ulbi20230726c_8k.htm
false 0000875657 0000875657 2023-07-27 2023-07-27
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 8-K
 
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
 
July 27, 2023
Date of Report (Date of Earliest Event Reported)
 
 
ULTRALIFE CORPORATION
(Exact name of registrant as specified in its charter)
 
Delaware
000-20852
16-1387013
(State of incorporation)
(Commission File Number)
(IRS Employer Identification No.)
 
2000 Technology Parkway, Newark, New York 14513
(Address of principal executive offices) (Zip Code)
 
(315) 332-7100
(Registrant’s telephone number, including area code)
 
Securities registered pursuant to Section 12(b) of the Act:
     
Common Stock, $0.10 par value per share
ULBI
NASDAQ
(Title of each class)
(Trading Symbol)
(Name of each exchange on which registered)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934. Emerging Growth Company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
 
 

 
 
Item 2.02 Results of Operations and Financial Condition
 
On July 27, 2023, Ultralife Corporation issued a press release regarding the financial results for its second quarter ended June 30, 2023. A copy of this press release is attached hereto as Exhibit 99.1 and is incorporated herein by this reference.
 
 
Item 9.01 Financial Statements, Pro Forma Financials and Exhibits
 
(d) Exhibits.
 
Exhibit
Number
 
Exhibit Description
 
99.1
   
104
 
Cover Page Interactive Data File (embedded within the Inline XBRL document)
 
 
 

 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
Date: July 27, 2023
 
ULTRALIFE CORPORATION
 
       
       
 
By:
/s/ Philip A. Fain
 
   
Philip A. Fain
 
   
Chief Financial Officer and Treasurer
 
       
       
 
 
 
 
ex_548759.htm

Exhibit 99.1

 

https://cdn.kscope.io/14eb8c3601c453aef802fea79bfe9dec-ex_548759img001.jpg

 

 

Ultralife Corporation Reports Second Quarter Results

 

 

NEWARK, N.Y. – July 27, 2023 -- Ultralife Corporation (NASDAQ: ULBI) reported operating results for the second quarter ended June 30, 2023 with the following highlights:

 

 

Sales of $42.7 million representing a 32.9% year-over-year increase

 

Operating income of $3.7 million compared to $0.8 million for the 2022 second quarter

 

Adjusted EPS of $0.29 compared to $0.03 for the 2022 second quarter

 

Adjusted EBITDA of $6.3 million or 14.7% of sales versus $2.2 million or 6.8% last year

 

Backlog increase to $110.9 million, the highest level in the Company’s history

 

“Driven by surging demand from our government/defense and medical customers, we delivered a 33% year-over-year sales increase to $42.7 million for the second quarter. Leveraged by a sequential improvement in gross margin and disciplined spending, operating profit more than quadrupled from the year-earlier quarter to $3.7 million, the highest level since the third quarter of 2010. With backlog increasing to $110.9 million and durable demand across our diverse end markets, the near-term highest priority remains to recapture gross margin through continued execution of price realization activities, qualification of alternate component suppliers, and lean manufacturing initiatives,” said Mike Manna, President and Chief Executive Officer. “These actions position us to deliver high-quality, sustainable profitable growth for 2023 generating incremental cash flow to pay down our acquisition debt and further invest in our businesses. We continue to strengthen our relationships with our key customers using our global new product development and sales resources to support future growth in target markets.”

 

Second Quarter 2023 Financial Results

 

Revenue was $42.7 million, an increase of $10.6 million, or 32.9%, as compared to revenue of $32.1 million for the second quarter of 2022. Overall, government/defense sales increased 111.5% and commercial sales increased 9.2% over the 2022 period. Battery & Energy Products sales increased 12.3% to $33.9 million, compared to $30.1 million last year, reflecting increases of 26.6% in government/defense sales, 25.2% in medical battery sales, and 17.9% in oil & gas market sales, partially offset by an 18.8% decrease in other commercial sales. Communications Systems sales increased more than four-fold to $8.8 million compared to $2.0 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 second quarter was $110.9 million representing a 40.1% increase over the comparable period last year with $76.4 million of the total backlog due to ship over the remaining six months of 2023. Total backlog increased $2.8 million or 2.6% compared to the backlog exiting the first quarter.

