Ultralife Corporation Reports Fourth Quarter Results
11 February 2016 - 11:00PM
Ultralife Corporation (NASDAQ:ULBI) reported operating income of
$0.5 million on revenue of $19.3 million for the quarter ended
December 31, 2015 compared to operating income of $1.0 million on
revenue of $19.9 million for the fourth quarter of 2014. For
total-year 2015, Ultralife produced operating income of $3.3
million on revenue of $76.4 million compared to an operating loss
of $1.4 million on revenue of $66.5 million for 2014.
“Fiscal 2015 was a strong year for Ultralife,” said Michael D.
Popielec, Ultralife’s President and Chief Executive Officer.
“We achieved our objective of producing profitable revenue growth
by increasing revenue 15%, expanding gross margin 140 basis points
to 30.5% and turning earnings per share to a positive $0.18
compared to a loss of $0.12 per share last year. Revenue
growth was balanced between government/defense and commercial
customers and included an increasing contribution from high value
proposition new products. In addition, building on the operating
leverage we began to realize in 2014, we generated operating income
growth of $4.8 million on a $9.9 million increase in revenue, a 48%
incremental return, while continuing to invest in new product
development.”
Popielec added, “Our performance during the fourth quarter was
solid as we ramped up production of new products, began to deliver
shipments under the VIPER program and prepared to acquire
Accutronics, a transaction we completed in January. We
ended the year in a strong position to deliver profitable growth in
2016 through continued maturation of diverse market opportunities,
ongoing new product development and disciplined adherence to our
business model parameters.”
Fourth Quarter 2015 Financial Results
Revenue was $19.3 million compared to $19.9 million for the
fourth quarter of 2014 with nearly all of the $0.7 million
reduction due to lower Communications Systems sales. Battery
& Energy Products sales were $16.6 million, $0.1 million lower
than last year with increased sales to government/defense customers
partially offsetting a decline in commercial sales reflecting large
stock-in orders to some customers in the prior year.
Communications Systems sales declined to $2.6 million from $3.2
million for the same period last year reflecting the fulfillment of
a large order in the fourth quarter of 2014.
Gross profit declined to $5.6 million from $6.3 million for the
fourth quarter a year ago. As a percentage of revenue, gross
profit declined 290 basis points to 28.8% from 31.7% last year,
primarily driven by a greater weighting of government/defense
sales, costs in our Communications Systems’ segment associated with
the ramp-up of some new products to large scale production, and
incremental social pension costs related to increased employment
levels in our China battery operation. Accordingly,
Battery & Energy Products’ gross margin was 27.6% compared to
30.0% last year, a decrease of 240 basis points, and Communications
Systems gross margin was 36.4% compared to 40.6% last year, a
decrease of 420 basis points.
Operating expenses were $5.0 million compared to $5.3 million
for the fourth quarter of 2014, reflecting higher new product
development spending, a non-cash charge of $0.15 million to write
down the value of a Communications Systems trademark, and expenses
related to the acquisition of Accutronics, offset by continued
control over discretionary spending. The trademark impairment
charge is based on compliance with Generally Accepted Accounting
Principles, taking into account time delays in the awarding by
government/defense customers in recent years of certain large
projects in our Communications Systems pipeline. As a
percentage of revenue, operating expenses declined 40 basis points
to 26.1% compared to 26.5% a year ago.
Operating income was $0.5 million compared to $1.0 million for
the fourth quarter of 2014 reflecting lower gross profit partially
offset by lower operating expenses. Operating margin was 2.7%
compared to 5.2% for the year-earlier period.
Net income was $0.5 million, or $0.03 per share, compared to net
income of $0.9 million, or $0.05 per share, for the fourth quarter
of 2014. The after-tax impact of the non-cash trademark
impairment charge on fourth quarter EPS was $.01.
Share Repurchase Program
During fiscal 2015, Ultralife repurchased 2,225,437 shares under
its current 3.4 million share repurchase program, which will end
April 30, 2016. Since the inception of the share repurchase program
on May 1, 2014, the Company has repurchased 2,442,191 shares at an
average cost of $4.04 per share.
About Ultralife Corporation
Ultralife Corporation serves its markets with products and
services ranging from power solutions to communications and
electronics systems. Through its engineering and collaborative
approach to problem solving, Ultralife serves government, defense
and commercial customers across the globe.
