________________ incorporation or organization) (I.R.S. Employer Identification No.) Yes..X… No….. Yes..X… No….. shares. Condensed Consolidated Balance Sheets - Item Current assets: Cash and cash equivalents Restricted cash Trade accounts receivable (less allowance for doubtful accounts of $664 at April 1, 2012 and $683 at December 31, 2011) Inventories Due from insurance company Deferred tax asset - current Income taxes receivable Prepaid expenses and other current assets Total current assets Property, plant and equipment, net Other assets: Goodwill Intangible assets, net Security deposits and other long-term assets Total Assets Current liabilities: Current portion of debt Accounts payable Income taxes payable Deferred tax liability - current Other current liabilities Total current liabilities Long-term liabilities: Deferred tax liability - long-term Other long-term liabilities Total long-term liabilities Commitments and contingencies (Note 10) Shareholders’ equity: Ultralife equity: Preferred stock, par value $0.10 per share, authorized 1,000,000 shares; none issued and outstanding Common stock, par value $0.10 per share, authorized 40,000,000 shares; issued - 18,757,192 at April 1, 2012 and 18,716,921 at December 31, 2011 Capital in excess of par value Accumulated other comprehensive loss Accumulated deficit Less - Treasury stock, at cost - 1,372,757 shares at April 1, 2012 and 1,372,757 shares at December 31, 2011 outstanding Total Ultralife equity Noncontrolling interest Total shareholders’ equity Total Liabilities and Shareholders’ Equity Revenues Cost of products sold Gross profit Operating expenses: Research and development (including $65 and $78, respectively, of amortization of intangible assets) Selling, general, and administrative (including $60 and $79, respectively, of amortization of intangible assets) Total operating expenses Operating income (loss) Other income (expense): Interest income Interest expense Miscellaneous Income (loss) from continuing operations before income taxes Income tax provision-current Income tax provision-deferred Total income taxes provision Net income (loss) from continuing operations Discontinued operations: Income (loss) from discontinued operations, net of tax Net income (loss) Net (income) loss attributable to noncontrolling interest Net income (loss) attributable to Ultralife Other comprehensive income (loss): Foreign currency translation adjustments Comprehensive income (loss) attributable to Ultralife Net income (loss) attributable to Ultralife common shareholders - basic Continuing operations Discontinued operations Total Net income (loss) attributable to Ultralife common shareholders - diluted Continuing operations Discontinued operations Total Weighted average shares outstanding - basic Weighted average shares outstanding - diluted OPERATING ACTIVITIES Net income (loss) Loss from discontinued operations, net of tax Adjustments to reconcile net income (loss) from continuing operations to net cash provided from operating activities: Depreciation and amortization of financing fees Amortization of intangible assets (Gain) loss on long-lived asset disposal and write-offs Foreign exchange gain Non-cash stock-based compensation Changes in deferred income taxes Changes in operating assets and liabilities: Accounts receivable Inventories Income taxes receivable Prepaid expenses and other current assets Income taxes payable Accounts payable and other liabilities Net cash provided from (used in) operating activities from continuing operations Net cash provided from operating activities from discontinued operations Net cash provided from (used in) operating activities INVESTING ACTIVITIES Purchase of property and equipment Payments for acquired companies, net of cash acquired Net cash used in investing activities from continuing operations Net cash provided from investing activities from discontinued operations Net cash used in investing activities FINANCING ACTIVITIES Net change in revolving credit facility Proceeds from issuance of common stock Principal payments on debt and capital lease obligations Net cash provided from financing activities from continuing operations Net cash used in financing activities from discontinued operations Net cash provided from financing activities Effect of exchange rate changes on cash Change in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period SUPPLEMENTAL CASH FLOW INFORMATION Cash paid for income taxes Cash paid for interest Net sales Loss from discontinued operations Provision for income taxes Loss from discontinued operations, net of tax Net sales Loss from discontinued operations Provision for income taxes Loss from discontinued operations, net of tax Inventory and fixed asset write-downs Employee related, including termination benefits Lease termination costs Other costs Total Exit Costs Cash Component Raw materials Work in process Finished goods Land Buildings and leasehold improvements Machinery and equipment Furniture and fixtures Computer hardware and software Construction in progress Less: Accumulated depreciation to September 30, 2012. Based upon the results of that review, we have determined that no impairment was necessary for either goodwill or the indefinite-lived intangible assets. Balance at December 31, 2010 Effect of foreign currency translations Balance at April 3, 2011 Effect of foreign currency translations Balance at December 31, 2011 Effect of foreign currency translations Balance at April 1, 2012 Trademarks Patents and technology Customer relationships Distributor relationships Non-compete agreements Total intangible assets Trademarks Patents and technology Customer relationships Distributor relationships Non-compete agreements Total intangible assets translations and the disposition of fully amortized intangible assets in conjunction with our sale of RedBlack Communications. Excess Availability Risk-free interest rate Volatility factor Dividends Weighted average expected life (years) September 30, 2012. Number of Shares Weighted Per Share Shares under option at January 1, 2012 Options granted Options exercised Options forfeited Options expired Shares under option at April 1, 2012 Vested and expected to vest as of April 1, 2012 Options exercisable at April 1, 2012 $29. Unvested at December 31, 2011 Granted Vested Forfeited Unvested at April 1, 2012 periods. April 1, 2012 April 3, 2011 Income (Loss) from continuing operations before Incomes Taxes (a) Total Income Tax Provision (b) Effective Tax Rate (b/a) April 1, 2012 April 3, 2011 Balance at beginning of the period Increases related to current year tax positions Increases related to prior year tax positions Decreases related to prior year tax positions Expiration of statute of limitations for assessment of taxes Settlements Balance at end of the period Net Income (Loss) from continuing operations attributable to Ultralife Net Income (Loss) from continuing operations attributable to participating securities (unvested restricted stock awards) (-0- and -0- shares, respectively) Net Income (Loss) from continuing operations attributable to Ultralife common shareholders (a) Effect of Dilutive Securities Net Income (Loss) from continuing operations attributable to Ultralife common shareholders - Adjusted (b) Net Income (Loss) from discontinued operations attributable to Ultralife common shareholders (c) Effect of Dilutive Securities Net Income (Loss) from discontinued operations attributable to Ultralife common shareholders - Adjusted (d) Average Common Shares Outstanding – Basic (e) Effect of Dilutive Securities: Stock Options / Warrants Convertible Notes Payable Average Common Shares Outstanding – Diluted (f) EPS – Basic (a/e) - continuing operations EPS – Basic (c/e) - discontinued operations EPS – Diluted (b/f) - continuing operations EPS – Diluted (d/f) - discontinued operations The dilutive effect of -0- and 259,552 outstanding stock options, warrants and restricted stock awards were included in the dilution computation for the three-month periods ended September 30, 2012 and October 2, 2011, respectively. Balance at December 31, 2011 Accruals for warranties issued Settlements made Balance at April 1, 2012 Arista. plaintiff abandoning all other claims against us. Revenues Segment contribution Interest expense, net Miscellaneous Income taxes-current Income taxes-deferred Loss from discontinued operations Noncontrolling interest Net loss attributable to Ultralife Total assets Revenues Segment contribution Interest expense, net Miscellaneous Income taxes-current Income taxes-deferred Loss from discontinued operations Noncontrolling interest Net income attributable to Ultralife Total assets and increased efficiency. Certain items included within income from discontinued operations are based upon management’s best estimates as of the date of sale and may change should our estimates be different from our actual experience. second quarter. average selling price of the newly designed 9-volt product, scrap and productivity improvements in our manufacturing operations, as well as favorable sales mix in both our business segments. of 230 basis points. operations and diligent working capital management. loss. products. primarily attributable to scrap reductions and productivity improvements, as well as improved 9-volt margins and favorable sales mix. revenues, excluding the 2011 inventory charge, decreased 230 basis points because of the higher proportion of amplifier sales in 2011. expenses. Income before Incomes Taxes (a) Total Income Tax Provision (b) Effective Tax Rate (b/a) Net income (loss) attributable to Ultralife Add: interest expense, net Add: income tax provision Add: depreciation and amortization of financing fees Add: amortization of intangible assets Add: stock-based compensation expense Add (Less): loss (gain) from discontinued operations Adjusted EBITDA The significant change year over year is a result of the significant change from Accounts Receivable and the changes in cash attributable to the operating activities of our discontinued operations. the prior year. obligations, partially offset by an inflow of $57 from stock option exercises. The decrease in this metric is mainly due to the overall decrease in sales volume in 2012. our Credit Facilities (as defined below). Excess AvailabilityxQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934April 1,September 30, 2012¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Number Number: 000-20852Delaware 16-1387013 Delaware16-1387013(Zip (Zip Code)Yes x No ¨Yes x No ¨Large accelerated filer¨Accelerated filerxNon-accelerated filer¨Smaller reporting company¨Yes No..X...¨At October 25, 2012, there were 17,430,219 No xIndicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.Common stock, $.10$0.10 par value – 17,388,435 shares of common stock outstanding, net of 1,372,757 treasury shares, as of April 29, 2012.Page PART I FINANCIAL INFORMATION PART I FINANCIAL INFORMATION Item 1.April 1,September 30, 2012 (Unaudited) and December 31, 2011 3 4 5 6 6 23 32 32 PART II OTHER INFORMATION 33 Item 6.Exhibits 34 Signatures3536Financial StatementsULTRALIFE CORPORATION1. Financial StatementsCONDENSED CONSOLIDATED BALANCE SHEETS(Dollars in Thousands, Except Per Share Amounts) (Unaudited)
April 1,
