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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
Date of Report (Date of earliest event reported):
February 15, 2007
ULTRALIFE BATTERIES, INC.
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation or organization)
0-20852 16-1387013
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(Commission File Number) (I.R.S. Employer Identification No.)
2000 Technology Parkway, Newark, New York 14513
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(Address of principal executive offices) (Zip Code)
(315) 332-7100
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(Registrant's telephone number, including area code)
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:
[ ] 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))
Item 2.02. Results of Operations and Financial Condition.
Ultralife Batteries, Inc. (the "Company") reported an operating loss of $1.5
million on record quarterly revenues of $30.1 million for the fourth quarter
ended December 31, 2006. In comparison, the company reported an operating profit
of $0.1 million on revenues of $17.8 million for the same period last year.
The Company's press release is attached as Exhibit 99.1 to this Form 8-K. The
information set forth in this Form 8-K and the attached exhibit is being
furnished to and not filed with the Securities and Exchange Commission and shall
not be deemed to be incorporated by reference in any filing under the Securities
Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended,
except to the extent specifically provided in any such filing.
Item 9.01. Financial Statements, Pro Forma Financials and Exhibits.
(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
99.1 Press Release dated February 15, 2007.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ULTRALIFE BATTERIES, INC.
Dated: February 15, 2007
By: /s/ Robert W. Fishback
---------------------------------
Robert W. Fishback
Vice President of Finance and CFO
INDEX TO EXHIBITS
(99) Additional Exhibits
99.1 Press Release dated February 15, 2007.
Exhibit 99.1
Ultralife Batteries Reports Fourth Quarter Results
NEWARK, N.Y.--(BUSINESS WIRE)--Feb. 15, 2007--Ultralife Batteries,
Inc. (NASDAQ: ULBI) reported an operating loss of $1.5 million on
record quarterly revenues of $30.1 million for the fourth quarter
ended December 31, 2006. In comparison, the company reported an
operating profit of $0.1 million on revenues of $17.8 million for the
same period last year.
Revenues in the fourth quarter of 2006 reflect growth in sales of
rechargeable batteries and chargers, 9-volt batteries and automotive
telematics products as well as the addition of McDowell Research and
ABLE New Energy, which were acquired in 2006. As a percentage of
revenues, gross margins for the fourth quarter of 2006 were 17%
compared to 21% for the same period last year, due to higher than
expected material costs at McDowell and certain manufacturing
inefficiencies in 9-volt production. Operating expenses totaled $6.6
million and included $1.7 million of additional expenses from McDowell
and ABLE, $0.7 million of intangible asset amortization and $0.5
million of stock-based compensation expense; excluding these items,
operating expenses rose modestly over the $3.5 million reported in the
fourth quarter last year.
At the end of 2004, the company recorded a deferred tax asset
associated with its U.S. net operating loss carryforwards as the
company had begun to demonstrate a profitable track record. The
company continually assesses the carrying value of this asset based on
relevant accounting standards. The company's assessment in the fourth
quarter of 2006 concluded by reestablishing full reserves against this
deferred tax asset, generating a $24.1 million non-cash charge to
income taxes. As the company reestablishes a pattern of profitability,
it will continue to reassess the reserves associated with this issue.
As a result of the above, net loss for the fourth quarter of 2006 was
$26.0 million, or $1.73 per common share, compared to a net loss of
$40,000, or $0.00 per common share, for the fourth quarter of 2005.
For the full year ended December 31, 2006, revenues totaled $93.5
million, a 33% increase over the $70.5 million reported for 2005. The
company reported an operating loss of $3.0 million in 2006, including
$1.5 million in stock-based compensation expense and $1.2 million of
intangible amortization, compared to an operating loss of $2.9 million
in 2005. Net loss for 2006 was $27.5 million, or $1.84 per share,
including the adjustment for the deferred tax asset, compared to a net
loss for the same period last year of $4.3 million, or $0.30 per
share.
Management cautions that the fourth quarter and full year results
are subject to the completion of its year-end audit by the company's
independent accounting firm. In particular, the final review related
to McDowell's inventory valuation and associated cost of goods sold
has not yet been completed. As a result, final financial statements
reported in the Form 10-K for the year ended December 31, 2006 may
differ from the results reported in this press release.
