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Ultralife Batteries Inc. Reports Operating Results (10-Q)

August 04, 2010 | About:
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10qk

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Ultralife Batteries Inc. (ULBI) filed Quarterly Report for the period ended 2010-06-27.

Ultralife Batteries Inc. has a market cap of $80.8 million; its shares were traded at around $4.75 with a P/E ratio of 158.3 and P/S ratio of 0.5.

Highlight of Business Operations:

Operating Expenses. Total operating expenses for the three-month period ended June 27, 2010 totaled $9,009, a decrease of $4,096 from $13,105 for the three-month period ended June 28, 2009. Overall, operating expenses as a percentage of sales decreased to 24.3% during the second quarter of 2010 from 33.1% reported in the second quarter of 2009, due to the across the board cost reduction and consolidation actions we commenced in the latter half of 2009 which have now been realized. These actions more than offset the increased expenses we have incurred from our acquisitions of US Energy in November 2008 and AMTI in March 2009. In addition, operating expenses for the second quarter of 2009 included approximately $1,200 of non-recurring items associated with staff reductions and legal expenses relating to a litigation matter that was successfully resolved. Amortization expense associated with intangible assets related to our acquisitions was $378 for the second quarter of 2010 ($263 in selling, general and administrative expenses and $115 in research and development costs), compared with $466 for the second quarter of 2009 ($318 in selling, general, and administrative expenses and $148 in research and development costs). Research and development costs were $1,903 in the second quarter of 2010, a decrease of $611, or 24.3%, from the $2,514 reported in the second quarter of 2009, due to the timing of development projects relating primarily to advanced battery systems. Selling, general, and administrative expenses decreased $3,485, or 32.9%, to $7,106 during the second quarter of 2010 as compared to the second quarter of 2009. This decrease represents the results of our broad actions to reduce our overall spending base in non-revenue producing functions, along with the impact of the 2009 non-recurring items mentioned above.

Other Income (Expense). Other income (expense) totaled ($343) for the second quarter of 2010, compared to ($558) for the second quarter of 2009. Interest expense, net of interest income, decreased $126, to $223 for the second quarter of 2010 from $349 for the comparable period in 2009, mainly as a result of lower average borrowings under our revolving credit facilities. Miscellaneous income/expense amounted to expense of $120 for the second quarter of 2010 compared with expense of $209 for the second quarter of 2009. The expense in the second quarter of 2010 and 2009 was primarily due to transactions impacted by changes in foreign currencies relative to the U.S. dollar.

Operating Expenses. Total operating expenses for the six-month period ended June 27, 2010 totaled $17,913, a decrease of $5,230 from the prior years $23,143. Overall, operating expenses as a percentage of sales decreased to 23.7% during the first six months of 2010 from 29.1% reported in the first six months of 2009, due to the across the board cost reduction and consolidation actions we commenced in the latter half of 2009 which have now been realized. These actions more than offset the increased expenses we have incurred from our acquisitions of US Energy in November 2008 and AMTI in March 2009. Amortization expense associated with intangible assets related to our acquisitions was $873 for the first six months of 2010 ($613 in selling, general and administrative expenses and $260 in research and development costs), compared with $807 for the first six months of 2009 ($549 in selling, general, and administrative expenses and $258 in research and development costs). Research and development costs were $3,631 in the first six months of 2010, a decrease of $863, or 19.2%, from the $4,494 reported in the first six months of 2009, due to the timing of development projects relating primarily to advanced battery systems. Selling, general, and administrative expenses decreased $4,367, or 23.4%, to $14,282 during the first six months of 2010 as compared to the first six months of 2009. This decrease represents the results of our broad actions to reduce our overall spending base in non-revenue producing functions, as well as approximately $1,200 of non-recurring expenses that were recorded in the second quarter of 2009 associated with staff reductions and legal expenses relating to a litigation matter that was successfully resolved.

Other Income (Expense). Other income (expense) totaled ($796) for the first six months of 2010, compared to ($726) for the first six months of 2009. Interest expense, net of interest income, increased $189, to $717 for the first six months of 2010 from $528 for the comparable period in 2009, mainly as a result of expenses related to the termination of our previous credit facility with JP Morgan Chase Bank, N.A. and Manufacturers and Traders Trust Company earlier this year, partially offset by lower average borrowings under our revolving credit facilities. Miscellaneous income/expense amounted to expense of $79 for the first six months of 2010 compared with expense of $198 for the first six months of 2009. The expense in the first six months of 2010 and 2009 was primarily due to transactions impacted by changes in foreign currencies relative to the U.S. dollar.

We used $680 in cash for investing activities during the first six months of 2010 compared with $8,016 in cash used for investing activities in the same period in 2009. In the first six months of 2010, we spent $554 to purchase plant, property and equipment, $452 was used to establish a restricted cash fund in connection with our U.K. operations, and $137 was used in connection with the contingent purchase price payout related to RPS Power Systems, Inc. (RPS). In addition, we received $463 in cash proceeds from dispositions of property, plant and equipment. In the first six months of 2009, we spent $1,253 to purchase plant, property and equipment, and $6,763 was used in connection with the acquisition of AMTI, as well as contingent purchase price payouts related to RedBlack and RPS.

During the six-month period ended June 27, 2010, we used $6,482 in funds from financing activities compared to the generation of $20,443 in funds in the same period of 2009. The financing activities in the first six months of 2010 included a $6,240 outflow from repayments on the revolver portion of our primary credit facilities, and an outflow of $242 for principal payments on debt and capital lease obligations. The financing activities in the first six months of 2009 included a $23,900 inflow from drawdowns on the revolver portion of our primary credit facility, an inflow of $751 for proceeds from the issuance of debt, and an inflow of cash from stock option and warrant exercises of $310, offset by an outflow of $1,192 for principal payments on term debt under our primary credit facility and capital lease obligations, and an outflow of $3,326 for the purchase of treasury shares related to our share repurchase program.

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