2012 December 31,
2011 ASSETS $ 4,136 $ 5,320 171 166 18,469 19,903 31,788 34,967 1,746 1,730 161 161 189 220 1,916 1,766 58,576 64,233 12,200 12,588 18,378 18,356 5,412 5,533 98 105 23,888 23,994 $ 94,664 $ 100,815 LIABILITIES AND SHAREHOLDERS’ EQUITY $ 19 $ — 8,994 13,766 11 11 145 187 8,753 9,194 17,922 23,158 4,237 4,170 193 261 4,430 4,431 — — 1,878 1,874 172,745 172,309 (837 ) (985 ) (93,782 ) (92,280 ) 80,004 80,918 7,658 7,658 72,346 73,260 (34 ) (34 ) 72,312 73,226 $ 94,664 $ 100,815 ULTRALIFE CORPORATION (Dollars in Thousands, Except Per Share Amounts) ASSETS Current assets: Cash and cash equivalents $ 4,959 $ 5,320 Restricted cash 412 166 20,254 19,903 Inventories 33,092 34,967 Due from insurance company 721 1,730 Deferred tax asset - current 155 161 Income taxes receivable 117 220 Prepaid expenses and other current assets 1,645 1,766 Total current assets 61,355 64,233 Property, plant and equipment, net 12,375 12,588 Other assets: Goodwill 16,337 18,356 Intangible assets, net 5,164 5,533 Security deposits and other long-term assets 98 105 21,599 23,994 Total Assets $ 95,329 $ 100,815 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of debt $ - $ - Accounts payable 11,930 13,766 Income taxes payable 2 11 Deferred tax liability - current 73 187 Other current liabilities 7,654 9,194 Total current liabilities 19,659 23,158 Long-term liabilities: Deferred tax liability - long-term 4,156 4,170 Other long-term liabilities 275 261 Total long-term liabilities 4,431 4,431 Commitments and contingencies (Note 10) Shareholders' equity: Ultralife equity: - - 1,883 1,874 Capital in excess of par value 173,416 172,309 Accumulated other comprehensive loss (1,066 ) (985 ) Accumulated deficit (95,271 ) (92,280 ) 78,962 80,918 7,658 7,658 Total Ultralife equity 71,304 73,260 Noncontrolling interest (65 ) (34 ) Total shareholders' equity 71,239 73,226 Total Liabilities and Shareholders' Equity $ 95,329 $ 100,815 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)(In Thousands, Except Per Share Amounts)(unaudited) Three-Month Periods Ended April 1,
2012 April 3,
2011 $ 27,501 $ 27,915 20,908 23,501 6,593 4,414 2,139 2,505 5,743 5,845 7,882 8,350 (1,289 ) (3,936 ) 1 1 (104 ) (156 ) 52 299 (1,340 ) (3,792 ) 79 4 12 54 91 58 (1,431 ) (3,850 ) (71 ) (1,853 ) (1,502 ) (5,703 ) — 13 $ (1,502 ) $ (5,690 ) 148 227 $ (1,354 ) $ (5,463 ) $ (0.08 ) $ (0.22 ) $ (0.01 ) $ (0.11 ) $ (0.09 ) $ (0.33 ) $ (0.08 ) $ (0.22 ) $ (0.01 ) $ (0.11 ) $ (0.09 ) $ (0.33 ) 17,358 17,276 17,358 17,276 ULTRALIFE CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In Thousands, Except Per Share Amounts) (unaudited) Three-Month Periods Ended Nine-Month Periods Ended September 30 October 2, September 30 October 2, 2012 2011 2012 2011 Revenues $ 26,181 $ 35,204 $ 72,388 $ 106,231 Cost of products sold 17,962 25,844 53,109 80,897 Gross profit 8,219 9,360 19,279 25,334 Operating expenses: 1,596 2,294 5,706 6,913 4,869 5,521 16,041 17,775 Total operating expenses 6,465 7,815 21,747 24,688 Operating income (loss) 1,754 1,545 (2,468 ) 646 Other income (expense): Interest income 1 2 4 4 Interest expense (97 ) (126 ) (316 ) (444 ) Miscellaneous (15 ) 49 17 339 Income (loss) from continuing operations before income taxes 1,643 1,470 (2,763 ) 545 Income tax provision-current 120 67 387 134 Income tax provision - deferred 55 55 50 164 Total income taxes provision 175 122 437 298 Net income (loss) from continuing operations 1,468 1,348 (3,200 ) 247 Discontinued operations: Income (loss) from discontinued operations, net of tax 200 4 178 (4,174 ) Net income (loss) 1,668 1,352 (3,022 ) (3,927 ) Net loss attributable to noncontrolling interest 11 11 31 39 Net income (loss) attributable to Ultralife $ 1,679 $ 1,363 $ (2,991 ) $ (3,888 ) Other comprehensive income (loss): Foreign currency translation adjustments (204 ) (19 ) (81 ) 268 Comprehensive income (loss) attributable to Ultralife $ 1,475 $ 1,344 $ (3,072 ) $ (3,620 ) Net income (loss) attributable to Ultralife common shareholders - basic Continuing operations $ 0.09 $ 0.08 $ (0.18 ) $ 0.02 Discontinued operations $ 0.01 $ 0.00 $ 0.01 $ (0.24 ) Total $ 0.10 $ 0.08 $ (0.17 ) $ (0.22 ) Net income (loss) attributable to Ultralife common shareholders - diluted Continuing operations $ 0.09 $ 0.08 $ (0.18 ) $ 0.02 Discontinued operations $ 0.01 $ 0.00 $ 0.01 $ (0.24 ) Total $ 0.10 $ 0.08 $ (0.17 ) $ (0.22 ) Weighted average shares outstanding - basic 17,418 17,313 17,390 17,295 Weighted average shares outstanding - diluted 17,418 17,341 17,390 17,295 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Dollars in Thousands)(unaudited) Three-Month Periods Ended April 1,
2012 April 3,
2011 $ (1,502 ) $ (5,703 ) 71 1,853 880 923 125 157 6 — (46 ) (290 ) 341 284 12 54 1,882 13,237 3,178 (9,224 ) 29 — (160 ) 66 — (24 ) (6,016 ) 702 (1,200 ) 2,035 — 31 (1,200 ) 2,066 (209 ) (492 ) — (50 ) (209 ) (542 ) — 15 (209) (527 ) 19 1,654 99 53 — (2 ) 118 1,705 — (40 ) 118 1,665 107 301 (1,184 ) 3,505 5,320 4,641 $ 4,136 $ 8,146 $ 47 $ 28 $ 69 $ 163 ULTRALIFE CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in Thousands) (unaudited) Nine-Month Periods Ended September 30 October 2, 2012 2011 OPERATING ACTIVITIES Net (loss) $ (3,022 ) $ (3,927 ) (Income) loss from discontinued operations, net of tax (178 ) 4,174 Depreciation and amortization of financing fees 2,566 2,720 Amortization of intangible assets 372 469 Loss on long-lived asset disposal and write-offs 13 105 Foreign exchange gain (3 ) (326 ) Impairment of goodwill and long-lived assets - - Non-cash stock-based compensation 1,001 882 Changes in deferred income taxes 74 199 Changes in operating assets and liabilities: Accounts receivable 3,265 8,090 Inventories 1,766 1,397 Income taxes receivable 104 - Prepaid expenses and other current assets (39 ) 92 Insurance receivable relating to fires 1,014 (1,724 ) Income taxes payable (9 ) (24 ) Accounts payable and other liabilities (5,020 ) (5,395 ) Net cash provided from (used in) operating activities from continuing operations 1,904 6,732 Net cash provided from operating activities from discontinued operations (2,133 ) 86 Net cash provided from (used in) operating activities (229 ) 6,818 INVESTING ACTIVITIES Purchase of property and equipment (2,011 ) (1,878 ) Proceeds from asset disposal - 7 Change in restricted cash (250 ) 468 Payments for acquired companies, net of cash acquired - (50 ) Net cash used in investing activities from continuing operations (2,261 ) (1,453 ) Net cash provided from investing activities from discontinued operations 2,133 102 Net cash used in investing activities (128 ) (1,351 ) FINANCING ACTIVITIES Net change in revolving credit facility - (6,060 ) Proceeds from issuance of common stock 115 57 Principal payments on debt and capital lease obligations - (6 ) Net cash provided from (used in) financing activities from continuing operations 115 (6,009 ) Net cash used in financing activities from discontinued operations - (128 ) Net cash provided from (used in) financing activities 115 (6,137 ) Effect of exchange rate changes on cash (119 ) 522 Change in cash and cash equivalents (361 ) (148 ) Cash and cash equivalents at beginning of period 5,320 4,641 Cash and cash equivalents at end of period $ 4,959 $ 4,493 SUPPLEMENTAL CASH FLOW INFORMATION Cash paid for income taxes $ 291 $ 158 Cash paid for interest $ 184 $ 353 1.BASIS OF PRESENTATIONcondensed consolidatedCondensed Consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.2.DISPOSITIONS AND EXIT ACTIVITIES15,16, 2012, we announced our senior management, as authorized by our Board of Directors, decidedintention to divest our RedBlack Communications, business.Inc. (“RedBlack”) business in 2012. RedBlack, a wholly owned subsidiary of ours based in Hollywood, Maryland, designs, integrates and fields mobile, modular and fixed site communication and electronic systems. As a result of management’s ongoing review of our business portfolio, management had determined that RedBlack offersoffered limited opportunities to achieve the operating margin thresholds of our new business model.decidedclosed a Stock Purchase Agreement (the “Agreement”) to refocussell 100% of our operations on profitable growth opportunities presentedcapital stock in RedBlack to BCF Solutions, Inc. In exchange for the sale of RedBlack, we received $2,533 as a purchase price, comprised of cash at closing in the other product linesamount of $2,133, funds held in escrow for up to one year in the amount of $250, as well as $150 to be available for RedBlack employee retention programs. In addition, there will be a customary post-closing working capital adjustment to the purchase price which is expected to be completed