• Ultralife Corporation Reports Fourth Quarter Results

    Source: Nasdaq GlobeNewswire / 03 Feb 2022 07:00:01   America/New_York

    NEWARK, N.Y., Feb. 03, 2022 (GLOBE NEWSWIRE) -- Ultralife Corporation (NASDAQ: ULBI) reported an operating loss of $1.2 million on revenue of $23.8 million for the fourth quarter ended December 31, 2021. For the fourth quarter of 2020, the Company reported operating income of $1.2 million on revenue of $29.0 million. Included in the results for the fourth quarter of 2021 are the one-time acquisition costs and the operating results of Excell Battery Group (“Excell”), which the Company acquired on December 13, 2021.

    “The supply chain challenges associated with the global pandemic persisted during the fourth quarter and weighed heavily on both revenue and earnings. While year-over-year revenues for government/defense and medical were most impacted by these challenges, we were encouraged by the rebound in oil & gas revenues, the performance of our China operations and the initial contribution of Excell. Order flow remained strong primarily in our medical and military end markets, and backlog at the end of the quarter increased to over $53 million representing a 35% increase over year-end 2020 for our core business and increasing to over $63 million representing a 61% increase bolstered by Excell. Despite the operating challenges, we continued to advance our transformational new product development projects and ended the year with a solid liquidity position even after the acquisition of Excell and paying off the remainder of our SWE acquisition debt,” said Michael D. Popielec, President and Chief Executive Officer. “As we look ahead, our backlog, durable customer relationships and new product initiatives anchor our view that our long-term profitable growth drivers and strategy are sound and achievable.”

    Fourth Quarter 2021 Financial Results

    Revenue was $23.8 million, a decrease of $5.2 million, or 18.0%, compared to $29.0 million for the fourth quarter of 2020. Overall, commercial sales increased 9.9% and government/defense sales decreased 50.5% from the 2020 period. Battery & Energy Products declined 12.7% to $22.1 million, compared to $25.3 million last year, with a 71.8% increase in oil & gas market sales, a 41.5% increase in lithium/thin cell batteries in our China operation and the initial sales contribution of Excell offset by a 48.9% decrease in government/defense sales and a 30.1% decrease in medical battery sales. Communications Systems sales decreased 54.6% to $1.7 million compared to $3.7 million for the same period last year. During the 2021 fourth quarter, increased lead times on components from suppliers and other COVID-19 related logistics matters resulted in delays in our shipments to future periods. We estimate that the delayed shipments adversely impacted revenue for the 2021 fourth quarter by approximately $5.4 million, with approximately $3.5 million and $1.9 million impacting Battery & Energy Products and Communications Systems, respectively. Conversely, the backlog exiting the fourth quarter of 2021 increased by approximately $11.3 million or 27% over the third quarter when excluding the Excell backlog.

    Gross profit was $5.3 million, or 22.3% of revenue, compared to $7.4 million, or 25.4% of revenue, for the same quarter a year ago. Battery & Energy Products’ gross margin was 21.8%, compared to 25.2% last year, primarily due to lower factory volume, sales product mix and 55 basis point impact of non-cash purchase accounting adjustments related to the acquisition of Excell. Communications Systems gross margin was 28.1%, compared to 26.3% last year, primarily due to favorable sales product mix partially offset by lower factory volume.
        
    Operating expenses were $6.5 million compared to $6.1 million last year, an increase of 6.2%, reflecting the addition of Excell, our continued investment in engineering resources for new product development, including resources dedicated to the Conformal Wear Battery IDIQ contract awarded in May 2021, and $0.4 million of non-recurring expenses related to the acquisition of Excell, partially offset by lower corporate expenses. Operating expenses were 27.4% of revenue compared to 21.2% of revenue for the year-earlier period.

    Operating loss was $1.2 million compared to income of $1.2 million last year. We estimate that delayed shipments resulting from supply chain disruptions and other COVID-19 related logistics matters adversely impacted operating income for the 2021 fourth quarter by approximately $1.8 million. The operating loss for the fourth quarter of 2021 includes a total of $0.5 million of acquisition accounting adjustments and one-time expenses related to the acquisition of Excell.

    Other expense was $0.1 million compared to other income of $1.6 million last year, primarily reflecting a $1.6 million gain realized during the fourth quarter of 2020 upon favorable resolution of Ultralife’s claim in a class action lawsuit.

    Net loss was $1.1 million or $0.07 per diluted share on a GAAP basis, compared to net income of $2.1 million or $0.13 per diluted share for the fourth quarter of 2020. We estimate that delayed shipments resulting from supply chain disruptions and other COVID-19 related logistics matters adversely impacted EPS for the 2021 fourth quarter by approximately $0.09.

    Fiscal Year 2021

    For fiscal year 2021, Ultralife produced GAAP EPS of ($0.01), Adjusted EPS of ($0.02), and breakeven operating profit on revenue of $98.3 million compared to GAAP EPS of $0.33, Adjusted EPS of $0.41 and operating income of $5.7 million on revenue of $107.7 million.

