Ultralife Corporation Reports Fourth Quarter Results

April 01, 2025 07:00 ET | Source: Ultralife Corporation Acquisition of Electrochem Completed and Integration Has Commenced NEWARK, N.Y., April 01, 2025 (GLOBE NEWSWIRE) -- Ultralife Corporation (NASDAQ: ULBI) reported operating results for the fourth quarter and full year ended December 31, 2024 as follows: Fourth Quarter: Sales of $43.9 million compared to $44.5 million for the 2023 fourth quarter, including a 11.7% increase in Battery & Energy Products sales and a 55.1% decrease in Communications Systems salesGross profit of $10.6 million, or 24.2% of revenue, compared to $11.4 million, or 25.6% of revenue, for the 2023 fourth quarterOperating income of $1.5 million, including one-time costs and GAAP adjustments of $1.1 million directly related to the acquisition of Electrochem Solutions, Inc. (“Electrochem”) on October 31, 2024, compared to $3.6 million for the 2023 fourth quarterGAAP EPS of $0.01 compared to $0.17 for the 2023 fourth quarterAdjusted EBITDA of $3.9 compared to $4.8 million for the 2023 fourth quarterBacklog and high confidence orders of $102.2 million exiting 2024 compared to $78.0 exiting the third quarter Fiscal Year 2024: Sales of $164.5 million represent a 3.7% year-over-year increase; essentially flat with 2023 when excluding ElectrochemOperating income of $10.0 million including one-time costs and GAAP adjustments of $1.4 million directly related to the acquisition of Electrochem on October 31, 2024, versus $9.5 million for 2023GAAP EPS of $0.38 compared to $0.44 for 2023 which included approximately $0.08 for recognition of the ERC filed under the Coronavirus Aid, Relief and Economic ActAdjusted EBITDA of $16.5 million compared to $15.7 million for 2023 “For the fourth quarter the contribution of Electrochem compensated for delays in the timing of expected larger orders for our Communications Systems segment and customer requests to push orders into 2025 for our Battery & Energy Products segment. These fulfillment delays illustrate how fluctuations in order timing can impact our financial results on a short-term basis even as demand for our products remains strong. In addition, after acquiring Electrochem on October 31st, we began implementing our integration playbook commencing the necessary groundwork to realize the benefits of our investment,” said Mike Manna, President and Chief Executive Officer. “We entered 2025 with a healthy backlog and a schedule of new products to launch representing a broadened opportunity set in high-growth markets that position us to more fully realize the operating leverage of our business model through scale, and a strengthened sales and marketing leadership team to expedite organic growth and further leverage our global brand and resources. We are also on track to complete the acquisition integration and realize resulting manufacturing cost efficiencies and U.S.-based vertical integration savings. As a result, we are confident in our ability to deliver profitable growth and incremental cash flow enabling us to reduce debt and support strategic capital expenditures,” concluded Mr. Manna. Fourth Quarter 2024 Financial Results Revenue was $43.9 million, including $6.1 million relating to our acquisition of Electrochem, compared to revenue of $44.5 million for the fourth quarter of 2023. Battery & Energy Products sales increased 11.7% to $39.9 million compared to $35.7 million last year reflecting the inclusion of Electrochem. Organic sales for this segment declined 5.3% as a 48.1% increase in government/defenses sales and a 1.6% increase in oil & gas market sales were offset by a 47.2% decrease in medical battery sales and a 4.4% decline in other industrial market sales. Communications Systems sales decreased by 55.1% to $4.0 million compared to $8.8 million for the same period last year, primarily attributable to shipments in the prior year of vehicle-amplifier adaptors to a global defense contractor for the U.S. Army and of integrated systems of amplifiers and radio vehicle mounts to a major international defense contractor. Our total backlog and high confidence orders exiting the fourth quarter was $102.2 million compared to $78.0 million reported for the third quarter. Gross profit was $10.6 million, or 24.2% of revenue, compared to $11.4 million, or 25.6% of revenue, for the same quarter a year ago. Battery & Energy Products gross margin was 23.4%, compared to 25.2% last year, primarily due to product mix and lower factory cost absorption. Communications Systems gross margin was 31.9% compared to 27.2% last year, primarily due to product mix and price realization despite lower factory volume. Operating expenses were $9.1 million, compared to $7.8 million for the 2023 fourth quarter, reflecting $1.8 million for the inclusion of Electrochem and the one-time costs associated with the acquisition. Operating expenses were 20.8% of revenue compared to 17.4% of revenue for the year-earlier period. Operating income was $1.5 million compared to $3.6 million last year. Driven by the 55.1% decline in Communications Systems sales and one-time acquisition costs, operating margin decreased to 3.4% compared to 8.2% last year. Net income attributable to Ultralife Corporation was $0.2 million or $0.01 per diluted share on a GAAP basis, compared to $2.9 million or $0.17 per diluted share for the fourth quarter of 2023. Adjusted EPS was also $0.01 on a diluted basis for the fourth quarter of 2024, compared to $0.18 for the 2023 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 and one-time acquisition costs and non-cash purchase accounting adjustments, was $3.9 million for the fourth quarter of 2024, or 8.9% of sales, compared to $4.8 million, or 10.7% of sales, for the year-earlier period. See the “Non-GAAP Financial Measures” section of this release for a reconciliation of adjusted EPS to EPS and adjusted EBITDA to net income attributable to Ultralife Corporation. 