Ultralife Corporation (NASDAQ: ULBI) reported
operating results for the fourth quarter and full year ended
December 31, 2023.
Fourth Quarter Highlights:
- Sales of $44.5 million representing
a 23.4% year-over-year increase
- Highest medical sales quarter in
Company’s history
- Operating income of $3.6 million
versus $0.2 million for the 2022 fourth quarter
- Adjusted EPS of $0.18 compared to a
loss of $0.03 for the 2022 fourth quarter
- Adjusted EBITDA of $4.8 million
representing a 134.8% year-over-year increase
- Backlog of $103.5 million exiting
2023, a 2.4% sequential increase over third quarter
Fiscal Year 2023
Highlights:
- Sales of $158.6 million
representing a 20.3% year-over-year increase
- Operating income of $9.5 million
versus $0.1 million for 2022
- Adjusted EPS of $0.52 compared to a
loss of $0.07 for 2022
- Adjusted EBITDA of $15.7 million
representing a 138.8% year-over-year increase
“Ultralife performed exceedingly well in the
fourth quarter, delivering higher Communications Systems revenue, a
360-basis point expansion of Battery & Energy Products’ gross
margin and operating expense leverage. In addition, medical sales
reached the highest quarterly level since we entered this market in
2012. With adjusted EBITDA more than doubling and inventory levels
lower, we are well positioned to commence paying down our
acquisition debt,” said Mike Manna, President and Chief Executive
Officer.
“Our strong fourth quarter performance caps a
year of accomplishment against our stated highest priority of
recapturing gross margin through price realization activities,
supply chain improvements, level-loaded production and lean
manufacturing initiatives. These actions resulted in a 240-basis
point expansion of gross margin for the year to 24.7% and a swing
from a loss to adjusted EPS of $0.52. Finally, our efforts to
strengthen our commercial relationships launching customer-driven
new products into the market have been bearing fruit and sustained
our backlog in excess of $100 million,” added Mr. Manna.
“As we enter 2024 with a healthy backlog and a
significantly stronger balance sheet, we are focused on driving
additional gross margin expansion, organic growth in our end
markets and operating leverage. We will continue to invest in new
product development for commercial expansion. Our focus in 2024 is
to build upon our 2023 momentum, sustain profitable growth and
generate incremental cash flow to reduce debt, and support
strategic capital expenditures and accretive acquisitions,”
concluded Mr. Manna.
Fourth Quarter 2023 Financial
Results
Revenue was $44.5 million, an increase of $8.4
million, or 23.4%, as compared to revenue of $36.1 million for the
fourth quarter of 2022. Overall, government/defense sales increased
28.8% and commercial sales increased 20.2% over the 2022 period.
Battery & Energy Products sales increased 11.1% to $35.7
million compared to $32.1 million last year reflecting increases of
20.2% in commercial sales, including a 118.0% increase in medical
battery sales, partially offset by decreases of 11.3% in oil &
gas market sales and 11.4% in government/defense sales.
Communications Systems sales increased by 121.9% to $8.8 million
compared to $4.0 million for the same period last year, primarily
attributable to shipments 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 under an ongoing allied country
government/defense modernization program. Our total backlog exiting
the 2023 fourth quarter was $103.5 million representing a 2.4%
sequential increase over that reported for the third quarter.
Gross profit was $11.4 million, or 25.6% of
revenue, compared to $8.1 million, or 22.4% of revenue, for the
same quarter a year ago. Battery & Energy Products gross margin
was 25.2%, compared to 21.6% last year, primarily due to more
efficiencies and higher cost absorption resulting from a concerted
effort to level-load production more evenly across the 2023
quarter, as well as improved price realization. Communications
Systems gross margin was 27.2% compared to 28.7% last year,
primarily due to inefficiencies caused by component delays from
suppliers, partially offset by higher factory volume.
Operating expenses were $7.8 million, compared
to $7.9 million for the 2022 fourth quarter. Operating expenses
were 17.4% of revenue compared to 21.8% of revenue for the
year-earlier period.
The combination of higher sales leveraged by
improved gross margin and operating expenses resulted in a $3.4
million increase in operating income to $3.6 million from $0.2
million last year.
Net income was $2.9 million or $0.17 per diluted
share on a GAAP basis, compared to a net loss of $0.2 million or
$0.01 per diluted share for the fourth quarter of 2022. Adjusted
EPS was $0.18 on a diluted basis for the fourth quarter of 2023,
compared to a loss of $0.03 for the 2022 period. Adjusted EPS
excludes the provision for deferred taxes 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.
Adjusted EBITDA, defined as EBITDA including
non-cash, stock-based compensation expense, was $4.8 million for
the fourth quarter of 2023, or 10.7% of sales, compared to $2.0
million, or 5.6% 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 fourth 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/BI9f2b6fae66954f53b4517cbe89148738.
