ulbi20240214_8k.htm
false 0000875657 0000875657 2024-02-15 2024-02-15
 
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
 
 
February 15, 2024
Date of Report (Date of Earliest Event Reported)
 
 
ULTRALIFE CORPORATION
(Exact name of registrant as specified in its charter)
 
Delaware
000-20852
16-1387013
(State of incorporation)
(Commission File Number)
(IRS Employer Identification No.)
 
2000 Technology Parkway, Newark, New York 14513
(Address of principal executive offices) (Zip Code)
 
(315) 332-7100
(Registrant’s telephone number, including area code)
 
Securities registered pursuant to Section 12(b) of the Act:
 
Common Stock, $0.10 par value per share
ULBI
NASDAQ
(Title of each class)
(Trading Symbol)
(Name of each exchange on which registered)
 
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 (see General Instruction A.2. below):
 
 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))
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934. Emerging Growth Company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
 

 
 
Item 2.02 Results of Operations and Financial Condition
 
On February 15, 2024, Ultralife Corporation issued a press release regarding the financial results for its fourth quarter and full year ended December 31, 2023.  A copy of this press release is attached hereto as Exhibit 99.1 and is incorporated herein by this reference.
 
 
Item 9.01 Financial Statements, Pro Forma Financials and Exhibits
 
(d) Exhibits.
 
Exhibit
Number
 
Exhibit Description
 
99.1
   
104
 
Cover Page Interactive Data File (embedded within the Inline XBRL document)
 
 
 

 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Date: February 15, 2024
 
ULTRALIFE CORPORATION
     
     
 
By:
/s/ Philip A. Fain
   
Philip A. Fain
   
Chief Financial Officer and Treasurer
 
 
ex_626948.htm

Exhibit 99.1

 

https://cdn.kscope.io/71fc659e4829f39b16481a6f9b54ef29-ex_626948img001.jpg

 

 

 

Ultralife Corporation Reports Fourth Quarter Results

 

 

NEWARK, N.Y. – February 15, 2024 -- Ultralife Corporation (NASDAQ: ULBI) reported operating results for the fourth quarter and full year ended December 31, 2023.

 

Fourth Quarter Highlights:

 

 

Sales of $44.5 million representing a 23.4% year-over-year increase

 

Highest medical sales quarter in Company’s history

 

Operating income of $3.6 million versus $0.2 million for the 2022 fourth quarter

 

Adjusted EPS of $0.18 compared to a loss of $0.03 for the 2022 fourth quarter

 

Adjusted EBITDA of $4.8 million representing a 134.8% year-over-year increase

 

Backlog of $103.5 million exiting 2023, a 2.4% sequential increase over third quarter

 

Fiscal Year 2023 Highlights:

 

 

Sales of $158.6 million representing a 20.3% year-over-year increase

 

Operating income of $9.5 million versus $0.1 million for 2022

 

Adjusted EPS of $0.52 compared to a loss of $0.07 for 2022

 

Adjusted EBITDA of $15.7 million representing a 138.8% year-over-year increase

 

 

“Ultralife performed exceedingly well in the fourth quarter, delivering higher Communications Systems revenue, a 360-basis point expansion of Battery & Energy Products’ gross margin and operating expense leverage. In addition, medical sales reached the highest quarterly level since we entered this market in 2012. With adjusted EBITDA more than doubling and inventory levels lower, we are well positioned to commence paying down our acquisition debt,” said Mike Manna, President and Chief Executive Officer.

 

“Our strong fourth quarter performance caps a year of accomplishment against our stated highest priority of recapturing gross margin through price realization activities, supply chain improvements, level-loaded production and lean manufacturing initiatives. These actions resulted in a 240-basis point expansion of gross margin for the year to 24.7% and a swing from a loss to adjusted EPS of $0.52. Finally, our efforts to strengthen our commercial relationships launching customer-driven new products into the market have been bearing fruit and sustained our backlog in excess of $100 million,” added Mr. Manna.

 

“As we enter 2024 with a healthy backlog and a significantly stronger balance sheet, we are focused on driving additional gross margin expansion, organic growth in our end markets and operating leverage. We will continue to invest in new product development for commercial expansion. Our focus in 2024 is to build upon our 2023 momentum, sustain profitable growth and generate incremental cash flow to reduce debt, and support strategic capital expenditures and accretive acquisitions,” concluded Mr. Manna.

 

 

 

 

Fourth Quarter 2023 Financial Results

 

Revenue was $44.5 million, an increase of $8.4 million, or 23.4%, as compared to revenue of $36.1 million for the fourth quarter of 2022. Overall, government/defense sales increased 28.8% and commercial sales increased 20.2% over the 2022 period. Battery & Energy Products sales increased 11.1% to $35.7 million compared to $32.1 million last year reflecting increases of 20.2% in commercial sales, including a 118.0% increase in medical battery sales, partially offset by decreases of 11.3% in oil & gas market sales and 11.4% in government/defense sales. Communications Systems sales increased by 121.9% to $8.8 million compared to $4.0 million for the same period last year, primarily attributable to shipments of vehicle-amplifier adaptors to a global defense contractor for the U.S. Army and of integrated systems of amplifiers and radio vehicle mounts to a major international defense contractor under an ongoing allied country government/defense modernization program. Our total backlog exiting the 2023 fourth quarter was $103.5 million representing a 2.4% sequential increase over that reported for the third quarter.