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 fourth quarter earnings conference call on today at 8:30 AM ET. To ensure a fast and reliable connection to our investor conference call, we require participants dialing in by phone to pre-register using this link prior to the call: https://register-conf.media-server.com/register/BI1a1f31c093654241b376ab0dfc2c088b. 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, 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 or delays in our supply of raw materials and components due to business conditions, 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 December 31,2024 December 31,2023 Current Assets: Cash$6,854 $10,278 Trade Accounts Receivable, Net 29,370 31,761 Inventories, Net 51,363 42,215 Prepaid Expenses and Other Current Assets 9,573 5,949 Total Current Assets 97,160 90,203 Property, Plant and Equipment, Net 40,485 21,117 Goodwill 45,006 37,571 Other Intangible Assets, Net 24,557 15,107 Deferred Income Taxes, Net 8,413 10,567 Other Non-Current Assets 4,830 3,711 Total Assets$220,451 $178,276 LIABILITIES AND SHAREHOLDERS' EQUITYCurrent Liabilities: Accounts Payable$14,160 $11,336 Current Portion of Long-Term Debt 2,750 2,000 Accrued Compensation and Related Benefits 2,911 3,115 Accrued Expenses and Other Current Liabilities 9,470 7,279 Total Current Liabilities 29,291 23,730 Long-Term Debt, Net 51,502 23,624 Deferred Income Taxes 1,443 1,714 Other Non-Current Liabilities 4,028 3,781 Total Liabilities 86,264 52,849 Shareholders' Equity: Common Stock 2,107 2,078 Capital in Excess of Par Value 191,828 189,160 Accumulated Deficit (34,442) (40,754) Accumulated Other Comprehensive Loss (4,006) (3,660) Treasury Stock (21,492) (21,492) Total Ultralife Corporation Equity 133,995 125,332 Non-Controlling Interest 192 95 Total Shareholders’ Equity 134,187 125,427 Total Liabilities and Shareholders' Equity$220,451 $178,276 ULTRALIFE CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME(In Thousands Except Per Share Amounts)(Unaudited) Three-Month Period Ended Year Ended December 31, December 31, December 31, December 31, 2024 2023 2024 2023 Revenues: Battery & Energy Products$39,880 $35,703 $144,081 $129,953 Communications Systems 3,972 8,845 20,375 28,691 Total Revenues 43,852 44,548 164,456 158,644 Cost of Products Sold: Battery & Energy Products 30,549 26,711 107,764 99,178 Communications Systems 2,704 6,435 14,378 20,266 Total Cost of Products Sold 33,253 33,146 122,142 119,444 Gross Profit 10,599 11,402 42,314 39,200 Operating Expenses: Research and Development 2,415 1,852 8,268 7,531 Selling, General and Administrative 6,710 5,901 24,081 22,194 Total Operating Expenses 9,125 7,753 32,349 29,725 Operating Income 1,474 3,649 9,965 9,475 Other Expense 979 536 1,664 358 Income Before Income Taxes 495 3,113 8,301 9,117 Income Tax Provision 262 263 1,892 1,951 Net Income 233 2,850 6,409 7,166 Net Income (Loss) Attributable to Non-Controlling Interest 39 (23) 97 (31) Net Income Attributable to Ultralife Corporation$194 $2,873 $6,312 $7,197 Net Income Per Share Attributable to UltralifeCommon Shareholders – Basic$.01 $.18 $.38 $.44 Net Income Per Share Attributable to UltralifeCommon Shareholders – Diluted$.01 $.17 $.38 $.44 Weighted Average Shares Outstanding – Basic 16,629 16,338 16,555 16,214 Weighted Average Shares Outstanding – Diluted 16,762 16,479 16,767 16,226 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 U.S. Generally Accepted Accounting Principles (“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 Year Ended December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Net Income Attributable to Ultralife Corporation$194 $2,873 $6,312 $7,197Adjustments: Interest Expense, Net 829 566 1,940 2,016Income Tax Provision 262 263 1,892 1,951Depreciation Expense 831 740 3,125 3,022Amortization Expense 348 226 1,032 889Stock-Based Compensation Expense 208 104 698 528Cyber-Insurance Policy Deductible - - - 100Non-Recurring Acquisition Costs 1,111 - 1,361 -Non-Cash Purchase Accounting Adjustment 120 - 120 -Adjusted EBITDA$3,903 $4,772 $16,480 $15,703 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. We define adjusted EPS as net income attributable to Ultralife Corporation excluding the provision (benefit) for deferred income 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 predominantly 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 December 31, 2024 December 31, 2023 Amount Per Basic Share Per Diluted Share Amount Per Basic Share Per Diluted ShareNet Income Attributable to Ultralife Corporation$194 $ .01 $ .01 $2,873 $ .18 $ .17Deferred Tax Provision (Benefit) (63) - - 56 - .01Adjusted Net Income$131 $.01 $ .01 $2,929 $ .18 $ .18 Weighted Average Shares Outstanding 16,629 16,762 16,338 16,479 Year Ended December 31, 2024 December 31, 2023 Amount Per Basic Share Per Diluted Share Amount Per Basic Share Per Diluted ShareNet Income Attributable to Ultralife Corporation$6,312 $.38 $.38 $7,197 $.44 $.44Deferred Tax Provision 1,232 .08 .07 1,301 .08 .08Adjusted Net Income$7,544 $.46 $.45 $8,498 $.52 $.52 Weighted Average Shares Outstanding 16,555 16,767 16,214 16,226 Company Contact: Investor Relations Contact:Ultralife Corporation Alliance Advisors IRPhilip A. Fain Jody Burfening/Alex Villalta(315) 210-6110 (212) 838-3777pfain@ulbi.com avillalta@allianceadvisors.com

Ultralife Corporation Reports Fourth Quarter Results

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