Ultralife Batteries Inc. (Newark, NY), a designer and manufacturer of batteries and power sources, adjusted its outlook for revenue in the second half of 2005 to approximately $35 million, consisting of approximately $15 million for the third quarter and $20 million for the fourth quarter, due to ongoing uncertainty regarding the timing and quantity of BA-5390 battery orders from the US Department of Defense for the reminder of the year. The company previously anticipated revenue for the second half of 2005 of approximately $46 million, assuming a modest level of BA-5390 orders. Along with lowering its revenue guidance, the company is taking action to reduce overhead costs by up to $4 million on an annualized basis starting in the fourth quarter.
"The US military has informed us that they are keeping inventories lean until they finalize plans to transition to the BA-5390 with the state-of-charge indicator, the major item in the Next Gen II, Phase IV Contract award. Because usage continues at a steady rate for the current version, however, they have informed us that they anticipate some procurement in the fourth quarter to maintain supply levels," said Ultralife President and Chief Executive Officer John Kavazanjian. "Nevertheless, given the uncertainty about both the volume and timing of orders, combined with the continued delays in the procurement process, we are moving forward with our near-term business plans assuming that we will not have any BA-5390 revenue for the rest of the year. These plans include taking action to reduce overhead costs in order to return to profitability in the fourth quarter."
