8-K
Ultralife Corp (ULBI)
| UNITED STATES | ||
|---|---|---|
| SECURITIES AND EXCHANGE COMMISSION | ||
| Washington, D.C. 20549 | ||
| FORM 8-K | ||
| CURRENT REPORT<br><br> <br>Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | ||
| April 30 , 2020 | ||
| Date of Report (Date of Earliest Event Reported) | ||
| ULTRALIFE CORPORATION | ||
| (Exact name of registrant as specified in its charter) | ||
| Delaware | 000-20852 | 16-1387013 |
| (State of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| 2000 Technology Parkway, Newark, New York 14513 | ||
| (Address of principal executive offices) (Zip Code) | ||
| (315) 332-7100 | ||
| (Registrant’s telephone number, including area code) | ||
| None | ||
| (Former name or former address, if changed since last report) | ||
| Securities registered pursuant to Section 12(b) of the Act: | ||
| Common Stock, $0.10 par value per share | ULBI | NASDAQ |
| (Title of each class) | (Trading Symbol) | (Name of each exchange on which registered) |
| Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): | ||
| ☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||
| ☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||
| ☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||
| ☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))<br><br> <br><br><br> <br>Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934. Emerging Growth Company ☐<br><br> <br><br><br> <br>If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ |
Ite m 2.02 **** Results of Operations and Financial Condition
On April 30, 2020, Ultralife Corporation issued a press release regarding the financial results for its first quarter ended March 31, 2020. A copy of this press release is attached hereto as Exhibit 99.1 and is incorporated herein by this reference.
The information set forth in this Form 8-K and the attached exhibit is being furnished to and not filed with the Securities and Exchange Commission and shall not be deemed as incorporated by reference in any filing under the Securities Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended, except to the extent specifically provided in any such filing.
I tem 9.01 Financial Statements , Pro Forma Financials and Exhibits
(d) Exhibits.
| Exhibit<br><br> <br>Number | Exhibit Description |
|---|---|
| 99.1 | Press Release of Ultralife Corporation dated April 30, 2020 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: April 30, 2020 | ULTRALIFE Corporation | |
|---|---|---|
| By: | /s/ Philip A. Fain | |
| Philip A. Fain | ||
| Chief Financial Officer and Treasurer |
ex_183408.htm
Exhibit 99.1
****
Ultralife Corporation Reports F irst Quarter Results
NEWARK, N.Y. – April 30, 2020 -- Ultralife Corporation (NASDAQ: ULBI) **** reported operating income of $1.5 million on revenue of $25.8 million for the first quarter ended March 31, 2020 compared to operating income of $0.5 million on revenue of $18.9 million for the first quarter of 2019.
“Ultralife posted strong results for the first quarter, delivering a leveraged operating profit of $1.5 million, up 171% over last year, on a 37% increase in revenue while contending with COVID-19 impacts including a month-long shutdown in China and supply chain disruptions,” said Michael D. Popielec, President and Chief Executive Officer. “As an essential supplier, while ensuring the health and safety of our employees by implementing the protocols established by state and federal public health officials, we are striving to ensure an uninterrupted flow of our mission critical products serving medical device, first responder, public safety, energy and national security customers. We are also investing approximately $1 million in the second quarter for additional test equipment to meet the increased demand for our power supplies for ventilators, respirators and infusion pumps.”
Concluded Mr. Popielec, “With a backlog increasing approximately 20% over year-end 2019, ample liquidity, end-market diversity and tight control over discretionary spending, we are well positioned to both sustain operations and continue investing in growth initiatives.”
First Quarter 20 20 Financial Results
Revenue was $25.8 million, an increase of $6.9 million, or 36.7%, compared to $18.9 million for the first quarter of 2019 reflecting the addition of Southwest Electronic Energy Corporation (“SWE”) and higher Communications Systems sales. Overall, commercial sales increased 47.9% while government/defense sales increased 24.1% from the 2019 period. Battery & Energy Products revenues were $20.8 million, compared to $16.0 million last year, primarily reflecting the SWE acquisition. Communications Systems sales grew 75.2% to $5.1 million compared to $2.9 million for the same period last year primarily reflecting shipments of vehicle amplifier-adaptor systems to support the U.S. Army’s Network Modernization initiatives under the delivery orders announced in October 2018.
