Exhibit 99.1
Ultralife Corporation Reports Third Quarter Results
NEWARK, N.Y. – November 8, 2024 -- Ultralife Corporation (NASDAQ: ULBI) reported operating results for the third quarter ended September 30, 2024 as follows:
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Sales of $35.7 million compared to $39.5 million for the 2023 third quarter, including 1.9% growth in Battery & Energy Products sales and a 58.2% decrease in Communications Systems sales |
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Gross profit of $8.7 million, or 24.3% of revenue, compared to $9.8 million, or 24.8% of revenue, for the 2023 third quarter |
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Operating income of $0.5 million, including legal fees and other costs of $0.3 million directly related to the acquisition of Electrochem Solution, Inc., compared to $2.1 for the 2023 third quarter |
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GAAP EPS of $0.02 compared to $0.08 for the 2023 third quarter |
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Debt reduction of $4.1 million, or 33.4%, to $8.0 million from $12.1 million at the end of the second quarter, and representing a $17.2 million, or 68.2%, reduction over the last two quarters |
“Ultralife’s third quarter results were weighed down by the timing of expected larger purchase orders for our Communications Systems segment and by the muted growth for our Battery & Energy Products segment due to some supply chain timing and customers’ requests delaying orders into the fourth quarter and first half of 2025. While we are not satisfied with these results, they do illustrate how fluctuations in order timing and periodic disruptions in our supply chain can impact our business on a short-term basis,” said Mike Manna, President and Chief Executive Officer. “I am thrilled we completed our acquisition of Electrochem on October 31st. We look forward to implementing our integration playbook to advance our strategy of more fully realizing the operating leverage of our business model through scale and manufacturing cost efficiencies, while creating highly attractive opportunities to further drive revenue growth through heightened cross-selling and extending our reach into underserved adjacent markets.”
Third Quarter 2024 Financial Results
Revenue was $35.7 million compared to revenue of $39.5 million for the third quarter of 2023. Battery & Energy Products sales increased 1.9% to $32.5 million, compared to $31.9 million last year, reflecting increases of 28.9% in government/defense sales and 1.5% in oil & gas market sales, partially offset by a 12.4% decrease in medical battery sales and a 10.9% decline in other industrial market sales. Communications Systems sales decreased 58.2% to $3.2 million compared to $7.6 million for the same period last year, attributable to shipments in the prior year of vehicle-amplifier adaptors to a global defense contractor for the U.S. Army and of integrated systems of amplifiers and radio vehicle mounts to a major international defense contractor. Our total backlog exiting the third quarter was $78.0 million.
Gross profit was $8.7 million, or 24.3% of revenue, compared to $9.8 million, or 24.8% of revenue, for the same quarter a year ago. Battery & Energy Products’ gross margin increased 50 basis points to 24.7%, compared to 24.2% last year, primarily due to higher cost absorption resulting from higher factory volume in our Newark, NY facility, partially offset by inefficiencies caused by delays in the receipt of some raw material components. Communications Systems gross margin was 20.1% compared to 27.0% last year, due to lower production volume and unfavorable product mix.
Operating expenses were $8.2 million, compared to $7.6 million for the 2023 third quarter, reflecting investments in new product development, the addition of sales resources to support future growth, and the recognition of legal and other fees recognized in the period directly relating to the signing of the stock purchase agreement on September 27th to acquire Electrochem Solutions, Inc. Operating expenses were 22.9% of revenue compared to 19.3% of revenue for the year-earlier period.
Operating income was $0.5 million compared to $2.1 million last year. Driven by the 58.2% decline in Communications Systems sales and one-time acquisition costs, operating margin decreased to 1.4% compared to 5.4% last year.
Net income was $0.3 million or $0.02 per diluted share on a GAAP basis, compared to $1.3 million or $0.08 per diluted share for the third quarter of 2023.
Adjusted EBITDA was $1.9 million for the third quarter of 2024, or 5.4% of sales, compared to $3.5 million, or 8.8% of sales, for the year-earlier period.
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 third quarter earnings conference call today at 8:30 AM ET.
