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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):
July 29, 2004
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)
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 July 29, 2004.
Item 12. Results of Operations and Financial Condition.
Ultralife Batteries, Inc. today reported operating income of $3.6 million on
revenues of $28.4 million for its second quarter ended June 26, 2004. Operating
income and revenue increased 91% and 41%, respectively, over the same
three-month period in 2003 when the company reported operating income of $1.9
million on revenue of $20.1 million. Refer to the attached Exhibit 99.1 for the
entire text of the release, which Exhibit is being furnished and not filed, and
which shall not be deemed incorporated by reference in any filing under the
Securities Act of 1933 or the Securities Exchange Act of 1934 except as
expressly set forth by specific reference in any such filing.
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: July 29, 2004 By: /s/ Robert W. Fishback
-----------------------------
Robert W. Fishback
Vice President of Finance &
Chief Financial Officer
Index to Exhibits
(99) Additional Exhibits
99.1 Press Release dated July 29, 2004.
EXHIBIT 99.1
Ultralife Batteries, Inc. Reports Second Quarter Results;
Operating Income Improves 91% to $3.6 Million on Revenue Growth
of 41% over Last Year's Second Quarter
NEWARK, N.Y.--(BUSINESS WIRE)--July 29, 2004--Ultralife Batteries,
Inc. (NASDAQ: ULBI) today reported operating income of $3.6 million on
revenues of $28.4 million for its second quarter ended June 26, 2004.
Operating income and revenue increased 91% and 41%, respectively, over
the same three-month period in 2003 when the company reported
operating income of $1.9 million on revenue of $20.1 million.
Gross margin improved $2.3 million, or 49%, from a year ago. As a
percentage of revenues, gross margins were 25% compared with 24% last
year reflecting higher sales and production volumes and gains in
manufacturing efficiencies. Operating expenses amounted to $3.4
million for the quarter, or 12% of revenues, compared with $2.8
million, or 14% of revenues, reported last year. The $0.6 million
increase in operating expenses is attributable to planned resource
additions in product development and sales, marketing and
administrative functions that are necessary for the company to execute
on its target growth opportunities.
In the second quarter, the company recorded a $4.0 million
non-cash, non-operating charge related to the company's ownership
interest in Ultralife Taiwan, Inc. (UTI) that consisted of a write-off
of the company's entire $2.4 million note from UTI and the book value
of its $1.6 million equity investment in UTI. Ultralife decided to
record this charge due to recent events that have caused increasing
uncertainty over UTI's near-term financial viability. Including this
charge, the company reported a net loss for the second quarter of $0.4
million, or $0.03 per share. For the second quarter of 2003, the
company reported net income of $2.1 million, or $0.16 per diluted
share.
John Kavazanjian, president and chief executive officer, said,
"Ultralife has organized its operations to deliver incremental
profitability on higher volumes, and this quarter was no exception as
evidenced by the year-over-year gross margin and operating margin
gains we reported. Shipments of primary batteries to the military
remained strong this quarter, and our rechargeable business continued
to develop, reaching $1.7 million in revenue, an encouraging trend.
Absent the one-time, non-cash UTI charge, we turned in another quarter
of double-digit earnings growth.
"UTI remains a valuable partner and an important part of our
rechargeable strategy. We are working with the company to help it
through its financial difficulties in an effort to ensure a
satisfactory outcome for all parties involved. We do not believe the
write-off poses a risk to our current operations or future growth
prospects because UTI continues to manufacture product for us and we
have taken steps to establish alternate sources of supply."
Kavazanjian added, "On our last two earnings conference calls, we
had indicated that there was the possibility of military demand
leveling in the second half of the year. Now, as we look ahead to the
remainder of 2004, this possibility still applies and, as a result, we
are maintaining a conservative stance on our outlook for the year. We
continue to make progress on our strategy of diversifying into
commercial markets where our lithium-manganese dioxide and
rechargeable lithium ion batteries bring value to applications. We are
driving design activity and adding sales and marketing resources to
support market adoption. We remain focused on realizing opportunities
in our target commercial markets while continuing to build share of
the military market in order to achieve an annual revenue growth rate
of 20% to 30% over the next three to five years, heading toward
revenue of $200 million."
