EX-99.1 2 a5202033ex991.txt EXHIBIT 99.1 Exhibit 99.1 Ultralife Batteries Reports Second Quarter Revenues of $21.4 Million; Management Increases Fiscal 2006 Guidance to Reflect the Acquisitions of ABLE New Energy and McDowell Research NEWARK, N.Y.--(BUSINESS WIRE)--Aug. 3, 2006--Ultralife Batteries, Inc. (NASDAQ: ULBI) reported results for the second quarter ended July 1, 2006. Operating income for the quarter was $0.5 million on revenues of $21.4 million. Included in operating income was stock-based compensation expense of $0.3 million. In comparison, the company reported operating income of $0.2 million on revenues of $21.6 million for the same period last year. Second quarter revenues reflect growth from the company's automotive telematics products partially offset by lower BA-5390 battery shipments. As a percentage of revenues, gross margins amounted to 20% compared with 19% in the same quarter last year. Operating expenses were $3.9 million, including $0.3 million in stock-based compensation expense, compared to $4.0 million in operating expenses a year ago. Net income for the second quarter of 2006 was $0.1 million, or $0.01 per diluted common share, compared to a net loss of $1.4 million, or $0.10 loss per diluted common share, for the second quarter of 2005. For the six-month period ended July 1, 2006, revenues totaled $39.7 million compared to $37.0 million for the same period last year. The company reported operating income of $0.7 million, including $0.6 million in stock-based compensation expense, compared to an operating loss of $1.5 million for the first six months of 2005. Net income for the first half of 2006 was $0.3 million, or $0.02 per share, compared to a net loss for the same period last year of $3.0 million, or $0.21 per share. "Having met our financial and strategic goals for the second quarter of 2006, we are focusing our efforts on accomplishing our plans for the year, which include continuing to grow our commercial business and diversify our government/military business, and integrating the two companies we recently acquired, ABLE New Energy and McDowell Research," said John D. Kavazanjian, president and chief executive officer. "We are making progress in strengthening our presence in target commercial markets, notably automotive telematics, where this quarter we expanded a customer relationship to supply another platform for model year 2007. "The addition of ABLE advances Ultralife's position as the supplier of choice of high-energy power sources to commercial customers in an expanding set of target markets. We have already started selling ABLE's products and are enhancing their operations by leveraging our engineering and manufacturing process expertise," continued Mr. Kavazanjian. "McDowell builds on our efforts to diversify our government/military business by extending our penetration into foreign defense organizations and the growing special operations area while strengthening our relationships with U.S. prime defense contractors. We are coordinating our strategies to operate as an integrated company with a diversified set of growth opportunities supported by broadened sales coverage and an expanded product portfolio." Mr. Kavazanjian concluded, "The traction we are gaining in the commercial business, coupled with the opportunities we have to broaden our government/military business, supports our confidence in our second half outlook." Outlook Management has revised its guidance for the full year 2006 to include the contributions from ABLE and McDowell. For the full year of 2006, the company now expects revenues of approximately $100 million. For the third quarter of 2006 management expects revenues to be between $25 million and $29 million and operating income to be in the range of $1.2 million to $2.4 million, including approximately $0.4 million in non-cash stock-based compensation expense. 