within ninety days.comprise ourwill survive for a period of two or three years. The Agreement also contains customary indemnification for breaches of the representations and warranties identified in the Agreement.segments, Battery & Energy Products and Communications Systems. Since 2008, ourdirectly or indirectly, that competes with the business conducted by RedBlack Communications business has incurred significant operating losses.for two years. We are actively seeking to sell ouralso prohibited from hiring, soliciting, or recruiting any current employee, independent contractor, or consultant of BCF Solutions, Inc. or RedBlack business as a going concern and will be engaging appropriate professionals to assist in that effort. We anticipate that the actions taken to divest the RedBlack Communications business will result in the elimination of approximately 30 jobs and the transfer of the RedBlack facility located in Hollywood, Maryland. We expect the RedBlack divestiture to occur within the next twelve months. for two years. and concluding with the ultimate closing of the transaction, the results of the RedBlack operations and related divestiture costs will behave been reported as a discontinued operation.presentationCondensed Consolidated Statements of resultsComprehensive Income (Loss) herein excludesexclude the RedBlack operations from the results of continuing operations. The following amounts have been reported as discontinued operations for the three-monththree- and nine-month periods ended April 1,September 30, 2012 and April 3,October 2, 2011: Three-Month Periods Ended April 1,
2012 April 3,
2011 $ 1,186 $ 541 (12 ) (184 ) 11 12 (23 ) (196 ) We cannot at this time determine an estimate or a range of estimates of the extent of the restructuring charges we will incur in connection with the RedBlack divestiture. Three-Month Periods Ended Nine-Month Periods Ended Net sales $ 1,267 $ 802 $ 3,404 $ 1,786 Income (Loss) from discontinued operations (59 ) 16 (3 ) (415 ) Provision (Benefit) for income taxes (196 ) 12 (174 ) 36 137 4 171 (451 ) three-monththree- and nine-month periods ended April 1,September 30, 2012 and April 3,October 2, 2011: Three-Month Periods Ended April 1,
2012 April 3,
2011 $ — $ 2,288 (48 ) (1,657 ) — — (48 ) (1,657 ) Three-Month Periods Ended Nine-Month Periods Ended Net sales $ - $ - $ - $ 3,895 Gain/(loss) from discontinued operations 63 - 8 (3,796 ) Provision for income taxes - - - - 63 - 8 (3,796 ) Three-Month Periods Ended April 1,
2012 April 3,
2011 $ — $ 469 — 266 — — — 50 $ — $ 785 $ — $ 318 3.INVENTORIES Three-Month Periods Ended Nine-Month Periods Ended Inventory and fixed asset write-downs $ - $ - $ - $ 941 - - - 703 Lease termination costs - - - 250 Other costs - - - 1,030 Total Exit Costs $ - $ - $ - $ 2,924 Cash Component $ - $ - $ - $ 1,984 first- outfirst-out (FIFO) method. The composition of inventories was: April 1, 2012 December 31, 2011 $ 20,995 $ 20,097 3,945 4,770 6,848 10,100 $ 31,788 $ 34,967 4.PROPERTY, PLANT AND EQUIPMENT September 30, 2012 December 31, 2011 Raw materials $ 15,977 $ 20,097 Work in process 5,095 4,770 Finished goods 12,020 10,100 $ 33,092 $ 34,967 April 1, 2012 December 31, 2011 $ 123 $ 123 7,010 7,000 45,068 44,770 1,910 1,894 3,822 3,815 1,019 641 58,952 58,243 46,752 45,655 $ 12,200 $ 12,588 September 30, 2012 December 31, 2011 Land $ 123 $ 123 Buildings and leasehold improvements 7,274 7,000 Machinery and equipment 46,044 44,770 Furniture and fixtures 1,904 1,894 Computer hardware and software 4,180 3,815 Construction in progress 889 641 60,414 58,243 Less: Accumulated depreciation 48,039 45,655 $ 12,375 $ 12,588 $836$800 and $1,022$2,460 for the three-monththree- and nine-month periods ended AprilSeptember 30, 2012, respectively, and $875 and $2,673 for the three- and nine-month periods ended October 2, 2011, respectively.and April 3, 2011, respectively.5.GOODWILL AND INTANGIBLE ASSETSthree-monthnine-month periods ended April 1,September 30, 2012 and April 3,October 2, 2011: Battery &
Energy Products Communications
Systems Discontinued
Operations Total $ 4,758 $ 11,493 $ 2,025 $ 18,276 17 — — 17 4,775 11,493 2,025 18,293 63 — — 63 4,838 11,493 2,025 18,356 22 — — 22 $ 4,860 $ 11,493 $ 2,025 $ 18,378 Total Balance at December 31, 2010 $ 4,758 $ 11,493 $ 2,025 $ 18,276 73 - - 73 Balance at October 2, 2011 4,831 11,493 2,025 18,349 7 - - 7 Balance at December 31, 2011 4,838 11,493 2,025 18,356 (2,025 ) (2,025 ) 6 - - 6 Balance at September 30, 2012 $ 4,844 $ 11,493 $ - $ 16,337 April 1, 2012 Gross
Assets Accumulated
Amortization Net $ 3,564 $ — $ 3,564 4,497 3,509 988 4,002 3,206 796 381 317 64 397 397 — $ 12,841 $ 7,429 $ 5,412 December 31, 2011 Gross
Assets Accumulated
Amortization Net $ 3,563 $ — $ 3,563 4,492 3,440 1,052 3,993 3,143 850 378 310 68 396 396 — $ 12,822 $ 7,289 $ 5,533 September 30, 2012 Net Trademarks $ 3,564 $ - $ 3,564 Patents and technology 4,493 3,635 858 Customer relationships 3,995 3,308 687 Distributor relationships 379 324 55 Non-compete agreements 216 216 - Total intangible assets $ 12,647 $ 7,483 $ 5,164 December 31, 2011 Net Trademarks $ 3,563 $ - $ 3,563 Patents and technology 4,492 3,440 1,052 Customer relationships 3,993 3,143 850 Distributor relationships 378 310 68 Non-compete agreements 396 396 - Total intangible assets $ 12,822 $ 7,289 $ 5,533 $125$122 and $157$372 for the three-monththree- and nine-month periods ended April 1,September 30, 2012, respectively, and April 3,$155 and $469 for the three- and nine-month periods ended October 2, 2011, respectively.April 1,September 30, 2012 is a result of the effect of foreign currency translations.6.DEBT new senior secured asset based revolving credit facility (“Credit Facility”) of up to $35,000 with RBS Business Capital, a division of RBS Asset Finance, Inc. (“RBS”). The proceeds from the Credit Facility can be used for general working capital purposes, general corporate purposes, and letter of credit foreign exchange support. The Credit Facility has a maturity date of February 17, 2013 (“Maturity Date”). The Credit Facility is secured by substantially all of our assets. At closing, we paid RBS a facility fee of $263. LIBOR Rate Plus Greater than $10,000 3.00 % Greater than $6,000 but less than or equal to $10,000 3.25 % Greater than $3,000 but less than or equal to $6,000 3.50 % April 1,September 30, 2012, our fixed charge coverage ratio was 3.501.95 to 1.00. Accordingly, we were in compliance with the financial covenants of the Credit Facility. All borrowings under the Credit Facility are subject to the satisfaction of customary conditions, including the absence of an event of default and accuracy of our representations and warranties. The Credit Facility also includes customary representations and warranties, affirmative covenants and events of default. If an event of default occurs, RBS would be entitled to take various actions, including accelerating the amount due under the Credit Facility, and all actions permitted to be taken by a secured creditor.April 1,September 30, 2012, we had $19no amounts outstanding under the Credit Facility. At April 1,September 30, 2012, the interest rate on the asset based revolver component of the Credit Facility was 3.24%3.23%. As of April 1,September 30, 2012, the revolver arrangement had approximately $13,369$14,574 of additional borrowing capacity, including outstanding letters of credit. At April 1,September 30, 2012, we had $413 of outstanding letters of credit under the Credit Facility.7.SHAREHOLDERS’ EQUITYApril 1,September 30, 2012 and December 31, 2011, we had 1,372,757 shares of treasury stock outstanding, valued at $7,658.April 1,September 30, 2012, there were 2,239,5282,244,722 stock options outstanding under the LTIP.commencingwhich commenced on December 30, 2011; (iii) 200,000 shares at $10.00, with vesting to begin on the date the stock reaches a closing price of $10.00 per share for 15 trading days within a 30-day trading period, with such vesting in annual increments of 50,000 shares over the four anniversary dates of that date; and (iv) 200,000 shares at $15.00, with vesting to begin on the date the stock reaches a closing price of $15.00 per share for 15 trading days within a 30-day trading period, with such vesting in annual increments of 50,000 shares over the four anniversary dates of that date. All such options in items (i) and (ii) shall expire on December 30, 2017. All such options in items (iii) and (iv) shall expire as of the later of December 30, 2017 and five years after the initial vesting commences, but in no event later than December 30, 2020. The options set forth in items (ii), (iii) and (iv) were subject to shareholder approval of an amendment to the LTIP, which approval was obtained on June 7, 2011.commencingwhich commenced on December 30, 2011. The option expires on December 30, 2017.$264$255 and $239$771 for the three-monththree- and nine-month periods ended April 1,September 30, 2012, respectively, and April 3,$282 and $683 for the three- and nine-month periods ended October 2, 2011, respectively. As of April 1,September 30, 2012, there was $1,493$1,317 of total unrecognized compensation cost related to outstanding stock options, which is expected to be recognized over a weighted average period of 2.14 years.three-monthnine-month periods ended April 1,September 30, 2012 and April 3,October 2, 2011. Three-Month Periods Ended April 1,
2012 April 3,
2011 0.66 % 1.64 % 62.93 % 54.61 % 0.00 % 0.00 % 3.91 3.89 Nine-Month Periods Ended Risk-free interest rate 0.56 % 1.22 % Volatility factor 63.53 % 60.63 % Dividends 0.00 % 0.00 % Weighted average expected life (years) 3.91 3.82 three-monthsnine-months ended April 1, 2012 and April 3, 2011.Risk-free interest rate 2.74 % Volatility factor 63.79 % Dividends 0.00 % Weighted average expected life (years) 5.51 threenine months of 2012 is summarized as:
Average
Exercise Price Weighted
Average
Remaining
Contractual
Term Aggregate
Intrinsic