"During 2006, we accomplished a great deal while facing numerous
challenges," said John D. Kavazanjian, Ultralife's president and chief
executive officer. "Diversifying our market opportunities and reducing
our dependence on orders from the U.S. Defense Department were
strategic priorities for the company and we achieved these objectives
by further building our commercial business, particularly in the area
of automotive telematics, and by expanding our reach into different
segments of the government/military market. As evidence of our success
in diversifying revenues, sales of standard batteries under contract
with the U.S. Defense Department for all of 2006 were approximately
$18 million, or 19% of total revenue, and only $1.0 million in the
fourth quarter, or 3% of total revenue. As a result of our key
initiatives to solidify our business with military prime contractors,
nurture relationships with automotive manufacturers and strengthen our
global distribution network, we now possess a broader set of market
opportunities and see greater demand for our power solutions than ever
before.
"The challenges we faced in 2006 were principally related to the
integration of McDowell Research and associated operational issues
that arose in the second half of the year," continued Mr. Kavazanjian.
"As stated in our fourth quarter pre-announcement, we are addressing
the operational issues and are resolved to improve manufacturing
efficiency and optimize McDowell's cost structure. The actions we took
in early January to address manufacturing issues at our Newark
facility are proving to be effective and we are now operating at
planned levels. In addition, we are working through McDowell's
inventory that carries above-normal product costs and have made the
necessary changes to lower future costs."
Concluded Mr. Kavazanjian, "Ultralife's mix of business today is
very different than a year ago, combining a steady revenue base in our
established commercial market segments and expanding activity with
military prime contractors who value our engineering expertise and
broad product offering, supplemented by design wins in target
commercial markets and by U.S. military orders against existing
contracts."
Outlook
Management is projecting revenue between $28 million to $30
million for its first quarter ending March 31, 2007, largely based on
our current backlog of shipments in addition to our pipeline of
orders. Based on this revenue estimate, management anticipates
reporting an operating loss in the range of $1 million up to
breakeven, inclusive of approximately $1.1 million of non-cash
expenses related to stock-based compensation and intangible asset
amortization.
About Ultralife Batteries, Inc.
Ultralife is a global provider of high-energy power solutions and
communications accessories for diverse applications. The company
develops, manufactures and markets a wide range of non-rechargeable
and rechargeable batteries, charging systems and accessories including
power supplies, amplifiers, amplified speakers, equipment mounts, case
equipment and integrated communication systems for markets including
military, industrial and consumer portable electronics. Through its
portfolio of standard products and engineered solutions, Ultralife is
at the forefront of providing the next generation of power systems and
accessories. Commercial, retail and government customers include:
General Dynamics, Philips Medical Systems, General Motors, Energizer,
Kidde Safety, Lowe's, Radio Shack and the national defense agencies of
the United States, United Kingdom, Germany, Australia and New Zealand,
among others.
Ultralife's headquarters, principal manufacturing and research
facilities are in Newark, New York, near Rochester. Ultralife's three
other operating units are: Ultralife Batteries (UK) Ltd., in Abingdon,
England; McDowell Research in Waco, Texas; and ABLE New Energy in
Shenzhen, China. Detailed information on Ultralife is available at:
www.ultralifebatteries.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, disruptions
related to restructuring actions and delays. 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
Investors are invited to listen to a live webcast of the
conference call at 10:00 a.m. ET on February 15, 2007 at
http://investor.ultralifebatteries.com. To listen to the live 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 broadcast, a replay of the webcast will be available
shortly after the call at the same location for 90 days. Investors may
also listen to a telephone replay of the conference call by dialing
888-203-1112, Reservation 4704751, during the period starting at 1:00
p.m. ET February 15 and ending at 1:00 p.m. ET February 22, 2007.
Ultralife(R) is a registered trademark of Ultralife Batteries,
Inc.
