Ultralife Corporation (NASDAQ: ULBI) reported GAAP EPS of $0.13,
Adjusted EPS of $0.17 and operating income of $1.2 million on
revenue of $29.0 million for the fourth quarter ended December 31,
2020 compared to GAAP EPS of $0.10, Adjusted EPS of $0.13 and
operating income of $2.5 million on revenue of $31.0 million for
the fourth quarter of 2019.
For fiscal 2020, Ultralife produced GAAP EPS of
$0.33, Adjusted EPS of $0.41 and operating income of $5.7 million
on revenue of $107.7 million compared to GAAP EPS of $0.32,
Adjusted EPS of $0.40 and operating income of $7.4 million on
revenue of $106.8 million for 2019. In addition, during 2020, the
Company reduced the debt related to its May 2019 acquisition of
Southwest Electronic Energy Corporation by $15.8 million, or 91.5%,
to $1.5 million as of December 31, 2020 while increasing its
year-end cash-on-hand by $3.2 million, or 43.9%, to $10.7
million.
“Fourth quarter operating results were in line
with our internal expectations and reflect the continuing negative
economic impact of the global pandemic, including oil & gas
market sluggishness. Battery & Energy Products medical sales
were up 94% and government/defense sales were up 19%, yet these
were offset by reductions in oil & gas and Communications
Systems sales. During the quarter, we also recognized a $1.6
million gain upon resolution of Ultralife’s claim in a class action
lawsuit,” said Michael D. Popielec, President and Chief Executive
Officer.
“Notwithstanding the unprecedented challenges we
faced during 2020, results for the year demonstrate the resiliency
of our business model, the efficacy of our end-market
diversification strategy and the strength of our balance sheet. We
grew total year sales to the highest level in nine years, sustained
profitability, generated operating cash flow and repaid nearly all
of the SWE acquisition-related debt,” added Popielec. “While the
outlook for demand in our end markets is less visible than we would
like, we will remain focused on what we can control: organic growth
initiatives, including completing transformational new product
development projects and investments in strategic capital
expenditure, and synergistic acquisitions.”
Fourth Quarter 2020 Financial Results
Revenue was $29.0 million, a decrease of $2.0
million or 6.6%, compared to $31.0 million for the fourth quarter
of 2019, as a 25.7% increase in core battery sales across
diversified end markets was offset by lower oil & gas market
and Communications Systems sales. Battery & Energy
Products revenues increased 0.7% to $25.3 million, compared to
$25.1 million last year, as a 94.3% increase in medical battery
sales, especially those used in ventilators, respirators and
infusion pumps, and an 18.8% increase in government/defense sales,
were offset by a 67.4% decline in oil & gas market sales.
Communications Systems sales decreased 37.6% to $3.7 million
compared to $5.9 million for the same period last year, primarily
reflecting 2019 shipments of vehicle amplifier-adaptor systems to
support the U.S. Army’s Network Modernization initiatives under the
delivery orders announced in October 2018. These orders were
completed in the second quarter of 2020. The net adverse impact of
COVID-19 on revenues for the 2020 fourth quarter was approximately
$2.6 million as a substantial increase in demand for medical
batteries was more than offset primarily by weakened demand in the
oil & gas and international industrial markets.
Gross profit was $7.4 million, or 25.4% of
revenue, compared to $9.4 million, or 30.2% of revenue, for the
same quarter a year ago. Battery & Energy Products’
gross margin was 25.2%, compared to 26.4% last year, primarily
reflecting lower volume for oil & gas market batteries.
Communications Systems gross margin was 26.3% compared to 46.1%
last year, due to sales mix and lower volume in 2020.
Operating expenses were $6.1 million compared to
$6.9 million last year, a reduction of 10.9%.
Operating expenses were 21.2% of revenue compared to 22.2% for the
year-earlier period.
Operating income was $1.2 million compared to
$2.5 million last year, and operating margin was 4.2% compared to
8.0% last year. The net adverse impact of COVID-19 on
operating income for the 2020 fourth quarter was approximately $1.2
million.
Other income of $1.6 million compared to other
expense of $0.3 million last year, primarily reflecting a $1.6
million gain realized during the fourth quarter upon favorable
resolution of Ultralife’s claim in a class action lawsuit.
