Ultralife Corporation Reports First Quarter Results

May 09, 2025 07:00 ET | Source: Ultralife Corporation NEWARK, N.Y., May 09, 2025 (GLOBE NEWSWIRE) -- Ultralife Corporation (NASDAQ: ULBI) reported operating results for the first quarter ended March 31, 2025 with the following highlights: Sales of $50.7 million compared to $41.9 million for the 2024 first quarter, including a 32.4% increase for Batteries & Energy Products and a 36.2% decrease in Communications Systems salesGross profit of $12.7 million, or 25.1% of revenue, compared to $11.5 million, or 27.4% of revenue, for the 2024 first quarterOperating income of $3.4 million, including one-time non-recurring costs and purchase accounting adjustments of $0.4 million, compared to $4.1 million for the 2024 first quarterGAAP EPS of $0.11 compared to $0.18 for the 2024 first quarterAdjusted EBITDA of $5.4 million compared to $5.2 million for the 2024 first quarterBacklog with high confidence orders of $95.0 million compared to $102.2 million exiting the fourth quarter of 2024 “We delivered a strong first quarter with a 21% revenue increase year over year. Robust organic growth in our Battery & Energy Products government/defense sales, coupled with the contribution of Electrochem, compensated for continued delays in the timing of expected larger orders for our Communications Systems segment. We remained focused on improving gross margin, achieving a 90-basis point sequential increase and a 7% inventory reduction, which freed up cash for strategic capital investments. Integration of our Electrochem acquisition continues to progress well, positioning us to capture manufacturing cost efficiencies and savings through U.S.-based vertical integration,” said Mike Manna, President and Chief Executive Officer. “We are actively implementing our tariff mitigation plan to manage the operational impact of tariffs across our supply chains. Our plan includes tariff surcharges, adjusting inventory movements, and reviewing sourcing and manufacturing locations.” Mr. Manna concluded, “We are confident in our ability to deliver and sustain profitable growth, generating incremental cash flow to reduce acquisition-related debt, and continuing to invest in strategic product development. Our strong backlog replenishment this quarter, combined with a growing pipeline of innovative products targeting high-growth markets, positions us to scale efficiently and capitalize on market demand. With enhanced sales and marketing leadership in place, we’re accelerating organic growth and maximizing the value of our global brand and resources.” First Quarter 2025 Financial Results Revenue was $50.7 million, an increase of $8.8 million, or 21.0%, as compared to revenue of $41.9 million for the first quarter of 2024. Battery & Energy Products sales increased 32.4% to $46.3 million compared to $35.0 million last year reflecting the inclusion of Electrochem Solutions, Inc. (“Electrochem”) and organic growth of 10.6%. The organic growth was primarily driven by a 53.6% increase in government/defense sales, partially offset by a 12.3% decrease in medical battery sales. Communications Systems sales decreased by 36.2% to $4.4 million compared to $6.9 million for the same period last year, primarily attributable to shipments in the prior year of integrated systems of amplifiers and radio vehicle mounts to a major international defense contractor. Our total backlog and high-confidence orders exiting the first quarter was $95.0 million compared to $102.2 million reported for the fourth quarter of 2024, indicative of the strong replenishment rate. Gross profit was $12.7 million, or 25.1% of revenue, compared to $11.5 million, or 27.4% of revenue, for the same quarter a year ago. Battery & Energy Products gross margin was 24.7%, compared to 25.7% last year, primarily due to product mix. Communications Systems gross margin was 29.5% compared to 35.8% last year, primarily due to lower factory volume and product mix. Operating expenses were $9.3 million, compared to $7.4 million for the 2024 first quarter, reflecting the inclusion of Electrochem, a 24.0% increase in new product development costs related to continued investment in our product offering, and one-time, non-recurring expenses. Operating expenses were 18.4% of revenue compared to 17.7% of revenue for the year-earlier period. Operating income was $3.4 million compared to $4.1 million last year. Driven by the 36.2% decline in Communications Systems sales and non-recurring costs, operating margin decreased to 6.7% compared to 9.7% last year. Net income attributable to Ultralife Corporation was $1.9 million or $0.11 per diluted share on a GAAP basis, compared to $2.9 million or $0.18 per diluted share for the first quarter of 2024. Adjusted EPS was $0.13 on a diluted basis for the first quarter of 2025, compared to $0.21 for the 2024 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 $5.4 million for the first quarter of 2025, or 10.7% of sales, compared to $5.2 million, or 12.5% of sales, for the year-earlier period. On a trailing twelve-month basis, adjusted EBITDA was $16.7 million or 9.6% of sales. See the “Non-GAAP Financial Measures” section of this release for a reconciliation of adjusted EBITDA to net income attributable to Ultralife Corporation and adjusted EPS to EPS. 