Value 2,356,228 $ 8.34 31,000 3.98 (24,000 ) 4.12 (4,200 ) 4.59 (21,500 ) 17.12 2,337,528 $ 8.25 4.76 years $ 681 2,074,104 $ 8.62 4.64 years $ 565 1,045,537 $ 9.21 2.89 years $ 252 Shares under option at January 1, 2012 2,356,228 $ 8.34 Options granted 303,150 3.63 Options exercised (28,000 ) 4.09 Options forfeited (75,389 ) 4.82 Options expired (213,267 ) 10.90 Shares under option at September 30, 2012 2,342,722 $ 7.66 4.83 years $ - 2,232,729 $ 7.80 4.79 years $ - Options exercisable at September 30, 2012 848,930 $ 9.01 2.63 years $ - three-monthnine-month period ended April 1,September 30, 2012 was $24.threenine months of 2012 and 2011. Cash received from stock option exercises under our stock-based compensation plans for the three-monthnine-month periods ended April 1,September 30, 2012 and April 3,October 2, 2011 was $99$115 and $53,$57, respectively.three-monthnine-month periods ended April 1,September 30, 2012 and April 3,October 2, 2011.threenine months of 2012 is summarized as follows: Weighted Average Number of Shares Grant Date Fair Value 1,218 $ 11.33 — — (1,218 ) 11.33 — — — $ — Unvested at December 31, 2011 1,218 $ 11.33 Granted - - Vested (1,218 ) 11.33 Forfeited - - Unvested at September 30, 2012 - $ - $1$-0- and $(32)$1 for the three-monththree- and nine-month periods ended April 1,September, 2012, respectively, and April 3,$(8) and $(31) for the three- and nine-month periods ended October 2, 2011, respectively. As of April 1,September 30, 2012, we had $-0- of total unrecognized compensation cost related to restricted stock awards. The total fair value of these grants that vested during the three-monthnine-month period ended April 1,September 30, 2012 was $5.8.INCOME TAXES
8. INCOME TAXESthree-monththree- and nine-month periods ended April 1,September 30, 2012, we recorded a benefit of $21 and April 3,a provision of $264, respectively, in income tax expense. For the three- and nine-month periods ended October 2, 2011, we recorded $102$132 and $70,$332, respectively, in income tax expense. The expense is primarily due to (a) the recognition of deferred tax liabilities generated from goodwill and certain intangible assets that cannot be predicted to reverse for book purposes during our loss carryforward periods. The remaining expense in 2012 was primarily due toperiods, and (b) the income reported for our China operations during the period.three-monththree- and nine-month periods ended April 1,September 30, 2012 and April 3,October 2, 2011 was: Three-Month Periods Ended $ (1,340 ) $ (3,792 ) $ 91 $ 58 6.8 % 1.5 % Three-Month Periods Ended Nine-Month Periods Ended $ 1,643 $ 1,470 $ (2,763 ) $ 545 Total Income Tax Provision (b) $ 175 $ 122 $ 437 $ 298 Effective Tax Rate (b/a) 10.7 % 8.3 % 15.8 % 54.7 % three-monththe three- and nine-month periods ended April 1,September 30, 2012 and April 3,October 2, 2011. The payment of the alternative minimum tax normally results in the establishment of a deferred tax asset; however, we have established a valuation allowance for our net U.S. deferred tax asset. Therefore, the expected payment of the alternative minimum tax does not result in a net deferred tax asset.April 1,September 30, 2012 relate to Federal and various state jurisdictions. The following table summarizes the activity related to our unrecognized tax benefits: Three-Month Periods Ended $ 6,779 $ — — — — — — — — — — — $ 6,779 $ — Nine-Month Periods Ended Balance at beginning of the period $ 6,779 $ - - - Increases related to prior year tax positions - - Decreases related to prior year tax positions - - - - Settlements - - Balance at end of the period $ 6,779 $ - April 1,September 30, 2012 is comprised of tax benefits that, if recognized, would result in a deferred tax asset and a corresponding increase in our valuation allowance. As a result, because the benefit would be offset by an increase in the valuation allowance, there would be no effect on the effective tax rate.9.EARNINGS PER SHAREthree-monththree- and nine-month periods ended April 1,September 30, 2012 and April 3,October 2, 2011, both the Two-Class Method and the treasury stock method calculations for diluted EPS yielded the same result. Three-Month Period Ended April 1,
2012 April 3,
2011 $ (1,431 ) $ (3,837 ) — — (1,431 ) (3,837 ) — — $ (1,431 ) $ (3,837 ) $ (71 ) $ (1,853 ) — — $ (71 ) $ (1,853 ) 17,358,000 17,276,000 — — — — 17,358,000 17,276,000 $ (0.08 ) $ (0.22 ) $ (0.01 ) $ (0.11 ) $ (0.08 ) $ (0.22 ) $ (0.01 ) $ (0.11 ) Three-Month Period Ended Nine-Month Period Ended $ 1,479 $ 1,359 $ (3,169 ) $ 286 - - - - 1,479 1,359 (3,169 ) 286 Effect of Dilutive Securities - - - - $ 1,479 $ 1,359 $ (3,169 ) $ 286 $ 200 $ 4 $ 178 $ (4,174 ) Effect of Dilutive Securities - - - - $ 200 $ 4 $ 178 $ (4,174 ) 17,418,000 17,313,000 17,390,000 17,295,000 Effect of Dilutive Securities: Stock Options / Warrants - 28,000 - - 17,418,000 17,341,000 17,390,000 17,295,000 EPS – Basic (a/e) - continuing operations $ 0.09 $ 0.08 $ (0.18 ) $ 0.02 EPS – Basic (c/e) - discontinued operations $ 0.01 $ 0.00 $ 0.01 $ (0.24 ) EPS – Diluted (b/f) - continuing operations $ 0.09 $ 0.08 $ (0.18 ) $ 0.02 EPS – Diluted (d/f) - discontinued operations $ 0.01 $ 0.00 $ 0.01 $ (0.24 ) 2,337,5282,342,722 and 1,882,8122,060,802 outstanding stock options, warrants and restricted stock awards for the three-month periods ended April 1,September 30, 2012 and April 3,October 2, 2011, respectively, that were not included in EPS as the effect would be anti-dilutive.10.COMMITMENTS AND CONTINGENCIESApril 1,September 30, 2012, we have made commitments to purchase approximately $560$477 of production machinery and equipment.threenine months of 2012 were as follows: $ 839 60 (108 ) $ 791 Balance at December 31, 2011 $ 839 Accruals for warranties issued 394 Settlements made (320 ) Balance at September 30, 2012 $ 913 have answered the allegations set forth in the Complaint, without asserting any counterclaims. Discovery has commenced and is ongoing. Power to protect our customers, employees and shareholders from the unauthorized use and theft of our investments in intellectual property, trade secrets and confidential information by Arista and its employees. Protecting our collective intellectual property and know-how, developed at great cost to us to form our competitive position in the marketplace and create value for our shareholders, is a fundamental responsibility of all our employees. Arista Complaint is retaliatory and without merit. Our development of the foundation for the new product concept for which Arista claims we allegedly used its trade secrets commenced in 2008, long prior to the departure of those individuals who now constitute the executive team of Arista. Furthermore, we believe the purported damage of $60,000 being claimed by Arista is based solely on the reduction in its market capitalization between November 2009 and the filing date of the Complaint. This market value loss is totally unrelated to any actions on account ofattributable to us, and claims for recovery of this or any other amount are legally and factually baseless.willare vigorously pursuepursuing our complaint against Arista and defenddefending what we believe to be a meritless action on the part of Arista Power.allegesalleged damages associated with claims of breach of warranty in an amount of approximately $1,100. We disputedisputed the customer’s allegations against us and intend to vigorously defenddefended the lawsuit. At this time, we have no basisA trial was held on May 25, 2012 in Japan before a panel of three judges, after which the parties agreed to settle the matter for assessing whether we may incur any liability as a resultapproximately $125, which has been reflected in our cost of products sold for the second quarter of 2012. The terms of the lawsuitsettlement agreement include no legal liability on our part and no accrual has been made or reflected in the condensed consolidated financial statements as of April 1, 2012.April 1,September 30, 2012, there were no outstanding exigent contracts with the U.S. government. As part of its due diligence, the U.S. government has conducted post-audits of the completed exigent contracts to ensure that information used in supporting the pricing of exigent contracts did not differ materially from actual results. In September 2005, the Defense Contracting Audit Agency (“DCAA”) presented its findings related to the audits of three of the exigent contracts, suggesting a potential pricing adjustment of approximately $1,400 related to reductions in the cost of materials that occurred prior to the final negotiation of these contracts. In addition, in June 2007, we received a request from the Office of Inspector General of the Department of Defense (“DoD IG”) seeking certain information and documents relating to our business with the Department of Defense. We cooperated with the DCAA audit and DoD IG inquiry by making our personnel available to government auditors and investigators our personnel and furnishing the requested information and documents. The DCAA Audit and DoD IG inquiry were consolidated and the US Attorney’s Office represented the government in connection with these matters. Under applicable federal law, we may have been subject up to treble damages and penalties associated with the potential pricing adjustment. In light of the uncertainty, we decided to enter into discussions with the U.S. Attorney’s Office in April 2011 to negotiate a settlement that would be in the best interests of our customers, employees and shareholders. On April 21, 2011, we were advised by the government that there was a $2,730 settlement-in-principle to resolve all claims related to the contracts, subject to final approval by the Department of Justice. As a result, we recorded a $2,730 charge as a reduction in revenues for the first quarter of 2011. On June 1, 2011, we entered into a Settlement Agreement with the United States of America, acting through the United States Department of Justice and