Ultralife Corporation (NASDAQ: ULBI) reported operating results for
the first quarter ended March 31, 2024 with the following
highlights:
- Sales of $41.9 million representing
a 31.4% year-over-year increase, including 54.7% growth in medical
market sales
- Gross profit of $11.5 million, or
27.4% of revenue, compared to $7.4 million, or 23.3% of revenue for
the 2023 first quarter
- Operating income of $4.1 million
versus breakeven for the 2023 first quarter
- GAAP EPS of $0.18 compared to a
loss of $0.02 for the 2023 first quarter
- Adjusted EBITDA of $5.2 million, a
four-fold gain compared to $1.2 million last year
- Backlog of $97.4 million exiting
the 2024 first quarter
“Ultralife’s strong first quarter results are a
testament to the teamwork and success to date of our gross margin
improvement initiatives and continued demand in our core products,
particularly from our government/defense and medical customers,”
said Mike Manna, President and Chief Executive Officer.
“With the current healthy backlog and new product
commercialization, we are prepared to capture additional organic
growth opportunities, while we continue to drive gross margin
improvements and invest in further new product development.
We are increasingly optimistic that we are positioned to sustain
profitable growth, generate incremental cash flow to pay down debt,
and invest in strategic capital expenditures and accretive
acquisitions.”
First Quarter 2024 Financial Results
Revenue was $41.9 million, an increase of $10.0
million, or 31.4%, as compared to revenue of $31.9 million for the
first quarter of 2023. Overall, government/defense sales increased
83.4% and commercial sales increased 8.6% over the 2023 period.
Battery & Energy Products sales increased 22.9% to $35.0
million compared to $28.5 million last year reflecting increases of
73.6% in government/defense sales and 8.6% in commercial sales,
including a 54.7% increase in medical battery sales and a 2.3% in
industrial sales, partially offset by a decrease of 13.9% in oil
& gas market sales. Communications Systems sales increased by
101.3% to $6.9 million compared to $3.4 million for the same period
last year, primarily attributable to shipments of EL8000 server
cases to a large multinational information technology company,
integrated systems of amplifiers and radio vehicle mounts to a
major international defense contractor under an ongoing allied
country government/defense modernization program, and power systems
to a U.S.-based global prime. Our total backlog exiting the 2024
first quarter was $97.4 million.
Gross profit was $11.5 million, or 27.4% of
revenue, compared to $7.4 million, or 23.3% of revenue, for the
same quarter a year ago. Battery & Energy Products gross margin
was 25.7%, compared to 22.9% last year, primarily due to higher
cost absorption and more efficiencies resulting from a concerted
effort to level-load production more evenly across the 2024
quarter, as well as improved price realization. Communications
Systems gross margin was 35.8% compared to 26.8% last year,
primarily due to higher factory volume and favorable sales product
mix.
Operating expenses were $7.4 million, compared
to $7.4 million for the 2023 first quarter. Operating expenses were
17.7% of revenue compared to 23.2% of revenue for the year-earlier
period.
The combination of higher sales leveraged by
improved gross margin and level operating expenses resulted in a
$4.0 million increase in operating income to $4.1 million from
breakeven last year. Operating margin increased to 9.7% compared to
0.1% last year. Operating results for the first quarter of 2023
were negatively impacted by the January 25, 2023 cybersecurity
attack.
Net income was $2.9 million or $0.18 per diluted
share on a GAAP basis, compared to a net loss of $0.3 million or
$0.02 per diluted share for the first quarter of 2023. Adjusted EPS
was $0.21 on a diluted basis for the first quarter of 2024,
compared to a loss of $0.05 for the 2023 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 $5.2 million for
the first quarter of 2024, or 12.5% of sales, compared to $1.2
million, or 3.6% of sales, for the year-earlier period.
See the “Non-GAAP Financial Measures” section of
this release for a reconciliation of adjusted EBITDA to net income
attributable to Ultralife Corporation and adjusted EPS to EPS.
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 first 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/BI5d712724df6d4c65bb6496c4ce2d606f.
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.
