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Ultralife Corporation Reports Second Quarter Results

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Ultralife (NASDAQ: ULBI) reported strong Q2 2024 results, with sales reaching $43.0 million, up from $42.7 million in Q2 2023. The Battery & Energy Products segment achieved record-high sales, growing 8.3%. Gross profit increased to $11.6 million (26.9% of revenue), compared to $10.6 million (24.8%) in Q2 2023. Operating income rose 6.9% to $3.9 million. GAAP EPS was $0.18, down from $0.21 in Q2 2023, which included a $0.07 per share Employee Retention Credit. The company reported an Adjusted EBITDA of $5.4 million (12.6% of sales) and a backlog of $93.0 million. Notably, Ultralife reduced its debt by 52.2% to $12.1 million.

Ultralife (NASDAQ: ULBI) ha riportato risultati solidi per il secondo trimestre del 2024, con vendite che hanno raggiunto 43,0 milioni di dollari, un aumento rispetto ai 42,7 milioni di dollari del secondo trimestre del 2023. Il segmento Batterie e Prodotti Energetici ha registrato vendite record, crescendo dell'8,3%. Il profitto lordo è aumentato a 11,6 milioni di dollari (26,9% del fatturato), rispetto ai 10,6 milioni di dollari (24,8%) del secondo trimestre del 2023. Il reddito operativo è salito del 6,9% a 3,9 milioni di dollari. EPS GAAP era di 0,18 dollari, in calo rispetto a 0,21 dollari nel secondo trimestre del 2023, che includeva un credito per la retention dei dipendenti di 0,07 dollari per azione. L'azienda ha riportato un EBITDA rettificato di 5,4 milioni di dollari (12,6% delle vendite) e un portafoglio ordini di 93,0 milioni di dollari. È degno di nota che Ultralife ha ridotto il suo debito del 52,2% a 12,1 milioni di dollari.

Ultralife (NASDAQ: ULBI) reportó resultados sólidos en el segundo trimestre de 2024, con ventas que alcanzaron $43.0 millones, un aumento respecto a los $42.7 millones del segundo trimestre de 2023. El segmento de Productos de Batería y Energía alcanzó ventas récord, creciendo un 8.3%. El beneficio bruto aumentó a $11.6 millones (26.9% de los ingresos), en comparación con $10.6 millones (24.8%) en el segundo trimestre de 2023. El ingreso operativo aumentó un 6.9% a $3.9 millones. GAAP EPS fue de $0.18, una disminución respecto a $0.21 en el segundo trimestre de 2023, que incluía un crédito de retención de empleados de $0.07 por acción. La compañía reportó un EBITDA ajustado de $5.4 millones (12.6% de las ventas) y un backlog de $93.0 millones. Notablemente, Ultralife redujo su deuda en un 52.2% a $12.1 millones.

Ultralife (NASDAQ: ULBI)는 2024년 2분기 실적이 강력하게 나타났으며, 판매액이 4,300만 달러에 달해 2023년 2분기의 4,270만 달러에서 증가했습니다. 배터리 및 에너지 제품 부문은 8.3% 성장하여 역대 최고 판매 기록을 세웠습니다. 총 이익은 1,160만 달러(수익의 26.9%)로 증가했으며, 이는 2023년 2분기의 1,060만 달러(24.8%)와 비교됩니다. 영업 이익은 6.9% 증가하여 390만 달러에 달했습니다. GAAP EPS는 0.18달러로, 2023년 2분기의 0.21달러에서 감소했으며, 여기에는 주당 0.07달러의 직원 유지 크레딧이 포함되어 있었습니다. 회사는 조정된 EBITDA 540만 달러(판매의 12.6%)와 9,300만 달러의 주문 백로그를 보고했습니다. 특히, Ultralife는 52.2%의 부채를 줄여 1,210만 달러로 감소했습니다.