    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,
    2021    		 December 31,
    2020
    Current Assets:   
    Cash$8,413 $10,653
    Trade Accounts Receivable, Net20,025 21,054
    Inventories, Net33,189 28,193
    Prepaid Expenses and Other Current Assets4,098 4,596
    Total Current Assets65,725 64,496
        
    Property, Plant and Equipment, Net23,979 22,850
    Goodwill38,161 27,018
    Other Intangible Assets, Net17,060 9,209
    Deferred Income Taxes, Net11,408 11,836
    Other Non-Current Assets2,717 2,292
    Total Assets$159,050 $137,701
         
    LIABILITIES AND SHAREHOLDERS' EQUITY

    Current Liabilities:    		 
    Accounts Payable$9,466 $10,839
    Current Portion of Long-Term Debt2,000 1,361
    Accrued Compensation and Related Benefits1,918 1,748
    Accrued Expenses and Other Current Liabilities4,976 4,758
    Total Current Liabilities18,360 18,706
    Long-Term Debt, Net18,857 -
    Deferred Income Taxes, Net2,330 515
    Other Non-Current Liabilities1,760 1,557
    Total Liabilities41,307 20,778
        
    Shareholders' Equity:   
    Common Stock2,052 2,037
    Capital in Excess of Par Value186,518 185,464
    Accumulated Deficit(47,832) (47,598)
    Accumulated Other Comprehensive Loss(1,653) (1,782)
    Treasury Stock(21,469) (21,321)
    Total Ultralife Equity117,616 116,800
    Non-Controlling Interest127 123
    Total Shareholders’ Equity117,743 116,923
        
    Total Liabilities and Shareholders' Equity$159,050 $137,701


    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,
     2021 2020 2021 2020
    Revenues:       
    Battery & Energy Products$22,089 $25,291 $87,083 $91,907
    Communications Systems1,674 3,685 11,184 15,805
    Total Revenues23,763 28,976 98,267 107,712
            
    Cost of Products Sold:       
    Battery & Energy Products17,271 18,910 66,021 68,507
    Communications Systems1,203 2,715 7,604 10,046
    Total Cost of Products Sold18,474 21,625 73,625 78,553
            
    Gross Profit5,289 7,351 24,642 29,159
            
    Operating Expenses:       
    Research and Development1,603 1,518 6,826 5,947
    Selling, General and Administrative4,915 4,618 17,781 17,511
    Total Operating Expenses6,518 6,136 24,607 23,458
            
    Operating (Loss) Income (1,229) 1,215 35 5,701
            
    Other Expense (Income):       
    Other Expenses, Net110 9 186 271
    Gain on Litigation Settlement- (1,593) - (1,593)
    Total Other Expense (Income)110 (1,584) 186 (1,322)
            
    (Loss) Income Before Income Taxes(1,339) 2,799 (151) 7,023

    Income Tax (Benefit) Provision(211) 682 79 1,692
            
    Net (Loss) Income (1,128) 2,117 (230) 5,331
            
    Net Income Attributable to Non-Controlling Interest3 9 4 99
            
    Net (Loss) Income Attributable to Ultralife Corporation($1,131) $2,108 (234) $5,232
            
            
    Net (Loss) Income Per Share Attributable to Ultralife Common Shareholders – Basic($.07) $.13 ($.01) $.33
            
    Net (Loss) Income Per Share Attributable to Ultralife Common Shareholders – Diluted($.07) $.13 ($.01) $.33
            
    Weighted Average Shares Outstanding – Basic16,084 15,940 16,037 15,902
            
    Weighted Average Shares Outstanding – Diluted16,084 16,122 16,037 16,096

    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 (loss) income attributable to Ultralife Corporation excluding the (benefit) 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 (loss) 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, 2021 December 31, 2020
     Amount Per Basic Share Per Diluted Share Amount Per Basic Share Per Diluted Share
    Net (Loss) Income Attributable to Ultralife Corporation($1,131) ($.07) ($.07) $2,108 $.13 $.13
    Deferred Income Tax (Benefit) Provision(274) (.02) (.02) 565 .04 .04
    Adjusted Net (Loss) Income Attributable to Ultralife Corporation($1,405) ($.09) ($.09) $2,673 $.17 $.17
    Weighted Average Shares Outstanding  16,084 16,084   15,940 16,122
                
     Year Ended
     December 31, 2021 December 31, 2020
     Amount Per Basic Share Per Diluted Share Amount Per Basic Share Per Diluted Share
    Net (Loss) Income Attributable to Ultralife Corporation($234) ($.01) ($.01) $5,232 $.33 $.33
    Deferred Income Tax (Benefit) Provision(147) (.01) (.01) 1,386 .09 .08
    Adjusted Net (Loss) Income Attributable to Ultralife Corporation($381) ($.02) ($.02) $6,618 $.42 $.41
    Weighted Average Shares Outstanding  16,037 16,037   15,902 16,096

    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 (loss) 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 (loss) 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,
    2021    		 December 31,
    2020    		 December 31,
    2021    		 December 31,
    2020
            
    Net (Loss) Income Attributable to Ultralife Corporation($1,131) $2,108 ($234) $5,232
    Adjustments:       
    Interest and Financing Expense, Net78 64 242 436
    Income Tax (Benefit) Provision(211) 682 79 1,692
    Depreciation Expense746 597 2,906 2,340
    Amortization of Intangible Assets175 166 633 646
    Stock-Based Compensation Expense159 187 671 943
    Non-Cash Purchase Accounting Adjustments121 - 121 -
    Adjusted EBITDA($63) $3,804 $4,418 $11,289


    Company Contact:
    Ultralife Corporation
    Philip A. Fain
    (315) 210-6110
    pfain@ulbi.com    		 Investor Relations Contact:
    LHA
    Jody Burfening
    (212) 838-3777
    jburfening@lhai.com

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