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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 10, 2005
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 February 10, 2005, Ultralife Batteries, Inc. (the "Company") reported
results for the fourth quarter and full year periods ended December 31, 2004.
The Company's press release is attached as Exhibit 99.1. The information set
forth in this Report on Form 8-K, including the attached exhibit, is being
furnished and not filed pursuant to Item 2.02.
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 10, 2005
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 10, 2005 By: /s/ Robert W. Fishback
-------------------------------
Vice President of Finance & CFO
INDEX TO EXHIBITS
(99) Additional Exhibits
99.1 Press Release dated February 10, 2005.
EXHIBIT 99.1
Ultralife Batteries, Inc. Reports Fourth Quarter Results
NEWARK, N.Y.--(BUSINESS WIRE)--Feb. 10, 2005--Ultralife Batteries,
Inc. (NASDAQ:ULBI) today reported results for the fourth quarter and
full year periods ended December 31, 2004. Revenues for the quarter
were $18.4 million compared to $24.0 million for the prior year
quarter. As a percentage of revenues, gross margins were 11% compared
to 22% in the same quarter last year due mainly to reduced production
volumes.
During the fourth quarter of 2004, the company recorded a non-cash
impairment charge of $1.8 million related to polymer rechargeable
production equipment, owned and leased, that it no longer expects to
utilize. Excluding this charge, operating expenses were $3.7 million,
a $0.7 million increase over last year's fourth quarter, attributable
to a greater focus on the development of new products and additional
selling, general and administrative resources needed to support the
company's growth objectives. Operating loss for the quarter, which
includes the $1.8 million impairment charge, was $3.4 million versus
operating income of $2.3 million for the same period last year.
Given its move to profitability over the past two years, the
company recorded a deferred tax asset at the end of 2004 associated
with its U.S. net operating loss carryforwards due to the belief that
the company has a reasonable probability of utilizing these benefits
to offset future taxable income. As a result, the company recorded an
income tax benefit during the fourth quarter of $21.1 million, which
had a nominal impact on cash flows.
Net income for the fourth quarter of 2004 was $18.1 million, or
$1.20 per diluted share. This compares with net income of $2.2
million, or $0.15 per diluted share, in the similar quarter in 2003.
For the full year ended December 31, 2004, revenues reached $98.2
million, a 24% increase over the $79.5 million reported in 2003. The
year-over-year improvement was driven by an increase in military
sales, primarily higher shipments of BA-5390s, as well as a five-fold
increase in rechargeable revenues that reached $8.1 million. Operating
income for 2004 amounted to $5.1 million, including the $1.8 million
impairment charge taken in the fourth quarter. Net income for the
twelve-month period of 2004 was $22.3 million, or $1.48 per diluted
share, and included a $4.0 million second quarter non-cash charge
related to the company's investment in Ultralife Taiwan, Inc., as well
as a $21.1 million income tax benefit related to the recognition of a
deferred tax asset. In 2003, the company reported operating income of
$6.0 million and net income of $6.4 million, or $0.46 per diluted
share.
"Fourth quarter results were close to our expectations. We are
particularly pleased with the progress of our rechargeable business
which performed especially well, breaking even on a gross margin basis
in the quarter and for the year producing revenue in excess of our $7
million goal," said John Kavazanjian, president and chief executive
officer.
"Demand from the military for high-performance batteries in the
field and for training remains quite high, particularly for our
BA-5390 batteries, and we remain confident that this will continue to
be a strong business for Ultralife in 2005," Kavazanjian added. "In
addition, 2005 is shaping up to be the year in which we gain
meaningful traction in a number of our target commercial markets as
design application opportunities move into volume production and as we
advance the development work underway by our engineered services
group. Our unique offering in automotive telematics in particular
looks very promising especially given the rate of adoption of
telematics as an automotive safety system. We are also accelerating
our pace of new product development, stepping up our efforts to
capitalize on opportunities for engineered solutions, and continuing
to broaden our product offering with an emphasis on charging systems
and accessories. All of these growth initiatives further capitalize on
Ultralife's leading energy technology, unique breadth of power
solutions and process-engineering expertise, and keep us on track to
achieve our goal of becoming a $200 million revenue company in the
next few years."
Outlook
For the first quarter ending April 2, 2005, management currently
projects revenues of at least $18.0 million and an operating loss of
approximately $0.8 million, assuming that the company is awarded an
urgent buy order for BA-5390 batteries with the U.S. military.
For the full year of 2005, management continues to expect revenue
growth of 10% to 20% over 2004. This growth is expected to result from
continued success in growing commercial business, in key target
markets such as medical and automotive telematics. This revenue growth
target also assumes sizeable order activity from the U.S. military, in
conjunction with the award of the Next Gen II Phase IV contract (as
well as a favorable resolution of the recent protest of that contract
in a timely fashion) and other anticipated contract activity. Order
activity and shipments are expected to increase throughout the year,
as commercial orders take hold and the military business stabilizes.
Operating income in 2005 is expected to show steady growth throughout
the year, returning to profitability in the second quarter and moving
toward the company's near-term operating margin target of 15% by
year-end. Management's operating income guidance excludes any
potential impact from expensing stock options, which if the current
accounting standards remain unchanged, the company would be required
to recognize beginning no later than the third quarter of 2005.
