Ultralife Corporation Reports Fourth Quarter Results
February 08 2018 - 7:00AM
Ultralife Corporation (NASDAQ:ULBI) reported operating income of
$2.1 million on revenue of $22.5 million for the fourth quarter
ended December 31, 2017 compared to operating income of $1.6
million on revenue of $21.6 million for the fourth quarter of
2016. For total year 2017, Ultralife produced operating
income of $6.5 million on revenue of $85.5 million compared to
operating income of $3.8 million on revenue of $82.5 million for
2016.
“We ended a year of growth and accomplishments with
our highest quarterly revenue, operating profit and EPS in five
years. Driven by a 32% increase in revenue from a broad
range of government and defense customers, we delivered a 9.1%
operating profit margin, up 150 basis points over last year’s
fourth quarter, on total Company revenue growth of 4%,” said
Michael D. Popielec, President and Chief Executive Officer.
“Throughout 2017, we aggressively pursued exciting new revenue
contributions from market and sales reach expansion, new product
development and customer partnerships, while preparing to launch
new products to serve emerging IoT demand. We achieved our
stated goal of generating profitable growth for the year,
increasing operating income by 72% on a 4% gain in revenue.
As a result of the actions taken in 2017 to lay the foundation for
new revenue contributions in 2018, we are starting the year with a
higher backlog than last year. The combination of new revenue
opportunities and continued disciplined execution of our business
model places us in an excellent position to extend our track record
of profitable growth.”
Fourth Quarter 2017 Financial Results
Revenue was $22.5 million, an increase of $.9
million, or 4%, compared to $21.6 million for the fourth quarter of
2016 reflecting higher government/defense sales for both business
segments. Battery & Energy Products sales decreased 5% to
$16.8 million compared to $17.6 million last year due primarily to
timing differences in medical sales which caused commercial sales
to come in below last year, not fully offset by a 25% increase in
government/defense sales. Communications Systems sales grew
42% to $5.7 million compared to $4.0 million for the same period
last year reflecting a 64% year-over-year increase in shipments of
core products such as our 20-watt amplifiers, universal vehicle
adaptors and power supplies, as well as a 25% increase in Vehicle
Installed Power Enhanced Riflemen Appliqué (“VIPER”) revenues.
Gross profit was $6.9 million, or 30.5% of revenue, compared to
$6.8 million, or 31.5% of revenue, for the same quarter a year
ago. Battery & Energy Products’ gross margin was 28.6%
compared to 29.4% last year, and Communications Systems’ gross
margin was 36.2% compared to 40.6% last year, primarily due
to sales mix.
Operating expenses were $4.8 million compared to $5.2 million
last year reflecting continued tight control over discretionary
spending. Operating expenses were 21.4% of revenue compared
to 23.9% of revenue for the year earlier period.
Operating income was $2.1 million compared to $1.6 million last
year for an operating margin of 9.1% compared to 7.6% last
year.
Net income was $3.8 million, which includes a one-time $1.9
million tax benefit, compared to net income of $1.7 million last
year. Reported earnings per share for the fourth quarter of
2017 of $0.24 include $0.12 from our operating performance compared
to $0.11 per share for the fourth quarter of 2016, plus $0.12
related to the tax benefit. Earnings per share for the full
year of $0.49 include $0.37 per share from our 2017 operating
performance compared to $0.23 for 2016.
Income tax net benefit was $1.7 million for the fourth quarter
of 2017 compared to $0.1 million last year. As a result of
the Tax Cuts and Jobs Act, a one-time, non-cash tax benefit of $1.9
million was recognized in the fourth quarter of 2017 upon the
revaluation, at the newly enacted 21% Federal tax rate, of deferred
tax liabilities relating to book-to-tax differences on goodwill and
other intangible assets. There was no earnings impact for the
revaluation of our domestic deferred tax assets, which include our
net operating losses, as they continue to be fully reserved.
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 revenues from key customers, 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, |
|
December 31, |
|
2017 |
|
2016 |
Current Assets: |
|
|
|
Cash |
$ |
18,330 |
|
|
$ |
10,706 |
|
Trade
Accounts Receivable, Net |
|
14,657 |
|
|
|