Net income was $2.1 million or $0.13 per diluted
share on a GAAP basis using the U.S. statutory tax rate, compared
to net income of $1.6 million, or $0.10 per diluted share for the
fourth quarter of 2019. Adjusted EPS was $0.17 on a diluted basis
for the fourth quarter of 2020, compared to $0.13 for the 2019
period. Adjusted EPS excludes the provision for deferred taxes of
$0.6 million which primarily represents non-cash charges for U.S.
taxes which we expect will be fully offset by net operating loss
carryforwards and other tax credits for the foreseeable future. The
net adverse impact of COVID-19 on Adjusted EPS for the 2020 fourth
quarter was approximately $0.07.
Adjusted EBITDA, defined as EBITDA including
non-cash, stock-based compensation expense and excluding the $1.6
million gain on the class action settlement, for the fourth quarter
was $2.2 million or 7.6% of sales and for the 2020 trailing
twelve-month period was $9.7 million or 9.0% of sales.
See the “Non-GAAP Financial Measures” section of
this release for a reconciliation of Adjusted EPS to EPS and
Adjusted EBITDA to Net Income Attributable to Ultralife
Corporation.
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.ultralifecorporation.com.
Conference Call Information
Ultralife will hold its fourth quarter earnings conference call
today at 8:30 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 the impact of
COVID-19, potential reductions in revenues from key customers,
acceptance of our new products on a global basis and uncertain
global economic conditions. 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, 2020 |
|
December 31,2019 |
|
Current
Assets: |
|
|
|
|
Cash |
$ |
10,653 |
|
|
$ |
7,405 |
|
|
Trade Accounts Receivable, Net |
|
21,054 |
|
|
|
30,106 |
|
|
Inventories, Net |
|
28,193 |
|
|
|
29,759 |
|
|
Prepaid Expenses and Other Current Assets |
|
4,596 |
|
|
|
3,103 |
|
|
Total Current Assets |
|
64,496 |
|
|
|
70,373 |
|
|
|
|
|
|
|
Property,
Equipment and Improvements, Net |
|
22,850 |
|
|
|
22,525 |
|
|
Goodwill |
|
27,018 |
|
|
|
26,753 |
|
|
Other Intangible
Assets, Net |
|
9,209 |
|
|
|
9,721 |
|
|
Deferred Income
Taxes, Net |
|
11,836 |
|
|
|
13,222 |
|
|
Other Non-Current
Assets |
|
2,292 |
|
|
|
1,963 |
|
|
Total Assets |
$ |
137,701 |
|
|
$ |
144,557 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
Current Liabilities: |
|
|
|
|
|
Accounts Payable |
$ |
10,839 |
|
|
$ |
9,388 |
|
|
Current Portion of Long-Term Debt, Net |
|
1,361 |
|
|
|
1,372 |
|
|
Accrued Compensation and Related Benefits |
|
1,748 |
|
|
|
1,655 |
|
|
Accrued Expenses and Other Current Liabilities |
|
4,758 |
|
|
|
4,775 |
|
|
Total Current Liabilities |
|
18,706 |
|
|
|
17,190 |
|
|
Long-Term
Debt |
|
- |
|
|
|
15,780 |
|
|
Deferred Income
Taxes |
|
515 |
|
|
|
559 |
|
|
Other Non-Current
Liabilities |
|
1,557 |
|
|
|
1,278 |
|
|
Total Liabilities |
|
20,778 |
|
|
|
34,807 |
|
|
|
|
|
|
|
Shareholders'
Equity: |
|
|
|
|
Common Stock |
|
2,037 |
|
|
|
2,026 |
|
|
Capital in Excess of Par Value |
|
185,464 |
|
|
|
184,292 |
|
|
Accumulated Deficit |
|
(47,598 |
) |
|
|
(52,830 |
) |
|
Accumulated Other Comprehensive Loss |
|
(1,782 |
) |
|
|
(2,531 |
) |
|
Treasury Stock |
|
(21,321 |
) |
|
|
(21,231 |
) |
|
Total Ultralife Equity |
|
116,800 |
|
|
|
109,726 |
|
|
Non-Controlling
Interest |
|
123 |
|
|
|
24 |
|
|
Total Shareholders’ Equity |
|
116,923 |
|
|
|
109,750 |
|
|
|
|
|
|
|
Total Liabilities and Shareholders' Equity |
$ |
137,701 |
|
|
$ |
144,557 |
|
|
ULTRALIFE CORPORATION AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF INCOME |