Gross profit was $7.3 million, or 28.4% of revenue, compared to $5.1 million, or 26.9% of revenue, for the same quarter a year ago. Battery & Energy Products’ gross margin was 25.6%, compared to 27.6% last year, reflecting a February government mandated shutdown of our China operation in response to the COVID-19. Communications Systems gross margin was 39.9%, compared to 23.4% last year, due to the transition of vehicle amplifier-adaptor systems for the U.S. Army to higher volume production as well as sales mix.
Operating expenses were $5.9 million compared to $4.5 million last year reflecting the addition of SWE and an 11.8% increase in engineering and technology expenses for new product development and testing. Operating expenses were 22.7% of revenue compared to 24.0% of revenue for the year-earlier period, an improvement of 130 basis points.
Operating income was $1.5 million compared to $0.5 million last year, and operating margin was 5.7% compared to 2.9% last year.
Net income was $1.1 million or $0.07 per diluted share using the U.S. statutory tax rate, compared to net income of $.4 million, or $0.03 per diluted share, for the first quarter of 2019, a 151.3% increase. Adjusted EPS was $0.08 on a diluted basis for the first quarter of 2020, representing a 212.4% increase over the 2019 period. Adjusted EPS excludes the provision for deferred income taxes which primarily represents non-cash charges of approximately $0.2 million for U.S. taxes which will be fully offset by net operating loss carryforwards and other tax credits for the foreseeable future.
Adjusted EBITDA, defined as EBITDA including non-cash, stock-based compensation expense, was $2.5 million for the first quarter of 2020, an increase of 109.5% over the year-earlier period. Adjusted EBITDA margin was 9.8% compared to 6.4% for the first quarter of 2019. For the trailing twelve-month period, Adjusted EBITDA was $12.3 million or 10.8% of revenues.
See the “Non-GAAP Financial Measures” section of this release for a reconciliation of Adjusted EPS to EPS and Adjusted EBITDA to Net Income Attributable to Ultralife Corporation.
About Ultralife Corporation
Ultralife Corporation serves its markets with products and services ranging from power solutions to communications and electronics systems. Through its engineering and collaborative approach to problem solving, Ultralife serves government, defense and commercial customers across the globe.
Headquartered in Newark, New York, the Company's business segments include Battery & Energy Products and Communications Systems. Ultralife has operations in North America, Europe and Asia. For more information, visit www.ultralifecorporation.com.
Conference Call Information
Ultralife will hold its first quarter earnings conference call today at 8:30 AM ET. To participate in the live call, please dial (800) 915-4836 at least ten minutes before the scheduled start time, identify yourself and ask for the Ultralife call. A live webcast of the conference call will be available to investors in the Events & Presentations section of the Company's website at http://investor.ultralifecorporation.com. For those who cannot listen to the live broadcast, a replay of the webcast will be available shortly after the call at the same location.
This press release may contain forward-looking statements based on current expectations that involve a number of risks and uncertainties. The potential risks and uncertainties that could cause actual results to differ materially include potential reductions in revenues from key customers, acceptance of our new products on a global basis and uncertain global economic conditions. The Company cautions investors not to place undue reliance on forward-looking statements, which reflect the Company's analysis only as of today's date. The Company undertakes no obligation to publicly update forward-looking statements to reflect subsequent events or circumstances. Further information on these factors and other factors that could affect Ultralife’s financial results is included in Ultralife’s Securities and Exchange Commission (SEC) filings, including the latest Annual Report on Form 10-K.