Ultralife (NASDAQ: ULBI) a annoncé des résultats solides pour le deuxième trimestre de 2024, avec des ventes atteignant 43,0 millions de dollars, en hausse par rapport aux 42,7 millions de dollars du deuxième trimestre de 2023. Le segment Produits de Batterie et d'Énergie a enregistré des ventes record, avec une croissance de 8,3%. Le bénéfice brut a augmenté à 11,6 millions de dollars (26,9% des revenus), contre 10,6 millions de dollars (24,8%) au deuxième trimestre de 2023. Le résultat opérationnel a augmenté de 6,9% pour atteindre 3,9 millions de dollars. Le BPA GAAP était de 0,18 $ , en baisse par rapport à 0,21 $ au deuxième trimestre de 2023, qui comprenait un crédit de rétention des employés de 0,07 $ par action. La société a signalé un EBITDA ajusté de 5,4 millions de dollars (12,6% des ventes) et un carnet de commandes de 93,0 millions de dollars. Notamment, Ultralife a réduit sa dette de 52,2 % à 12,1 millions de dollars.

Ultralife (NASDAQ: ULBI) meldete starke Ergebnisse für das zweite Quartal 2024, mit einem Umsatz von 43,0 Millionen US-Dollar, ein Anstieg gegenüber 42,7 Millionen US-Dollar im zweiten Quartal 2023. Das Segment Batterien und Energiewirtschaft erzielte Rekordverkäufe und wuchs um 8,3%. Der Bruttogewinn stieg auf 11,6 Millionen US-Dollar (26,9% des Umsatzes), verglichen mit 10,6 Millionen US-Dollar (24,8%) im zweiten Quartal 2023. Der operative Gewinn stieg um 6,9% auf 3,9 Millionen US-Dollar. GAAP EPS betrug 0,18 US-Dollar, ein Rückgang von 0,21 US-Dollar im zweiten Quartal 2023, das einen Kredit für die Mitarbeiterbindung von 0,07 US-Dollar pro Aktie beinhaltete. Das Unternehmen meldete ein bereinigtes EBITDA von 5,4 Millionen US-Dollar (12,6% des Umsatzes) und einen Auftragsbestand von 93,0 Millionen US-Dollar. Bemerkenswert ist, dass Ultralife seine Schulden um 52,2% auf 12,1 Millionen US-Dollar reduziert hat.

Positive
  • Record-high sales in Battery & Energy Products segment, up 8.3%
  • Gross profit increased to $11.6 million, with margin improving to 26.9%
  • Operating income rose 6.9% to $3.9 million
  • Significant debt reduction of 52.2% to $12.1 million
  • Strong backlog of $93.0 million exiting Q2
Negative
  • Communications Systems sales decreased 28.7% to $6.3 million
  • Operating expenses increased to 17.8% of revenue from 16.2% in Q2 2023
  • GAAP EPS decreased to $0.18 from $0.21 in Q2 2023
  • Adjusted EBITDA margin declined to 12.6% from 14.7% in Q2 2023

Insights

Ultralife 's Q2 2024 results present a mixed picture with some positive developments and areas of concern. Revenue increased slightly to $43.0 million, up from $42.7 million in Q2 2023. The Battery & Energy Products segment showed strong growth, reaching its highest historical level with an 8.3% increase. However, this was partially offset by a 28.7% decrease in Communications Systems sales.

Profitability metrics showed improvement, with gross profit margin expanding to 26.9% from 24.8% year-over-year. This was primarily driven by the Battery & Energy Products segment, which saw a substantial 480 basis point increase in gross margin to 27.1%. Operating income grew by 6.9% to $3.9 million, with operating margin improving to 9.1%.

However, GAAP EPS declined to $0.18 from $0.21 in Q2 2023. It's important to note that the previous year's EPS included a $0.07 per share benefit from an Employee Retention Credit, which wasn't present in Q2 2024. Adjusted EBITDA also decreased to $5.4 million (12.6% of sales) from $6.3 million (14.7% of sales) last year, again impacted by the absence of the ERC.

A significant positive is the company's debt reduction efforts. Ultralife reduced its debt by $13.2 million, or 52.2%, to $12.1 million. This substantial deleveraging improves the company's financial flexibility and reduces interest expenses.

The $93.0 million backlog suggests a healthy pipeline of future business. However, investors should monitor the Communications Systems segment's performance, as its sales decline and margin compression could impact overall results if the trend continues.