 

Gross profit was $10.6 million, or 24.8% of revenue, compared to $7.6 million, or 23.8% of revenue, for the same quarter a year ago. Battery & Energy Products’ gross margin was 22.3%, compared to 23.7% last year, primarily due to lingering inefficiencies resulting from the first quarter cyber-attack, disposition of certain non-conforming materials and continued investments in the transition of new products to high volume production, partially offset by improved price realization. Communications Systems gross margin was 34.5% compared to 24.9% last year, primarily due to higher factory volume and favorable product mix.

 

 

 

Operating expenses were $6.9 million, the same as that reported for the 2022 second quarter. Operating expenses were 16.2% of revenue compared to 21.3% of revenue for the year-earlier period.

 

The combination of higher gross profit and flat operating expenses resulted in a $2.9 million increase in operating income to $3.7 million from $0.8 million last year.

 

Other income, reported below operating income, includes an Employee Retention Credit (“ERC”) for $1.5 million under Section 2301 of the Coronavirus Aid, Relief and Economic Security Act of 2020 and the American Rescue Plan of 2021 which was filed with the Internal Revenue Service during the second quarter of 2023.

 

Net income was $3.3 million or $0.21 per diluted share on a GAAP basis, compared to net income of $0.5 million or $0.03 per diluted share for the second quarter of 2022. Adjusted EPS was $0.29 on a diluted basis for the second quarter of 2023, compared to $0.03 for the 2022 period. Adjusted EPS excludes the provision for deferred taxes of $1.3 million which primarily represents non-cash charges for U.S. taxes which 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 $6.3 million for the second quarter of 2023, or 14.7% of sales, including the ERC, compared to $2.2 million, or 6.8% 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 second 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/BI05d612e50dae4c4f91cf91687da98603. 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

 

 

   

June 30,

   

December 31,

 
    2023     2022  

Current Assets:

               

Cash

  $ 8,283     $ 5,713  

Trade Accounts Receivable, Net

    28,630       27,779  

Inventories, Net

    46,063       41,192  

Prepaid Expenses and Other Current Assets

    4,850       4,304  

Total Current Assets

    87,826       78,988  
                 

Property, Plant and Equipment, Net

    21,122       21,716  

Goodwill

    37,501       37,428  

Other Intangible Assets, Net

    15,552       15,921  

Deferred Income Taxes, Net

    11,084       12,069  

Other Non-Current Assets

    2,307       2,308  
                 
Total Assets   $ 175,392     $ 168,430  
                 
                 
                 

LIABILITIES AND SHAREHOLDERS' EQUITY

 
                 
                 

Current Liabilities:

               

Accounts Payable

  $ 18,541     $ 16,074  

Current Portion of Long-Term Debt

    2,000       2,000  

Accrued Compensation and Related Benefits

    2,320       2,890  

Accrued Expenses and Other Current Liabilities

    6,342       7,949  

Total Current Liabilities

    29,203       28,913  

Long-Term Debt, Net

    22,642       19,310  

Deferred Income Taxes

    1,876       1,917  

Other Non-Current Liabilities

    1,996       1,887  

Total Liabilities

    55,717       52,027  
                 

Shareholders' Equity:

               

Common Stock

    2,059       2,057  

Capital in Excess of Par Value

    187,758       187,405  

Accumulated Deficit

    (44,957 )     (47,951 )

Accumulated Other Comprehensive Loss

    (3,846 )     (3,750 )

Treasury Stock

    (21,484 )     (21,484 )

Total Ultralife Equity

    119,530       116,277  

Non-Controlling Interest

    145       126  

Total Shareholders’ Equity

    119,675       116,403  
                 

Total Liabilities and Shareholders' Equity

  $ 175,392     $ 168,430  

 

 

 

ULTRALIFE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In Thousands Except Per Share Amounts)

(Unaudited)

 

 

   

Three-Month Period Ended

   

Six-Month Period Ended

 
   

June 30,

   

June 30,

   

June 30,

   

June 30,

 
   

2023

   

2022

   