| ULTRALIFE CORPORATION AND SUBSIDIARIES | ||||||
|---|---|---|---|---|---|---|
| CONSOLIDATED BALANCE SHEETS<br><br> <br>(Dollars in Thousands) | ||||||
| (U naudited) | ||||||
| ASSETS | ||||||
| --- | --- | --- | --- | --- | --- | --- |
| March 31,<br><br> <br>2020 | December 31,<br><br> <br>2019 | |||||
| Current Assets: | ||||||
| Cash | $ | 6,109 | $ | 7,405 | ||
| Trade Accounts Receivable, Net | 35,750 | 30,106 | ||||
| Inventories, Net | 28,979 | 29,759 | ||||
| Prepaid Expenses and Other Current Assets | 2,730 | 3,103 | ||||
| Total Current Assets | 73,568 | 70,373 | ||||
| Property, Equipment and Improvements, Net | 22,039 | 22,525 | ||||
| Goodwill | 26,468 | 26,753 | ||||
| Other Intangible Assets, Net | 9,405 | 9,721 | ||||
| Deferred Income Taxes, Net | 12,887 | 13,222 | ||||
| Other Non-Current Assets | 1,783 | 1,963 | ||||
| Total Assets | $ | 146,150 | $ | 144,557 | ||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
| Current Liabilities: | ||||||
| Accounts Payable | $ | 11,731 | $ | 9,388 | ||
| Current Portion of Long-Term Debt | 1,467 | 1,372 | ||||
| Accrued Compensation and Related Benefits | 1,597 | 1,655 | ||||
| Accrued Expenses and Other Current Liabilities | 4,133 | 4,775 | ||||
| Total Current Liabilities | 18,928 | 17,190 | ||||
| Long-Term Debt | 15,354 | 15,780 | ||||
| Deferred Income Taxes | 496 | 559 | ||||
| Other Non-Current Liabilities | 1,103 | 1,278 | ||||
| Total Liabilities | 35,881 | 34,807 | ||||
| Shareholders' Equity: | ||||||
| Common Stock | 2,028 | 2,026 | ||||
| Capital in Excess of Par Value | 184,550 | 184,292 | ||||
| Accumulated Deficit | (51,771 | ) | (52,830 | ) | ||
| Accumulated Other Comprehensive Loss | (3,338 | ) | (2,531 | ) | ||
| Treasury Stock | (21,239 | ) | (21,231 | ) | ||
| Total Ultralife Equity | 110,230 | 109,726 | ||||
| Non-Controlling Interest | 39 | 24 | ||||
| Total Shareholders’ Equity | 110,269 | 109,750 | ||||
| Total Liabilities and Shareholders' Equity | $ | 146,150 | $ | 144,557 |
| ULTRALIFE CORPORATION AND SUBSIDIARIES | ||||||
|---|---|---|---|---|---|---|
| CONSOLIDATED STATEMENTS OF INCOME<br><br> <br>(In Thousands Except Per Share Amounts) | ||||||
| (Unaudited) | ||||||
| Three-Month Period Ended | ||||||
| --- | --- | --- | --- | --- | --- | --- |
| March 31, | March 31, | |||||
| 2020 | 2019 | |||||
| Revenues: | **** | **** | **** | **** | **** | **** |
| Battery & Energy Products | $ | 20,761 | $ | 15,998 | ||
| Communications Systems | 5,053 | 2,884 | ||||
| Total Revenues | 25,814 | 18,882 | ||||
| Cost of Products Sold: | **** | **** | **** | **** | **** | **** |
| Battery & Energy Products | 15,445 | 11,588 | ||||
| Communications Systems | 3,035 | 2,210 | ||||
| Total Cost of Products Sold | 18,480 | 13,798 | ||||
| Gross Profit | 7,334 | 5,084 | ||||
| Operating Expenses: | **** | **** | **** | **** | **** | **** |
| Research and Development | 1,548 | 1,036 | ||||
| Selling, General and Administrative | 4,301 | 3,500 | ||||
| Total Operating Expenses | 5,849 | 4,536 | ||||
| Operating Income | 1,485 | 548 | ||||
| Other Expense | (92 | ) | (58 | ) | ||
| Income Before Income Tax Provision | 1,393 | 490 | ||||
| Income Tax Provision | (319 | ) | (41 | ) | ||
| Net Income | 1,074 | 449 | ||||
| Net Income Attributable to Non-Controlling Interest | (15 | ) | (24 | ) | ||
| Net Income Attributable to Ultralife Corporation | $ | 1,059 | $ | 425 | ||
| Net Income Per Share Attributable to Ultralife Common Shareholders – Basic | $ | 0.07 | $ | 0.03 | ||
| Net Income Per Share Attributable to Ultralife Common Shareholders – Diluted | $ | 0.07 | $ | 0.03 | ||
| Weighted Average Shares Outstanding – Basic | 15,875 | 15,740 | ||||
| Weighted Average Shares Outstanding – Diluted | 16,087 | 16,225 |
Non-GAAP Financial Measure s:
Adjusted Earnings Per Share
In evaluating our business, we consider and use Adjusted EPS, a non-GAAP financial measure, as a supplemental measure of our business performance in addition to U.S. GAAP financial measures. We define Adjusted EPS as net income attributable to Ultralife Corporation excluding the provision for deferred taxes divided by our weighted average shares outstanding on both a basic and diluted basis. We believe that this information is useful in providing period-to-period comparisons of our results by reflecting the portion of our tax provision that will be offset by our U.S. net operating loss carryforwards and other tax credits for the foreseeable future. We reconcile Adjusted EPS to EPS, the most comparable financial measure under U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). Neither current nor potential investors in our securities should rely on Adjusted EPS as a substitute for any GAAP measures and we encourage investors to review the following reconciliation of Adjusted EPS to EPS and net income attributable to Ultralife Corporation.