on behalf of the Department of Defense which provides that we shall pay the U.S. $2,700 plus accrued interest thereon at the rate of 2.625% per annum from May 6, 2011, with principal payments of $1,000, $567, $567 and $566 being due on June 8, 2011, December 1, 2011, June 1, 2012 and December 1, 2012, respectively. Each principal payment will be accompanied by a payment of accrued interest. As of April 1,September 30, 2012, we have made the first twothree required payments.April 1,September 30, 2012, approximately $480 has been distributed under the grant. Under an agreement with the City of West Point, we agreed to employ at least 30 full-time employees at the facility, of which 51% of the jobs had to be filled or made available to low or moderate income families, within three years of completion of the CDBG improvement activities. In addition, we agreed to invest at least $1,000 in equipment and working capital into the facility within the first three years of operation of the facility. While we have yet to receive formal notice from the applicable government agency confirming the closure of the grant, we believe that both of theseour commitments were satisfied as of March 2011 and, therefore, have not recorded an accrual with respect to any potential liability for the grant amounts received under the CDBG.April 1,September 30, 2012, approximately $150 has been distributed under the grant. Under an agreement with Clay County, we agreed to employ at least 30 full-time employees at the facility, of which 51% of the jobs had to be filled or made available to low or moderate income families, within two years of completion of the RIFG improvement activities. In September 2010, we received an extension for this commitment to March 31, 2011. In addition, we agreed to invest at least $1,000 in equipment and working capital into the facility within the first three years of operation of the facility. While we have yet to receive formal notice from the applicable government agency confirming the closure of the grant, we believe that both of theseour commitments were satisfied as of March 2011 and, therefore, have not recorded an accrual with respect to any potential liability for the grant amounts received under the RIFG.11.BUSINESS SEGMENT INFORMATIONThree-Month Period Ended April 1, 2012 Battery &
Energy
Products Communications
Systems Discontinued
Operations Corporate Total $ 20,082 $ 7,419 $ — $ — $ 27,501 3,943 2,650 — (7,882 ) (1,289 ) (103 ) (103 ) 52 52 (79 ) (79 ) (12 ) (12 ) (71 ) (71 ) — — $ (1,502 ) $ 51,597 $ 30,524 $ 3,125 $ 9,418 $ 94,664 Three-Month Period Ended April 3, 2011 Battery &
Energy
Products Communications
Systems Discontinued
Operations Corporate Total $ 24,248 $ 3,667 $ — $ — $ 27,915 3,041 1,373 — (8,350 ) (3,936 ) (155 ) (155 ) 299 299 (4 ) (4 ) (54 ) (54 ) (1,853 ) (1,853 ) 13 13 $ (5,690 ) $ 56,419 $ 35,636 $ 7,960 $ 12,376 $ 112,391 12.FAIR VALUE OF FINANCIAL INSTRUMENTSThree-Month Period Ended September 30, 2012 Corporate Total Revenues $ 16,633 $ 9,548 $ - $ - $ 26,181 Segment contribution 4,770 3,449 - (6,465 ) 1,754 Interest expense, net (96 ) (96 ) Miscellaneous (15 ) (15 ) Income taxes-current (120 ) (120 ) Income taxes-deferred (55 ) (55 ) Income from discontinued operations 200 200 Noncontrolling interest 11 11 Net income attributable to Ultralife $ 1,679 Total assets $ 54,031 $ 32,290 $ 11 $ 8,997 $ 95,329 Three-Month Period Ended October 2, 2011 Corporate Total Revenues $ 28,834 $ 6,370 $ - $ - $ 35,204 Segment contribution 7,929 1,431 - (7,815 ) 1,545 Interest expense, net (124 ) (124 ) Miscellaneous 49 49 Income taxes-current (67 ) (67 ) Income taxes-deferred (55 ) (55 ) Income from discontinued operations 4 4 Noncontrolling interest 11 11 Net income attributable to Ultralife $ 1,363 Total assets $ 54,661 $ 34,001 $ 2,885 $ 9,800 $ 101,347 Nine-Month Period Ended September 30, 2012 Corporate Total Revenues $ 52,238 $ 20,150 $ - $ - $ 72,388 Segment contribution 12,476 6,803 - (21,747 ) (2,468 ) Interest expense, net (312 ) (312 ) Miscellaneous 17 17 Income taxes-current (387 ) (387 ) Income taxes-deferred (50 ) (50 ) Income from discontinued operations 178 178 Noncontrolling interest 31 31 Net loss attributable to Ultralife $ (2,991 ) Total assets $ 54,031 $ 32,290 $ 11 $ 8,997 $ 95,329 Nine-Month Period Ended October 2, 2011 Corporate Total Revenues $ 84,321 $ 21,910 $ - $ - $ 106,231 Segment contribution 18,223 7,111 - (24,688 ) 646 Interest expense, net (440 ) (440 ) Miscellaneous 339 339 Income taxes-current (134 ) (134 ) Income taxes-deferred (164 ) (164 ) Loss from discontinued operations (4,174 ) (4,174 ) Noncontrolling interest 39 39 Net loss attributable to Ultralife $ (3,888 ) Total assets $ 54,661 $ 34,001 $ 2,885 $ 9,800 $ 101,347 April 1,September 30, 2012 and December 31, 2011. The fair value of cash, trade accounts receivable, trade accounts payable, accrued liabilities, and our revolving credit facility approximates carrying value due to the short-term nature of these instruments.13.FIRE AT MANUFACTURING FACILITY$1,587.$1,584. The majority of theour insurance claim is related to the recovery of damaged inventory. In June 2012, we received approximately $1,017 as a partial payment on our insurance claim, which resulted in no gain or loss being recognized. As of April 1,September 30, 2012, we reflect a receivable from the insurance company relating to this claim of $1,455,$432, which is net of our deductible of approximately $132.$132, and represents additional proceeds to be received. The deductible charge was expensed in the second quarter of 2011 and reflected as a component of cost of products sold in the Condensed Consolidated Statements of Operations.14.RECENT ACCOUNTING PRONOUNCEMENTS AND DEVELOPMENTS“safe harbor”"safe harbor" for forward-looking statements. This report contains certain forward-looking statements and information that are based on the beliefs of management as well as assumptions made by and information currently available to management. The statements contained in this report relating to matters that are not historical facts are forward-looking statements that involve risks and uncertainties, including, but not limited to, future demand for our products and services, addressing the process of U.S. defense procurement, reduced U.S. defense spending, the successful commercialization of our products, our reliance on certain key customers, the impairment of our intangible assets, general domestic and global economic conditions, including the uncertainty with government budget approvals, the unique risks associated with our Chinese operations, government and environmental regulations, finalization of non-bid government contracts, competition and customer strategies, technological innovations in the non-rechargeable and rechargeable battery industries, changes in our business strategy or development plans, capital deployment, business disruptions, including those caused by fires, raw material supplies, and other risks and uncertainties, certain of which are beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may differ materially from those forward-looking statements described herein. When used in this report, the words “anticipate”, “believe”, “estimate” or “expect” or words of similar import are intended to identify forward-looking statements. For further discussion of certain of the matters described above and other risks and uncertainties, see Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2011.$46$39 and were due to the difference in our actual experience compared to our expectations as of the completion of our exit activities.through becoming more efficient.15,16, 2012, we announced our senior management, as authorized by our Board of Directors, decidedintention to divest our RedBlack Communications, business.Inc. (“RedBlack”) business in 2012. RedBlack, a wholly owned subsidiary of ours based in Hollywood, Maryland, designs, integrates and fields mobile, modular and fixed site communication and electronic systems. As a result of management’s ongoing review of our business portfolio, management had determined that RedBlack offersoffered limited opportunities to achieve the operating margin thresholds of our new business modelmodel.decidedclosed a Stock Purchase Agreement to refocussell 100% of our operations on profitable growth opportunities presentedcapital stock in RedBlack to BCF Solutions, Inc (the “Agreement”). In exchange for the sale of RedBlack, we received $2,533 as a purchase price, comprised of cash at closing in the other product linesamount of $2,133, funds held in escrow for up to one year in the amount of $250, as well as $150 to be available for RedBlack employee retention programs. In addition, there will be a customary post-closing working capital adjustment to the purchase price which is expected to be completed within ninety days.comprise ourwill survive for a period of two or three years. The Agreement also contains customary indemnification for breaches of the representations and warranties identified in the Agreement.segments, Battery & Energy Products and Communications Systems. Since 2008, ourdirectly or indirectly, that competes with the business conducted by RedBlack Communications business has incurred significant operating losses.for two years. We are actively seeking to sell ouralso prohibited from hiring, soliciting, or recruiting any current employee, independent contractor, or consultant of BCF Solutions, Inc. or RedBlack business as a going concern and will be engaging appropriate professionals to assist in that effort. We anticipate that the actions taken to divest the RedBlack Communications business will result in the elimination of approximately 30 jobs and the transfer of the RedBlack facility located in Hollywood, Maryland. We expect the RedBlack divestiture to occur within the next twelve months. for two years. and concluding with the ultimate closing of the transaction, the results of the RedBlack