Ultralife Corporation (Ultralife) has reported total revenues of $254.7 million for the year-end 2008, compared with total revenues of $137.6 million in the previous year-end. It has also reported a net loss of $13.6 million, or $0.78 per diluted share, for the year-end 2008, compared with the net loss of $5.58 million, or $0.36 per diluted share, in the previous year-end.
Operating expenses for the fourth quarter of 2008 totaled $10.0 million compared to $8.4 million a year ago. The $1.6 million increase in operating expenses was mainly attributable to higher selling and marketing expenses pertaining to the development of new business opportunities, as well as increased investment in product development and higher administrative costs from operating a more diverse business. As a percentage of revenue, operating expenses declined from 23% in the fourth quarter of 2007 to 20% in the fourth quarter of 2008. During the fourth quarter of 2008, the company recorded miscellaneous non-operating income of $0.9 million, consisting primarily of a $0.3 million non-operating gain on the completion of commitments pertaining to a state government grant, and a $0.5 million foreign currency exchange gain related to the strength of the US dollar against the British pound. Included in fourth quarter 2007 results was a $7.6 million non-operating gain related to the negotiated purchase price settlement with the sellers of McDowell Research. Net income for the fourth quarter of 2008 was $0.2 million, or $0.01 per share, compared with net income of $4.4 million, or $0.27 per share, for the same quarter in 2007.
Operating income for the year-end 2008 is $17.3 million compared to an operating loss of $0.2 million for the prior year. The year-over-year improvement in operating income of $17.5 million primarily resulted from strong revenue growth and higher gross margins in the Communications Systems segment, as well as improved leverage of operating expenses. Net income for the year-end 2008 was $13.7 million, or $0.78 per share, compared to $5.6 million, or $0.36 per share, in the previous year-end.
“During 2008 we accomplished our objective of capitalizing on high value market opportunities that leverage our superior engineering capabilities, particularly in the areas of advanced communications systems and standby power management services,” said John D. Kavazanjian, president and chief executive officer. “By focusing on higher level electronics, we transformed our communications accessories business into a provider of advanced communications systems. As a result, we produced a break-out year, establishing Ultralife as the standard for Satcom-on-the-Move systems and launching the first portable tactical repeater product for hand held radios. In the standby power market, we expanded our footprint, broadened our product offerings and grew revenue. In addition to delivering record top line growth, we strengthened our financial position, generating significant cash from operations during 2008 and ending the year with minimal debt on the balance sheet.”
Kavazanjian added, “The steps we have taken to diversify our customer base, broaden our product and service offerings and extend our global reach have placed Ultralife in a solid position to take advantage of attractive growth prospects in 2009. The expectation for continued spending on advanced communications and electronics systems supports our goals of increasing our share of customers’ budgets both in the United States and abroad. As we participate more frequently in major systems programs, we may see fluctuations in quarterly revenue from time to time caused by either contracting delays or expedited shipments of orders. Rising demand for back-up power and energy storage justifies continued investment in the standby power services business as we advance our goal of becoming a dominant player in the market.
“Operationally, we plan to continue improving margins while managing costs conservatively. Our operational flexibility will enable us to adjust quickly should order flow not meet our expectations. Financially, we enter 2009 with a strong balance sheet and the flexibility to execute our growth plans, now enhanced by our new $35 million credit facility,” Kavazanjian concluded. “Through continued geographic expansion, further product development and new market penetration, we are building the platform for long-term growth.”