"This was a very difficult but necessary decision, particularly considering the dedication, talent and hard work of our Waco employees. We greatly appreciate their work and accomplishments and will be working closely with local Waco officials and agencies to provide assistance in helping our employees transition to other jobs," said John D. Kavazanjian, Ultralife's president and chief executive officer. "While our McDowell Research products continue to be extremely popular with our customers, and are in high demand, unfortunately the Waco operation has not achieved the profitability that we had planned." Kavazanjian concluded, "This move will enable us to realize the operational efficiencies and profit enhancements envisioned when we acquired McDowell Research last year."

Approximately 100 employees will be affected. Ultralife is working closely with McDowell Research customers and suppliers to achieve a smooth transition. No significant charges are anticipated at this time as a result of this action.

About Ultralife Batteries, Inc.

Ultralife is a global provider of high-energy power solutions and communications accessories for diverse applications. The company develops, manufactures and markets a wide range of non-rechargeable and rechargeable batteries, charging systems and accessories including power supplies, amplifiers, amplified speakers, equipment mounts, case equipment and integrated communication systems for markets including military, industrial and consumer portable electronics. Through its portfolio of standard products and engineered solutions, Ultralife is at the forefront of providing the next generation of power systems and accessories. Commercial, retail and government customers include: General Dynamics, Philips Medical Systems, General Motors, Energizer, Kidde Safety, Lowe's, Radio Shack and the national defense agencies of the United States, United Kingdom, Germany, Australia and New Zealand, among others.

Ultralife's headquarters, principal manufacturing and research facilities are in Newark, New York, near Rochester. Ultralife's three other operating units are: Ultralife Batteries (UK) Ltd., in Abingdon, England; McDowell Research in Waco, Texas; and ABLE New Energy in Shenzhen, China. Detailed information on Ultralife is available at: www.ultralifebatteries.com.

This press release may contain forward-looking statements based on current expectations that involve a number of risks and uncertainties. The potential risks and uncertainties that could cause actual results to differ materially include: Addressing the process of U.S. military procurement, worsening global economic conditions, increased competitive environment and pricing pressures, disruptions related to restructuring actions and delays. Further information on these factors and other factors that could affect Ultralife's financial results is included in Ultralife's Securities and Exchange Commission (SEC) filings, including the latest Annual Report on Form 10-K.

Ultralife(R) is a registered trademark of Ultralife Batteries, Inc.

SOURCE: Ultralife Batteries, Inc.

Ultralife Batteries, Inc.
Pete Comerford, 315-332-7100
pcomerford@ulbi.com
or
Investor Relations:
Lippert/Heilshorn & Associates, Inc.
Jody Burfening, 212-838-3777
jburfening@lhai.com