operations and related divestiture costs will be reported as a discontinued operation.April 1,September 30, 2012 decreased by $414,$9,023, or 1.5%25.6%, from the three-month period ended April 3, 2011, reflectingOctober 2, 2011. The decrease was primarily attributable to continued slowdown in the completion of large non-recurring telematics orders in 2011. To a lesser extent, the decline in revenue resulted from slower government and defense order rate for rechargeable and non-rechargeable batteries, partially offset by higher amplifieran order for our M-1 battery products to service an allied country’s department of defense and an increase in Communications Systems sales, reflecting shipments of SATCOM systems and the impactfulfillment of amplifier orders that were delayed from the $2,730 charge related to the DCAA settlement during the first quarter of 2011.firstthird quarter of 2012 was $6,593,$8,219, or 24.0%31.4% of revenues, compared to $4,414,$9,360, or 15.8%26.6% of revenues, for the same quarter a year ago. The year-over-year comparison was impacted by the $1,100 non-cash charge recorded in the third quarter of 2011 to write-off discontinued legacy amplifiers, which equaled approximately 300 basis points of gross margin. The increase is duein the gross margin percentage was attributable to higher Communications Systems’ revenues and last year’s $2,730 DCAA settlement charge, partially offset by unfavorable manufacturing variancesimproved 9-volt margins resulting from lower batterythe transition of production levelsto our China operations and increases in 2012.$7,882$6,465 during the three-month period ended April 1,September 30, 2012, compared to $8,350a decrease of $1,350, or 17.3%, from the $7,815 during the three-month period ended April 3,October 2, 2011, resulting from continued actionsprimarily due to reduce general and administrative expenses, focused spendingheadcount reductions completed in the developmentfirst half of new products, partially offset by2012 in addition to discretionary spending cuts and lower sales commissions. Operating expenses as a percentage of revenue increased from 22.2% during the expansionquarter ended October 2, 2011 to 24.7% during the quarter ended September, 2012 primarily because of ourlower sales forcevolumes.our geographic coverage and penetrate new markets.$109$3,052 in the firstthird quarter of 2012 compared to $(2,260)$3,000 for the firstthird quarter of 2011. This increase in Adjusted EBITDA from continuing operations was primarily attributable to our operating results. See the section “Adjusted EBITDA from continuing operations” beginning on page 3032 for a reconciliation of Adjusted EBITDA from continuing operations to net income (loss) attributable to Ultralife.Thewas $19 at April 1,as of September 30, 2012. By comparison, at April 3,as of October 2, 2011 and atas of December 31, 2011, the outstanding revolver balance under our credit facility was $10,195$2,481 and $0,$-0-, respectively. The decrease from the third quarter of 2011 is primarily attributable to our financial performance and cash generated from our Lean initiatives, including a reduction in inventory.confirmedreaffirms its previous guidance ofoutlook for 2012. Management expects high-single to low-double digit year-over-year revenue growth approaching double digitsfor its Communication Systems segment and China operations. Given the continued uncertainty in government and defense orders for the Battery & Energy Products segment, the company’s largest segment, management expects year-over-year total sales to decline by between 20% and 30%. Based on the third quarter results and the actions taken in the first half of 2012 to reduce spending and align capacity, management expects a return to operating profitability for the second half of 2012 with operating income growthmargin in the low- to mid- single digits. The magnitude of the first half operating loss is expected to outpace revenue growth and generate anresult in a total year operating margin of approximately 7.0% to 7.5%. Management cautions that the timing of orders and shipments may cause variability in quarterly results.April 1,September 30, 2012 and April 3,October 2, 2011Revenues. Consolidated revenues for the three-month period ended April 1,September 30, 2012 amounted to $27,501,$26,181, a decrease of $414,$9,023, or 1.5%25.6%, from the $27,915$35,204 reported in the same quarter in 2011.$4,166,$12,201, or 17.2%42.3%, from $24,248$28,834 during the firstthird quarter last year to $20,082$16,633 during the firstthird quarter this year. Revenues for Battery & Energy Products decreased dueThis decrease was primarily attributable to the completion of large non-recurring telematics orderscontinued slowdown in 2011 and, to a lesser extent, a slowerthe US government and defense order rate for rechargeable and non-rechargeable batteries. In addition, in 2011 Battery & Energy Products revenue included a $2,730 charge relatedbatteries and charger systems. Partially offsetting this decline was an order for our M-1 battery products to the DCAA settlement.service an allied country’s department of defense.$3,752,$3,178, or 102.3%49.9%, from $3,667$6,370 during the firstthird quarter last year to $7,419$9,548 during the firstthird quarter this year, reflectingyear. This increase was attributable to shipments of SATCOM units to a large prime customer contract which services the US Department of Defense and continued solid global demand for our broader focus on large, global modernization opportunities, which resulted in higher20 watt amplifier sales.$20,908$17,962 for the quarter ended April 1,September 30, 2012, a decrease of $2,593,$7,882, or 11.0%30.5%, from the $23,501$25,844 reported for the same three-month period a year ago. Consolidated cost of products sold as a percentage of total revenue decreased from 84.2%73.4% for the three-month period ended April 3,October 2, 2011 to 76.0%68.6% for the three-month period ended April 1,September 30, 2012. Correspondingly, consolidated gross margin was 24.0%31.4% for the three-month period ended April 1,September 30, 2012, compared with 15.8%26.6% for the three-month period ended April 3,October 2, 2011. The year-over-year comparison was impacted by the $1,100 non-cash charge recorded in the third quarter of 2011 primarilyto write-off discontinued legacy amplifiers, which equaled approximately 300 basis points of gross margin. The increase in the gross margin percentage was attributable to higher Communications Systems’ revenues and last year’s $2,730 DCAA settlement charge, partially offset by unfavorable manufacturing variancesimproved 9-volt margins resulting from lower batterythe transition of production levelsto our China operations and increases in 2012.average selling price of the newly designed 9-volt, scrap and productivity improvements in our manufacturing operations, as well as favorable sales mix in both our business segments.$5,068,$9,042, from $21,207$20,905 during the three-month period ended April 3,October 2, 2011 to $16,139$11,863 during the three-month period ended April 1,September 30, 2012. Battery & Energy Products’ gross profit for the firstthird quarter of 2012 was $3,943,$4,770, or 19.6%28.7% of revenues, an increasea decrease of $902$3,159 from gross profit of $3,041,$7,929, or 12.5%27.5% of revenues, for the firstthird quarter of 2011. Battery & Energy Products’ gross margin as a percentage of revenues increased by 120 basis points for the three-month period ended April 1,September 30, 2012, reflecting last year’s DCAA settlement charge partially offset by the impact of unfavorable manufacturing variances resulting from lower production levels in 2012.$2,475$1,160 from $2,294$4,939 during the three-month period ended April 3,October 2, 2011 to $4,769$6,099 during the first quarter ofthree-month period ended September 30, 2012. Communications Systems’ gross profit for the firstthird quarter of 2012 was $2,650,$3,449, or 35.7%36.1% of revenues, an increase of $1,277$2,018 from gross profit of $1,373,$1,431, or 37.4%22.5% of revenues, for the firstthird quarter of 2011. The decrease in2011, which was impacted by the $1,100 inventory charge to write-off discontinued legacy amplifiers. Excluding this adjustment, the gross margin for the third quarter of 2011 would have been 38.4%. Gross margin as a percentagepercent of revenue during 2012 is primarily due to reduced volume pricing for certain large projects.April 1,September 30, 2012 totaled $7,882,$6,465, a decrease of $468$1,350 from $8,350$7,815 for the three-month period ended April 3,October 2, 2011, resulting from continued actions to reducethe reductions in force completed in the first half of 2012, general and administrative expenses,discretionary spending cuts, lower sales commissions and more focused spending in the development ofR&D and new products, partially offset by the expansion of our sales force to increase our geographic coverage and penetrate new markets.product spending.decreasedincreased to 28.7%24.7% during the firstthird quarter of 2012 from 29.9%22.2% reported in the firstthird quarter of 2011.2011 because of lower sales volumes. Amortization expense associated with intangible assets related to our acquisitions was $125$122 for the firstthird quarter of 2012 ($6057 in selling, general and administrative expenses and $65 in research and development costs), compared with $157$155 for the firstthird quarter of 2011 ($7978 in selling, general, and administrative expenses and $78$77 in research and development costs). Research and development costs were $2,139$1,596 in the firstthird quarter of 2012, a decrease of $366,$698, or 14.6%30.4%, from the $2,505$2,294 reported in the firstthird quarter of 2011, as we focused our spending on the development of new products with the highest estimated return on investment. Selling, general, and administrative expenses decreased $102,$652, or 1.7%11.8%, to $5,743$4,869 during the firstthird quarter of 2012 as compared to $5,521 in the firstthird quarter of 2011, reflecting continuedlower sales commission and the impact of actions taken in the first half of 2012 to reduce general and administrative expenses, partially offset by the expansion of our sales force to increase our geographic coverage and penetrate new markets.