the fourth quarter of 2004 reflected
a $21.1 million, or $1.41 per diluted share, income tax benefit
related to the recognition of a deferred tax asset associated with the
company's U.S. net operating loss carryforwards.
For the twelve-month period ended December 31, 2005, revenues
totaled $70.5 million compared with $98.2 million reported for 2004. A
decline in shipments of BA-5390 batteries to the U.S. military was
partially offset by higher commercial revenues and other
military-related sales. The company reported an operating loss of $2.9
million for full year of 2005 compared to operating income of $5.1
million last year, reflecting lower gross margins associated with
lower volumes. The net loss for 2005 was $4.3 million, or $.30 per
share, compared to net income of $22.3 million, or $1.48 per diluted
share, for 2004, including the $21.1 million impact from the
recognition of the income tax benefit.
"During 2005, Ultralife made great strides in building its
non-9-volt commercial business with revenues increasing by
approximately 40% on the strength of groundbreaking automotive
telematics contracts in addition to design wins in other target
markets where our power solutions add value to device applications,
notably search and rescue. We also succeeded in trimming our cost
structure in the second half of the year, as planned, realigning our
business model to be breakeven at the operating earnings line on $18
million in quarterly revenue," said John D. Kavazanjian, president and
chief executive officer.
"Looking ahead, we are optimistic about the prospects for
continued growth of our commercial business. Our goals include adding
new automotive telematics contracts and continuing to convert design
wins into production contracts. As previously announced, adding Able
New Energy Co. Ltd. to the Ultralife family will also open up
significant new avenues for our commercial business while creating
opportunities to reduce costs even further by employing sourcing
alternatives in China," concluded Kavazanjian. "On the military side,
indications are favorable for renewed order flow from the U.S.
Military and we are ready to deliver with the qualified BA-5390A and
BA-5347 batteries. Over the course of 2006, we plan to complete the
qualification of the other batteries under the Next Gen II, Phase IV
award both in the U.S. and the U.K. while actively promoting the
migration from our competitors' sulfur dioxide chemistry to
Ultralife's manganese dioxide batteries. In summary, we are in an
excellent position competitively with an expanding set of target
market opportunities supported by an increasing array of power
solutions and improving operational efficiency."
Outlook
Management expects revenues in the first quarter of 2006 to be
approximately $21 million, including the restart of shipments of
BA-5390 batteries to the U.S. military. Management projects operating
income will be in the range of $750,000 in the first quarter,
excluding any impact from the expensing of stock options pursuant to
the adoption of FAS 123R. The company projects its first quarter
non-cash expense related to stock options will be approximately
$250,000.
For the full year, the company anticipates quarterly growth
resulting in revenue of at least $90 million. Growth above $90 million
will depend on a number of factors, including the pace at which the
military transitions to manganese dioxide technology, and further
expansion in commercial markets.
About Ultralife Batteries, Inc.
Ultralife is a global provider of high-energy power systems for
diverse applications. The company develops, manufactures and markets a
wide range of non-rechargeable and rechargeable batteries, charging
systems and accessories for use in military, industrial and consumer
portable electronic products. Through its portfolio of standard
products and engineered solutions, Ultralife is at the forefront of
providing the next generation of power systems. Industrial, retail and
government customers include General Dynamics, Philips Medical
Systems, General Motors, Energizer, Kidde Safety, Lowe's, Radio Shack
and the national defense agencies of the United States, United
Kingdom, Germany and Australia, among others.
Ultralife's headquarters, principal manufacturing and research
facilities are in Newark, New York, near Rochester. Ultralife
Batteries (UK) Ltd., a second manufacturing facility, is located in
Abingdon, England. Both facilities are ISO-9001 certified. Detailed
information on Ultralife is available at the Company's web site,
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.
Conference Call Information
Investors are invited to listen to a live webcast of the
conference call at 10:00 a.m. ET on February 9, 2006 at
http://investor.ultralifebatteries.com. To listen to the live 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 broadcast, a replay of the webcast will be available
shortly after the call at the same location for 90 days. Investors may
also listen to a telephone replay of the conference call by dialing
888-203-1112, Reservation #6857549, during the period starting at 1:00
p.m. ET February 9 and ending at 1:00 p.m. ET February 16, 2006.
