Ultralife Batteries Reports Second Quarter Results
Ultralife Batteries, Inc. reported record revenues of $35.2 million for its second quarter of 2007, an increase of 65% compared with $21.4 million reported in the same three-month period in 2006. Operating income rose more than three-fold to $1.7 million compared with $0.5 million a year ago.
Second quarter revenues grew $13.8 million year-over-year due in part to higher sales to international governments and defense organizations, as well as the addition of communications accessories sales from the McDowell acquisition which the company completed in mid-2006. As a percentage of revenues, gross margin for the second quarter of 2007 was 24%, up from 20% a year ago due to higher sales and production volumes and a shift toward more highly engineered products.
Operating expenses totaled $6.9 million, which included $1.4 million of additional expenses and $0.6 million of intangible asset amortization connected with last year’s acquisitions. Excluding these items, operating expenses rose $1.0 million over the $3.9 million reported in the comparable quarter last year due to increased corporate costs required to operate a larger, more diverse business. Net interest expense was $0.6 million in the second quarter of 2007, up from $0.2 million reported in the prior year due to the increased debt to finance last year’s acquisitions. Net income for the second quarter of 2007 was $1.3 million, or $0.08 per diluted share, compared with net income of $109,000, or $0.01 per share, for the same quarter in 2006.
For the six-month period ended June 30, 2007, revenues totaled $67.5 million compared to $39.7 million for the same period a year ago. Operating income amounted to $2.3 million for the first half of 2007, an increase of $1.6 million over 2006. Net income for the first half of 2007 was $1.3 million, or $0.08 per diluted share, compared to $249,000, or $0.02 per share, for the same period last year.
"Second quarter results offer solid evidence of the success we have achieved in diversifying the company’s government/defense revenue mix and in broadening the range of our product offering, coupled with our commitment to improving operational efficiencies," said John D. Kavazanjian, Ultralife’s President and CEO. "Second quarter revenue marked the fourth consecutive quarter of year-over-year growth and surpassed last quarter’s record level. In addition, we continued to drive gross margin expansion as we increased the contribution of higher engineered products and improved manufacturing efficiencies. Asset utilization also improved with inventory levels and revolver borrowings down from the first quarter."