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 the impact
of COVID-19 and related supply chain disruptions, 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, 2023 |
|
December 31,2022 |
|
Current
Assets: |
|
|
|
|
Cash |
$ |
10,278 |
|
|
$ |
5,713 |
|
|
Trade Accounts Receivable, Net |
|
31,761 |
|
|
|
27,779 |
|
|
Inventories, Net |
|
42,215 |
|
|
|
41,192 |
|
|
Prepaid Expenses and Other Current Assets |
|
5,949 |
|
|
|
4,304 |
|
|
Total Current Assets |
|
90,203 |
|
|
|
78,988 |
|
|
|
|
|
|
|
Property, Plant
and Equipment, Net |
|
21,117 |
|
|
|
21,716 |
|
|
Goodwill |
|
37,571 |
|
|
|
37,428 |
|
|
Other Intangible
Assets, Net |
|
15,107 |
|
|
|
15,921 |
|
|
Deferred Income
Taxes, Net |
|
10,567 |
|
|
|
12,069 |
|
|
Other Non-Current
Assets |
|
3,711 |
|
|
|
2,308 |
|
|
Total
Assets |
$ |
178,276 |
|
|
$ |
168,430 |
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
Current Liabilities: |
|
|
|
Accounts Payable |
$ |
11,336 |
|
|
$ |
16,074 |
|
|
Current Portion of Long-Term Debt |
|
2,000 |
|
|
|
2,000 |
|
|
Accrued Compensation and Related Benefits |
|
3,115 |
|
|
|
2,890 |
|
|
Accrued Expenses and Other Current Liabilities |
|
7,279 |
|
|
|
7,949 |
|
|
Total Current Liabilities |
|
23,730 |
|
|
|
28,913 |
|
|
Long-Term Debt,
Net |
|
23,624 |
|
|
|
19,310 |
|
|
Deferred Income
Taxes |
|
1,714 |
|
|
|
1,917 |
|
|
Other Non-Current
Liabilities |
|
3,781 |
|
|
|
1,887 |
|
|
Total Liabilities |
|
52,849 |
|
|
|
52,027 |
|
|
|
|
|
|
|
Shareholders'
Equity: |
|
|
|
|
Common Stock |
|
2,078 |
|
|
|
2,057 |
|
|
Capital in Excess of Par Value |
|
189,160 |
|
|
|
187,405 |
|
|
Accumulated Deficit |
|
(40,754 |
) |
|
|
(47,951 |
) |
|
Accumulated Other Comprehensive Loss |
|
(3,660 |
) |
|
|
(3,750 |
) |
|
Treasury Stock |
|
(21,492 |
) |
|
|
(21,484 |
) |
|
Total Ultralife Equity |
|
125,332 |
|
|
|
116,277 |
|
|
Non-Controlling
Interest |
|
95 |
|
|
|
126 |
|
|
Total Shareholders’ Equity |
|
125,427 |
|
|
|
116,403 |
|
|
|
|
|
|
|
Total Liabilities and Shareholders' Equity |
$ |
178,276 |
|
|
$ |
168,430 |
|
|
ULTRALIFE CORPORATION AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF INCOME |
(In Thousands Except Per Share Amounts) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three-Month Period Ended |
|
Year Ended |
|
December31, |
|
December 31, |
|
December31, |
|
December 31, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenues: |
|
|
|
|
|
|
|
Battery & Energy Products |
$ |
35,703 |
|
|
$ |
32,122 |
|
|
$ |
129,953 |
|
|
$ |
119,995 |
|
Communications Systems |
|
8,845 |
|
|
|
3,985 |
|
|
|
28,691 |
|
|
|
11,845 |
|
Total Revenues |
|
44,548 |
|
|
|
36,107 |
|
|
|
158,644 |
|
|
|
131,840 |
|
|
|
|
|
|
|
|
|
Cost of Products
Sold: |
|
|
|
|
|
|
|
Battery & Energy Products |
|
26,711 |
|
|
|
25,185 |
|
|
|
99,178 |
|
|
|
93,841 |
|
Communications Systems |
|
6,435 |
|
|
|
2,841 |
|
|
|
20,266 |
|
|
|
8,599 |
|
Total Cost of Products Sold |
|
33,146 |
|
|
|
28,026 |
|
|
|
119,444 |
|
|
|
102,440 |
|
|
|
|
|
|
|
|
|
Gross Profit |
|
11,402 |
|
|
|
8,081 |
|
|
|
39,200 |
|
|
|
29,400 |
|
|
|
|
|
|
|
|
|
Operating
Expenses: |
|
|
|
|
|
|
|
Research and Development |
|
1,852 |
|
|
|
1,656 |
|
|
|
7,531 |
|
|
|
7,081 |
|
Selling, General and Administrative |
|
5,901 |
|
|
|
6,208 |
|
|
|
22,194 |
|
|
|
22,190 |
|
Total Operating Expenses |
|
7,753 |
|
|
|
7,864 |
|
|
|
29,725 |
|
|
|
29,271 |
|
|
|
|
|
|
|
|
|
Operating
Income |
|
3,649 |
|
|
|
217 |
|
|
|
9,475 |
|
|
|
129 |
|
|
|
|
|
|
|
|
|
Other
Expense |
|
536 |
|
|
|
597 |
|
|
|
358 |
|
|
|
575 |
|
Income (Loss) Before
Income Taxes |
|
3,113 |
|
|
|
(380 |
) |
|
|
