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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest
event reported):
November 6, 2003
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.)
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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)
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Item 7. 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 November 6, 2003
Item 12. Results of Operations and Financial Condition.
The Company today reported operating income of $1.1 million on revenues of $19.9
million for its third quarter ended September 27, 2003. Net income was $1.8
million, or $0.12 per diluted share, which includes $0.8 million of
miscellaneous, non-cash income related to the forgiveness of a
government-sponsored loan/grant as the Company met certain employment
milestones. A copy of the related press release is being furnished as Exhibit
99.1 to this Form 8-K.
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: November 6, 2003 By: /s/Robert W. Fishback
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Robert W. Fishback
Vice President - Finance and
Chief Financial Officer
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Index to Exhibits
(99) Additional Exhibits
99.1 Press Release dated November 6, 2003
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Exhibit 99.1
Ultralife Batteries, Inc. Reports Third Quarter Results
NEWARK, N.Y.--(BUSINESS WIRE)--Nov. 6, 2003--
Operational Improvement and Profitability Continues for Third
Consecutive Quarter; Year-to-Date Revenues up 128%
Ultralife Batteries, Inc. (NASDAQ: ULBI) today reported operating
income of $1.1 million on revenues of $19.9 million for its third
quarter ended September 27, 2003. Net income was $1.8 million, or
$0.12 per diluted share, which includes $0.8 million of miscellaneous,
non-cash income related to the forgiveness of a government-sponsored
loan/grant as the Company met certain employment milestones.
Revenues for the third quarter increased nearly three-fold to
$19.9 million from the $6.8 million reported for the same three-month
period a year ago. The $13.1 million increase resulted from greater
shipments of the Company's HiRate(R) batteries, particularly the
BA-5390 batteries used by military organizations in a variety of
communications and weapons systems, as well as higher 9-volt battery
sales.
Gross margin for the September 2003 quarter amounted to $3.9
million, or 20% of revenues, compared with $0.1 million, or 2% of
revenues, in the same period a year ago. This improvement was mainly
attributable to higher volumes and improved manufacturing
efficiencies. Operating expenses were $2.8 million, an increase of
$0.7 million over last year due to higher product development costs
and increased costs associated with a higher volume of business. As a
result, the Company reported operating income of $1.1 million for the
three months ended September 27, 2003 compared to an operating loss of
$1.9 million in the prior year. Net income amounted to $1.8 million,
or $0.12 per diluted share, compared with a net loss of $2.7 million,
or $0.21 per share, for the same period a year ago.
For the first nine months of 2003, revenues reached $55.4 million,
a 128% increase over the $24.3 million in the prior year. This
increase resulted from strong demand for HiRate batteries, including
the BA-5390, and higher 9-volt battery shipments. Operating income was
$3.7 million compared to an operating loss of $20.1 million in 2002
that included a $14.3 million asset impairment charge. Net income
amounted to $4.2 million in the first nine months of 2003, or $0.31
per diluted share, compared with a net loss of $22.0 million in the
same nine-month period last year, or a loss of $1.72 per diluted
share.
"Ultralife achieved unprecedented revenue growth and profitability
for the third consecutive quarter, driven by continued market share
gains in the U.S. military market," said John Kavazanjian, president
and chief executive officer. "On a sequential basis, however, gross
margin declined, primarily due to a lower margin per unit on a
military contract. During the third quarter, we delivered half of the
agreed-upon shipments on the $18.6 million BA-5390 contract with the
U.S. Army. Unlike contract awards that result from a competitive
bidding process, this contract was an 'exigent' contract, which is
subject to an audit and a final price adjustment. In the first week of
November, the audit process was completed, resulting in a reduction of
the margin over the term of the contract. This lower margin is
reflected in the third quarter results. The previous guidance for
operating income did not anticipate either this contract adjustment or
higher labor costs that we experienced arising from capacity
constraints in both the U.S. and U.K. facilities. As a result,
operating income came in below the second quarter results and guidance
for the third quarter. We have adjusted our planning assumptions
around a reduction in margin for the near future based on this
contract finalization. We do expect relief on capacity constraints
over the next several months as new equipment comes on line."
Outlook
For the fourth quarter ending December 31, 2003, management
expects operating income of approximately $2.0 million, taking into
account lower pricing on the BA-5390, on revenues of approximately
$23.0 million. This compares to an operating loss of $1.7 on revenues
of $8.8 million in the same quarter last year. For the full year of
2003, management anticipates operating income of approximately $5.7
million on total revenues of approximately $78.0 million. In 2002, the
Company had an operating loss of $21.8 million, which included a $14.3
million asset impairment charge, on revenues of $33.0 million.
