NEWARK, N.Y., July 29, 2021 (GLOBE NEWSWIRE) -- Ultralife Corporation (NASDAQ: ULBI) reported operating income of $1.1 million on revenue of $26.8 million for the second quarter ended June 30, 2021. For the second quarter of 2020, the Company reported operating income of $2.3 million on revenue of $28.6 million.

“Ultralife’s end-market diversification strategy continues to serve us well. For the second quarter, sales increased sequentially 3% from the first quarter as our oil & gas revenues rebounded, growing 49% year over year. Medical sales abated from last year’s COVID-related demand spike yet were above pre-pandemic levels, and sales from government/defense customers were soft relative to last year’s strong shipment flows,” said Michael D. Popielec, President and Chief Executive Officer. “Given our solid liquidity position, we increased investments in capex and critical engineering resources to support new contracts and completion of transformational new products. Although these investments weighed on operating and net income year-over-year comparisons, sequential EPS grew 20% on the strength of gains in commercial sales.”

Added Mr. Popielec, “Supply chains and logistics continue to be the source of operational challenges, delaying some shipments and increasing freight costs, and clouding our visibility for the second half of the year. Nevertheless, activity in our end markets remains high and our goal is to continue improving our financial performance each quarter. We remain focused on executing near-term growth initiatives and developing long-term growth opportunities while adhering to our proven and profitable business model.”

Second Quarter 2021 Financial Results

Revenue was $26.8 million, a decrease of $1.8 million, or 6.3%, compared to $28.6 million for the second quarter of 2020. Overall, commercial sales decreased 1.0% and government/defense sales decreased 13.2% from the 2020 period. Battery & Energy Products declined 4.8% to $22.9 million, compared to $24.0 million last year, with a 48.6% increase in oil & gas market sales and a 23.2% increase in 9-Volt sales offset by a 27.9% decrease in medical battery sales and a 12.7% decrease in government/defense sales. Communications Systems sales decreased 13.9% to $3.9 million compared to $4.5 million for the same period last year, primarily due to 2020 shipments of vehicle amplifier-adaptor systems to support the U.S. Army’s Network Modernization initiatives completing the delivery orders announced in October 2018. During the 2021 second quarter, increased lead times on components from suppliers and other COVID-19 related logistics matters resulted in delays in our shipments to future periods. We estimate that the delayed shipments adversely impacted revenue for the 2021 second quarter by approximately $1.5 million.

Gross profit was $7.3 million, or 27.1% of revenue, compared to $8.0 million, or 27.9% of revenue, for the same quarter a year ago. Battery & Energy Products’ gross margin was 26.3%, compared to 25.1% last year, as a result of favorable sales product mix and lower scrap and rework on new products transitioning to high volume production. Communications Systems gross margin was 32.1%, compared to 42.8% last year, primarily due to the favorable sales mix in 2020 of the vehicle amplifier-adaptor systems for the U.S. Army.

Operating expenses were $6.2 million compared to $5.7 million last year, representing an increase of 9.0%, primarily relating to our continued investment in engineering resources for new product development, including resources dedicated to the Conformal Wear Battery IDIQ contract awarded in May 2021. Operating expenses were 23.1% of revenue compared to 19.8% of revenue for the year-earlier period.

Operating income was $1.1 million compared to $2.3 million last year, and operating margin was 4.1% compared to 8.0% last year. We estimate that delayed shipments resulting from supply chain and other COVID-19 related logistics matters adversely impacted operating income for the 2021 second quarter by approximately $0.5 million.

Net income was $0.8 million or $0.05 per diluted share using the U.S. statutory tax rate, compared to net income of $1.7 million or $0.10 per diluted share for the second quarter of 2020. Adjusted EPS was $0.06 on a diluted basis for the second quarter of 2021, compared to $0.13 for the 2020 period. Adjusted EPS excludes the provision for deferred taxes which primarily represents non-cash charges of $.2 million for U.S. taxes which will be fully offset by net operating loss carryforwards and other tax credits for the foreseeable future. We estimate that delayed shipments resulting from supply chain and other COVID-19 related logistics matters adversely impacted Adjusted EPS for the 2021 second quarter by approximately $0.03.

During the second quarter of 2021, our cash-on-hand increased by 15.9% to $15.8 million and our debt was reduced by 36.6% to $0.7 million.

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 participate in the live call, please dial (800) 915-4836 at least ten minutes before the scheduled start time, identify yourself and ask for the Ultralife call. 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, 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.

Non-GAAP Financial Measures:

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 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 attributable to Ultralife Corporation.

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 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.