 

Gross profit was $11.4 million, or 25.6% of revenue, compared to $8.1 million, or 22.4% of revenue, for the same quarter a year ago. Battery & Energy Products gross margin was 25.2%, compared to 21.6% last year, primarily due to more efficiencies and higher cost absorption resulting from a concerted effort to level-load production more evenly across the 2023 quarter, as well as improved price realization. Communications Systems gross margin was 27.2% compared to 28.7% last year, primarily due to inefficiencies caused by component delays from suppliers, partially offset by higher factory volume.

 

Operating expenses were $7.8 million, compared to $7.9 million for the 2022 fourth quarter. Operating expenses were 17.4% of revenue compared to 21.8% of revenue for the year-earlier period.

 

The combination of higher sales leveraged by improved gross margin and operating expenses resulted in a $3.4 million increase in operating income to $3.6 million from $0.2 million last year.

 

Net income was $2.9 million or $0.17 per diluted share on a GAAP basis, compared to a net loss of $0.2 million or $0.01 per diluted share for the fourth quarter of 2022. Adjusted EPS was $0.18 on a diluted basis for the fourth quarter of 2023, compared to a loss of $0.03 for the 2022 period. Adjusted EPS excludes the provision for deferred taxes which primarily represents non-cash charges for U.S. taxes which we expect will be fully offset by net operating loss carryforwards and other tax credits for the foreseeable future.

 

Adjusted EBITDA, defined as EBITDA including non-cash, stock-based compensation expense, was $4.8 million for the fourth quarter of 2023, or 10.7% of sales, compared to $2.0 million, or 5.6% of sales, for the year-earlier period.

 

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 fourth quarter earnings conference call today at 8:30 AM ET.

 

To ensure a fast and reliable connection to our investor conference call, we now require participants dialing in by phone to register using the following link prior to the call: https://register.vevent.com/register/BI9f2b6fae66954f53b4517cbe89148738. This will eliminate the need to speak with an operator. Once registered, dial-in information will be provided along with a personal identification number. Should you register early and misplace your details, you can simply click back on this same link at any time to register and view this information again. 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 and related supply chain disruptions, 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.

 

 

 

 

ULTRALIFE CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands)

(Unaudited)

 

 

ASSETS

 
                 
   

December 31,

2023

   

December 31,

2022

 

Current Assets:

               

Cash

  $ 10,278     $ 5,713  

Trade Accounts Receivable, Net

    31,761       27,779  

Inventories, Net

    42,215       41,192  

Prepaid Expenses and Other Current Assets

    5,949       4,304  

Total Current Assets

    90,203       78,988  
                 

Property, Plant and Equipment, Net

    21,117       21,716  

Goodwill

    37,571       37,428  

Other Intangible Assets, Net

    15,107       15,921  

Deferred Income Taxes, Net

    10,567       12,069  

Other Non-Current Assets

    3,711       2,308  

Total Assets

  $ 178,276     $ 168,430  
                 

LIABILITIES AND SHAREHOLDERS' EQUITY

 
   

Current Liabilities:

               

Accounts Payable

  $ 11,336     $ 16,074  

Current Portion of Long-Term Debt

    2,000       2,000  

Accrued Compensation and Related Benefits

    3,115       2,890  

Accrued Expenses and Other Current Liabilities

    7,279       7,949  

Total Current Liabilities

    23,730       28,913  

Long-Term Debt, Net

    23,624       19,310  

Deferred Income Taxes

    1,714       1,917  

Other Non-Current Liabilities

    3,781       1,887  

Total Liabilities

    52,849       52,027  
                 

Shareholders' Equity:

               

Common Stock

    2,078       2,057  

Capital in Excess of Par Value

    189,160       187,405  

Accumulated Deficit

    (40,754 )     (47,951 )

Accumulated Other Comprehensive Loss

    (3,660 )     (3,750 )

Treasury Stock

    (21,492 )     (21,484 )

Total Ultralife Equity

    125,332       116,277  

Non-Controlling Interest

    95       126  

Total Shareholders’ Equity

    125,427       116,403  
                 

Total Liabilities and Shareholders' Equity

  $ 178,276     $ 168,430  

 

 

 

ULTRALIFE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In Thousands Except Per Share Amounts)

(Unaudited)

 

 

   

Three-Month Period Ended

   

Year Ended

 
   

December

31,

   

December

31,

   

December

31,

   

December

31,

 
   

2023

   

2022

   

2023

   

2022

 

Revenues:

                               

Battery & Energy Products

  $ 35,703     $ 32,122     $ 129,953     $ 119,995  

Communications Systems

    8,845       3,985       28,691       11,845  

Total Revenues

    44,548       36,107       158,644       131,840  
                                 

Cost of Products Sold:

                               