To ensure a fast and reliable connection to our investor conference call, we now require participants dialing in by phone to register using the following link prior to the call: https://register.vevent.com/register/BI08b0baed0c3b4c4c932b669a039e555d. This will eliminate the need to speak with an operator. Once registered, dial-in information will be provided along with a personal identification number. Should you register early and misplace your details, you can simply click back on this same link at any time to register and view this information again. 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 uncertain global economic conditions, reductions in revenues from key customers, delays or reductions in U.S. and foreign military spending, acceptance of our new products on a global basis, and disruptions or delays in our supply of raw materials and components due to business conditions, global conflicts, weather or other factors not under our control. 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)
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ASSETS |
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September 30, 2024 |
December 31, 2023 |
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Current Assets: |
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Cash |
$ | 6,774 | $ | 10,278 | ||||
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Trade Accounts Receivable, Net |
27,754 | 31,761 | ||||||
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Inventories, Net |
43,994 | 42,215 | ||||||
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Prepaid Expenses and Other Current Assets |
7,908 | 5,949 | ||||||
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Total Current Assets |
86,430 | 90,203 | ||||||
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Property, Plant and Equipment, Net |
20,245 | 21,117 | ||||||
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Goodwill |
37,792 | 37,571 | ||||||
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Other Intangible Assets, Net |
14,487 | 15,107 | ||||||
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Deferred Income Taxes, Net |
9,125 | 10,567 | ||||||
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Other Non-Current Assets |
4,361 | 3,711 | ||||||
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Total Assets |
$ | 172,440 | $ | 178,276 | ||||
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current Liabilities: |
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Accounts Payable |
$ | 12,681 | $ | 11,336 | ||||
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Current Portion of Long-Term Debt |
2,000 | 2,000 | ||||||
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Accrued Compensation and Related Benefits |
2,631 | 3,115 | ||||||
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Accrued Expenses and Other Current Liabilities |
8,892 | 7,279 | ||||||
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Total Current Liabilities |
26,204 | 23,730 | ||||||
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Long-Term Debt, Net |
5,888 | 23,624 | ||||||
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Deferred Income Taxes |
1,626 | 1,714 | ||||||
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Other Non-Current Liabilities |
4,093 | 3,781 | ||||||
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Total Liabilities |
37,811 | 52,849 | ||||||
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Stockholders' Equity: |
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Common Stock |
2,106 | 2,078 | ||||||
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Capital in Excess of Par Value |
191,582 | 189,160 | ||||||
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Accumulated Deficit |
(34,636 | ) | (40,754 | ) | ||||
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Accumulated Other Comprehensive Loss |
(3,084 | ) | (3,660 | ) | ||||
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Treasury Stock |
(21,492 | ) | (21,492 | ) | ||||
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Total Ultralife Equity |
134,476 | 125,332 | ||||||
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Non-Controlling Interest |
153 | 95 | ||||||
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Total Stockholders’ Equity |
134,629 | 125,427 | ||||||
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Total Liabilities and Stockholders' Equity |
$ | 172,440 | $ | 178,276 | ||||
ULTRALIFE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands Except Per Share Amounts)
(Unaudited)
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Three-Month Period Ended |
Nine-Month Period Ended |
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September 30, |
September 30, |
September 30, |
September 30, |
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2024 |
2023 |
2024 |
2023 |
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Revenues: |
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Battery & Energy Products |
$ | 32,529 | $ | 31,919 | $ | 104,201 | $ | 94,250 | ||||||||
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Communications Systems |
3,165 | 7,569 | 16,403 | 19,846 | ||||||||||||
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Total Revenues |
35,694 | 39,488 | 120,604 | 114,096 | ||||||||||||
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Cost of Products Sold: |
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Battery & Energy Products |
24,482 | 24,191 | 77,215 | 72,467 | ||||||||||||
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Communications Systems |
2,530 | 5,523 | 11,674 | 13,831 | ||||||||||||
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Total Cost of Products Sold |
27,012 | 29,714 | 88,889 | 86,298 | ||||||||||||
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Gross Profit |
