NEWARK, N.Y., Apr 29, 2010 (BUSINESS WIRE) --Ultralife Corporation (NASDAQ: ULBI)reported operating income of $0.9 million on revenue of $38.5 million for the quarter ended March 28, 2010. For the first quarter of 2009, the company reported an operating loss of $2.3 million on revenue of $39.8 million.

Gross margin for the first quarter of 2010 was $9.8 million, or 25.3% of revenue, compared to $7.8 million, or 19.5% of revenue, for the same quarter a year ago, primarily reflecting improved manufacturing efficiencies in the company's Battery & Energy Products segment and improved mix of high-margin communications systems revenue partially offset by a negative gross margin in the Energy Services segment. Operating expenses for the first quarter of 2010 totaled $8.9 million inclusive of $0.7 million of expenses for AMTI, which was acquired on March 20, 2009, compared to $10.0 million a year ago. Net income for the first quarter of 2010 was $0.3 million, or $0.02 per share, compared to a net loss of $2.5 million, or $0.15 per share, for the same quarter in 2009.

"Improving gross margin is a key goal for the company in 2010, and for the first quarter we delivered a six percentage point gain over last year's first quarter. The investments we have made to improve manufacturing processes and move up the value chain from components to advanced batteries and communications systems with greater engineered content are yielding desired returns," said John D. Kavazanjian, Ultralife's president and chief executive officer. "While gross margin in our Energy Services segment continues to negatively impact the total company gross margin, we are starting to see evidence of a recovery in customer spending. This should alleviate project delays and pricing pressures that have weighed on the industry and the segment's financial results.

"On the strength of gross margin gains and ongoing operating expense discipline, we generated positive operating cash flow for the quarter. Increased operating cash flow combined with improved working capital management strengthened the balance sheet, and we ended the quarter with an outstanding balance under our revolving credit facility of $8.0 million and $4.1 million of cash and cash equivalents on our balance sheet," added Kavazanjian.

"Business conditions are steadily improving, particularly for our battery and energy products, creating more opportunities for us to further penetrate international markets. In addition, demand for our advanced communications systems remains robust," concluded Kavazanjian. "During the rest of 2010, we plan to increase research and development activities while holding quarterly operating expenses under $10 million. Above all, we remain keenly focused on delivering incremental returns on increased revenue."

Outlook

The company's 2010 operating plan calls for the company to generate revenue of $177 million and operating income of approximately $4.6 million on this base business. Management cautions that the timing of orders and shipments may cause some variability in quarterly results.

About Ultralife Corporation

Ultralife Corporation, which began as a battery company, serves its markets with products and services ranging from portable and standby 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.

Ultralife's family of brands includes: Ultralife Batteries, Stationary Power Services, RPS Power Systems, ABLE, McDowell Research, RedBlack Communications and AMTI. Ultralife's operations are in North America, Europe and Asia. For more information, visit www.ultralifecorp.com.

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: worsening global economic conditions, increased competitive environment and pricing pressures, and the possibility of intangible asset impairment charges that may be taken should management decide to retire one or more of the brands of acquired companies. 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.

Conference Call Information

Ultralife will hold its first quarter earnings conference call today at 10:00 AM ET. To participate, please call (800) 915-4836, identify yourself and ask for the Ultralife call. The conference call will also be broadcast live over the Internet at http://investor.ultralifecorp.com. To listen to the call, please go to the web site at least fifteen minutes early to download and install any necessary audio software. For those who cannot listen to the live webcast, a replay of the webcast will be available shortly after the call at the same location.

SOURCE: Ultralife Corporation

Company:
Ultralife Corporation
Philip Fain, 315-332-7100
pfain@ulbi.com
or
Investor Relations:
Lippert/Heilshorn & Associates
Jody Burfening, 212-838-3777
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