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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):
October 28, 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)
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.
On October 28, 2004, Ultralife Batteries, Inc. (the "Company") issued a press
release regarding its results of operations and financial condition for the
third quarter ended September 25, 2004. The Company's press release is attached
as Exhibit 99.1 to this Form 8-K.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits.
99.1 Press Release dated October 28, 2004.
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: October 29, 2004 By: /s/ Robert W. Fishback
----------------------
Robert W. Fishback
Vice President Finance & CFO
Index to Exhibits
(99) Additional Exhibits
99.1 Press Release dated October 28, 2004.
EXHIBIT 99.1
Ultralife Batteries, Inc. Reports Third Quarter Results
NEWARK, N.Y.--(BUSINESS WIRE)--Oct. 28, 2004--Ultralife Batteries,
Inc. (NASDAQ: ULBI) today reported operating income of $1.5 million on
revenues of $24.4 million for its third quarter ended September 25,
2004. Operating income and revenue increased 34% and 23%,
respectively, over the same three-month period in 2003 when the
company reported operating income of $1.1 million on revenue of $19.9
million.
Revenues for the third quarter of 2004 benefited from higher
military orders for HiRate(R) batteries and a substantial increase in
sales of rechargeable batteries to $2.6 million from $0.3 million in
2003.
As a percentage of revenues, gross margins were 20%, consistent
with last year. Operating expenses increased $0.6 million to $3.3
million in the third quarter of 2004, reflecting the addition of
selling, general and administrative resources to support the company's
growth objectives. Operating expenses amounted to 14% of revenues,
consistent with the same quarter in 2003.
Net income for the third quarter of 2004 was $1.4 million, or
$0.09 per diluted share, compared with $1.8 million, or $0.12 per
diluted share, in the comparable quarter in 2003 which included a $0.8
million gain on the forgiveness of debt. During the quarter, the
company significantly strengthened the balance sheet as a result of
its credit facility refinancing. At of the end of the quarter, cash
stood at $12.8 million and interest-bearing debt was $10.3 million,
resulting in a 19% debt/capital ratio.
For the nine months ended September 25, 2004, revenues reached
$79.8 million, a 44% increase over the $55.4 million reported for the
same period last year. Operating income for the year-to-date period
more than doubled to $8.5 million compared to $3.7 million last year.
Net income for first nine months of 2004 was $4.3 million, or $0.28
per diluted share, compared to $4.2 million, or $0.31 per diluted
share, for 2003. Net income for 2004 included a $4.0 million second
quarter non-cash charge related to the company's investment in
Ultralife Taiwan, Inc.
John Kavazanjian, president and chief executive officer, said,
"Third quarter revenue and operating income came in slightly better
than we anticipated last month when we announced our revised outlook
for the second half of 2004. Since then, we have had several
discussions with the military; unfortunately we do not have resolution
yet on two outstanding issues, namely, a unit pricing adjustment on
our current BA-5390 contract and additional BA-5390 orders. These
discussions have, however, given us renewed confidence in the strength
of our position with the military and reaffirmed our belief in the
long-term growth potential the military business offers us."
Kavazanjian continued, "On the commercial side, we are seeing
growing success, particularly in our rechargeable business. To support
expanding and increasing opportunities in our target markets,
including medical, automotive telematics, and portable electronics, we
have added resources in the areas of selling, marketing and product
development. Once we are designed into an application, we believe we
will enjoy a critical advantage over competitors due to the
multi-step, iterative design and qualification process involved in
turning these opportunities into volume orders. Based on our growing
pipeline of opportunities combined with our strong competitive
position, we remain confident that we will be able to reach $200
million in revenue within the next 3 to 5 years."
Outlook
Management reiterates its second half of 2004 outlook, as stated
in its September 27th announcement, that operating income and revenue
could be as low as $0.4 million and $42 million, respectively,
assuming the company does not receive additional BA-5390 orders during
the remainder of the year.
Based on its belief that the company will be awarded a portion of
the Next Gen II Phase IV contract, and taking into account the
uncertain timing of the award, management expects overall military
sales will decline modestly in 2005. Management's assessment of the
company's growth prospects in the commercial business remains
unchanged, with commercial sales, including sales of rechargeable
products, expected to increase throughout the year. As a result,
management now anticipates 2005 revenue growth in the range of 10%-20%
over 2004.
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 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 October 28 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
888-203-1112, Reservation #992302, starting at 1:00 p.m. ET October 28
until 1:00 p.m. ET November 4.
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 Nine Month
Period Ended Period Ended
Sept 25, Sept 27, Sept 25, Sept 27,
2004 2003 2004 2003
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Revenues:
Battery sales $23,931 $19,743 $78,639 $54,583
Technology contracts 462 131 1,181 829
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Total revenues 24,393 19,874 79,820 55,412
Cost of products sold:
Battery costs 19,178 15,936 60,631 43,200
Technology contracts 339 45 933 429
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Total cost of products sold 19,517 15,981 61,564 43,629
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Gross margin 4,876 3,893 18,256 11,783
Operating expenses:
Research and development 692 652 1,755 1,883
Selling, general, and
administrative 2,653 2,098 7,982 6,247
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Total operating expenses 3,345 2,750 9,737 8,130
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Operating income 1,531 1,143 8,519 3,653
Other income (expense):
Interest, net (154) (143) (342) (380)
Gain from forgiveness of debt /
grant - 781 - 781
Write-off of UTI investment and
note - - (3,951) -
Miscellaneous (61) (4) 32 183
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Income before income taxes 1,316 1,777 4,258 4,237
Income taxes (101) - (22) -
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Net income $1,417 $1,777 $4,280 $4,237
======== ======== ======== ========
Earnings per share - basic $0.10 $0.13 $0.31 $0.33
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Earnings per share - diluted $0.09 $0.12 $0.28 $0.31
======== ======== ======== ========
Average shares outstanding - basic 14,238 13,229 14,026 13,004
======== ======== ======== ========
Average shares outstanding -
diluted 15,121 14,361 15,104 13,701
======== ======== ======== ========
ULTRALIFE BATTERIES, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Per Share Amounts)
(unaudited)
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September 25, December 31,
ASSETS 2004 2003
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Current assets:
Cash and investments $12,801 $880
Trade accounts receivable, net 12,060 17,803
Inventories 14,516 10,209
Prepaid expenses and other current assets 2,604 3,664
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Total current assets 41,981 32,556
Property and equipment 20,318 18,213
Other assets 347 1,583
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Total Assets $62,646 $52,352
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt and current portion of
long-term debt $2,570 $8,295
Accounts payable 5,599 6,385
Other current liabilities 3,763 3,174
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Total current liabilities 11,932 17,854
Long-term liabilities:
Long-term debt and capital lease
obligations 7,735 68
Long-term swap liability 152 -
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Total long-term liabilities 7,887 68
Shareholders' equity:
Common stock, par value $0.10 per share 1,501 1,430
Capital in excess of par value 124,807 120,626
Accumulated other comprehensive loss (858) (723)
Accumulated deficit (80,245) (84,525)
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45,205 36,808
Less --Treasury stock, at cost 2,378 2,378
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Total shareholders' equity 42,827 34,430
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Total Liabilities and Shareholders' Equity $62,646 $52,352
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CONTACT: Ultralife Batteries, Inc.
Robert W. Fishback, 315-332-7100
bfishback@ulbi.com
or
Lippert/Heilshorn & Associates, Inc.
Investor Relations Contact:
Jody Burfening, 212-838-3777
jburfening@lhai.com
or
Media Contact:
Chenoa Taitt, 212-201-6635
ctaitt@lhai.com