$(51)$(111) for the firstthird quarter of 2012, compared to $144$(75) for the firstthird quarter of 2011. Interest expense, net of interest income, decreased $52,$28, to $103$96 for the firstthird quarter of 2012 from $155$124 for the comparable period in 2011, as a result of lower average borrowings under our revolving credit facilities. Miscellaneous income/expense amounted to incomeexpense of $52$15 for the firstthird quarter of 2012 compared with income of $299$49 for the firstthird quarter of 2011. The expense in the third quarter of 2012 and income in the first quartersthird quarter of 2012 and 2011 waswere primarily due to transactions impacted by changes in foreign currencies relative to the U.S. dollar.$91$175 for the firstthird quarter of 2012 compared with $58$122 during the firstthird quarter of 2011. The expense is primarily due to (a) the recognition of deferred tax liabilities generated from goodwill and certain intangible assets that cannot be predicted to reverse for book purposes during our loss carryforward periods, and (b) the income reported for our China operations during the periods. The effective consolidated tax rate for the three-month periods ended April 1,September 30, 2012 and April 3,October 2, 2011 was: Three-Month Periods Ended April 1, 2012 April 3, 2011 $ (1,340 ) $ (3,792 ) $ 91 $ 58 6.8 % 1.5 % Three-Month Periods Ended Income (Loss) before Incomes Taxes (a) $ 1,643 $ 1,470 Total Income Tax Provision (b) $ 175 $ 122 Effective Tax Rate (b/a) 10.7 % 8.3 % Nine-Month Periods Ended Income (Loss) before Incomes Taxes (a) $ (2,763 ) $ 545 Total Income Tax Provision (b) $ 437 $ 298 Effective Tax Rate (b/a) 15.8 % 54.7 % quartersnine months of 2012 and 2011. The use of our U.K. NOL carryforwards may be limited due to the change in the U.K. operation during 2008 from a manufacturing and assembly center to primarily a distribution and service center. LossIncome from discontinued operations, net of tax, totaled $71$178 for the first quarternine months of 2012, compared to $1,853a loss of $4,174 for the first quarternine months of 2011. The first quarternine months of 2012 loss includesinclude operating results and costs related to our previously announcedthe divestiture of our RedBlack Communication business and our exit from the Energy Services business which was completed in the second quarter of 2011.on September 28, 2012. The loss from discontinued operations for the first quarternine months of 2011 reflects the unfavorable performanceinclusion of costs associated with our exit from the Energy Services business for that period.completed in the second quarter of 2011. For more information, see Note 2 to the Condensed Consolidated Financial Statements.$1,502$2,991 and $0.09,$0.17, respectively, for the threenine months ended April 1,September 30, 2012, compared to a net loss attributable to Ultralife and loss attributable to Ultralife common shareholders per diluted share of $5,690$3,888 and $0.33,$0.22, respectively, for the first quarternine months of 2011. Average common shares outstanding used to compute diluted earnings per share increased from 17,276,00017,295,000 in the first quarternine months of 2011 to 17,358,00017,390,000 in the first quarternine months of 2012, mainly due to stock option exercises and shares of common stock issued to our non-employee directors.Adjusted EBITDA from continuing operations does not reflect (1) our cash expenditures or future requirements for capital expenditures or contractual commitments; (2) changes in, or cash requirements for, our working capital needs; (3) the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt; (4) income taxes or the cash requirements for any tax payments; and (5) all of the costs associated with operating our business;although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often will have to be replaced in the future, and Adjusted EBITDA from continuing operations does not reflect any cash requirements for such replacements;· Adjusted EBITDA from continuing operations does not reflect (1) our cash expenditures or future requirements for capital expenditures or contractual commitments; (2) changes in, or cash requirements for, our working capital needs; (3) the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt; (4) income taxes or the cash requirements for any tax payments; and (5) all of the costs associated with operating our business; while stock-based compensation is a component of cost of products sold and operating expenses, the impact on our consolidated financial statements compared to other companies can vary significantly due to such factors as assumed life of the stock-based awards and assumed volatility of our common stock;although discontinued operations does not reflect our current business operations, discontinued operations includes the costs we incurred by exiting our Energy Services business and divesting our RedBlack Communications business; andother companies may calculate Adjusted EBITDA from continuing operations differently than we do, limiting its usefulness as a comparative measure.· although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often will have to be replaced in the future, and Adjusted EBITDA from continuing operations does not reflect any cash requirements for such replacements; · while stock-based compensation is a component of cost of products sold and operating expenses, the impact on our consolidated financial statements compared to other companies can vary significantly due to such factors as assumed life of the stock-based awards and assumed volatility of our common stock; · although discontinued operations does not reflect our current business operations, discontinued operations includes the costs we incurred by exiting our Energy Services business and divesting our RedBlack Communications business; and · other companies may calculate Adjusted EBITDA from continuing operations differently than we do, limiting its usefulness as a comparative measure. Three-Month Periods Ended April 1,
2012 April 3,
2011 $ (1,502 ) $ (5,690 ) 103 155 91 58 880 923 125 157 341 284 71 1,853 $ 109 $ (2,260 ) Three-Month Periods Ended Nine-Month Periods Ended Net income (loss) attributable to Ultralife $ 1,679 $ 1,363 $ (2,991 ) $ (3,888 ) Add: interest expense, net 96 124 312 440 Add: income tax provision 175 122 437 298 849 890 2,566 2,720 Add: amortization of intangible assets 122 155 372 469 Add: stock-based compensation expense 331 350 1,001 882 (200 ) (4 ) (178 ) 4,174 Adjusted EBITDA $ 3,052 $ 3,000 $ 1,519 $ 5,095 The following cash flow information is being presented net of continuing and discontinued operations.April 1,September 30, 2012, cash and cash equivalents totaled $4,136,$4,959, a decrease of $1,184$361 from December 31, 2011. During the three-monthnine-month period ended April 1,September 30, 2012, we used $1,200$229 of cash from operating activities as compared to the generation of $2,066$6,818 for the three-monthnine-month period ended April 3,October 2, 2011. The use of cash from operating activities in 2012 resulted mainly from our net loss of $1,502 and use$3,200, net of approximately $1,087$1,081 of cash forgenerated from working capital due mainly to decreases in the balancesbalance of accounts receivable, accounts payable, and inventories.$209$128 in cash for investing activities during the first threenine months of 2012 compared with $527$1,351 in cash used for investing activities in the same period in 2011. In the first threenine months of 2012, we spent $209$2,011 to purchase plant, property and equipment. In the first threenine months of 2011, we spent $492$1,878 to purchase plant, property and equipment and $50 was used in connection with the contingent purchase price payout related to RPS Power Systems, Inc. In addition, we received $15Further, investing activities provided $2,133 from our discontinued operations due to our sale of RedBlack compared to $102 provided in cash proceeds from dispositions of property, plant and equipment.three-monthnine-month period ended April 1,September 30, 2012, we generated $118$115 in funds from financing activities compared to the generationuse of $1,665$6,137 in funds in the same period of 2011. The financing activities in the first threenine months of 2012 included a $19 inflow from borrowings on the revolver portion of our primary credit facility, and an inflow of $99$115 from stock option exercises. The financing activities in the first threenine months of 2011 included a $1,654 inflow$6,060 outflow from borrowingsrepayments on the revolver portion of our primary credit facilities,Credit Facilities (as defined below), and an inflow of $53 from stock option exercises, partially offset by an outflow of $42$6 for principal payments on debt and capital lease obligations.threesix months of 2012 was an annualized rate of approximately 3.02.3 turns per year, unchangeda decrease from the 3.0 turns for the full year of 2011.April 1,September 30, 2012, we had made commitments to purchase approximately $560$477 of production machinery and equipment, which we expect to fund through operating cash flows or draws upon the userevolver portion of debt. new senior secured asset based revolving credit facility (“Credit Facility”) of up to $35,000 with RBS Business Capital, a division of RBS Asset Finance, Inc. (“RBS”). The proceeds from the Credit Facility can be used for general working capital purposes, general corporate purposes, and letter of credit foreign exchange support. The Credit Facility has a maturity date of February 17, 2013 (“Maturity Date”). The Credit Facility is secured by substantially