9,117 |
|
|
|
(446 |
) |
|
|
|
|
|
|
|
|
Income Tax Provision
(Benefit) |
|
263 |
|
|
|
(155 |
) |
|
|
1,951 |
|
|
|
(326 |
) |
|
|
|
|
|
|
|
|
Net Income
(Loss) |
|
2,850 |
|
|
|
(225 |
) |
|
|
7,166 |
|
|
|
(120 |
) |
|
|
|
|
|
|
|
|
Net Loss Attributable to
Non-Controlling Interest |
|
(23 |
) |
|
|
(1 |
) |
|
|
(31 |
) |
|
|
(1 |
) |
|
|
|
|
|
|
|
|
Net Income (Loss)
Attributable to Ultralife Corporation |
$ |
2,873 |
|
|
($ |
224 |
) |
|
$ |
7,197 |
|
|
($ |
119 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) Per
Share Attributable to UltralifeCommon Shareholders
– Basic |
$.18 |
|
($.01) |
|
$.44 |
|
($.01) |
|
|
|
|
|
|
|
|
Net Income (Loss) Per
Share Attributable to UltralifeCommon Shareholders
– Diluted |
$.17 |
|
($.01) |
|
$.44 |
|
($.01) |
|
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding – Basic |
|
16,338 |
|
|
|
16,135 |
|
|
|
16,214 |
|
|
|
16,125 |
|
|
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding – Diluted |
|
16,479 |
|
|
|
16,135 |
|
|
|
16,226 |
|
|
|
16,125 |
|
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) |
|
Three-Month Period Ended |
|
Year Ended |
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
|
|
|
|
|
|
|
|
Net Income (Loss) Attributable
to Ultralife Corporation |
$ |
2,873 |
|
($ |
224 |
) |
|
$ |
7,197 |
|
($ |
119 |
) |
Adjustments: |
|
|
|
|
|
|
|
Interest Expense, Net |
|
566 |
|
|
368 |
|
|
|
2,016 |
|
|
951 |
|
|
Income Tax Provision (Benefit) |
|
263 |
|
|
(155 |
) |
|
|
1,951 |
|
|
(326 |
) |
|
Depreciation Expense |
|
740 |
|
|
727 |
|
|
|
3,022 |
|
|
3,177 |
|
|
Amortization Expense |
|
226 |
|
|
313 |
|
|
|
889 |
|
|
1,282 |
|
|
Stock-Based Compensation Expense |
|
104 |
|
|
224 |
|
|
|
528 |
|
|
776 |
|
Cyber-Insurance Policy Deductible |
|
- |
|
|
- |
|
|
|
100 |
|
|
- |
|
Non-Cash Purchase Accounting Adjustment |
|
- |
|
|
- |
|
|
|
- |
|
|
55 |
|
Severance to Former President & CEO |
|
- |
|
|
779 |
|
|
|
- |
|
|
779 |
|
Adjusted EBITDA |
$ |
4,772 |
|
$ |
2,032 |
|
|
$ |
15,703 |
|
$ |
6,575 |
|
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 we expect
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) |
|
Three-Month Period Ended |
|
December 31, 2023 |
|
December 31, 2022 |
|
Amount |
|
Per Basic Share |
|
Per Diluted Share |
|
Amount |
|
Per Basic Share |
|
Per Diluted Share |
Net Income (Loss) Attributable to Ultralife Corporation |
$ |
2,873 |
|
$.18 |
|
$.17 |
|
($ |
224 |
) |
|
($.01) |
|
($.01) |
Deferred Tax Provision
(Benefit) |
|
56 |
|
- |
|
.01 |
|
|
(279 |
) |
|
(.02) |
|
(.02) |
Adjusted Net Income (Loss) |
$ |
2,929 |
|
$.18 |
|
$.18 |
|
($ |
503 |
) |
|
($.03) |
|
($.03) |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares
Outstanding |
|
|
16,338 |
|
16,479 |
|
|
|
16,135 |
|
16,135 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended |
|
December 31, 2023 |
|
December 31, 2022 |
|
Amount |
|
Per Basic Share |
|
Per Diluted Share |
|
Amount |
|
Per Basic Share |
|
Per Diluted Share |
Net Income Attributable to Ultralife Corporation |
$ |
7,197 |
|
$.44 |
|
$.44 |
|
($ |
119 |
) |
|
($.01) |
|
($.01) |
Deferred Tax Provision
(Benefit) |
|
1,301 |
|
.08 |
|
.08 |
|
|
(962 |
) |
|
(.06) |
|
(.06) |
Adjusted Net Income (Loss) |
$ |
8,498 |
|
$.52 |
|
$.52 |
|
($ |
1,081 |
) |
|
($.07) |
|
($.07) |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares
Outstanding |
|
|
16,214 |
|
16,226 |
|
|
|
16,125 |
|
16,125 |
Company Contact:
Ultralife Corporation
Philip A. Fain
(315)
210-6110
pfain@ulbi.com
Investor Relations Contact:LHA Jody
Burfening(212)
838-3777jburfening@lhai.com
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