Ultralife Batteries Inc. (ULBI, Financial) filed Quarterly Report for the period ended 2011-04-03.
Ultralife Corp. has a market cap of $68.3 million; its shares were traded at around $3.95 with a P/E ratio of 43.9 and P/S ratio of 0.4.
Consolidated revenues for the three-month period ended April 3, 2011 decreased by $7,763, or 20.2%, from the three-month period ended March 28, 2010. This decrease was primarily caused by decreased revenues in our Communications Systems segment due to delays in orders from the U.S. Department of Defense and the absence of orders for SATCOM units and a $2,730 reduction to revenues to reflect a proposed settlement with the U.S. government related to exigent contracts completed between 2003 and 2004. This decrease was partially offset by higher sales of chargers and commercial products from our China operation. Gross profit for the first quarter of 2011 was $3,530, or 11.5% of revenue, compared to $9,758, or 25.3% of revenue, for the same quarter a year ago, reflecting the decreased revenues in our Communications Systems segment, the $2,730 charge, unfavorable product mix and deterioration in the gross margin for the Energy Services segment. Also included in gross margin for the first quarter of 2011 was approximately $700 of costs related to exiting the Energy Services business, of which approximately $600 was non-cash. Excluding the $2,730 charge in 2011 and the Energy Services segment gross margin of $(1,008) and $(81) for the first quarters of 2011 and 2010, respectively, gross margin would have been 23.3% for the first quarter of 2011, compared to 27.0% for the same period last year. The reduction in gross margin was primarily caused by the completion of a low margin contract from 2009, manufacturing variances due to low U.S. government defense sales volume and the write-off of certain inventories.
In our Battery & Energy Products segment, the cost of products sold increased $2,119, from $19,088 during the three-month period ended March 28, 2010 to $21,207 during the three-month period ended April 3, 2011. Battery & Energy Products gross margin for the first quarter of 2011 was $3,041, or 12.5% of revenues, a decrease of $2,161 from gross margin of $5,202, or 21.4% of revenues, for the first quarter of 2010. Battery & Energy Products gross margin as a percentage of revenues decreased for the three-month period ended April 3, 2011, primarily as a result of the $2,730 charge to reflect a proposed settlement with the U.S. government regarding exigent contracts, the completion of a low margin contract from 2009, manufacturing variances due to low U.S. government defense sales volume and the write-off of certain inventories, in comparison to the three-month period ended March 28, 2010.
Operating Expenses. Total operating expenses for the three-month period ended April 3, 2011 totaled $9,331, an increase of $427 from $8,904 for the three-month period ended March 28, 2010. Overall, operating expenses as a percentage of revenues increased to 30.4% during the first quarter of 2011 from 23.1% reported in the first quarter of 2010, due to higher research and development expenses associated with an increase in new product development activity and the impact of lower revenues in the first quarter of 2011. Amortization expense associated with intangible assets related to our acquisitions was $157 for the first quarter of 2011 ($79 in selling, general and administrative expenses and $78 in research and development costs), compared with $495 for the first quarter of 2010 ($350 in selling, general, and administrative expenses and $145 in research and development costs). Research and development costs were $2,507 in the first quarter of 2011, an increase of $779, or 45.1%, from the $1,728 reported in the first quarter of 2010, due to an increase in new product development activity for the Battery & Energy Products and Communications Systems segments. Selling, general, and administrative expenses decreased $352, or 4.9%, to $6,824 during the first quarter of 2011 as compared to the first quarter of 2010. This decrease reflects lower sales commissions earned and a reduction in spending for our Energy Services segment as we exit the business.
We used $467 in cash for investing activities during the first three months of 2011 compared with $733 in cash used for investing activities in the same period in 2010. In the first three months of 2011, we spent $432 to purchase plant, property and equipment and $50 was used in connection with the contingent purchase price payout related to RPS Power Systems, Inc. (RPS). In addition, we received $15 in cash proceeds from dispositions of property, plant and equipment. In the first three months of 2010, we spent $164 to purchase plant, property and equipment, $447 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. In addition, we received $15 in cash proceeds from dispositions of property, plant and equipment.
During the three-month period ended April 3, 2011, we generated $1,665 in funds from financing activities compared to the use of $7,622 in funds in the same period of 2010. The financing activities in the first three months of 2011 included a $1,654 inflow from drawdowns on the revolver portion of our primary credit facility, used to purchase components for products that shipped in the second quarter of 2011, and $53 from stock option exercises, partially offset by an outflow of $42 for principal payments on debt and capital lease obligations. The financing activities in the first three months of 2010 included a $7,451 outflow from repayments on the revolver portion of our primary credit facilities, and an outflow of $171 for principal payments on debt and capital lease obligations.
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Ultralife Corp. has a market cap of $68.3 million; its shares were traded at around $3.95 with a P/E ratio of 43.9 and P/S ratio of 0.4.
