NEWARK, N.Y., Oct 28, 2010 (BUSINESS WIRE) --

Ultralife Corporation (NASDAQ: ULBI)reported operating income of $4.7 million on revenue of $53.3 million for the quarter ended September 26, 2010. For the third quarter of 2009, the company reported an operating loss of $0.4 million on revenue of $42.4 million.

Gross margin for the third quarter of 2010 was $14.9 million, or 27.9% of revenue, compared to $10.4 million, or 24.5% of revenue, for the same quarter a year ago, reflecting a favorable mix of high-margin Communications Systems revenue, including strong AMTI amplifier revenue, and Battery & Energy Products manufacturing efficiencies notably in the company's China operations. Included in gross margin for the third quarter last year was a $1.3 million gain related to the resolution of a trade dispute.

Operating expenses for the third quarter of 2010 totaled $10.2 million compared to $10.8 million a year ago. Net income for the third quarter of 2010 was $4.5 million, or $0.26 per share, compared to a net loss of $0.6 million, or $0.04 per share, for the same quarter in 2009.

For the nine months ended September 26, 2010, revenue was $128.8 million compared to $121.8 million for the same period a year ago. Operating income amounted to $6.0 million compared to an operating loss of $9.0 million for the first nine months of 2009. Net income was $4.8 million for the nine months ended September 26, 2010, or $0.28 per share, compared to a net loss of $10.1 million, or $0.59 per share, for the same period a year ago.

"During the third quarter we generated strong incremental returns on revenue growth," said John D. Kavazanjian, Ultralife's president and chief executive officer. "Our focus on developing and selling higher-margin products with greater engineering content helped produce the third consecutive quarter of significant gross margin expansion. After taking into account the planned increase in product development, gross margin gains flowed through to operating income as we held firm on cost controls and realized operational efficiencies.

"Revenue grew by 26% year-over-year led by Communication Systems sales," added Kavazanjian. "Absent orders for standard military batteries from the U.S. Defense Logistics Agency, Battery & Energy Products revenue increased by 32% as international defense order activity remained robust and volumes in our China operation continued to grow. Results in Energy Services were softer than expected, however, as standby power customers, still cautious about capital spending, delayed project implementations."

"Our year-to-date performance puts us on track to deliver gross margin expansion and strong operating income growth in 2010. As we continue to generate positive cash flow from operations, we are also making solid progress toward our goal of sustaining a net positive cash position," concluded Kavazanjian.

Outlook

The company reaffirms its 2010 forecast which calls for revenue in the range of $177 million to $182 million and operating income of approximately $7.0 million. 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 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 third 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:
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Jody Burfening, 212-838-3777
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