Battery & Energy Products

    26,711       25,185       99,178       93,841  

Communications Systems

    6,435       2,841       20,266       8,599  

Total Cost of Products Sold

    33,146       28,026       119,444       102,440  
                                 

Gross Profit

    11,402       8,081       39,200       29,400  
                                 

Operating Expenses:

                               

Research and Development

    1,852       1,656       7,531       7,081  

Selling, General and Administrative

    5,901       6,208       22,194       22,190  

Total Operating Expenses

    7,753       7,864       29,725       29,271  
                                 

Operating Income

    3,649       217       9,475       129  
                                 

Other Expense

    536       597       358       575  

Income (Loss) Before Income Taxes

    3,113       (380 )     9,117       (446 )
                                 

Income Tax Provision (Benefit)

    263       (155 )     1,951       (326 )
                                 

Net Income (Loss)

    2,850       (225 )     7,166       (120 )
                                 

Net Loss Attributable to Non-Controlling Interest

    (23 )     (1 )     (31 )     (1 )
                                 

Net Income (Loss) Attributable to Ultralife Corporation

  $ 2,873     $ (224 )   $ 7,197     $ (119 )
                                 
                                 

Net Income (Loss) Per Share Attributable to Ultralife Common Shareholders Basic

  $ .18     $ (.01 )   $ .44     $ (.01 )
                                 

Net Income (Loss) Per Share Attributable to Ultralife Common Shareholders Diluted

  $ .17     $ (.01 )   $ .44     $ (.01 )
                                 

Weighted Average Shares Outstanding Basic

    16,338       16,135       16,214       16,125  
                                 

Weighted Average Shares Outstanding Diluted

    16,479       16,135       16,226       16,125  

 

 

 

 

Non-GAAP Financial Measures

 

 

 

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 U.S. Generally Accepted Accounting Principles (“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.

 

 

 

ULTRALIFE CORPORATION AND SUBSIDIARIES

CALCULATION OF ADJUSTED EBITDA

(Dollars in Thousands)

(Unaudited)

 

 

   

Three-Month Period Ended

   

Year Ended

 
   

December

31, 2023

   

December

31, 2022

   

December

31, 2023

   

December

31, 2022

 
                                 

Net Income (Loss) Attributable to Ultralife Corporation

  $ 2,873     $ (224 )   $ 7,197     $ (119 )

Adjustments:

                               

Interest Expense, Net

    566       368       2,016       951  

Income Tax Provision (Benefit)

    263       (155 )     1,951       (326 )

Depreciation Expense

    740       727       3,022       3,177  

Amortization Expense

    226       313       889       1,282  

Stock-Based Compensation Expense

    104       224       528       776  

Cyber-Insurance Policy Deductible

    -       -       100       -  

Non-Cash Purchase Accounting Adjustment

    -       -       -       55  

Severance to Former President & CEO

    -       779       -       779  

Adjusted EBITDA

  $ 4,772     $ 2,032     $ 15,703     $ 6,575  

 

 

 

 

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. We define adjusted EPS as net income attributable to Ultralife Corporation excluding the provision (benefit) for deferred income 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 predominantly 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.

 

 

 

ULTRALIFE CORPORATION AND SUBSIDIARIES

CALCULATION OF ADJUSTED EPS

(In Thousands Except Per Share Amounts)

(Unaudited)

 

 

   

Three-Month Period Ended

 
   

December 31, 2023

   

December 31, 2022

 
   

Amount

   

Per

Basic

Share

   

Per

Diluted

Share

   

Amount

   

Per

Basic

Share

   

Per

Diluted

Share

 

Net Income (Loss) Attributable to Ultralife Corporation

  $ 2,873     $ .18     $ .17     $ (224 )   $ (.01 )   $ (.01 )

Deferred Tax Provision (Benefit)

    56       -       .01       (279 )     (.02 )     (.02 )

Adjusted Net Income (Loss)

  $ 2,929     $ .18     $ .18     $ (503 )   $ (.03 )   $ (.03 )
                                                 

Weighted Average Shares Outstanding

            16,338       16,479               16,135       16,135  

 

 

   

Year Ended

 
   

December 31, 2023

   

December 31, 2022

 
   

Amount

   

Per

Basic

Share

   

Per

Diluted

Share

   

Amount

   

Per

Basic

Share

   

Per

Diluted

Share

 

Net Income (Loss) Attributable to Ultralife Corporation

  $ 7,197     $ .44     $ .44     $ (119 )   $ (.01 )   $ (.01 )

Deferred Tax Provision (Benefit)

    1,301       .08       .08       (962 )     (.06 )     (.06 )

Adjusted Net Income (Loss)

  $ 8,498     $ .52     $ .52     $ (1,081 )   $ (.07 )   $ (.07 )
                                                 

Weighted Average Shares Outstanding

            16,214       16,226               16,125       16,125  

 

 

 

Company Contact:

Ultralife Corporation

Philip A. Fain

(315) 210-6110

pfain@ulbi.com

 

Investor Relations Contact:

LHA

Jody Burfening

(212) 838-3777

jburfening@lhai.com