2023

   

2022

 

Revenues:

                               

Battery & Energy Products

  $ 33,861     $ 30,140     $ 62,331     $ 59,290  

Communications Systems

    8,831       1,986       12,277       3,209  

Total Revenues

    42,692       32,126       74,608       62,499  
                                 

Cost of Products Sold:

                               

Battery & Energy Products

    26,318       22,989       48,276       45,418  

Communications Systems

    5,786       1,491       8,308       2,477  

Total Cost of Products Sold

    32,104       24,480       56,584       47,895  
                                 

Gross Profit

    10,588       7,646       18,024       14,604  
                                 

Operating Expenses:

                               

Research and Development

    1,778       1,672       3,810       3,529  

Selling, General and Administrative

    5,145       5,181       10,523       10,577  

Total Operating Expenses

    6,923       6,853       14,333       14,106  
                                 

Operating Income

    3,665       793       3,691       498  
                                 

Other Income (Expense)

    1,058       (115 )     564       (232 )

Income Before Income Taxes

    4,723       678       4,255       266  
                                 

Income Tax Provision (Benefit)

    1,375       170       1,242       (81 )
                                 

Net Income

    3,348       508       3,013       347  
                                 

Net Income (Loss) Income Attributable to Non-Controlling Interest

    8       (4 )     19       3  
                                 

Net Income Attributable to Ultralife Corporation

  $ 3,340     $ 512     $ 2,994     $ 344  
                                 

Net Income Per Share Attributable to Ultralife Common Shareholders Basic

  $ .21     $ .03     $ .19     $ .02  
                                 

Net Income Per Share Attributable to Ultralife Common Shareholders Diluted

  $ .21     $ .03     $ .19     $ .02  
                                 

Weighted Average Shares Outstanding Basic

    16,141       16,129       16,138       16,116  
                                 

Weighted Average Shares Outstanding Diluted

    16,144       16,149       16,141       16,141  

 

 

 

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

   

Six-Month Period Ended

 
   

June 30,

2023

   

June 30,

2022

   

June 30,

2023

   

June 30,

2022

 
                                 

Net Income Attributable to Ultralife Corporation

  $ 3,340     $ 512     $ 2,994     $ 344  

Adjustments:

                               

Interest Expense, Net

    440       177       864       311  

Income Tax Provision (Benefit)

    1,375       170       1,242       (81 )

Depreciation Expense

    760       819       1,522       1,635  

Amortization Expense

    227       323       436       651  

Stock-Based Compensation Expense

    154       184       293       373  

Cyber-Insurance Policy Deductible

    -       -       100       -  

Non-Cash Purchase Accounting Adjustment

    -       -       -       55  

Adjusted EBITDA

  $ 6,296     $ 2,185     $ 7,451     $ 3,288  

 

 

 

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)

 
 
   

Three-Month Period Ended

 
   

June 30, 2023

   

June 30, 2022

 
   

Amount

   

Per

Basic

Share

   

Per

Diluted

Share

   

Amount

   

Per

Basic

Share

   

Per

Diluted

Share

 

Net Income

  $ 3,340     $ .21     $ .21     $ 512     $ .03     $ .03  

Deferred Tax Provision

    1,278       .08       .08       27       -       -  

Adjusted Net Income

  $ 4,618     $ .29     $ .29     $ 539     $ .03     $ .03  
                                                 

Weighted Average Shares Outstanding

            16,141       16,144               16,129       16,149  

 

 

   

Six-Month Period Ended

 
   

June 30, 2023

   

June 30, 2022

 
   

Amount

   

Per

Basic

Share

   

Per

Diluted

Share

   

Amount

   

Per

Basic

Share

   

Per

Diluted

Share

 

Net Income

  $ 2,994     $ .19     $ .19     $ 344     $ .02     $ .02  

Deferred Tax Provision (Benefit)

    888       .05       .05       (375 )     (.02 )     (.02 )

Adjusted Net Income (Loss)

  $ 3,882     $ .24     $ .24     $ (31 )   $ .00     $ .00  
                                                 

Weighted Average Shares Outstanding

            16,138       16,141               16,116       16,141  

 

 

 

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