EX-99 3 a4565785ex991.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Ultralife Batteries, Inc. Reports Fourth Quarter Results - Operating Income Amounts to $2.3 Million on Record Revenues of $24.0 Million; Full Year 2003 Revenues Reach $79.5 Million NEWARK, N.Y.--(BUSINESS WIRE)--Feb. 5, 2004--Ultralife Batteries, Inc. (NASDAQ: ULBI) today reported operating income of $2.3 million on record quarterly revenues of $24.0 million for its fourth quarter ended December 31, 2003. Net income was $2.2 million, or $0.15 per diluted share. For the comparable period last year, the Company reported an operating loss of $1.7 million and a net loss of $0.4 million, or $0.03 per share. Revenues for the fourth quarter nearly tripled to $24.0 million compared to $8.8 million in the same quarter last year on the strength of orders for HiRate(R) batteries, mainly the BA-5390 batteries used by military organizations in a variety of communications and weapons systems. Gross margin rose to $5.3 million, or 22% of revenues, compared with $0.8 million, or 9% of revenues, in the same period last year reflecting sales and production volume increases and improved manufacturing efficiencies. Operating expenses were $3.0 million, an increase of $0.5 million over last year due to increased selling and administrative costs associated with managing a growing business. Full year 2003 financial highlights include: -- Revenues reached $79.5 million, up 140% over 2002 -- Gross margin increased nearly six-fold to $17.1 million from $2.9 million in 2002 -- As a percent of revenues, gross margin expanded from 9% to 22% -- Operating income was $6.0 million, or 7.5% of revenues, compared to an operating loss of $21.8 million, including a $14.3 million impairment charge, in 2002 -- Net income amounted to $6.4 million, or $0.46 per diluted share, versus a net loss of $22.4 million, or $1.75 per share, in 2002 "We hit the ground running at the beginning of 2003, breaking through to profitability in the first quarter, and have not slowed down," said John Kavazanjian, president and chief executive officer. "This year's outstanding performance is a clear affirmation of the strategy Ultralife put in place four years ago: improve manufacturing processes and asset management; target promising markets that are advantaged by our lithium technology - military, medical devices, automotive telematics, safety and security, and search and rescue; and, organize manufacturing operations to enable cost-efficient customization. To date, our dramatic success with the military market has enabled us to build volumes and establish a platform for growth into our targeted commercial sectors." Added Kavazanjian, "We are especially proud of having delivered four consecutive quarters of explosive revenue growth, operating profit, net income and positive operating cash flow in 2003. A combination of escalating demand from the military for portable electronic equipment, market share gains in the military market, expanding OEM relationships and orders for emerging commercial applications drove revenue growth. In addition, we demonstrated the returns to scale of the business model, achieving gross margin and operating margin expansion." Outlook For the first quarter ending March 27, 2004, management projects operating income will reach approximately $3.0 million on revenues of approximately $26.0 million. This compares to operating income of $0.6 million on revenues of $15.4 million in the comparable quarter in 2003. In addition, based on current order flow, the company anticipates sequential revenue growth for the second quarter. As a result, management now expects full year operating income of approximately $12 million on total revenues of approximately $104 million. This compares to the previous guidance for 2004 of $11 million in operating income on $100 million in sales. Kavazanjian concluded, "At Ultralife we have set our sights on moving toward $200 million in revenue over the next few years as we firmly establish our position as the leading supplier of power solutions for diverse applications that need high-energy density, reliable, non-rechargeable and rechargeable power sources, leveraging our expertise in lithium chemistries. By continuing to exploit opportunities in our target markets and gain manufacturing efficiencies, we intend to move toward a 15% operating margin within the next couple years." 