Headquartered in Newark, New York, the company's business
segments include: Battery & Energy Products and
Communications Systems. Ultralife has operations in North America,
Europe and Asia. For more information, visit
www.ultralifecorp.com.
Conference Call Information
Ultralife will hold its fourth quarter earnings conference call
today at 10:00 AM ET. To participate in the live call, please dial
(800) 915-4836 at least ten minutes before the scheduled start
time, identify yourself and ask for the Ultralife call. A
live webcast of the conference call will be available to investors
in the Events & Presentations section of the Company's website
at http://investor.ultralifecorporation.com. 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.
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:
potential reductions in U.S. military spending, uncertain
global economic conditions and acceptance of our new products on a
global basis. The Company cautions investors not to place
undue reliance on forward-looking statements, which reflect the
Company's analysis only as of today's date. The Company undertakes
no obligation to publicly update forward-looking statements to
reflect subsequent events or circumstances. 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 CORPORATION AND
SUBSIDIARIES |
CONSOLIDATED BALANCE
SHEETS(Dollars in Thousands) |
(unaudited) |
|
|
|
|
ASSETS |
|
December 31, |
|
2015 |
|
2014 |
Current
assets: |
|
|
|
Cash and cash
equivalents |
$ |
14,533 |
|
|
$ |
17,866 |
|
Trade accounts
receivable, net |
|
11,430 |
|
|
|
11,295 |
|
Inventories, net |
|
23,814 |
|
|
|
26,086 |
|
Prepaid expenses and
other current assets |
|
2,174 |
|
|
|
1,603 |
|
Total current
assets |
|
51,951 |
|
|
|
56,850 |
|
Property,
equipment and improvements, net |
|
9,038 |
|
|
|
9,812 |
|
Goodwill,
intangibles and other assets |
|
20,582 |
|
|
|
20,980 |
|
Total assets |
$ |
81,571 |
|
|
$ |
87,642 |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY |
Current
liabilities: |
|
|
|
Accounts payable |
$ |
6,494 |
|
|
$ |
6,996 |
|
Accrued compensation
and related benefits |
|
2,377 |
|
|
|
1,725 |
|
Accrued expenses and
other current liabilities |
|
1,987 |
|
|
|
2,490 |
|
Total current
liabilities |
|
10,858 |
|
|
|
11,211 |
|
Deferred
income taxes and other non-current liabilities
|
|
4,653 |
|
|
|
4,518 |
|
Total liabilities |
|
15,511 |
|
|
|
15,729 |
|
|
|
|
|
Commitments
and contingencies (Note 10) |
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
Common stock |
|
1,918 |
|
|
|
1,895 |
|
Capital in excess of
par value |
|
177,007 |
|
|
|
175,939 |
|
Accumulated
deficit |
|
(94,051 |
) |
|
|
(96,920 |
) |
Accumulated other
comprehensive loss |
|
(863 |
) |
|
|
(467 |
) |
Treasury stock |
|
(17,808 |
) |
|
|
(8,420 |
) |
Total Ultralife
equity |
|
66,203 |
|
|
|
72,027 |
|
Noncontrolling
interest |
|
(143 |
) |
|
|
(114 |
) |
Total shareholders’
equity |
|
66,060 |
|
|
|
71,913 |
|
|
|
|
|
Total liabilities and
shareholders' equity |
$ |
81,571 |
|
|
$ |
87,642 |
|
|
|
|
|
|
ULTRALIFE
CORPORATION AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(In
Thousands except per share amounts) |
(unaudited) |
|
|
|
Three month
periods ended |
|
Year
ended |
|
December
31, |
|
December
31, |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
Revenues: |
|
|
|
|
|
|
|