| ULTRALIFE CORPORATION AND SUBSIDIARIES | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CALCULATION OF ADJUSTED EPS | |||||||||||||
| (In Thousands Except Per Share Amounts) | |||||||||||||
| (Unaudited) | |||||||||||||
| Three-Month Period Ended | |||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| March 31, 2020 | March 31, 2019 | ||||||||||||
| Amount | Per Basic Share | Per Diluted Share | Amount | Per Basic Share | Per Diluted Share | ||||||||
| Net Income Attributable to Ultralife Corporation | $ | 1,059 | $ | .07 | $ | .07 | $ | 425 | $ | 0.03 | $ | 0.03 | |
| Deferred Tax Provision | 242 | .01 | .01 | (5 | ) | - | - | ||||||
| Adjusted Net Income | $ | 1,301 | $ | .08 | $ | .08 | $ | 420 | $ | .03 | $ | .03 | |
| Weighted Average Shares Outstanding | 15,875 | 16,087 | 15,740 | 16,225 |
Adjusted EBITDA
In evaluating our business, we consider and use Adjusted EBITDA, a non-GAAP financial measure, as a supplemental measure of our operating performance in addition to U.S. GAAP financial measures. We define Adjusted EBITDA as net income attributable to Ultralife Corporation before net interest expense, provision (benefit) for income taxes, depreciation and amortization, and stock-based compensation expense, plus/minus expense/income that we do not consider reflective of our ongoing continuing operations. We reconcile Adjusted EBITDA to net income attributable to Ultralife Corporation, the most comparable financial measure under U.S. GAAP. Neither current nor potential investors in our securities should rely on Adjusted EBITDA as a substitute for any GAAP measures and we encourage investors to review the following reconciliation of Adjusted EBITDA to net income attributable to Ultralife Corporation.
| ULTRALIFE CORPORATION AND SUBSIDIARIES | ||||
|---|---|---|---|---|
| CALCULATION OF ADJUSTED EBITDA | ||||
| (Dollars in Thousands) | ||||
| (Unaudited) | ||||
| Three-Month Period Ended | ||||
| --- | --- | --- | --- | --- |
| March 31,<br><br> <br>2020 | March 31,<br><br> <br>2019 | |||
| Net Income Attributable to Ultralife Corporation | $ | 1,059 | $ | 425 |
| Adjustments: | ||||
| Interest and Financing Expense, Net | 174 | 5 | ||
| Income Tax Provision | 319 | 41 | ||
| Depreciation Expense | 579 | 447 | ||
| Amortization of Intangible Assets and Financing Fees | 161 | 101 | ||
| Stock-Based Compensation Expense | 230 | 185 | ||
| Adjusted EBITDA | $ | 2,522 | $ | 1,204 |
| Company Contact: |
|---|
| Ultralife Corporation |
| Philip A. Fain |
| (315) 210-6110 |
| [email protected] |
| Investor Relations Contact: |
| LHA |
| Jody Burfening |
| (212) 838-3777 |