Ultralife(R) is a registered trademark of Ultralife Batteries,
Inc.
ULTRALIFE BATTERIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
(Unaudited)
- ----------------------------------------------------------------------
Three-Month Twelve-Month
Periods Ended Periods Ended
December December December December
31, 31, 31, 31,
2005 2004 2005 2004
---- ---- ---- ----
Revenues:
Non-rechargeable products $15,204 $14,913 $58,509 $87,899
Rechargeable products 2,391 2,418 10,067 8,071
Technology contracts 248 1,031 1,925 2,212
------- ------- ------- -------
Total revenues 17,843 18,362 70,501 98,182
Cost of products sold:
Non-rechargeable products 11,781 13,017 47,626 67,408
Rechargeable products 2,021 2,413 8,751 8,653
Technology contracts 371 886 1,866 1,819
------- ------- ------- -------
Total cost of products sold 14,173 16,316 58,243 77,880
------- ------- ------- -------
Gross margin 3,670 2,046 12,258 20,302
Operating expenses:
Research and development 877 878 3,751 2,633
Selling, general, and
administrative 2,664 2,789 11,409 10,771
Impairment of long lived assets - 1,803 - 1,803
------- ------- ------- -------
Total operating expenses 3,541 5,470 15,160 15,207
------- ------- ------- -------
Operating income /(loss) 129 (3,424) (2,902) 5,095
Other income (expense):
Interest income 23 49 185 116
Interest expense (228) (189) (821) (598)
Gain on fires - 214 - 214
Write-off of UTI investment and
note receivable - - - (3,951)
Miscellaneous (115) 320 (318) 352
------- ------- ------- -------
(Loss)/income before income taxes (191) (3,030) (3,856) 1,228
------- ------- ------- -------
Income tax provision-current - 54 3 32
Income tax (benefit)/provision-
deferred (151)(21,136) 486 (21,136)
------- ------- ------- -------
Total income taxes (151)(21,082) 489 (21,104)
------- ------- ------- -------
Net (loss)/income $(40)$18,052 $(4,345) $22,332
======= ======= ======= =======
(Loss)/earnings per share - basic $(0.00) $1.26 $(0.30) $1.59
======= ======= ======= =======
(Loss)/earnings per share - diluted $(0.00) $1.20 $(0.30) $1.48
======= ======= ======= =======
Weighted average shares outstanding
- basic 14,727 14,288 14,551 14,087
======= ======= ======= =======
Weighted average shares outstanding
- diluted 14,727 15,000 14,551 15,074
======= ======= ======= =======
ULTRALIFE BATTERIES, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Per Share Amounts)
(unaudited)
- ----------------------------------------------------------------------
December December
31, 31,
ASSETS 2005 2004
---- ----
Current assets:
Cash and investments $ 3,214 $11,529
Trade accounts receivable, net 10,965 8,585
Inventories 19,446 13,938
Prepaid expenses and other current assets 5,768 6,131
-------- --------
Total current assets 39,393 40,183
Property and equipment 19,931 20,202
Other assets 22,363 20,749
-------- --------
Total Assets $81,687 $81,134
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt and current portion of long-term
debt $ 7,715 $ 2,390
Accounts payable 5,218 3,545
Other current liabilities 5,481 3,603
-------- --------
Total current liabilities 18,414 9,538
-------- --------
Long-term liabilities:
Long-term debt and capital lease obligations 25 7,215
Other long-term liabilities 1,141 756
-------- --------
Total long-term liabilities 1,166 7,971
-------- --------
Shareholders' equity:
Common stock, par value $0.10 per share 1,547 1,502
Capital in excess of par value 130,530 127,299
Accumulated other comprehensive income (1,054) (605)
Accumulated deficit (66,538) (62,193)
-------- --------
64,485 66,003
Less --Treasury stock, at cost 2,378 2,378
-------- --------
Total shareholders' equity 62,107 63,625
-------- --------
Total Liabilities and Shareholders' Equity $81,687 $81,134
======== ========
CONTACT: Ultralife Batteries, Inc.
Robert W. Fishback, 315-332-7100
bfishback@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