Ultralife's Q2 results reflect shifting market dynamics and the company's strategic focus. The 8.3% growth in Battery & Energy Products sales, particularly the 30.5% increase in government/defense sales and 20.1% rise in medical battery sales, indicates strong demand in these sectors. This aligns with broader trends of increased defense spending and growing healthcare technology needs.

However, the 10.9% decrease in oil & gas market sales suggests potential challenges or shifts in this sector. The energy industry's volatility and increasing focus on renewable sources might be influencing this trend.

The 28.7% decline in Communications Systems sales is concerning, especially given that it's attributed to the normalization of supply chain conditions. This implies that the segment might face challenges in maintaining its sales levels without the backlog created by previous supply chain disruptions.

Ultralife's focus on improving gross margins through initiatives like material cost deflation, lean productivity and scrap reduction demonstrates a proactive approach to enhancing profitability. The success of these efforts is evident in the Battery & Energy Products segment's margin improvement.

The company's debt reduction strategy and focus on cash flow generation position it well for future investments and potential acquisitions. This approach could lead to new growth opportunities and market expansions.

Looking ahead, Ultralife's ability to capitalize on the strong demand in government/defense and medical sectors, while addressing challenges in other segments, will be important for sustaining growth. The company's emphasis on larger projects and expanding opportunity funnels suggests a strategic shift towards higher-value contracts, which could drive future revenue growth if executed effectively.

NEWARK, N.Y., July 25, 2024 (GLOBE NEWSWIRE) -- Ultralife Corporation (NASDAQ: ULBI) reported operating results for the second quarter ended June 30, 2024 with the following highlights:

  • Sales of $43.0 million compared to $42.7 million for the 2023 second quarter, including 8.3% growth in Battery & Energy Products sales to its highest level in the Company’s history for this segment
  • Gross profit of $11.6 million, or 26.9% of revenue, compared to $10.6 million, or 24.8% of revenue, for the 2023 second quarter
  • Operating income of $3.9 million, a 6.9% increase over the 2023 second quarter
  • GAAP EPS of $0.18 compared to $0.21 which included recognition of our Employee Retention Credit equivalent to $0.07 per share for the 2023 second quarter
  • Adjusted EBITDA of $5.4 million or 12.6% of sales versus $6.3 million or 14.7% last year, which included $1.5 million for our Employee Retention Credit
  • Backlog of $93.0 million exiting the second quarter
  • Debt reduction of $13.2 million, or 52.2%, to $12.1 million from $25.3 million at the end of the first quarter

“Ultralife’s second quarter results testify to the continued high demand for our products particularly from our government/defense and medical battery customers, the success of our initiatives to improve Battery & Energy Products’ gross margin, and our solid cash flow generation which we used to reduce our debt by over 50%,” said Mike Manna, President and Chief Executive Officer. “Looking ahead to the second half of the year, our main priorities remain driving gross margin increases through material cost deflation, lean productivity, scrap reduction and price realization for both businesses, and expanding the opportunity funnels and customer wins for larger projects. We are optimistic that we are well positioned to sustain profitable growth and generate incremental cash flow that can be allocated to debt reduction and investments in strategic capital expenditures and accretive acquisitions.”

Second Quarter 2024 Financial Results
Revenue was $43.0 million compared to revenue of $42.7 million for the second quarter of 2023. Battery & Energy Products sales increased 8.3% to $36.7 million, compared to $33.9 million last year, reflecting increases of 30.5% in government/defense sales and 20.1% in medical battery sales, partially offset by a 10.9% decrease in oil & gas market sales. Communications Systems sales decreased 28.7% to $6.3 million compared to $8.8 million for the same period last year, primarily attributable to shipments in the 2023 period for orders which had been previously delayed by supply chain disruptions. Our total backlog exiting the second quarter was $93.0 million.

Gross profit was $11.6 million, or 26.9% of revenue, compared to $10.6 million, or 24.8% of revenue, for the same quarter a year ago. Battery & Energy Products’ gross margin increased 480 basis points to 27.1%, compared to 22.3% last year, primarily due to higher cost absorption and more efficiencies resulting from our concerted effort to level-load production more evenly across the 2024 quarter, as well as improved price realization. Communications Systems gross margin was 25.6% compared to 34.5% last year, primarily due to product mix.