Management expects that its overall effective income tax rate will be
in the range of 40% of pre-tax earnings during 2005, although actual
cash payments for income taxes are expected to be nominal as the
company utilizes its net operating loss carryforwards to offset
taxable income.
About Ultralife Batteries, Inc.
Ultralife is a global provider of power solutions for diverse
applications. The company develops, manufactures and markets a wide
range of non-rechargeable and rechargeable batteries, charging systems
and accessories for use in military, industrial and consumer portable
electronic products. Through its range of standard products and
engineered solutions, Ultralife is able to provide the next generation
of power systems. Industrial, retail and government customers include
General Dynamics, Philips Medical Systems, Energizer, Kidde Safety,
Lowe's, 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. Detailed information on
Ultralife is available at the Company's web site,
www.ultralifebatteries.com.
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.
In conjunction with the requirement to comply with Section 404 of
the Sarbanes-Oxley Act of 2002, the company and its independent
accountants are working to complete the testing and evaluation of the
effectiveness of the company's internal control over financial
reporting. While the company is committed to addressing any and all
control deficiencies that have been identified, sufficient information
has not yet been compiled to conclude whether these deficiencies may
constitute either significant deficiencies or material weaknesses. In
connection with the filing of its Annual Report on Form 10-K for the
year ended December 31, 2004 and the requirements of Section 404,
management and the independent accountants will issue separate reports
on the effectiveness of the company's internal control over financial
reporting.
Conference Call Information
Investors are invited to listen to a live webcast of the
conference call at 10:00 a.m. ET on February 10 at
www.ultralifebatteries.com/invest.asp. To listen to the live call,
please go to the Web site at least 15 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 #2329384, starting at 1:00 p.m. ET February
10 until 1:00 p.m. ET February 17.
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 Months Ended Twelve Months Ended
December December December December
31, 31, 31, 31,
2004 2003 2004 2003
------- ------- -------- ---------
Revenues:
Non-rechargeable
products $14,913 $23,418 $87,899 $77,070
Rechargeable products 2,418 597 8,071 1,528
Technology contracts 1,031 23 2,212 852
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Total revenues 18,362 24,038 98,182 79,450
Cost of products sold:
Non-rechargeable products 13,017 17,817 67,408 59,171
Rechargeable products 2,413 903 8,653 2,749
Technology contracts 886 5 1,819 434
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Total cost of products sold 16,316 18,725 77,880 62,354
Gross margin 2,046 5,313 20,302 17,096
Operating and other
expenses:
Research and development 878 622 2,633 2,505
Selling, general, and
administrative 2,789 2,363 10,771 8,610
Impairment of long lived
assets 1,803 - 1,803 -
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Total operating expenses 5,470 2,985 15,207 11,115
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Operating (loss)/income (3,424) 2,328 5,095 5,981
Other income (expense):
Interest income 49 17 116 23
Interest expense (189) (157) (598) (543)
Gain on fires 214 - 214 -
Gain from forgiveness of
debt/grant - - - 781
Write-off of UTI
investment and note
receivable - - (3,951) -
Miscellaneous 320 128 352 311
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(Loss)/income before
income taxes (3,030) 2,316 1,228 6,553
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Income tax provision-
current 54 106 32 106
Income tax (benefit)/
provision-deferred (21,136) - (21,136) -
------- ------- -------- ---------
Total income taxes (21,082) 106 (21,104) 106
------- ------- -------- ---------
Net income $18,052 $2,210 $22,332 $6,447
======= ======= ======== =========
Earnings per share -basic $1.26 $0.16 $1.59 $0.49
======= ======= ======== =========
Earnings per share -diluted $1.20 $0.15 $1.48 $0.46
======= ======= ======== =========
Weighted average shares
outstanding - basic 14,288 13,501 14,087 13,132
======= ======= ======== =========
Weighted average shares
outstanding - diluted 15,000 14,537 15,074 13,917
======= ======= ======== =========
ULTRALIFE BATTERIES, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Per Share Amounts)
(unaudited)
- ----------------------------------------------------------------------
December 31, December 31,
2004 2003
ASSETS --------- ----------
Current assets:
Cash and investments $ 11,529 $ 880
Trade accounts receivable, net 8,585 17,803
Inventories 13,938 10,209
Prepaid expenses and other current
assets 4,437 3,438
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Total current assets 38,489 32,330
Property and equipment 20,202 18,213
Other assets 23,549 1,809
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Total Assets $ 82,240 $ 52,352
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt and current portion
of long-term debt $ 2,390 $ 8,295
Accounts payable 3,545 6,385
Other current liabilities 3,603 3,174
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Total current liabilities 9,538 17,854
Long-term liabilities:
Long-term debt and capital lease
obligations 7,215 68
Other long-term liabilities 756 -
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Total long-term liabilities 7,971 68
Shareholders' equity:
Common stock, par value $0.10 per
share 1,502 1,430
Capital in excess of par value 128,405 120,626
Accumulated other comprehensive
income (605) (723)
Accumulated deficit (62,193) (84,525)
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67,109 36,808
Less --Treasury stock, at cost 2,378 2,378
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Total shareholders' equity 64,731 34,430
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Total Liabilities and Shareholders'
Equity $ 82,240 $ 52,352
========= ==========
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
jburfening@lhai.com
or
Media Contact:
Chenoa Taitt, 212-201-6635
ctaitt@lhai.com