Ultralife Corporation Reports Second Quarter ResultsNEWARK, N.Y., Jul 29, 2010 (BUSINESS WIRE) -- Ultralife Corporation (NASDAQ: ULBI)reported operating income of $0.4 million on revenue of $37.0 million for the quarter ended June 27, 2010. For the second quarter of 2009, the company reported an operating loss of $6.3 million on revenue of $39.6 million.

Gross margin for the second quarter of 2010 was $9.4 million, or 25.4% of revenue, compared to $6.8 million, or 17.1% of revenue, for the same quarter a year ago, reflecting manufacturing efficiencies and higher selling prices in the company's Battery & Energy Products segment, a favorable mix of high-margin Communications Systems revenue and the impact of higher Energy Services revenue. Included in gross margin for the second quarter last year was a $1.8 million increase in the inventory reserve.

Operating expenses for the second quarter of 2010 totaled $9.0 million compared to $13.1 million a year ago. Net income for the second quarter of 2010 was $0.02 million, or $0.00 per share, compared to a net loss of $7.0 million, or $0.41 per share, for the same quarter in 2009. Included in operating expenses for the second quarter last year were $1.2 million of non-recurring severance and legal expenses.

For the six-month period ended June 27, 2010, revenue was $75.5 million compared to $79.4 million for the same period a year ago. Operating income amounted to $1.3 million compared to an operating loss of $8.6 million for the first half of 2009. Net income for the first half of 2010 was $0.3 million, or $0.02 per share, compared to a net loss of $9.5 million, or $0.56 per share, for the same period a year ago.

"Manufacturing process improvements and rigorous operating expense control sustained operating profitability for the second quarter even though sales of batteries to the U.S. Department of Defense were lighter than the first quarter of 2010 and shipments of SATCOM-on-the-Move systems commenced in the third quarter," said John D. Kavazanjian, Ultralife's president and chief executive officer.

"As we move into the second half of 2010, we are on track to complete deliveries of SATCOM systems in the fourth quarter. Order flow for advanced batteries and communications systems with greater engineered content is picking up, although we still do not have visibility for orders of batteries to the U.S. Department of Defense," added Kavazanjian. "Having lowered the cost basis of our business and successfully increased the weight of higher-margin products, we are well positioned to deliver strong incremental returns on the higher revenue anticipated for the second half of the year. On the strength of our profitable business model and improved working capital management, we also have within our sight a return to a net positive cash position."

Outlook

The company's current 2010 forecast calls for the company to generate revenue in the range of $177 million to $182 million and operating income of approximately $7.0 million. Excluded from this forecast is any revenue associated with orders for batteries from the U.S. Department of Defense. 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.

Headquartered in Newark, New York, the company's business segments include: Battery & Energy Products, Communications Systems and Energy Services. Ultralife has operations in North America, Europe and Asia. For more information, visit http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.ultralifecorp.com&esheet=6377445&lan=en-US&anchor=www.ultralifecorp.com&index=1&md5=62a15e12cc2c3a96ba105cb4e89df356.

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 second 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://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Finvestor.ultralifecorp.com&esheet=6377445&lan=en-US&anchor=http%3A%2F%2Finvestor.ultralifecorp.com&index=2&md5=00d0d402d02e297dc6e92fca335c87d2. 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.

ULTRALIFE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
(Unaudited)
			Three-Month Periods Ended										Six-Month Periods Ended
			June 27,				June 28,						June 27,				June 28,
			2010				2009						2010				2009
Revenues:
Battery & energy products			$	22,405			$	25,634					$	45,808			$	48,626
Communications systems				11,242				10,357						24,308				21,622
Energy services				3,377				3,602						5,415				9,148
Total revenues				37,024				39,593						75,531				79,396
Cost of products sold:
Battery & energy products				17,340				21,338						35,807				40,530
Communications systems				7,301				8,036						15,464				15,685
Energy services				2,963				3,439						5,082				8,620
Total cost of products sold				27,604				32,813						56,353				64,835
Gross margin				9,420				6,780						19,178				14,561
Operating expenses:
Research and development				1,903				2,514						3,631				4,494
Selling, general, and administrative				7,106				10,591						14,282				18,649
Total operating expenses				9,009				13,105						17,913				23,143
Operating income (loss)				411				(6,325	)					1,265				(8,582	)
Other income (expense):
Interest income				(1	)			1						2				4
Interest expense				(222	)			(350	)					(719	)			(532	)
Miscellaneous				(120	)			(209	)					(79	)			(198	)
Income (loss) before income taxes				68				(6,883	)					469				(9,308	)
Income tax provision-current				10				-						34				2
Income tax provision-deferred				41				95						122				184
Total income taxes				51				95						156				186
Net income (loss)				17				(6,978	)					313				(9,494	)
Net (income) loss attributable to noncontrolling interest				3				14						(6	)			18
Net income (loss) attributable to Ultralife			$	20			$	(6,964	)				$	307			$	(9,476	)
Net income (loss) attributable to Ultralife common shareholders - basic			$	0.00			$	(0.41	)				$	0.02			$	(0.56	)
Net income (loss) attributable to Ultralife common shareholders - diluted			$	0.00			$	(0.41	)				$	0.02			$	(0.56	)
Weighted average shares outstanding - basic				17,164				16,894						17,089				17,024
Weighted average shares outstanding - diluted				17,169				16,894						17,094				17,024

ULTRALIFE CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Per Share Amounts)
(unaudited)
								June 27,					December 31,
ASSETS								2010					2009
Current assets:
Cash and cash equivalents								$	2,563				$	6,094
Trade accounts receivable, net									27,895					32,449
Inventories									38,607					35,503
Prepaid expenses and other current assets									1,919					1,912
Total current assets									70,984					75,958
Property and equipment									15,361					16,648
Other assets
Goodwill, intangible and other assets									38,740					38,560
Total Assets								$	125,085				$	131,166
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt and current portion of long-term debt								$	12,729				$	19,082
Accounts payable									18,181					19,177
Other current liabilities									9,613					9,875
Total current liabilities									40,523					48,134
Long-term liabilities:
Long-term debt and capital lease obligations									297					267
Other long-term liabilities									4,766					4,651
Total long-term liabilities									5,063					4,918
Shareholders' equity:
Ultralife equity:
Common stock, par value $0.10 per share									1,861					1,831
Capital in excess of par value									170,449					169,064
Accumulated other comprehensive loss									(1,505)					(1,256)
Accumulated deficit									(83,714)					(84,021)
									87,091					85,618
Less -- Treasury stock, at cost									7,652					7,558
Total Ultralife equity									79,439					78,060
Noncontrolling interest									60					54
Total shareholders' equity									79,499					78,114
Total Liabilities and Shareholders' Equity								$	125,085				$	131,166

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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