Mr. Kavazanjian concluded, "2003 is proving to be a year of
transformation at Ultralife, and we continue to strengthen the
foundation for sustainable growth and to move forward with design
projects for our primary and rechargeable products. As a result, our
current outlook for 2004 indicates revenues of at least $100 million
with operating income in the range of $11 million. We remain committed
to our long-term strategy of leveraging the military business to
expand into commercial sectors where the performance characteristics
of Ultralife's lithium chemistries add value."
About Ultralife Batteries, Inc.
Ultralife is a leading developer, manufacturer, and marketer of
standard and customized lithium primary (non-rechargeable), lithium
ion and lithium polymer rechargeable batteries. Ultralife's
high-energy batteries use advanced lithium technology and are used in
military, industrial and consumer portable electronic products.
Through its range of standard products and ability to customize for a
wide range of applications, Ultralife is able to provide the next
generation of battery solutions. OEM, retail and government customers
include Energizer, Kidde Safety, Philips Medical Systems, Radio Shack
and the national defense agencies of the United States and United
Kingdom, among others.
Ultralife's headquarters, principal manufacturing and research
facilities are in Newark, New York, near Rochester. Ultralife (UK)
Ltd., a second manufacturing and research facility, is located in
Abingdon, U.K. Both facilities are ISO-9001 certified.
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,
world events, 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.
Detailed information on Ultralife is available at the Company's
web site, www.ultralifebatteries.com.
Conference Call Information
Investors are invited to listen to a live webcast of the
conference call at 10:00 a.m. ET on November 6 at
www.ultralifebatteries.com/invest.asp. 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
800-428-6051, Reservation #309664, starting at 12:00 p.m. ET November
6 until 12:00 p.m. ET November 13.
Ultralife and HiRate are registered trademarks of Ultralife
Batteries, Inc.
ULTRALIFE BATTERIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
(unaudited)
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Three Month Period Nine Month Period
Ended Ended
September September September September
27, 28, 27, 28,
2003 2002 2003 2002
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Revenues:
Battery sales $19,743 $ 6,847 $54,583 $ 24,044
Technology contracts 131 - 829 243
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Total revenues 19,874 6,847 55,412 24,287
Cost of products sold:
Battery costs 15,936 6,718 43,200 21,930
Technology contracts 45 - 429 221
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Total cost of products sold 15,981 6,718 43,629 22,151
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Gross margin 3,893 129 11,783 2,136
Operating expenses:
Research and development 652 477 1,883 2,614
Selling, general, and
administrative 2,098 1,569 6,247 5,305
Impairment of long-lived
assets - - - 14,318
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Total operating expenses 2,750 2,046 8,130 22,237
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Operating income (loss) 1,143 (1,917) 3,653 (20,101)
Other income (expense):
Interest, net (143) (82) (380) (283)
Equity loss in UTI - (959) - (2,138)
Gain from forgiveness of debt
/ grant 781 - 781 -
Miscellaneous (4) 221 183 486
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Income (loss) before income
taxes 1,777 (2,737) 4,237 (22,036)
Income taxes - - - -
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Net income (loss) $ 1,777 $(2,737) $ 4,237 $(22,036)
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Earnings (loss) per share -
basic $ 0.13 $ (0.21) $ 0.33 $ (1.72)
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Earnings (loss) per share -
diluted $ 0.12 $ (0.21) $ 0.31 $ (1.72)
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Average shares outstanding -
basic 13,229 13,137 13,004 12,807
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Average shares outstanding -
diluted 14,361 13,137 13,701 12,807
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ULTRALIFE BATTERIES, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Per Share Amounts)
(unaudited)
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September December
27, 31,
ASSETS 2003 2002
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Current assets:
Cash and investments $ 929 $ 1,374
Trade accounts receivable, net 15,842 6,200
Inventories 7,572 5,813
Prepaid expenses and other current assets 2,383 968
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Total current assets 26,726 14,355
Property and equipment 17,783 15,336
Other assets 1,608 1,683
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Total Assets $ 46,117 $ 31,374
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt and current portion of long-term
debt $ 6,391 $ 816
Accounts payable 7,472 4,283
Other current liabilities 2,951 2,045
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Total current liabilities 16,814 7,144
Long-term debt and capital lease obligations 87 1,987
Shareholders' equity:
Common stock, par value $0.10 per share 1,405 1,358
Capital in excess of par value 117,990 115,251
Accumulated other comprehensive loss (1,066) (1,016)
Accumulated deficit (86,735) (90,972)
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31,594 24,621
Less --Treasury stock, at cost 2,378 2,378
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Total shareholders' equity 29,216 22,243
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Total Liabilities and Shareholders' Equity $ 46,117 $ 31,374
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CONTACT: Ultralife Batteries, Inc.
Company Contact:
Robert W. Fishback, 315-332-7100
bfishback@ulbi.com
or
Lippert/Heilshorn & Associates, Inc.
Investor Relations Contact:
Jody Burfening, 212-838-3777
jks@lhai.com
or
Media Contact:
Chenoa Taitt, 212-201-6635
ctaitt@lhai.com