ULTRALIFE BATTERIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
(Unaudited)
- ----------------------------------------------------------------------
Three-Month Periods Twelve-Month Periods
Ended Ended
December 31, December 31, December 31, December 31,
2006 2005 2006 2005
------------ ------------ ------------ ------------
Revenues:
Non-rechargeable
products $ 16,678 $ 15,204 $ 67,779 $ 58,509
Rechargeable
products 9,069 2,391 17,745 10,067
Communications
accessories 4,387 - 7,433 -
Technology
contracts (25) 248 589 1,925
------------ ------------ ------------ ------------
Total revenues 30,109 17,843 93,546 70,501
Cost of products
sold:
Non-rechargeable
products 14,100 11,781 55,921 47,626
Rechargeable
products 7,129 2,021 13,923 8,751
Communications
accessories 3,720 - 5,662 -
Technology
contracts 45 371 597 1,866
------------ ------------ ------------ ------------
Total cost of
products sold 24,994 14,173 76,103 58,243
------------ ------------ ------------ ------------
Gross margin 5,115 3,670 17,443 12,258
Operating
expenses:
Research and
development 1,395 877 4,478 3,751
Selling,
general, and
administrative 4,542 2,664 14,723 11,409
Amortization of
intangible
assets 687 - 1,199 -
------------ ------------ ------------ ------------
Total operating
expenses 6,624 3,541 20,400 15,160
------------ ------------ ------------ ------------
Operating income
/(loss) (1,509) 129 (2,957) (2,902)
Other income
(expense):
Interest income 22 23 126 185
Interest expense (561) (228) (1,424) (821)
Gain on
insurance
settlement - - 191 -
Miscellaneous 125 (115) 311 (318)
------------ ------------ ------------ ------------
Income/(loss)
before income
taxes (1,923) (191) (3,753) (3,856)
------------ ------------ ------------ ------------
Income tax
provision/
(benefit)-current (20) - - 3
Income tax
provision/
(benefit)-deferred 24,136 (151) 23,735 486
------------ ------------ ------------ ------------
Total income
taxes 24,116 (151) 23,735 489
------------ ------------ ------------ ------------
Net Income/(Loss) $ (26,039) $ (40) $ (27,488) $ (4,345)
============ ============ ============ ============
Earnings/(Loss)
per share - basic $ (1.73) $ (0.00) $ (1.84) $ (0.30)
============ ============ ============ ============
Earnings/(Loss)
per share -
diluted $ (1.73) $ (0.00) $ (1.84) $ (0.30)
============ ============ ============ ============
Weighted average
shares
outstanding -
basic 15,030 14,727 14,906 14,551
============ ============ ============ ============
Weighted average
shares
outstanding -
diluted 15,030 14,727 14,906 14,551
============ ============ ============ ============
ULTRALIFE BATTERIES, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Per Share Amounts)
(unaudited)
- ----------------------------------------------------------------------
December 31, December 31,
ASSETS 2006 2005
------------ ------------
Current assets:
Cash and investments $ 720 $ 3,214
Trade accounts receivable, net 24,197 10,965
Inventories 27,360 19,446
Prepaid expenses and other current assets 3,669 5,737
------------ ------------
Total current assets 55,946 39,362
Property and equipment 19,396 19,931
Other assets
Deferred tax asset - non-current - 21,221
Goodwill, intangible and other assets 22,416 243
------------ ------------
Total Assets $ 97,758 $ 80,757
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt and current portion of
long-term debt $ 12,246 $ 7,715
Accounts payable 15,925 5,218
Other current liabilities 9,639 5,450
------------ ------------
Total current liabilities 37,810 18,383
------------ ------------
Long-term liabilities:
Long-term debt and capital lease
obligations 20,043 25
Other long-term liabilities 316 242
------------ ------------
Total long-term liabilities 20,359 267
------------ ------------
Shareholders' equity:
Common stock, par value $0.10 per share 1,585 1,547
Capital in excess of par value 134,729 130,530
Accumulated other comprehensive income (321) (1,054)
Accumulated deficit (94,026) (66,538)
------------ ------------
41,967 64,485
Less -- Treasury stock, at cost 2,378 2,378
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Total shareholders' equity 39,589 62,107
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Total Liabilities and Shareholders' Equity $ 97,758 $ 80,757
============ ============
CONTACT: Ultralife Batteries, Inc.
Robert W. Fishback, 315-332-7100
bfishback@ulbi.com
or
Investor Relations:
Lippert/Heilshorn & Associates, Inc.
Jody Burfening, 212-838-3777
jburfening@lhai.com