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, Australia and New Zealand, among others. Ultralife's headquarters, principal manufacturing and research facilities are in Newark, New York, near Rochester. Ultralife's three other operating units are: Ultralife Batteries (UK) Ltd., in Abingdon, England; McDowell Research in Waco, Texas; and ABLE New Energy in Shenzhen, China. Detailed information on 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: addressing the process of U.S. military procurement, 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 August 3, 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 #9143546, during the period starting at 1:00 p.m. ET August 3 and ending at 1:00 p.m. ET August 10, 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 Six-Month Periods Ended Periods Ended July 1, July 2, July 1, July 2, 2006 2005 2006 2005 ---- ---- ---- ---- Revenues: Non-rechargeable products $18,458 $17,692 $34,103 $30,500 Rechargeable products 2,648 3,262 5,213 5,390 Technology contracts 287 649 396 1,076 -------- -------- -------- -------- Total revenues 21,393 21,603 39,712 36,966 Cost of products sold: Non-rechargeable products 14,900 13,983 27,223 24,851 Rechargeable products 1,859 2,823 3,728 4,900 Technology contracts 257 592 414 987 -------- -------- -------- -------- Total cost of products sold 17,016 17,398 31,365 30,738 -------- -------- -------- -------- Gross margin 4,377 4,205 8,347 6,228 Operating expenses: Research and development 884 1,059 1,844 1,905 Selling, general, and administrative 3,032 2,942 5,814 5,843 -------- -------- -------- -------- Total operating expenses 3,916 4,001 7,658 7,748 -------- -------- -------- -------- Operating income /(loss) 461 204 689 (1,520) Other income (expense): Interest income 40 58 85 118 Interest expense (207) (180) (412) (373) Gain on insurance settlement 43 - 191 - Miscellaneous 139 (191) 147 (194) -------- -------- -------- -------- Income/(loss) before income taxes 476 (109) 700 (1,969) -------- -------- -------- -------- Income tax provision/(benefit)- current 20 15 24 (2) Income tax provision/(benefit)- deferred 347 1,315 427 1,022 -------- -------- -------- -------- Total income taxes 367 1,330 451 1,020 -------- -------- -------- -------- Net Income/(Loss) $ 109 $(1,439) $ 249 $(2,989) ======== ======== ======== ======== Earnings/(Loss) per share - basic $ 0.01 $ (0.10) $ 0.02 $ (0.21) ======== ======== ======== ======== Earnings/(Loss) per share - diluted $ 0.01 $ (0.10) $ 0.02 $ (0.21) ======== ======== ======== ======== Weighted average shares outstanding - basic 14,851 14,450 14,807 14,413 ======== ======== ======== ======== Weighted average shares outstanding - diluted 15,165 14,450 15,150 14,413 ======== ======== ======== ======== ULTRALIFE BATTERIES, INC. CONSOLIDATED BALANCE SHEETS (In Thousands, Except Per Share Amounts) (unaudited) ---------------------------------------------------------------------- July 1, December 31, 2006 2005 ---------- ----------- ASSETS Current assets: Cash and investments $ 4,237 $ 3,214 Trade accounts receivable, net 12,748 10,965 Inventories 17,010 19,446 Prepaid expenses and other current assets 4,158 5,737 ---------- ----------- Total current assets 38,153 39,362 Property and equipment 19,892 19,931 Goodwill 2,806 - Other assets 20,892 21,464 ---------- ----------- Total Assets $ 81,743 $ 80,757 ========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short-term debt and current portion of long- term debt $ 6,190 $ 7,715 Accounts payable 5,681 5,218 Other current liabilities 4,191 5,450 ---------- ----------- Total current liabilities 16,062 18,383 ---------- ----------- Long-term liabilities: Long-term debt and capital lease obligations 25 25 Other long-term liabilities 251 242 ---------- ----------- Total long-term liabilities 276 267 ---------- ----------- Shareholders' equity: Common stock, par value $0.10 per share 1,565 1,547 Capital in excess of par value 133,159 130,530 Accumulated other comprehensive income (652) (1,054) Accumulated deficit (66,289) (66,538) ---------- ----------- 67,783 64,485 Less --Treasury stock, at cost 2,378 2,378 ---------- ----------- Total shareholders' equity 65,405 62,107 ---------- ----------- Total Liabilities and Shareholders' Equity $ 81,743 $ 80,757 ========== =========== CONTACT: Ultralife Batteries, Inc. Robert W. Fishback, 315-332-7100 bfishback@ulbi.com or Lippert/Heilshorn & Associates, Inc. Investor Relations: Jody Burfening, 212-838-3777 jburfening@lhai.com