NEWARK, N.Y., Feb. 03, 2022 (GLOBE NEWSWIRE) — Ultralife Corporation (NASDAQ: ULBI) reported an operating loss of $1.2 million on revenue of $23.8 million for the fourth quarter ended December 31, 2021. For the fourth quarter of 2020, the Company reported operating income of $1.2 million on revenue of $29.0 million. Included in the results for the fourth quarter of 2021 are the one-time acquisition costs and the operating results of Excell Battery Group (“Excell”), which the Company acquired on December 13, 2021.
“The supply chain challenges associated with the global pandemic persisted during the fourth quarter and weighed heavily on both revenue and earnings. While year-over-year revenues for government/defense and medical were most impacted by these challenges, we were encouraged by the rebound in oil & gas revenues, the performance of our China operations and the initial contribution of Excell. Order flow remained strong primarily in our medical and military end markets, and backlog at the end of the quarter increased to over $53 million representing a 35% increase over year-end 2020 for our core business and increasing to over $63 million representing a 61% increase bolstered by Excell. Despite the operating challenges, we continued to advance our transformational new product development projects and ended the year with a solid liquidity position even after the acquisition of Excell and paying off the remainder of our SWE acquisition debt,” said Michael D. Popielec, President and Chief Executive Officer. “As we look ahead, our backlog, durable customer relationships and new product initiatives anchor our view that our long-term profitable growth drivers and strategy are sound and achievable.”
Fourth Quarter 2021 Financial Results
Revenue was $23.8 million, a decrease of $5.2 million, or 18.0%, compared to $29.0 million for the fourth quarter of 2020. Overall, commercial sales increased 9.9% and government/defense sales decreased 50.5% from the 2020 period. Battery & Energy Products declined 12.7% to $22.1 million, compared to $25.3 million last year, with a 71.8% increase in oil & gas market sales, a 41.5% increase in lithium/thin cell batteries in our China operation and the initial sales contribution of Excell offset by a 48.9% decrease in government/defense sales and a 30.1% decrease in medical battery sales. Communications Systems sales decreased 54.6% to $1.7 million compared to $3.7 million for the same period last year. During the 2021 fourth quarter, increased lead times on components from suppliers and other COVID-19 related logistics matters resulted in delays in our shipments to future periods. We estimate that the delayed shipments adversely impacted revenue for the 2021 fourth quarter by approximately $5.4 million, with approximately $3.5 million and $1.9 million impacting Battery & Energy Products and Communications Systems, respectively. Conversely, the backlog exiting the fourth quarter of 2021 increased by approximately $11.3 million or 27% over the third quarter when excluding the Excell backlog.
Gross profit was $5.3 million, or 22.3% of revenue, compared to $7.4 million, or 25.4% of revenue, for the same quarter a year ago. Battery & Energy Products’ gross margin was 21.8%, compared to 25.2% last year, primarily due to lower factory volume, sales product mix and 55 basis point impact of non-cash purchase accounting adjustments related to the acquisition of Excell. Communications Systems gross margin was 28.1%, compared to 26.3% last year, primarily due to favorable sales product mix partially offset by lower factory volume.
Operating expenses were $6.5 million compared to $6.1 million last year, an increase of 6.2%, reflecting the addition of Excell, our continued investment in engineering resources for new product development, including resources dedicated to the Conformal Wear Battery IDIQ contract awarded in May 2021, and $0.4 million of non-recurring expenses related to the acquisition of Excell, partially offset by lower corporate expenses. Operating expenses were 27.4% of revenue compared to 21.2% of revenue for the year-earlier period.
Operating loss was $1.2 million compared to income of $1.2 million last year. We estimate that delayed shipments resulting from supply chain disruptions and other COVID-19 related logistics matters adversely impacted operating income for the 2021 fourth quarter by approximately $1.8 million. The operating loss for the fourth quarter of 2021 includes a total of $0.5 million of acquisition accounting adjustments and one-time expenses related to the acquisition of Excell.
Other expense was $0.1 million compared to other income of $1.6 million last year, primarily reflecting a $1.6 million gain realized during the fourth quarter of 2020 upon favorable resolution of Ultralife’s claim in a class action lawsuit.
Net loss was $1.1 million or $0.07 per diluted share on a GAAP basis, compared to net income of $2.1 million or $0.13 per diluted share for the fourth quarter of 2020. We estimate that delayed shipments resulting from supply chain disruptions and other COVID-19 related logistics matters adversely impacted EPS for the 2021 fourth quarter by approximately $0.09.
Fiscal Year 2021
For fiscal year 2021, Ultralife produced GAAP EPS of ($0.01), Adjusted EPS of ($0.02), and breakeven operating profit on revenue of $98.3 million compared to GAAP EPS of $0.33, Adjusted EPS of $0.41 and operating income of $5.7 million on revenue of $107.7 million.
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.