Battery & energy products |
$ |
16,634 |
|
|
$ |
16,772 |
|
|
$ |
65,272 |
|
|
$ |
56,772 |
|
Communication systems |
|
2,617 |
|
|
|
3,176 |
|
|
|
11,155 |
|
|
|
9,722 |
|
Total
revenues |
$ |
19,251 |
|
|
$ |
19,948 |
|
|
$ |
76,427 |
|
|
$ |
66,494 |
|
|
|
|
|
|
|
|
|
Cost of products sold: |
|
|
|
|
|
|
|
Battery & energy products |
|
12,036 |
|
|
|
11,745 |
|
|
|
46,574 |
|
|
|
41,256 |
|
Communication systems |
|
1,665 |
|
|
|
1,886 |
|
|
|
6,537 |
|
|
|
5,888 |
|
Total cost of products
sold |
|
13,701 |
|
|
|
13,631 |
|
|
|
53,111 |
|
|
|
47,144 |
|
|
|
|
|
|
|
|
|
Gross profit |
|
5,550 |
|
|
|
6,317 |
|
|
|
23,316 |
|
|
|
19,350 |
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
Research and development |
|
1,686 |
|
|
|
1,323 |
|
|
|
5,603 |
|
|
|
5,333 |
|
Selling, general and
administrative |
|
3,196 |
|
|
|
3,962 |
|
|
|
14,233 |
|
|
|
15,460 |
|
Intangible asset impairment |
|
150 |
|
|
|
- |
|
|
|
150 |
|
|
|
- |
|
Total operating expenses |
|
5,032 |
|
|
|
5,285 |
|
|
|
19,986 |
|
|
|
20,793 |
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
518 |
|
|
|
1,032 |
|
|
|
3,330 |
|
|
|
(1,443 |
) |
|
|
|
|
|
|
|
|
Other (expense) income: |
|
|
|
|
|
|
|
Interest income |
|
1 |
|
|
|
1 |
|
|
|
3 |
|
|
|
13 |
|
Interest and financing expense |
|
(51 |
) |
|
|
(65 |
) |
|
|
(248 |
) |
|
|
(218 |
) |
Miscellaneous |
|
26 |
|
|
|
(26 |
) |
|
|
65 |
|
|
|
(154 |
) |
Income (loss) from continuing operations
before income taxes |
|
494 |
|
|
|
942 |
|
|
|
3,150 |
|
|
|
(1,802 |
) |
Income tax (benefit) provision |
|
(2 |
) |
|
|
91 |
|
|
|
310 |
|
|
|
268 |
|
|
|
|
|
|
|
|
|
Net income (loss) from continuing
operations |
|
496 |
|
|
|
851 |
|
|
|
2,840 |
|
|
|
(2,070 |
) |
Income (loss) from discontinued operations, net
of tax |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(61 |
) |
Net income (loss) |
|
496 |
|
|
|
851 |
|
|
|
2,840 |
|
|
|
(2,131 |
) |
Net loss attributable to non-controlling
interest |
|
6 |
|
|
|
2 |
|
|
|
29 |
|
|
|
15 |
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to
Ultralife |
|
502 |
|
|
|
853 |
|
|
|
2,869 |
|
|
|
(2,116 |
) |
|
|
|
|
|
|
|
|
Other comprehensive income: |
|
|
|
|
|
|
|
Foreign currency translation
adjustments |
|
(113 |
) |
|
|
(17 |
) |
|
|
(396 |
) |
|
|
147 |
|
Comprehensive income (loss) attributable
to Ultralife |
$ |
389 |
|
|
$ |
836 |
|
|
$ |
2,473 |
|
|
$ |
(1,969 |
) |
|
|
|
|
|
|
|
|
Net income (loss) per share attributable
to Ultralife common shareholders – basic: |
|
|
|
|
|
|
|
Continuing operations |
$.03 |
|
$.05 |
|
$.18 |
|
$(.12) |
Discontinued operations |
.00 |
|
.00 |
|
.00 |
|
(.00) |
Total |
$.03 |
|
$.05 |
|
$.18 |
|
$(.12) |
Net income per share attributable to
Ultralife common shareholders – diluted: |
|
|
|
|
|
|
|
Continuing operations |
$.03 |
|
$.05 |
|
$.17 |
|
|
Discontinued operations |
.00 |
|
.00 |
|
.00 |
|
|
Total |
$.03 |
|
$.05 |
|
$.17 |
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding –
basic |
|
15,271 |
|
|
|
17,374 |
|
|
|
16,182 |
|
|
|
17,475 |
|
Weighted average shares outstanding –
diluted |
|
15,757 |
|
|
|
17,513 |
|
|
|
16,419 |
|
|
|
Company Contact:
Ultralife Corporation
Philip A. Fain
(315) 332-7100
pfain@ulbi.com
Investor Relations Contact:
LHA
Jody Burfening
(212) 838-3777
jburfening@lhai.com
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