Operating expenses were $7.6 million, compared to $6.9 million for the 2023 second quarter, reflecting investments in new product development, the addition of sales resources to support future growth and executive bonus accruals which were not recognized in last year’s second quarter. Operating expenses were 17.8% of revenue compared to 16.2% of revenue for the year-earlier period.

Operating income was $3.9 million compared to $3.7 million last year. Driven by the 210-basis point gain in gross margin, operating margin increased to 9.1% compared to 8.6% last year.

Other income, reported below operating income, includes $0.2 million as a preliminary payment from our insurance carrier pertaining to the cyberattack which occurred in the first quarter of 2023. Other income for the second quarter of 2023 included an Employee Retention Credit (“ERC”) of $1.5 million under Section 2301 of the Coronavirus Aid, Relief and Economic Security Act of 2020 and the American Rescue Plan of 2021 which was filed with the Internal Revenue Service during that quarter.

Net income was $3.0 million, or $0.18 per diluted share on a GAAP basis, compared to net income of $3.3 million or $0.21 per diluted share for the second quarter of 2023. Adjusted EPS was $0.22 on a diluted basis for the second quarter of 2024, compared to $0.29 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. Recognition of the ERC in the second quarter of 2023 increased GAAP and Adjusted EPS by $0.07 and $0.10, respectively, for that period.

Adjusted EBITDA, defined as EBITDA including non-cash, stock-based compensation expense, was $5.4 million for the second quarter of 2024, or 12.6% of sales, compared to $6.3 million, or 14.7% of sales, for the year earlier period which included the ERC.

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 second quarter earnings conference call today at 8:30 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.vevent.com/register/BI3ab77e4ff3d049f3b130d6d227043bba. 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 SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
        
ASSETS
    
 June 30,
2024
 December 31,
2023
Current Assets:   
Cash$6,690  $10,278 
Trade Accounts Receivable, Net 31,055   31,761 
Inventories, Net 41,392   42,215 
Prepaid Expenses and Other Current Assets 4,650   5,949 
Total Current Assets 83,787   90,203 
    
Property, Plant and Equipment, Net 20,281   21,117 
Goodwill 37,510   37,571 
Other Intangible Assets, Net 14,646   15,107 
Deferred Income Taxes, Net 9,088   10,567 
Other Non-Current Assets 4,505   3,711 
        
Total Assets$169,817  $178,276 
    
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
Current Liabilities:  
Accounts Payable$9,691  $11,336 
Current Portion of Long-Term Debt 2,000   2,000 
Accrued Compensation and Related Benefits 2,312   3,115 
Accrued Expenses and Other Current Liabilities 6,570   7,279 
Total Current Liabilities 20,573   23,730 
Long-Term Debt, Net 9,978   23,624 
Deferred Income Taxes 1,642   1,714 
Other Non-Current Liabilities 4,279   3,781 
Total Liabilities 36,472   52,849 
    
Shareholders' Equity:   
Common Stock 2,106   2,078 
Capital in Excess of Par Value 191,388   189,160 
Accumulated Deficit (34,894)  (40,754)
Accumulated Other Comprehensive Loss (3,895)  (3,660)
Treasury Stock (21,492)  (21,492)
Total Ultralife Equity 133,213   125,332 
Non-Controlling Interest 132   95 
Total Shareholders’ Equity 133,345   125,427 
    
Total Liabilities and Shareholders' Equity$169,817  $178,276 


 
ULTRALIFE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands Except Per Share Amounts)
(Unaudited)
        
 Three-Month Period Ended Six-Month Period Ended
 June 30, June 30, June 30, June 30,
 2024 2023 2024 2023
Revenues:       
Battery & Energy Products$36,683 $33,861 $71,672 $62,331
Communications Systems6,300 8,831 13,238 12,277
Total Revenues42,983 42,692 84,910 74,608
        
Cost of Products Sold:       
Battery & Energy Products26,730 26,318 52,733 48,276
Communications Systems4,690 5,786 9,144 8,308
Total Cost of Products Sold31,420 32,104 61,877 56,584
        
