Board of Directors Authorizes Share
Repurchase Program
Ultralife Corporation (NASDAQ: ULBI) reported operating
income of $1.5 million on revenue of $20.3 million for the third
quarter ended September 30, 2018. For the third quarter of
2017, the Company reported operating income of $1.3 million on
revenue of $21.0 million.
“In the third quarter, Ultralife grew net income 30% and EPS 26%
driven by a 25% increase in Communications Systems revenues, while
overall revenue slightly declined. These double-digit
earnings gains demonstrate the ability of our leveraged business
model to deliver increases in profitability even though sales may
fluctuate by business unit quarter to quarter,” said Michael D.
Popielec, President and Chief Executive Officer. “We are also
delighted about the two recently announced Communications Systems
delivery contracts totaling $19.2 million to supply our Vehicle
Amplifier-Adaptors and Mounted Power Amplifiers for the U.S. Army,
as well as the $9.5 million IDIQ contract to supply our
communication kits for an undisclosed branch of the U.S. Department
of Defense. We remain focused on our revenue diversification
strategy, pursuing commercial opportunities and government/defense
opportunities as U.S. spending continues to recover, and are
positioned to deliver another year of profitable growth in
2018.”
Third Quarter 2018 Financial Results
Revenue was $20.3 million, a decrease of $0.7 million, or 3.4%,
compared to $21.0 million for the third quarter of 2017 reflecting
lower commercial sales. Battery & Energy Products sales
decreased $1.3 million, or 7.1%, to $17.3 million compared to $18.6
million last year due primarily to lower non-U.S.
government/defense and 9-Volt battery sales, partially offset by
increases in U.S. government/defense and core medical sales.
Communications Systems sales grew 25.1% to $3.0 million compared to
$2.4 million for the same period last year reflecting an increase
in shipments of core products such as our 20-watt amplifiers and
universal vehicle adaptors.
Gross profit was $6.0 million, or 29.7% of revenue, compared to
$6.3 million, or 29.7% of revenue, for the same quarter a year
ago. Battery & Energy Products’ gross margin was 27.2%,
compared to 27.9% last year, and Communications Systems gross
margin was 44.0%, the same as last year.
Operating expenses were $4.5 million compared to $5.0 million
last year, a decrease of 9.0%, reflecting continued tight control
over discretionary spending in line with our business model.
Operating expenses were 22.3% of revenue compared to 23.7% of
revenue for the year earlier period.
Operating income was $1.5 million compared to $1.3 million last
year, an increase of 18.7%, and operating margin was 7.4% compared
to 6.0% last year.
Net income was $1.4 million, or $0.09 per share, compared to net
income of $1.1 million, or $0.07 per share, for the third quarter
of 2017. Earnings per share for the trailing
twelve-month period increased to $.57 compared to $.55 at the end
of the second quarter of 2018, with both periods reflecting the
$.12 favorable impact of the Tax Cuts and Jobs Act in the fourth
quarter of 2017.
Adjusted EBITDA, defined as EBITDA including non-cash,
stock-based compensation expense, of $2.5 million, or 12.2% of
sales, grew 25% over the $2.0 million, or 9.4% of sales, reported
last year.
See the “Non-GAAP Financial Measure – Adjusted EBITDA” section
of this release for a reconciliation of Adjusted EBITDA to Net
Income Attributable to Ultralife Corporation.
Share Repurchase Program
Ultralife’s Board of Directors has authorized the repurchase of
up to 2.5 million shares of the Company’s common stock over a
period not to exceed twelve months. Share repurchases, if
any, will be made in accordance with SEC Rule 10b-18 using a
variety of methods, which may include open market purchases,
privately negotiated transactions or block trades, or any
combination of such methods, in accordance with applicable insider
trading and other securities laws and regulations.
The timing and actual number of shares repurchased will depend
on a variety of factors including price, market conditions and
applicable legal requirements. The share repurchase program does
not obligate the Company to repurchase any specific number of
shares and may be suspended or terminated at any time without prior
notice.