(In Thousands Except Per Share Amounts) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three-Month Period Ended |
|
Year Ended |
|
December 31, |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
2020 |
|
|
|
2019 |
|
|
2020 |
|
|
|
2019 |
Revenues: |
|
|
|
|
|
|
|
Battery & Energy Products |
$ |
25,291 |
|
|
$ |
25,120 |
|
$ |
91,907 |
|
|
$ |
83,996 |
Communications Systems |
|
3,685 |
|
|
|
5,903 |
|
|
15,805 |
|
|
|
22,799 |
Total Revenues |
|
28,976 |
|
|
|
31,023 |
|
|
107,712 |
|
|
|
106,795 |
|
|
|
|
|
|
|
|
Cost of Products
Sold: |
|
|
|
|
|
|
|
Battery & Energy Products |
|
18,910 |
|
|
|
18,489 |
|
|
68,507 |
|
|
|
61,183 |
Communications Systems |
|
2,715 |
|
|
|
3,179 |
|
|
10,046 |
|
|
|
14,447 |
Total Cost of Products Sold |
|
21,625 |
|
|
|
21,668 |
|
|
78,553 |
|
|
|
75,630 |
|
|
|
|
|
|
|
|
Gross Profit |
|
7,351 |
|
|
|
9,355 |
|
|
29,159 |
|
|
|
31,165 |
|
|
|
|
|
|
|
|
Operating
Expenses: |
|
|
|
|
|
|
|
Research and Development |
|
1,518 |
|
|
|
2,153 |
|
|
5,947 |
|
|
|
6,805 |
Selling, General and Administrative |
|
4,618 |
|
|
|
4,730 |
|
|
17,511 |
|
|
|
16,992 |
Total Operating Expenses |
|
6,136 |
|
|
|
6,883 |
|
|
23,458 |
|
|
|
23,797 |
|
|
|
|
|
|
|
|
Operating
Income |
|
1,215 |
|
|
|
2,472 |
|
|
5,701 |
|
|
|
7,368 |
|
|
|
|
|
|
|
|
Other (Income)
Expense: |
|
|
|
|
|
|
|
Gain on Litigation
Settlement |
|
(1,593 |
) |
|
|
- |
|
|
(1,593 |
) |
|
|
- |
Other Expense, Net |
|
9 |
|
|
|
296 |
|
|
271 |
|
|
|
597 |
Total Other (Income) Expense |
|
(1,584 |
) |
|
|
296 |
|
|
(1,322 |
) |
|
|
597 |
|
|
|
|
|
|
|
|
Income Before Income
Taxes |
|
2,799 |
|
|
|
2,176 |
|
|
7,023 |
|
|
|
6,771 |
Income Tax Provision |
|
682 |
|
|
|
515 |
|
|
1,692 |
|
|
|
1,457 |
|
|
|
|
|
|
|
|
Net
Income |
|
2,117 |
|
|
|
1,661 |
|
|
5,331 |
|
|
|
5,314 |
|
|
|
|
|
|
|
|
Net Income Attributable to
Non-Controlling Interest |
|
9 |
|
|
|
35 |
|
|
99 |
|
|
|
109 |
|
|
|
|
|
|
|
|
Net Income
Attributable to Ultralife Corporation |
$ |
2,108 |
|
|
$ |
1,626 |
|
$ |
5,232 |
|
|
$ |
5,205 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Per Share
Attributable to Ultralife Common Shareholders – Basic |
$ |
.13 |
|
|
$ |
.10 |
|
$ |
.33 |
|
|
$ |
.33 |
|
|
|
|
|
|
|
|
Net Income Per Share
Attributable to Ultralife Common Shareholders –
Diluted |
$ |
.13 |
|
|
$ |
.10 |
|
$ |
.33 |
|
|
$ |
.32 |
|
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding – Basic |
|
15,940 |
|
|
|
15,861 |
|
|
15,902 |
|
|
|
15,783 |
|
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding – Diluted |
|
16,122 |
|
|
|
16,205 |
|
|
16,096 |
|
|
|
16,179 |
Non-GAAP Financial Measures:
Adjusted Earnings Per Share
In evaluating our business, we consider and use
Adjusted EPS, a non-GAAP financial measure, as a supplemental
measure of our business performance in addition to GAAP financial
measures. We define Adjusted EPS as net income attributable to
Ultralife Corporation excluding the provision for deferred taxes
divided by our weighted average shares outstanding on both a basic
and diluted basis. We believe that this information is useful in
providing period-to-period comparisons of our results by reflecting
the portion of our tax provision that we expect will be offset by
our U.S. net operating loss carryforwards and other tax credits for
the foreseeable future. We reconcile Adjusted EPS to EPS, the most
comparable financial measure under GAAP. Neither current nor
potential investors in our securities should rely on Adjusted EPS
as a substitute for any GAAP measures and we encourage investors to
review the following reconciliation of Adjusted EPS to EPS and net
income attributable to Ultralife Corporation.
