Item 1.01 Entry into a Material Definitive Agreement.
On April 30, 2014, Ultralife Corporation (the "Company") and PNC Bank, National
Association ("PNC") entered into an amendment (the "Amendment") to the Revolving
Credit, Guaranty and Security Agreement (the "Credit Agreement") dated as of May
24, 2013, between the Company and PNC. The Amendment permits the Company to
commence a Share Repurchase Program (see Item 8.01 below) under which the
Company's Board of Directors has authorized the repurchase of up to 1.8 million
common shares through May 1, 2015. Repurchases of the Company's common shares
are permitted provided that (a) the Company is not in default under the Credit
Agreement, (b) the Company's undrawn availability under the Credit Agreement is
at least $6 million both prior to and immediately following the repurchase, (c)
the Company's undrawn availability under the Credit Agreement plus domestic
unrestricted cash is at least $8 million both prior to and immediately following
the repurchase, and (d) the Company uses its unrestricted cash for such
repurchases and does not request advances against the Credit Agreement for such
The Company plans to file a copy of the Amendment as an exhibit to its Form 10-Q
for the quarter ended March 30, 2014.
Item 2.02 Results of Operation and Financial Condition.
-May 1, 2014
-- Ultralife Corporation
(NASDAQ: ULBI) reported an
operating loss from continuing operations of $1.1 million
on revenue of $15.3
for the quarter ended March 30, 2014
. For the first quarter of 2013, the
company reported an operating profit from continuing operations of $0.4 million
on revenue of $21.0 million
Discontinued operations for the first quarters of 2014 and 2013 include the
final adjustments relating to the sale of RedBlack and the final settlement of
the company's obligation regarding its former UK
facility, respectively. All
revenue, gross margin and operating expense amounts presented below represent
results from continuing operations.
Revenue was $15.3 million
, compared to $21.0 million
for the first quarter of
2013, a 27% decline, reflecting an increase of $0.9 million
in Battery & Energy
Products sales offset by a $6.6 million
decrease in Communications Systems
sales. Battery & Energy Products sales were $13.9 million
, compared to $13.1
last year, a 7% increase, driven by new medical cart power systems and
international shipments. Communications Systems sales were $1.4 million
compared to $8.0 million
for the same period last year, a decrease of 83%,
reflecting continued slowness in closing new orders from the U.S. government.
Gross profit was $4.3 million
, or 28.4% of revenue, compared to $6.4 million
30.3% of revenue, for the same quarter a year ago. The 190 basis point decrease
is primarily attributable to the lower mix of Communications Systems
sales. Battery & Energy Products' gross margin was 27.3%, compared to 23.7% last
year, an increase of 360 basis points reflecting ongoing productivity
improvements and higher production volumes. Communications Systems' gross margin
was 39.2%, compared to 41.2%, a decrease of 200 basis points reflecting lower
volumes of amplifier shipments.
Operating expenses decreased by 9.5% to $5.4 million
, compared to $6.0 million
year ago, reflecting continued tight control over general and administrative
spending. Operating expenses were 35.5% of revenue, compared to 28.6% for the
year earlier period.
Despite the reduction in operating expenses, the lower gross profit resulted in
an operating loss of $1.1 million
for the quarter compared to operating income
of $0.4 million
As a result, the company reported a net loss from continuing operations of $1.2
, or $0.07
per share, compared to net income of $0.2 million
, or $0.01
per share, for the first quarter of 2013. Net loss from discontinued operations
was $0.1 million
, or $0.00
per share, compared to net income of $0.3 million
per share, for the first quarter of 2013.
For 2014, management still expects mid-single digit organic revenue growth,
despite continued constraints on global government spending. Based on this
outlook for revenue growth and the improvements made to the business model in
2013, management expects to increase operating profit year-over-year and
generate a mid-single digit operating margin.
Management cautions that the timing of orders and shipments may cause
variability in quarterly results.
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
not be deemed to be 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.
Item 8.01 Other Events.
Board of Directors has authorized the repurchase of up to 1.8
million shares of the company's common stock over the next twelve months. Share
repurchases, if any, will be made in accordance with SEC Rule 10b-18 using a
variety of methods, which may include open market purchases, privately
negotiated transactions or block trades, or any combination of such methods, in
accordance with applicable insider trading and other securities laws and
The timing and actual number of shares repurchased will depend on a variety of
factors including price, market conditions and applicable legal requirements.
The share repurchase program does not obligate the company to repurchase any
specific number of shares and may be suspended or terminated at any time without
Item 9.01 Financial Statements, Pro Forma Financials and Exhibits.
99.1 Press Release of Ultralife Corporation
dated May 1, 2014