all of our assets. At closing, we paid RBS a facility fee of $263. LIBOR Rate Plus Greater than $10,000 3.00 % Greater than $6,000 but less than or equal to $10,000 3.25 % Greater than $3,000 but less than or equal to $6,000 3.50 % April 1,September 30, 2012, our fixed charge coverage ratio was 3.501.95 to 1.00. Accordingly, we were in compliance with the financial covenants of the Credit Facility. All borrowings under the Credit Facility are subject to the satisfaction of customary conditions, including the absence of an event of default and accuracy of our representations and warranties. The Credit Facility also includes customary representations and warranties, affirmative covenants and events of default. If an event of default occurs, RBS would be entitled to take various actions, including accelerating the amount due under the Credit Facility, and all actions permitted to be taken by a secured creditor.April 1,September 30, 2012, we had $19no amounts outstanding under the Credit Facility. At April 1,September 30, 2012, the interest rate on the asset based revolver component of the Credit Facility was 3.24%3.23%. As of April 1,September 30, 2012, the revolver arrangement had approximately $13,369$14,574 of additional borrowing capacity, including outstanding letters of credit. At April 1,September 30, 2012, we had $413 of outstanding letters of credit under the Credit Facility.Equity TransactionsIn some of our recent acquisitions, we utilized securities as consideration in these transactions in part to reduce the need to draw on the liquidity provided by our cash and cash equivalents and revolving credit facility.See Note 7 in the Notes to Condensed Consolidated Financial Statements for additional information.us.us pursuant to our Credit Facility, which matures on February 17, 2013. In the event that we are unable to finance our operations with internally generated funds or through the use of additional financing from our Credit Facility, we may need to seek additional credit or access the capital markets for additional funds. We can provide no assurance that we would be successful in this regard.threenine months of 2012, there were no significant changes in the manner in which our significant accounting policies were applied or in which related assumptions and estimates were developed.threenine months ended April 3,September 30, 2012, there were no material changes to our quantitative and qualitative disclosures about market risk as presented in Item 7A of Part II of our Annual Report on Form 10-K for the year ended December 31, 2011.We are subject to legal proceedings and claims that arise in the normal course of business. We believe that the final disposition of such matters will not have a material adverse effect on our financial position, results of operations or cash flows.Arista Power LitigationOn September 23, 2011, we initiated an action against Arista Power, Inc. (“Arista”) and our former senior sales and engineering employee, David Modeen, in the State of New York Supreme Court, County of Wayne (Index No. 73379). In our Complaint, we allege that Arista recruited all but one of the members of its executive team from us, subsequently changed its business to compete directly with us by using our confidential information, and during the summer of 2011, recruited Modeen to become an Arista employee. We allege that, as a result of actions by Arista and Modeen: (i) Modeen has breached the terms of his Employee Confidentiality, Non-Disclosure, Non-Compete, Non-Disparagement and Assignment Agreement with us; (ii) Modeen has breached certain agreements, duties and obligations he owed us, including to protect and refrain from disclosing our trade secrets and confidential and proprietary information; (iii) Arista’s employment of Modeen will inevitably lead to the disclosure and use of our trade secrets by Arista, in violation of Modeen’s duties and obligations to us; (iv) Arista unlawfully induced Modeen to breach his agreements with and duties and obligations to us; and (v) Arista’s recruitment and employment of Modeen has breached a subcontract between Arista and us. We seek damages as determined at trial and preliminary and permanent injunctive relief. The defendants have answered the allegations set forth in the Complaint, without asserting any counterclaims. Discovery has commenced and is ongoing.On December 5, 2011, Arista served us with a Complaint it filed on November 29, 2011 in the State of New York Supreme Court, County of Monroe (Index No. 11-13896) against us, our officers, several of our directors, and an employee. In its Complaint, Arista alleges that we and our named defendants have violated the terms of a Confidentiality Agreement with Arista and have unfairly competed against Arista by unlawfully appropriating Arista’s trade secrets and that as a result of such activity, Arista has incurred damages in excess of $60,000. Arista seeks damages, an accounting, and preliminary and permanent injunctive relief.On December 21, 2011, we and our officers, directors and employee named in Arista’s Complaint filed a motion to dismiss Arista’s Complaint against our officers, directors and employee as Arista’s Complaint fails to state any cause of action against any of them and to dismiss the claim of fraud against our officers, directors and employee. Subsequently, Arista filed an Amended Complaint alleging essentially the same causes of action but adding additional factual allegations against us and our officers, directors and employee. In addition, Arista filed a motion to disqualify our outside legal counsel representing us and our officers, directors and employee in both Arista’s Complaint and our Complaint against Arista. In response, we and our officers, directors and employee filed a new motion to dismiss Arista’s Complaint against us in its entirety and seeking dismissal of the fraud claim against us. Arista’s motion to disqualify our outside legal counsel was denied on February 10, 2012. On March 9, 2012, the Court issued its decision on our motion to dismiss, granting the motion to the extent of dismissing some claims against us, but denying the motion to dismiss the individuals from the lawsuit at this preliminary stage. On April 19, 2012, an Answer was filed on behalf of us, our officers, directors and employee.We initiated the September 23, 2011 Complaint against Arista Power to protect our customers, employees and shareholders from the unauthorized use and theft of our investments in intellectual property, trade secrets and confidential information by Arista and its employees. Protecting our collective intellectual property and know-how, developed at great cost to us to form our competitive position in the marketplace and create value for our shareholders, is a fundamental responsibility of all our employees.We believe the November 29, 2011 Arista Complaint is retaliatory and without merit. Our development of the foundation for the new product concept for which Arista claims we allegedly used its trade secrets commenced in 2008, long prior to the departure of those individuals who now constitute the executive team of Arista. Furthermore, we believe the purported damage of $60,000 being claimed by Arista is based solely on the reduction in its market capitalization between November 2009 and the filing date of the Complaint. This market value loss is totally unrelated to any actions on account of us, and claims for recovery of this or any other amount are legally and factually baseless.Accordingly, we will vigorously pursue our complaint against Arista and defend what we believe to be a meritless action on the part of Arista Power.ExhibitIndex Description of Document 10.1† 2.1 Stock Purchase Agreement by and between BCF Solutions, Inc. and Ultralife Corporation. Filed herewith 10.37 Second Amendment No. 4 to Credit Facility, dated as of September 28, 2012, by and among Ultralife Corporation, AmendedRedBlack Communications, Inc., Ultralife Energy Services Corporation, and Restated Long-Term Incentive PlanRBS Asset Finance, Inc. Exhibit 4.5 of the Registration Statement on Form S-8 filed on January 30, 2012, File No. 333-179235Filed herewith31.1 Rule 13a-14(a) / 15d-14(a) CEO Certifications Filed herewith 31.2 Rule 13a-14(a) / 15d-14(a) CFO Certifications Filed herewith 32 Section 1350 Certifications Filed herewith *101.INS XBRL Instance Document *101.SCH XBRL Taxonomy Extension Schema Document *101.CAL XBRL Taxonomy Calculation Linkbase Document *101.LAB XBRL Taxonomy Label Linkbase Document *101.PRE XBRL Taxonomy Presentation Linkbase Document *101.DEF XBRL Taxonomy Definition Document †Management contract or compensatory plan or arrangement.* Pursuant to Rule 406T of Regulation S-T, the information in this exhibit is deemed not filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is otherwise not subject to liability under these sections. SIGNATURES 2.1 Stock Purchase Agreement by and between BCF Solutions, Inc. and Ultralife Corporation. ULTRALIFE CORPORATION10.37Second Amendment to Credit Facility, dated as of September 28, 2012, by and among Ultralife Corporation, RedBlack Communications, Inc., Ultralife Energy Services Corporation, and RBS Asset Finance, Inc. (Registrant)Date: May 10, 2012By:/s/ Michael D. PopielecMichael D. PopielecPresident and Chief Executive Officer(Principal Executive Officer)Date: May 10, 2012By:/s/ Philip A. FainPhilip A. FainChief Financial Officer and Treasurer(Principal Financial Officer and Principal Accounting Officer)31.1 Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.231.2 Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 3232 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101.INS XBRL Instance Document 101.SCH XBRL Taxonomy Extension Schema Document 101.CAL XBRL Taxonomy Calculation Linkbase Document 101.LAB XBRL Taxonomy Label Linkbase Document 101.PRE XBRL Taxonomy Presentation Linkbase Document 101.DEF XBRL Taxonomy Definition Document 36