Outlook
Management re-affirms its guidance for fiscal year 2004 revenue of
approximately $106 million and operating income of approximately $12.5
million, with results likely to be evenly divided between the third
and fourth quarters. Consistent with its outlook at the beginning of
fiscal 2004, management anticipates a modest flattening of order flow
from the military in the second half of the year compared to the first
half. Management cautions that uncertainties exist arising from the
pending October transfer of procurement authority from the U.S. Army
Communications and Electronics Command (CECOM) to the Defense
Logistics Agency and the outcome of the Next Gen II Phase IV award.
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 contains 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: loss of business with the U.S.
government, 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 July 29 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 #364937, starting at 12:00 p.m. ET July 29
until 12:00 p.m. ET August 5.
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 Ended Six Month Period Ended
June 26, June 28, June 26, June 28,
2004 2003 2004 2003
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Revenues:
Battery sales $ 28,012 $ 19,828 $ 54,708 $ 34,840
Technology contracts 427 282 719 698
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Total revenues 28,439 20,110 55,427 35,538
Cost of products sold:
Battery costs 21,046 15,209 41,453 27,264
Technology contracts 345 170 594 384
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Total cost of products
sold 21,391 15,379 42,047 27,648
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Gross margin 7,048 4,731 13,380 7,890
Operating expenses:
Research and
development 560 646 1,063 1,231
Selling, general,
and administrative 2,858 2,187 5,329 4,149
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Total operating
expenses 3,418 2,833 6,392 5,380
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Operating income 3,630 1,898 6,988 2,510
Other income
(expense):
Interest, net (83) (146) (188) (237)
Write-off of UTI
investment and note (3,951) - (3,951) -
Miscellaneous 32 397 93 187
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(Loss) income before
income taxes (372) 2,149 2,942 2,460
Income taxes - - 79 -
----------- ----------- ----------- -----------
Net (loss) income $ (372) $ 2,149 $ 2,863 $ 2,460
=========== =========== =========== ===========
(Loss) earnings per
share - basic $ (0.03) $ 0.17 $ 0.21 $ 0.19
=========== =========== =========== ===========
(Loss) earnings per
share - diluted $ (0.03) $ 0.16 $ 0.19 $ 0.19
=========== =========== =========== ===========
Average shares
outstanding - basic 14,115 12,927 13,930 12,895
=========== =========== =========== ===========
Average shares
outstanding - diluted 14,115 13,651 15,109 13,266
=========== =========== =========== ===========
ULTRALIFE BATTERIES, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Per Share Amounts)
(unaudited)
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June 26, December 31,
ASSETS 2004 2003
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Current assets:
Cash and investments $ 992 $ 880
Trade accounts receivable, net 20,205 17,803
Inventories 16,131 10,209
Prepaid expenses and other current
assets 1,662 3,664
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Total current assets 38,990 32,556
Property and equipment 19,169 18,213
Other assets - 1,583
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Total Assets $ 58,159 $ 52,352
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt and current portion of
long-term debt $ 5,439 $ 8,295
Accounts payable 7,720 6,385
Other current liabilities 3,841 3,174
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Total current liabilities 17,000 17,854
Long-term debt and capital lease
obligations 68 68
Shareholders' equity:
Common stock, par value $0.10 per share 1,493 1,430
Capital in excess of par value 124,276 120,626
Accumulated other comprehensive loss (638) (723)
Accumulated deficit (81,662) (84,525)
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43,469 36,808
Less -- Treasury stock, at cost 2,378 2,378
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Total shareholders' equity 41,091 34,430
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Total Liabilities and Shareholders' Equity $ 58,159 $ 52,352
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CONTACT: Company
Ultralife Batteries, Inc.
Robert W. Fishback, 315-332-7100
bfishback@ulbi.com
or
Investor
Lippert/Heilshorn & Associates, Inc.
Jody Burfening, 212-838-3777
jburfening@lhai.com
or
Media
Lippert/Heilshorn & Associates, Inc.
Chenoa Taitt, 212-201-6635
ctaitt@lhai.com