Ultralife Corporation (Ultralife), formerly Ultralife Batteries, Inc., a US-based manufacturer of power and communications systems, has reported total revenues of $39.8 million for the first quarter of 2009, down 20%, compared with total revenues of $49.6 million in the year-ago quarter. It has also reported a net loss of $2.5 million, or $0.15 loss per share, for the first quarter of 2009, compared with the net income of $2.4 million, or $0.14 per share, in the year-ago quarter.
Ultralife reported an operating loss of $2.3 million in the first quarter of 2009, compared with operating income of $2.4 million in the year ago quarter.
The $9.8 million decrease in revenue resulted primarily from lower shipments of advanced communications systems, as orders received in the latter part of 2007 were fulfilled during 2008. Partially offsetting this was a near doubling of rechargeable product revenue as demand for rechargeable batteries and chargers rose. Consolidated gross margin for the first quarter was 20%, compared with 22% in the same quarter a year ago.
Operating expenses for the first quarter of 2009 totaled $10 million compared to $8.5 million a year ago. The $1.5 million increase in operating expenses was attributable to increases in product development costs, higher selling and marketing expenses related to the development of the standby power business, and generally higher administrative costs.
During the first quarter of 2009, borrowings under the company’s revolving credit facility increased $16.6 million. This resulted primarily from the acquisition of assets associated with the AMTI brand in March 2009 that required $5.7 million in cash, the repurchase of about 416,000 shares of the company’s common stock for $3.3 million under the company’s share repurchase program, and the pre-positioning of inventory for an anticipated order.
“Our fiscal year 2009 has started more slowly than we had planned,” stated John D. Kavazanjian, president and chief executive office of Ultralife. “First, the release of government/defense orders is taking longer than anticipated. Although funding for the related programs is in place, there have been government delays in finalizing the proper contract vehicles. However, in order to be responsive to anticipated customer needs, our inventory levels rose during the quarter to put us in a delivery-ready mode. Second, severe price competition by component suppliers has been putting pressure on the margins in our standby power business. To combat these short-term pricing dynamics, we are intensifying our efforts to market our system solutions, which bundle services and products, to customers and prospects. We believe that our value-added solutions approach, combined with our engineering and services capabilities and growing national footprint, creates a compelling advantage that will support long-term growth in the standby power market.”
Kavazanjian added, “Although we still expect orders for our advanced communications systems and rechargeable batteries and charging systems to be released against government/defense programs in 2009, our assumption is that administrative delays will cause implementation of these programs to be one quarter later than previously anticipated. In other areas of our business, our outlook for growth remains unchanged.”
Outlook:
As a result of the delays in government/defense programs, management has lowered its revenue guidance for 2009 from $250 million to about $230 million and reduced its operating income estimate from about $20 million to about $13 million.