Gross Profit11,563 10,588 23,033 18,024
        
Operating Expenses:       
Research and Development1,997 1,778 3,753 3,810
Selling, General and Administrative5,649 5,145 11,300 10,523
Total Operating Expenses7,646 6,923 15,053 14,333
        
Operating Income 3,917 3,665 7,980 3,691
        
Other (Expense) Income(71) 1,058 (527) 564
Income Before Income Taxes3,846 4,723 7,453 4,255

        
Income Tax Provision853 1,375 1,556 1,242
        
Net Income 2,993 3,348 5,897 3,013
        
Net Income Attributable to Non-Controlling Interest24 8 37 19
        
Net Income Attributable to Ultralife Corporation$2,969 $3,340 $5,860 $2,994
        
        
Net Income Per Share Attributable to Ultralife Common Shareholders – Basic$.18 $.21 $.36 $.19
        
Net Income Per Share Attributable to Ultralife Common Shareholders – Diluted$.18 $.21 $.35 $.19
        
Weighted Average Shares Outstanding – Basic16,568 16,141 16,482 16,138
        
Weighted Average Shares Outstanding – Diluted16,825 16,144 16,661 16,141


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 (benefit) 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 SUBSIDIARIES
CALCULATION OF ADJUSTED EBITDA
(Dollars in Thousands)
(Unaudited)

 
 Three-Month Period Ended Six-Month Period Ended
 June 30,
2024
 June 30,
2023
 June 30,
2024
 June 30,
2023
        
Net Income Attributable to Ultralife Corporation$2,969 $3,340 $5,860 $2,994
Adjustments:       
Interest Expense, Net418 440 938 864
Income Tax Provision853 1,375 1,556 1,242
Depreciation Expense789 760 1,529 1,522
Amortization Expense227 227 455 436
Stock-Based Compensation Expense159 154 320 293
Cyber-Insurance Policy Deductible- - - 100
Adjusted EBITDA$5,415 $6,296 $10,658 $7,451


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 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 SUBSIDIARIES
CALCULATION OF ADJUSTED EPS
(In Thousands Except Per Share Amounts)
(Unaudited)
 
 Three-Month Period Ended
 June 30, 2024 June 30, 2023
 Amount Per
Basic
Share
 Per
Diluted
Share
 Amount Per
Basic
Share
 Per
Diluted
Share
Net Income Attributable to Ultralife Corporation$2,969 $.18 $.18 $3,340 $.21 $.21
Deferred Tax Provision744 .04 .04 1,278 .08 .08
Adjusted Net Income$3,713 $.22 $.22 $4,618 $.29 $.29
            
Weighted Average Shares Outstanding  16,568 16,825   16,141 16,144


 Six-Month Period Ended
 June 30, 2024 June 30, 2023
 Amount Per
Basic
Share
 Per
Diluted
Share
 Amount Per
Basic
Share
 Per
Diluted
Share
Net Income Attributable to Ultralife Corporation$5,860 $.36 $.35 $2,994 $.19 $.19
Deferred Tax Provision1,394 .08 .09 888 .05 .05
Adjusted Net Income7,254 $.44 $.44 $3,882 $.24 $.24
            
Weighted Average Shares Outstanding  16,482 16,661   16,138 16,141


  
Company Contact:
Ultralife Corporation
Philip A. Fain
(315) 210-6110
pfain@ulbi.com 
Investor Relations Contact:
LHA
Jody Burfening
(212) 838-3777
jburfening@lhai.com 

FAQ

What was Ultralife 's (ULBI) revenue for Q2 2024?

Ultralife reported revenue of $43.0 million for Q2 2024, compared to $42.7 million in Q2 2023.

How much did Ultralife (ULBI) reduce its debt in Q2 2024?

Ultralife reduced its debt by $13.2 million, or 52.2%, from $25.3 million at the end of Q1 to $12.1 million at the end of Q2 2024.

What was Ultralife's (ULBI) GAAP EPS for Q2 2024?

Ultralife reported a GAAP EPS of $0.18 for Q2 2024, compared to $0.21 in Q2 2023, which included a $0.07 per share Employee Retention Credit.

How much was Ultralife's (ULBI) backlog at the end of Q2 2024?

Ultralife reported a backlog of $93.0 million exiting the second quarter of 2024.

Ultralife Corporation

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