13,179 |
|
Inventories |
|
26,326 |
|
|
|
23,456 |
|
Prepaid
Expenses and Other Current Assets |
|
2,603 |
|
|
|
2,079 |
|
Total
Current Assets |
|
61,916 |
|
|
|
49,420 |
|
|
|
|
|
Property, Equipment and
Improvements, Net |
|
7,570 |
|
|
|
7,999 |
|
Goodwill, Intangibles
and Other Assets |
|
27,700 |
|
|
|
27,325 |
|
Total
Assets |
$ |
97,186 |
|
|
$ |
84,744 |
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
Current
Liabilities: |
|
|
|
|
|
|
|
Accounts
Payable |
$ |
8,787 |
|
|
$ |
7,292 |
|
Accrued
Compensation and Related Benefits |
|
2,413 |
|
|
|
1,258 |
|
Accrued
Expenses and Other Current Liabilities |
|
3,039 |
|
|
|
2,778 |
|
Total
Current Liabilities |
|
14,239 |
|
|
|
11,328 |
|
Deferred Income Taxes
and Other Non-Current Liabilities |
|
3,898 |
|
|
|
5,556 |
|
Total
Liabilities |
|
18,137 |
|
|
|
16,884 |
|
|
|
|
|
Shareholders'
Equity: |
|
|
|
Common
Stock |
|
1,966 |
|
|
|
1,932 |
|
Capital
in Excess of Par Value |
|
180,211 |
|
|
|
178,163 |
|
Accumulated Deficit |
|
(82,894 |
) |
|
|
(90,542 |
) |
Accumulated Other Comprehensive Loss |
|
(1,611 |
) |
|
|
(3,080 |
) |
Treasury
Stock |
|
(18,469 |
) |
|
|
(18,443 |
) |
Total
Ultralife Equity |
|
79,203 |
|
|
|
68,030 |
|
Non-Controlling
Interest |
|
(154 |
) |
|
|
(170 |
) |
Total
Shareholders’ Equity |
|
79,049 |
|
|
|
67,860 |
|
|
|
|
|
Total
Liabilities and Shareholders' Equity |
$ |
97,186 |
|
|
$ |
84,744 |
|
|
|
|
|
|
|
|
|
|
ULTRALIFE CORPORATION AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF
INCOME |
(In Thousands Except Per Share
Amounts) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Month Periods Ended |
|
Year Ended |
|
December 31, |
|
December 31, |
|
December 31, |
|
December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Revenues: |
|
|
|
|
|
|
|
Battery
& Energy Products |
$ |
16,812 |
|
|
$ |
17,611 |
|
|
$ |
69,789 |
|
|
$ |
64,753 |
|
Communication Systems |
|
5,697 |
|
|
|
4,014 |
|
|
|
15,742 |
|
|
|
17,707 |
|
Total Revenues |
|
22,509 |
|
|
|
21,625 |
|
|
|
85,531 |
|
|
|
82,460 |
|
|
|
|
|
|
|
|
|
Cost of
Products Sold: |
|
|
|
|
|
|
|
Battery
& Energy Products |
|
12,011 |
|
|
|
12,436 |
|
|
|
50,130 |
|
|
|
45,173 |
|
Communication Systems |
|
3,632 |
|
|
|
2,384 |
|
|
|
9,169 |
|
|
|
12,179 |
|
Total Cost of Products Sold |
|
15,643 |
|
|
|
14,820 |
|
|
|
59,299 |
|
|
|
57,352 |
|
|
|
|
|
|
|
|
|
Gross Profit |
|
6,866 |
|
|
|
6,805 |
|
|
|
26,232 |
|
|
|
25,108 |
|
|
|
|
|
|
|
|
|
Operating
Expenses: |
|
|
|
|
|
|
|
Research
and Development |
|
1,059 |
|
|
|
1,508 |
|
|
|
4,737 |
|
|
|
5,946 |
|
Selling,
General and Administrative |
|
3,757 |
|
|
|
3,653 |
|
|
|
15,019 |
|
|
|
15,399 |
|
Total
Operating Expenses |
|
4,816 |
|
|
|
5,161 |
|
|
|
19,756 |
|
|
|
21,345 |
|
|
|
|
|
|
|
|
|
Operating
Income |
|
2,050 |
|
|
|
1,644 |
|
|
|
6,476 |
|
|
|
3,763 |
|
|
|
|
|
|
|
|
|
Other Expense
(Income) |
|
(19 |
) |
|
|
16 |
|
|
|
181 |
|
|
|
183 |
|
Income Before
Income Taxes |
|
2,069 |
|
|
|
1,628 |
|
|
|
6,295 |
|
|
|
3,580 |
|
|
|
|
|
|
|
|
|
Income Tax (Benefit)
Provision |
|
(1,739 |
) |
|
|
(115 |
) |
|
|
(1,369 |
) |
|
|
98 |
|
|
|
|
|
|
|
|
|
Net
Income |
|
3,808 |
|
|
|
1,743 |
|
|
|
7,664 |
|
|
|
3,482 |
|
|
|
|
|
|
|
|
|
Net Income (Loss)
Attributable to Non-Controlling Interest |
|
8 |
|
|
|
(2 |
) |
|
|
16 |
|
|
|
(27 |
) |
|
|
|
|
|
|
|
|
Net Income
Attributable to Ultralife Corporation |
$ |
3,800 |
|
|
$ |
1,745 |
|
|
$ |
7,648 |
|
|
$ |
3,509 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Comprehensive Income: |
|
|
|
|
|
|
|
Foreign
Currency Translation Adjustments |
|
716 |
|
|
|
(858 |
) |
|
|
1,469 |
|
|
|
(2,173 |
) |
Comprehensive
Income Attributable to Ultralife |
$ |
4,516 |
|
|
$ |
887 |
|
|
$ |
9,117 |
|
|
$ |
1,336 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Per
Share Attributable to Ultralife Common Shareholders –
Basic |
$ |
.24 |
|
|
$ |
.11 |
|
|
$ |
.49 |
|
|
$ |
.23 |
|
|
|
|
|
|
|
|
|
Net Income Per
Share Attributable to Ultralife Common Shareholders –
Diluted |
$ |
.24 |
|
|
$ |
.11 |
|
|
$ |
.48 |
|
|
$ |
.23 |
|
|
|
|
|
|
|
|
|
Weighted
Average Shares Outstanding – Basic |
|
15,627 |
|
|
|
15,259 |
|
|
|
15,528 |
|
|
|
15,261 |
|
|
|
|
|
|
|
|
|
Weighted
Average Shares Outstanding – Diluted |
|
16,031 |
|
|
|
15,360 |
|
|
|
15,858 |
|
|
|
15,405 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company Contact:Ultralife
CorporationPhilip A. Fain(315)
210-6110pfain@ulbi.com
Investor Relations Contact:LHAJody
Burfening(212)
838-3777jburfening@lhai.com
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