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ULTRALIFE CORPORATION AND SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS(Dollars in
Thousands) |
(Unaudited) |
|
|
ASSETS |
|
|
|
|
|
March 31,2024 |
|
December 31,2023 |
Current Assets: |
|
|
|
Cash |
$10,099 |
|
$10,278 |
Trade Accounts Receivable, Net |
35,278 |
|
31,761 |
Inventories, Net |
43,821 |
|
42,215 |
Prepaid Expenses and Other Current Assets |
5,104 |
|
5,949 |
Total Current Assets |
94,302 |
|
90,203 |
|
|
|
|
Property, Plant and Equipment,
Net |
20,670 |
|
21,117 |
Goodwill |
37,499 |
|
37,571 |
Other Intangible Assets,
Net |
14,867 |
|
15,107 |
Deferred Income Taxes,
Net |
9,873 |
|
10,567 |
Other Non-Current Assets |
3,340 |
|
3,711 |
Total Assets |
$180,551 |
|
$178,276 |
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
Current Liabilities: |
|
Accounts Payable |
$13,315 |
|
$11,336 |
Current Portion of Long-Term Debt |
2,000 |
|
2,000 |
Accrued Compensation and Related Benefits |
2,013 |
|
3,115 |
Accrued Expenses and Other Current Liabilities |
6,048 |
|
7,279 |
Total Current Liabilities |
23,376 |
|
23,730 |
Long-Term Debt, Net |
23,140 |
|
23,624 |
Deferred Income Taxes,
Net |
1,675 |
|
1,714 |
Other Non-Current
Liabilities |
3,415 |
|
3,781 |
Total Liabilities |
51,606 |
|
52,849 |
|
|
|
|
Shareholders' Equity: |
|
|
|
Common Stock |
2,089 |
|
2,078 |
Capital in Excess of Par Value |
189,995 |
|
189,160 |
Accumulated Deficit |
(37,863) |
|
(40,754) |
Accumulated Other Comprehensive Loss |
(3,892) |
|
(3,660) |
Treasury Stock |
(21,492) |
|
(21,492) |
Total Ultralife Equity |
128,837 |
|
125,332 |
Non-Controlling Interest |
108 |
|
95 |
Total Shareholders’ Equity |
128,945 |
|
125,427 |
|
|
|
|
Total Liabilities and Shareholders' Equity |
$180,551 |
|
$178,276 |
|
|
|
|
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ULTRALIFE CORPORATION AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF INCOME(In
Thousands Except Per Share Amounts) |
(Unaudited) |
|
|
|
Three-Month Period Ended |
|
March 31, |
|
March 31, |
|
2024 |
|
2023 |
Revenues: |
|
|
|
Battery & Energy Products |
$34,989 |
|
$28,470 |
Communications Systems |
6,938 |
|
3,446 |
Total
Revenues |
41,927 |
|
31,916 |
|
|
|
|
Cost of Products
Sold: |
|
|
|
Battery & Energy Products |
26,003 |
|
21,958 |
Communications Systems |
4,454 |
|
2,522 |
Total Cost of Products
Sold |
30,457 |
|
24,480 |
|
|
|
|
Gross Profit |
11,470 |
|
7,436 |
|
|
|
|
Operating
Expenses: |
|
|
|
Research and Development |
1,756 |
|
2,032 |
Selling, General and Administrative |
5,651 |
|
5,378 |
Total Operating
Expenses |
7,407 |
|
7,410 |
|
|
|
|
Operating Income
(Loss) |
4,063 |
|
26 |
|
|
|
|
Other
Expense |
456 |
|
494 |
Income (Loss) Before
Income Tax Provision |
3,607 |
|
(468) |
|
|
|
|
Income Tax Provision
(Benefit) |
703 |
|
(133) |
|
|
|
|
Net Income
(Loss) |
2,904 |
|
(335) |
|
|
|
|
Net Income Attributable to
Non-Controlling Interest |
(13) |
|
(11) |
|
|
|
|
Net Income (Loss)
Attributable to Ultralife Corporation |
$2,891 |
|
($346) |
|
|
|
|
Net Income (Loss) Per
Share Attributable to UltralifeCommon Shareholders
– Basic |
$0.18 |
|
($0.02) |
|
|
|
|
Net Income (Loss) Per
Share Attributable to UltralifeCommon Shareholders
– Diluted |
$0.18 |
|
($0.02) |
|
|
|
|
Weighted Average
Shares Outstanding – Basic |
16,396 |
|
16,135 |
|
|
|
|
Weighted Average
Shares Outstanding – Diluted |
16,518 |
|
16,135 |
|
|
|
|
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 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 (loss) attributable to Ultralife Corporation.
|
ULTRALIFE CORPORATION AND SUBSIDIARIES |
CALCULATION OF ADJUSTED EBITDA |
(Dollars in Thousands) |
(Unaudited) |
|
|
|
Three-Month Period Ended |
|
March 31,2024 |
|
March 31,2023 |
|
|
|
|
Net Income (Loss) Attributable
to Ultralife Corporation |
$2,891 |
|
($346) |
Adjustments: |
|
|
|
Interest Expense, Net |
520 |
|
424 |
Income Tax Provision (Benefit) |
703 |
|
(133) |
Depreciation Expense |
740 |
|
762 |
Amortization of Intangible Assets |
228 |
|
209 |
Stock-Based Compensation Expense |
161 |
|
139 |
Non-Recurring – Cyber Insurance Deductible |
- |
|
100 |
Adjusted EBITDA |
$5,243 |
|
$1,155 |
|
|
|
|
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 income (loss) attributable
to Ultralife Corporation excluding the 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
income (loss) attributable to Ultralife Corporation.
|
ULTRALIFE CORPORATION AND SUBSIDIARIES |
CALCULATION OF ADJUSTED EPS |
(In Thousands Except Per Share Amounts) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-Month Period Ended |
|
March 31, 2024 |
|
March 31, 2023 |
|
Amount |
|
PerBasicShare |
|
PerDilutedShare |
|
Amount |
|
PerBasicShare |
|
PerDilutedShare |
Net Income (Loss) Attributable to
Ultralife Corporation |
$2,891 |
|
$.18 |
|
$.18 |
|
($346) |
|
($0.02) |
|
($0.02) |
Deferred Tax Provision
(Benefit) |
650 |
|
.04 |
|
.03 |
|
(390) |
|
(.03) |
|
(.03) |
Adjusted Net Income (Loss) |
$3,541 |
|
$.22 |
|
$.21 |
|
($736) |
|
($.05) |
|
($.05) |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares
Outstanding |
|
|
16,396 |
|
16,518 |
|
|
|
16,135 |
|
16,135 |
|
|
|
|
|
|
|
|
|
|
|
|
Company Contact: |
Investor Relations Contact: |
Ultralife Corporation |
LHA |
Philip A. Fain |
Jody Burfening |
(315) 210-6110 |
(212) 838-3777 |
pfain@ulbi.com |
jburfening@lhai.com |
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