ULTRALIFE CORPORATION AND SUBSIDIARIES |
CALCULATION OF ADJUSTED EPS |
(In Thousands Except Per Share Amounts) |
(Unaudited) |
|
Three-Month Period Ended |
|
December 31, 2020 |
|
December 31, 2019 |
|
Amount |
|
Per Basic Share |
|
Per Diluted Share |
|
Amount |
|
Per Basic Share |
|
Per Diluted Share |
Net Income Attributable to
Ultralife Corporation |
$2,108 |
|
$.13 |
|
$.13 |
|
$1,626 |
|
$.10 |
|
$.10 |
Deferred Tax Provision |
565 |
|
.04 |
|
.04 |
|
|
410 |
|
.03 |
|
.03 |
Adjusted Net Income |
$2,673 |
|
$.17 |
|
$.17 |
|
$2,036 |
|
$.13 |
|
$.13 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares
Outstanding |
|
|
15,940 |
|
16,122 |
|
|
|
15,861 |
|
16,205 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended |
|
December 31, 2020 |
|
December 31, 2019 |
|
Amount |
|
Per Basic Share |
|
Per Diluted Share |
|
Amount |
|
Per Basic Share |
|
Per Diluted Share |
Net Income Attributable to
Ultralife Corporation |
$5,232 |
|
$.33 |
|
$.33 |
|
$5,205 |
|
$.33 |
|
$.32 |
Deferred Tax Provision |
|
1,386 |
|
.09 |
|
.08 |
|
|
1,211 |
|
.08 |
|
.08 |
Adjusted Net Income |
$6,618 |
|
$.42 |
|
$.41 |
|
$6,416 |
|
$.41 |
|
$.40 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares
Outstanding |
|
|
15,902 |
|
16,096 |
|
|
|
15,783 |
|
16,179 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
In evaluating our business, we consider and use Adjusted EBITDA,
a non-GAAP financial measure, as a supplemental measure of our
operating performance in addition to GAAP financial measures. We
define Adjusted EBITDA as net income attributable to Ultralife
Corporation before net interest expense, provision (benefit) for
income taxes, depreciation and amortization, and stock-based
compensation expense, plus/minus expense/income that we do not
consider reflective of our ongoing continuing operations. We
reconcile Adjusted EBITDA to net income attributable to Ultralife
Corporation, the most comparable financial measure under GAAP.
Neither current nor potential investors in our securities should
rely on Adjusted EBITDA as a substitute for any GAAP measures and
we encourage investors to review the following reconciliation of
Adjusted EBITDA to net income attributable to Ultralife
Corporation.
ULTRALIFE CORPORATION AND SUBSIDIARIES |
CALCULATION OF ADJUSTED EBITDA |
(Dollars in Thousands) |
(Unaudited) |
|
Three-Month Period Ended |
|
Year Ended |
|
December 31, 2020 |
|
December 31, 2019 |
|
December 31, 2020 |
|
December 31, 2019 |
|
|
|
|
|
|
|
|
Net Income Attributable to
Ultralife Corporation |
$ |
2,108 |
|
|
$ |
1,626 |
|
$ |
5,232 |
|
|
$ |
5,205 |
Adjustments: |
|
|
|
|
|
|
|
Interest and Financing Expense, Net |
|
64 |
|
|
|
200 |
|
|
436 |
|
|
|
539 |
Income Tax Provision |
|
682 |
|
|
|
515 |
|
|
1,692 |
|
|
|
1,457 |
Depreciation Expense |
|
597 |
|
|
|
672 |
|
|
2,340 |
|
|
|
2,220 |
Amortization of Intangible Assets and Financing Fees |
|
166 |
|
|
|
165 |
|
|
646 |
|
|
|
569 |
Stock-Based Compensation Expense |
|
187 |
|
|
|
235 |
|
|
943 |
|
|
|
753 |
Gain on Litigation Settlement |
|
(1,593 |
) |
|
|
- |
|
|
(1,593 |
) |
|
|
- |
Non-Cash Purchase Accounting Adjustments |
|
- |
|
|
|
- |
|
|
- |
|
|
|
264 |
Adjusted EBITDA |
$ |
2,211 |
|
|
$ |
3,413 |
|
$ |
9,696 |
|
|
$ |
11,007 |
Company
Contact: |
|
Investor
Relations Contact: |
Ultralife Corporation |
|
LHA |
Philip A.
Fain |
|
Jody
Burfening |
(315)
210-6110 |
|
(212)
838-3777 |
pfain@ulbi.com |
|
jburfening@lhai.com |
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