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 first quarter earnings conference call today at 10:00 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-conf.media-server.com/register/BI00ee37974c5b4cbc86cd1d7ef099d998. 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 uncertain global economic conditions including the impact of tariffs and inflation, reductions in revenues from key customers, delays or reductions in U.S. and foreign military spending, acceptance of our new products on a global basis, and disruptions, delays or material price increases in our supply of raw materials and components due to business conditions, new or additional tariffs, global conflicts, weather or other factors not under our control. 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 SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Dollars in Thousands)(Unaudited) ASSETS March 31,2025 December 31,2024Current Assets: Cash$8,719 $6,854Trade Accounts Receivable, Net36,061 29,370Inventories, Net47,853 51,363Prepaid Expenses and Other Current Assets8,836 9,573Total Current Assets101,469 97,160 Property, Plant and Equipment, Net40,277 40,485Goodwill45,141 45,006Other Intangible Assets, Net24,185 24,557Deferred Income Taxes, Net8,020 8,413Other Non-Current Assets4,661 4,830Total Assets$223,753 $220,451 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts Payable$16,617 $14,160Current Portion of Long-Term Debt3,094 2,750Accrued Compensation and Related Benefits3,207 2,911Accrued Expenses and Other Current Liabilities8,578 9,470Total Current Liabilities31,496 29,291Long-Term Debt, Net50,510 51,502Deferred Income Taxes, Net1,413 1,443Other Non-Current Liabilities3,730 4,028Total Liabilities87,149 86,264 Shareholders' Equity: Common Stock2,107 2,107Capital in Excess of Par Value192,055 191,828Accumulated Deficit(32,577) (34,442)Accumulated Other Comprehensive Loss(3,695) (4,006)Treasury Stock(21,492) (21,492)Total Ultralife Equity136,398 133,995Non-Controlling Interest206 192Total Shareholders’ Equity136,604 134,187 Total Liabilities and Shareholders' Equity$223,753 $220,451 ULTRALIFE CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME(In Thousands Except Per Share Amounts)(Unaudited) Three-Month Period Ended March 31, March 31, 2025 2024Revenues: Battery & Energy Products$46,321 $34,989Communications Systems4,425 6,938 Total Revenues50,746 41,927 Cost of Products Sold: Battery & Energy Products34,881 26,003Communications Systems3,120 4,454Total Cost of Products Sold38,001 30,457 Gross Profit12,745 11,470 Operating Expenses: Research and Development2,404 1,756Selling, General and Administrative6,942 5,651Total Operating Expenses9,346 7,407 Operating Income3,399 4,063 Other Expense953 456Income Before Income Tax Provision2,446 3,607 Income Tax Provision567 703 Net Income1,879 2,904 Net Income Attributable to Non-Controlling Interest(14) (13) Net Income Attributable to Ultralife Corporation$1,865 $2,891 Net Income Per Share Attributable to UltralifeCommon Shareholders – Basic$0.11 $0.18 Net Income Per Share Attributable to UltralifeCommon Shareholders – Diluted$0.11 $0.18 Weighted Average Shares Outstanding – Basic16,633 16,396 Weighted Average Shares Outstanding – Diluted16,680 16,518 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 GAAP financial measures. We define adjusted EBITDA as net income attributable to Ultralife Corporation before net interest expense, provision 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 SUBSIDIARIESCALCULATION OF ADJUSTED EBITDA(Dollars in Thousands)(Unaudited) Three-Month Period Ended March 31, 2025 March 31, 2024 Net Income Attributable to Ultralife Corporation$1,865 $2,891Adjustments: Interest Expense, Net1,032 520Income Tax Provision567 703Depreciation Expense950 740Amortization of Intangible Assets405 228Stock-Based Compensation Expense227 161Severance Costs for Plant Closure150 -Acquisition and Other Non-Recurring Costs192 -Non-Cash Purchase Accounting Adjustment60 -Adjusted EBITDA$5,448 $5,243 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 in addition to GAAP financial measures. We define Adjusted EPS as net income attributable to Ultralife Corporation excluding the provision for deferred 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 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 SUBSIDIARIESCALCULATION OF ADJUSTED EPS(In Thousands Except Per Share Amounts)(Unaudited) Three-Month Period Ended March 31, 2025 March 31, 2024 Amount PerBasicShare PerDilutedShare Amount PerBasicShare PerDilutedShareNet Income Attributable to Ultralife Corporation$1,865 $0.11 $0.11 $2,891 $0.18 $0.18Deferred Tax Provision344 .02 .02 650 0.04 0.03Adjusted Net Income$2,209 $.13 $.13 $3,541 $0.22 $0.21 Weighted Average Shares Outstanding 16,633 16,680 16,396 16,518

Ultralife Corporation Reports First Quarter Results

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