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 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 |
|
|
|
|
|
September
30,2018 |
|
December
31,2017 |
Current Assets: |
|
|
|
Cash |
$25,454 |
|
$18,330 |
Trade
Accounts Receivable, Net |
14,533 |
|
14,657 |
Inventories |
23,118 |
|
26,326 |
Prepaid
Expenses and Other Current Assets |
2,900 |
|
2,603 |
Total
Current Assets |
66,005 |
|
61,916 |
|
|
|
|
Property, Equipment and
Improvements, Net |
8,792 |
|
7,570 |
Goodwill, Intangibles
and Other Assets |
26,999 |
|
27,700 |
Total
Assets |
$101,796 |
|
$97,186 |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY |
|
Current
Liabilities: |
|
Accounts
Payable |
$7,260 |
|
$8,787 |
Accrued
Compensation and Related Benefits |
1,641 |
|
2,413 |
Accrued
Expenses and Other Current Liabilities |
3,463 |
|
3,039 |
Total
Current Liabilities |
12,364 |
|
14,239 |
Deferred Income Taxes
and Other Non-Current Liabilities |
3,936 |
|
3,898 |
Total
Liabilities |
16,300 |
|
18,137 |
|
|
|
|
Shareholders'
Equity: |
|
|
|
Common
Stock |
1,998 |
|
1,966 |
Capital
in Excess of Par Value |
182,246 |
|
180,211 |
Accumulated Deficit |
(77,709) |
|
(82,894) |
Accumulated Other Comprehensive Loss |
(2,473) |
|
(1,611) |
Treasury
Stock |
(18,469) |
|
(18,469) |
Total
Ultralife Equity |
85,593 |
|
79,203 |
Non-Controlling
Interest |
(97) |
|
(154) |
Total
Shareholders’ Equity |
85,496 |
|
79,049 |
|
|
|
|
Total
Liabilities and Shareholders' Equity |
$101,796 |
|
$97,186 |
|
|
|
|
ULTRALIFE CORPORATION
AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS
OF INCOME |
(In Thousands Except Per
Share Amounts) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three-Month Periods
Ended |
|
Nine-Month Periods
Ended |
|
September |
|
October |
|
September |
|
October |
|
30, |
|
1, |
|
30, |
|
1, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Revenues: |
|
|
|
|
|
|
|
Battery & Energy Products |
$17,289 |
|
$18,616 |
|
$52,344 |
|
$52,977 |
Communications Systems |
3,041 |
|
2,431 |
|
13,919 |
|
10,045 |
Total Revenues |
20,330 |
|
21,047 |
|
$66,263 |
|
$63,022 |
|
|
|
|
|
|
|
|
Cost of Products Sold: |
|
|
|
|
|
|
|
Battery & Energy Products |
12,587 |
|
13,430 |
|
37,680 |
|
38,119 |
Communications Systems |
1,702 |
|
1,362 |
|
8,710 |
|
5,537 |
Total Cost of Products
Sold |
14,289 |
|
14,792 |
|
46,390 |
|
43,656 |
|
|
|
|
|
|
|
|
Gross Profit |
6,041 |
|
6,255 |
|
19,873 |
|
19,366 |
|
|
|
|
|
|
|
|
Operating Expenses: |
|
|
|
|
|
|
|
Research and Development |
1,099 |
|
1,355 |
|
3,417 |
|
3,678 |
Selling, General and Administrative |
3,442 |
|
3,637 |
|
10,968 |
|
11,262 |
Total Operating Expenses |
4,541 |
|
4,992 |
|
14,385 |
|
14,940 |
|
|
|
|
|
|
|
|
Operating Income |
1,500 |
|
1,263 |
|
5,488 |
|
4,426 |
|
|
|
|
|
|
|
|
Other (Income) Expense |
(21) |
|
58 |
|
27 |
|
200 |
Income Before Income Tax Provision |
1,521 |
|
1,205 |
|
5,461 |
|
4,226 |
|
|
|
|
|
|
|
|
Income Tax Provision |
86 |
|
104 |
|
219 |
|
370 |
|
|
|
|
|
|
|
|
Net Income |
1,435 |
|
1,101 |
|
5,242 |
|
3,856 |
|
|
|
|
|
|
|
|
Net Income Attributable to Non-Controlling Interest |
27 |
|
3 |
|
57 |
|
8 |
|
|
|
|
|
|
|
|
Net Income Attributable to Ultralife
Corporation |
$1,408 |
|
$1,098 |
|
$5,185 |
|
$3,848 |
|
|
|
|
|
|
|
|
Net Income Per Share Attributable to Ultralife Common
Shareholders – Basic |
$.09 |
|
$.07 |
|
$.33 |
|
$.25 |
|
|
|
|
|
|
|
|
Net Income Per Share Attributable to Ultralife Common
Shareholders – Diluted |
$.09 |
|
$.07 |
|
$.32 |
|
$.24 |
|
|
|
|
|
|
|
|
Weighted Average Shares Outstanding – Basic |
15,952 |
|
15,564 |
|
15,859 |
|
15,495 |
|
|
|
|
|
|
|
|
Weighted Average Shares Outstanding – Diluted |
16,523 |
|
15,971 |
|
16,407 |
|
15,818 |
|
|
|
|
|
|
|
|
Non-GAAP Financial Measure – 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. 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. We reconcile
Adjusted EBITDA to net income attributable to Ultralife
Corporation, the most comparable financial measure under
U.S. generally accepted accounting principles
(“U.S. 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.
ULTRALIFE CORPORATION AND
SUBSIDIARIESCALCULATION OF ADJUSTED
EBITDA(In
Thousands)(Unaudited)
|
Three-Month Periods
Ended |
|
Nine-Month Periods
Ended |
|
September 30, |
|
October 1, |
|
September 30, |
|
October 1, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
Net Income Attributable to Ultralife
Corporation |
$1,408 |
|
$1,098 |
|
$5,185 |
|
$3,848 |
Adjustments: |
|
|
|
|
|
|
|
Interest and Financing Expense, Net |
13 |
|
38 |
|
67 |
|
147 |
Income Tax Provision |
86 |
|
104 |
|
219 |
|
370 |
Depreciation Expense |
496 |
|
497 |
|
1,476 |
|
1,507 |
Amortization of Intangible Assets and
Financing Fees |
106 |
|
115 |
|
327 |
|
357 |
Stock-Based Compensation Expense |
363 |
|
133 |
|
707 |
|
529 |
Adjusted EBITDA |
$2,472 |
|
$1,985 |
|
$7,981 |
|
$6,758 |
|
|
|
|
|
|
|
|
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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