Exhibit 99.1
Ultralife Batteries Reports First Quarter Results;
Operating Income Increases $2.0 Million on $3.0 Million Revenue Gain
NEWARK, N.Y.--(BUSINESS WIRE)--May 4, 2006--Ultralife Batteries,
Inc. (NASDAQ:ULBI) reported results for the first quarter ended April
1, 2006. Operating income for the quarter was $0.2 million on revenues
of $18.3 million. Included in operating income was stock-based
compensation expense of approximately $0.3 million. In comparison, the
company reported an operating loss of $1.7 million on revenue of $15.4
million for the same period last year.
Revenues for the quarter rose $3.0 million over last year, mainly
reflecting higher sales of batteries to commercial customers,
particularly in the automotive telematics market, and modestly higher
sales of a variety of batteries to military customers. As a percentage
of revenues, gross margins amounted to 22% compared with 13% in the
same quarter last year, as sales volumes grew and manufacturing
efficiencies improved. Operating expenses were $3.7 million,
consistent with the comparable period a year ago. Net income for the
first quarter of 2006 was $0.1 million, or $0.01 per diluted common
share, compared to a net loss of $1.6 million, or an $0.11 loss per
diluted common share, for the first quarter of 2005.
"Consistent with our preliminary assessment of the first quarter
results, constraints on BA-5390 shipments to the U.S. military
impinged on revenue growth for the quarter; however, the manufacturing
efficiency improvements and cost controls we implemented in the latter
half of 2005 produced positive operating income," said John D.
Kavazanjian, president and chief executive officer. "Since the quarter
close, we are preparing to accelerate shipments against existing
orders for the BA-5390A, the only qualified battery with a
state-of-charge indicator (SOCI) currently in production, in response
to a request from the Department of Defense, which intends to begin
fielding them as soon as practicable. This request reinforces our
belief that demand for the BA-5390A is strong and will escalate as the
U.S. military continues to convert to lithium-manganese dioxide
technology over the course of the year, resulting in further market
share gains for Ultralife.
"As we enter the second half of the year, we are well positioned
to leverage our cost infrastructure as revenues grow. Growth in
commercial markets is helping us lessen our dependence on BA-5390
battery sales and our prospects for continued growth from a broadening
customer base in our target markets remain strong."
Outlook
Management expects revenues in the second quarter of 2006 to be
approximately $20 million, with upside dependent in part upon
additional military orders. Management anticipates operating income
will be in the range of $0.5 million in the second quarter, including
$0.3 million of non-cash stock-based compensation expense.
For the full year of 2006, the company reiterates its outlook for
at least $90 million, with significant growth in the second half of
the year related to growth in military sales, particularly BA-5390s.
Growth above $90 million will continue to 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 May 4, 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 #8704306, during the period starting at 1:00
p.m. ET May 4 and ending at 1:00 p.m. ET May 11, 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 Periods Ended
April 1, April 2,
2006 2005
---- ----
Revenues:
Non-rechargeable products $ 15,645 $ 12,808
Rechargeable products 2,565 2,128
Technology contracts 109 427
----------- -----------
Total revenues 18,319 15,363
Cost of products sold:
Non-rechargeable products 12,323 10,868
Rechargeable products 1,869 2,077
Technology contracts 157 395
----------- -----------
Total cost of products sold 14,349 13,340
----------- -----------
Gross margin 3,970 2,023
Operating expenses:
Research and development 960 846
Selling, general, and administrative 2,782 2,901
----------- -----------
Total operating expenses 3,742 3,747
----------- -----------
Operating income /(loss) 228 (1,724)
Other income (expense):
Interest income 45 60
Interest expense (205) (193)
Gain on insurance settlement 148 -
Miscellaneous 8 (3)
----------- -----------
Income/(loss) before income taxes 224 (1,860)
----------- -----------
Income tax provision/(benefit)-current 4 (17)
Income tax provision/(benefit)-deferred 80 (293)
----------- -----------
Total income taxes 84 (310)
----------- -----------
Net Income/(Loss) $ 140 $ (1,550)
=========== ===========
Earnings/(Loss) per share - basic $ 0.01 $ (0.11)
=========== ===========
Earnings/(Loss) per share - diluted $ 0.01 $ (0.11)
=========== ===========
Weighted average shares outstanding - basic 14,756 14,376
=========== ===========
Weighted average shares outstanding -
diluted 15,122 14,376
=========== ===========
ULTRALIFE BATTERIES, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Per Share Amounts)
(unaudited)
- ----------------------------------------------------------------------
April 1, December 31,
2006 2005
---- ----
ASSETS
Current assets:
Cash and investments $ 3,491 $ 3,214
Trade accounts receivable, net 12,869 10,965
Inventories 18,868 19,446
Prepaid expenses and other current assets 4,189 5,737
----------- ------------
Total current assets 39,417 39,362
Property and equipment 19,602 19,931
Other assets 21,412 21,464
----------- ------------
Total Assets $ 80,431 $ 80,757
=========== ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt and current portion of
long-term debt $ 7,184 $ 7,715
Accounts payable 5,336 5,218
Other current liabilities 4,765 5,450
----------- ------------
Total current liabilities 17,285 18,383
----------- ------------
Long-term liabilities:
Long-term debt and capital lease obligations 25 25
Other long-term liabilities 282 242
----------- ------------
Total long-term liabilities 307 267
----------- ------------
Shareholders' equity:
Common stock, par value $0.10 per share 1,551 1,547
Capital in excess of par value 131,045 130,530
Accumulated other comprehensive income (981) (1,054)
Accumulated deficit (66,398) (66,538)
----------- ------------
65,217 64,485
Less --Treasury stock, at cost 2,378 2,378
----------- ------------
Total shareholders' equity 62,839 62,107
----------- ------------
Total Liabilities and Shareholders' Equity $ 80,431 $ 80,757
=========== ============
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:
Chenoa Taitt, 212-838-3777
ctaitt@lhai.com