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 and research facility, is located in Abingdon, U.K. Both facilities are ISO-9001 certified. This press release contains 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, world events, 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. Detailed information on Ultralife is available at the Company's web site, www.ultralifebatteries.com. Conference Call Information Investors are invited to listen to a live webcast of the conference call at 10:00 a.m. ET on February 5 at www.ultralifebatteries.com/invest.asp. 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 800-428-6051, Reservation #331113, starting at 12:00 p.m. ET February 5 until 12:00 p.m. ET February 12. ULTRALIFE BATTERIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In Thousands, Except Per Share Amounts) (unaudited) ---------------------------------------------------------------------- Three Month Twelve Month Period Ended Period Ended December December December December 31, 31, 31, 31, 2003 2002 2003 2002 -------- -------- -------- --------- Revenues: Battery sales $24,015 $8,659 $78,598 $32,703 Technology contracts 23 93 852 336 -------- -------- -------- --------- Total revenues 24,038 8,752 79,450 33,039 Cost of products sold: Battery costs 18,720 7,965 61,920 29,895 Technology contracts 5 24 434 245 -------- -------- -------- --------- Total cost of products sold 18,725 7,989 62,354 30,140 -------- -------- -------- --------- Gross margin 5,313 763 17,096 2,899 Operating expenses: Research and development 622 629 2,505 3,243 Selling, general, and administrative 2,363 1,872 8,610 7,177 Impairment of long-lived assets - - - 14,318 -------- -------- -------- --------- Total operating expenses 2,985 2,501 11,115 24,738 -------- -------- -------- --------- Operating income (loss) 2,328 (1,738) 5,981 (21,839) Other income (expense): Interest, net (140) (69) (520) (352) Equity loss in UTI - (314) - (2,452) Gain on sale of UTI Stock - 1,459 - 1,459 Gain from forgiveness of debt / grant - - 781 - Miscellaneous 128 287 311 773 -------- -------- -------- --------- Income (loss) before income taxes 2,316 (375) 6,553 (22,411) Income taxes 106 - 106 - -------- -------- -------- --------- Net income (loss) $2,210 $(375) $6,447 $(22,411) ======== ======== ======== ========= Earnings (loss) per share - basic $0.16 $(0.03) $0.49 $(1.75) ======== ======== ======== ========= Earnings (loss) per share - diluted $0.15 $(0.03) $0.46 $(1.75) ======== ======== ======== ========= Average shares outstanding - basic 13,501 12,825 13,132 12,786 ======== ======== ======== ========= Average shares outstanding - diluted 14,537 12,825 13,917 12,786 ======== ======== ======== ========= ULTRALIFE BATTERIES, INC. CONSOLIDATED BALANCE SHEETS (In Thousands, Except Per Share Amounts) (unaudited) ---------------------------------------------------------------------- December December 31, 31, ASSETS 2003 2002 -------- -------- Current assets: Cash and investments $882 $1,374 Trade accounts receivable, net 17,803 6,200 Inventories 10,209 5,813 Prepaid expenses and other current assets 3,662 968 -------- -------- Total current assets 32,556 14,355 Property and equipment 18,213 15,336 Other assets 1,583 1,683 -------- -------- Total Assets $52,352 $31,374 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short-term debt and current portion of long-term debt $8,295 $816 Accounts payable 6,385 4,283 Other current liabilities 3,174 2,045 -------- -------- Total current liabilities 17,854 7,144 Long-term debt and capital lease obligations 68 1,987 Shareholders' equity: Common stock, par value $0.10 per share 1,430 1,358 Capital in excess of par value 120,626 115,251 Accumulated other comprehensive loss (723) (1,016) Accumulated deficit (84,525) (90,972) -------- -------- 36,808 24,621 Less --Treasury stock, at cost 2,378 2,378 -------- -------- Total shareholders' equity 34,430 22,243 -------- -------- Total Liabilities and Shareholders' Equity $52,352 $31,374 ======== ======== CONTACT: Company Contact: Ultralife Batteries, Inc. Robert W. Fishback, 315-332-7100 bfishback@ulbi.com or Investor Relations Contact: Lippert/Heilshorn & Associates, Inc. Jody Burfening, 212-838-3777 jburfening@lhai.com or Media Contact: Lippert/Heilshorn & Associates, Inc. Chenoa Taitt, 212-201-6635 ctaitt@lhai.com