8,682 | 9,774 | 31,715 | 27,798 | ||||||||||||
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Operating Expenses: |
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Research and Development |
2,101 | 1,869 | 5,854 | 5,679 | ||||||||||||
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Selling, General and Administrative |
6,070 | 5,770 | 17,370 | 16,293 | ||||||||||||
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Total Operating Expenses |
8,171 | 7,639 | 23,224 | 21,972 | ||||||||||||
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Operating Income |
511 | 2.135 | 8,491 | 5,826 | ||||||||||||
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Other (Expense) Income |
(158 | ) | (386 | ) | (685 | )) | 178 | |||||||||
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Income Before Income Taxes |
353 | 1,749 | 7,806 | 6,004 | ||||||||||||
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Income Tax Provision |
74 | 446 | 1,630 | 1,688 | ||||||||||||
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Net Income |
279 | 1,303 | 6,176 | 4,316 | ||||||||||||
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Net Income (Loss) Attributable to Non-Controlling Interest |
21 | (27 | ) | 58 | (8 | ) | ||||||||||
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Net Income Attributable to Ultralife Corporation |
$ | 258 | $ | 1,330 | $ | 6,118 | $ | 4,324 | ||||||||
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Net Income Per Share Attributable to Ultralife Common Shareholders – Basic |
$ | .02 | $ | .08 | $ | .37 | $ | .27 | ||||||||
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Net Income Per Share Attributable to Ultralife Common Shareholders – Diluted |
$ | .02 | $ | .08 | $ | .37 | $ | .27 | ||||||||
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Weighted Average Shares Outstanding – Basic |
16,625 | 16,238 | 16,530 | 16,172 | ||||||||||||
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Weighted Average Shares Outstanding – Diluted |
16,874 | 16,303 | 16,742 | 16,174 | ||||||||||||
Non-GAAP Financial Measures
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 U.S. Generally Accepted Accounting Principles (“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)
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Three-Month Period Ended |
Nine-Month Period Ended |
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September 30, 2024 |
September 30, 2023 |
September 30, 2024 |
September 30, 2023 |
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Net Income Attributable to Ultralife Corporation |
$ | 258 | $ | 1,330 | $ | 6,118 | $ | 4,324 | ||||||||
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Adjustments: |
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Interest Expense, Net |
173 | 586 | 1,111 | 1,450 | ||||||||||||
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Income Tax Provision |
74 | 446 | 1,630 | 1,688 | ||||||||||||
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Depreciation Expense |
765 | 760 | 2,294 | 2,282 | ||||||||||||
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Amortization Expense |
229 | 227 | 684 | 663 | ||||||||||||
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Stock-Based Compensation Expense |
170 | 131 | 490 | 424 | ||||||||||||
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Cyber-Insurance Policy Deductible |
- | - | - | 100 | ||||||||||||
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One-Time Acquisition Costs |
250 | - | 250 | - | ||||||||||||
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Adjusted EBITDA |
$ | 1,919 | $ | 3,480 | $ | 12,577 | $ | 10,931 | ||||||||
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. We define adjusted EPS as net income attributable to Ultralife Corporation excluding the provision (benefit) for deferred income 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 will be predominantly 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)
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Three-Month Period Ended |
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September 30, 2024 |
September 30, 2023 |
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Amount |
Per Basic Share |
Per Diluted Share |
Amount |
Per Basic Share |
Per Diluted Share |
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Net Income Attributable to Ultralife Corporation |
$ | 258 | $ | .02 | $ | .02 | $ | 1,330 | $ | .08 | $ | .08 | ||||||||||||
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Deferred Tax Provision (Benefit) |
(99 | ) | (.01 | ) | (.01 | ) | 357 | .02 | .02 | |||||||||||||||
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Adjusted Net Income |
$ | 159 | $ | .01 | $ | .01 | $ | 1,687 | $ | .10 | $ | .10 | ||||||||||||
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Weighted Average Shares Outstanding |
16,625 | 16,874 | 16,238 | 16,303 | ||||||||||||||||||||
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Nine-Month Period Ended |
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September 30, 2024 |
September 30, 2023 |
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Amount |
Per Basic Share |
Per Diluted Share |
Amount |
Per Basic Share |
Per Diluted Share |
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Net Income Attributable to Ultralife Corporation |
$ | 6,118 | $ | .37 | $ | .37 | $ | 4,324 | $ | .27 | $ | .27 | ||||||||||||
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Deferred Tax Provision |
1,295 | .08 | .07 | 1,245 | .07 | .07 | ||||||||||||||||||
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Adjusted Net Income |
7,413 | $ | .45 | $ | .44 | $ | 5,569 | $ | .34 | $ | .34 | |||||||||||||
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Weighted Average Shares Outstanding |
16,530 | 16,742 | 16,172 | 16,174 | ||||||||||||||||||||
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