Highlight of Business Operations:
In connection with the exit activities described above, we expect that we will record total restructuring charges of approximately $3,200. The restructuring charges include approximately $500 of employee-related costs, including termination benefits, approximately $500 of lease termination costs, approximately $950 of inventory and fixed asset write-downs and approximately $1,250 of other associated costs. During the first quarter of 2011, we incurred approximately $300 of employee-related costs, including termination benefits, and approximately $400 of inventory and fixed asset write-downs. The cash component of the aggregate charge is expected to be approximately $2,200.Consolidated revenues for the three-month period ended April 3, 2011 decreased by $7,763, or 20.2%, from the three-month period ended March 28, 2010. This decrease was primarily caused by decreased revenues in our Communications Systems segment due to delays in orders from the U.S. Department of Defense and the absence of orders for SATCOM units and a $2,730 reduction to revenues to reflect a proposed settlement with the U.S. government related to exigent contracts completed between 2003 and 2004. This decrease was partially offset by higher sales of chargers and commercial products from our China operation. Gross profit for the first quarter of 2011 was $3,530, or 11.5% of revenue, compared to $9,758, or 25.3% of revenue, for the same quarter a year ago, reflecting the decreased revenues in our Communications Systems segment, the $2,730 charge, unfavorable product mix and deterioration in the gross margin for the Energy Services segment. Also included in gross margin for the first quarter of 2011 was approximately $700 of costs related to exiting the Energy Services business, of which approximately $600 was non-cash. Excluding the $2,730 charge in 2011 and the Energy Services segment gross margin of $(1,008) and $(81) for the first quarters of 2011 and 2010, respectively, gross margin would have been 23.3% for the first quarter of 2011, compared to 27.0% for the same period last year. The reduction in gross margin was primarily caused by the completion of a low margin contract from 2009, manufacturing variances due to low U.S. government defense sales volume and the write-off of certain inventories.
In our Battery & Energy Products segment, the cost of products sold increased $2,119, from $19,088 during the three-month period ended March 28, 2010 to $21,207 during the three-month period ended April 3, 2011. Battery & Energy Products gross margin for the first quarter of 2011 was $3,041, or 12.5% of revenues, a decrease of $2,161 from gross margin of $5,202, or 21.4% of revenues, for the first quarter of 2010. Battery & Energy Products gross margin as a percentage of revenues decreased for the three-month period ended April 3, 2011, primarily as a result of the $2,730 charge to reflect a proposed settlement with the U.S. government regarding exigent contracts, the completion of a low margin contract from 2009, manufacturing variances due to low U.S. government defense sales volume and the write-off of certain inventories, in comparison to the three-month period ended March 28, 2010.
Operating Expenses. Total operating expenses for the three-month period ended April 3, 2011 totaled $9,331, an increase of $427 from $8,904 for the three-month period ended March 28, 2010. Overall, operating expenses as a percentage of revenues increased to 30.4% during the first quarter of 2011 from 23.1% reported in the first quarter of 2010, due to higher research and development expenses associated with an increase in new product development activity and the impact of lower revenues in the first quarter of 2011. Amortization expense associated with intangible assets related to our acquisitions was $157 for the first quarter of 2011 ($79 in selling, general and administrative expenses and $78 in research and development costs), compared with $495 for the first quarter of 2010 ($350 in selling, general, and administrative expenses and $145 in research and development costs). Research and development costs were $2,507 in the first quarter of 2011, an increase of $779, or 45.1%, from the $1,728 reported in the first quarter of 2010, due to an increase in new product development activity for the Battery & Energy Products and Communications Systems segments. Selling, general, and administrative expenses decreased $352, or 4.9%, to $6,824 during the first quarter of 2011 as compared to the first quarter of 2010. This decrease reflects lower sales commissions earned and a reduction in spending for our Energy Services segment as we exit the business.
We used $467 in cash for investing activities during the first three months of 2011 compared with $733 in cash used for investing activities in the same period in 2010. In the first three months of 2011, we spent $432 to purchase plant, property and equipment and $50 was used in connection with the contingent purchase price payout related to RPS Power Systems, Inc. (RPS). In addition, we received $15 in cash proceeds from dispositions of property, plant and equipment. In the first three months of 2010, we spent $164 to purchase plant, property and equipment, $447 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. In addition, we received $15 in cash proceeds from dispositions of property, plant and equipment.
During the three-month period ended April 3, 2011, we generated $1,665 in funds from financing activities compared to the use of $7,622 in funds in the same period of 2010. The financing activities in the first three months of 2011 included a $1,654 inflow from drawdowns on the revolver portion of our primary credit facility, used to purchase components for products that shipped in the second quarter of 2011, and $53 from stock option exercises, partially offset by an outflow of $42 for principal payments on debt and capital lease obligations. The financing activities in the first three months of 2010 included a $7,451 outflow from repayments on the revolver portion of our primary credit facilities, and an outflow of $171 for principal payments on debt and capital lease obligations.
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