Ultralife Reports First Quarter Results

May 11, 2008 by Jeff Shepard

Ultralife Batteries Inc. reported revenue of $49.6 million for its first quarter of 2008, an increase of 53% compared with $32.3 million reported in the same three-month period in 2007. Operating income for the quarter was $2.4 million compared with $0.6 million last year.

Revenue in the first quarter rose $17.3 million over the same quarter last year primarily due to strong sales of advanced communications systems related to three major contracts announced in the latter half of 2007, and an increase in design and installation services revenue related to the contribution from RedBlack Communications and Stationary Power Services, acquired in September 2007 and November 2007, respectively. As a percentage of revenue, gross margin for the first quarter of 2008 was 22%, compared to 23% in the same quarter a year ago.

Operating expenses for the first quarter of 2008 totaled $8.5 million, up from $6.9 million a year ago. The $1.6 million increase includes $0.8 million related to the addition of RedBlack and Stationary Power and $0.8 million related to incremental sales and marketing efforts and higher administrative costs related to operating a larger organization.

Net income for the first quarter of 2008 was $2.4 million, or $0.14 per diluted share, compared with a net loss of $36,000, or $0.00 per share, for the same quarter in 2007. Included in first quarter 2008 results was a $0.3 million non-operating gain related to the early conversion of the $10.5 million debt held by the sellers of McDowell Research into 700,000 shares of common stock.

"In the first quarter we delivered advanced communications systems against planned schedules as the supply delays we experienced in the fourth quarter were resolved, and production is currently on track to meet delivery schedules," said John D. Kavazanjian, President and Chief Executive Officer. "In other areas of the business, we made progress with the integration of both RedBlack Communications and Stationary Power Services; began to implement our expansion plans for Stationary Power, opening offices in Atlanta and Dallas; and continued to expand automotive telematics batteries into additional model platforms. Based on a strong backlog of orders and firm demand in all areas of our business, we continue to plan for full year revenue of at least $238 million in 2008 while devoting product development and sales resources to creating new opportunities with prime contractors, government entities and commercial customers to drive sustainable profitable growth for the company."