NEWARK, N.Y.--(BUSINESS WIRE)--Oct. 1, 2007--Ultralife Batteries, Inc. (NASDAQ: ULBI) has completed the acquisition of Innovative Solutions Consulting, Inc. (ISC), an engineering and technical services company located in Hollywood, Maryland, effective September 28.

Under the terms of the agreement, the purchase price of approximately $3 million consists of $1 million in cash and an earn-out totaling up to $2 million to be paid over three years based on exceeding certain agreed-upon annual sales measures. Ultralife is financing the transaction with operating cash and available credit. Management anticipates that the transaction will be accretive in 2008.

"Our acquisition of ISC will broaden our relationships with a diverse group of U.S. governmental agencies and prime defense contractors and expand our distribution channels for our broad range of communications accessories, portable power products and integrated engineering services," said John D. Kavazanjian, Ultralife's president and chief executive officer. "As an Ultralife company, ISC, under the leadership of Jim Evans, Ultralife vice president and general manager, will continue operating from its strategically located Southern Maryland site with the consistent level of excellence and focus that has enabled them to earn the business and respect from their diverse and distinguished portfolio of customers."

Established in 1999, ISC is an engineering and technical services firm specializing in the design, integration, and fielding of mobile, modular, and fixed-site communication and electronic systems. ISC was awarded a prime contract by the U.S. Air Force to provide the Battle Control System-Mobile (BCS-M) program's Communication Switch Subsystem (CSS) and also has several subcontracts with local prime contractors such as L-3 Communications Systems, BAE Systems and Booz Allen & Hamilton to support the Naval Air System Command (NAVAIR) Special Communications Requirements Division (SCRD). Through these NAVAIR contracts, ISC supports a diverse list of clients including: U.S. Special Operations Command (USSOCOM), U.S. Central Command (CENTCOM), U.S. Department of State and various other DoD commands and Government agencies. Other clients include: National Security Agency, SRA International and SWE-DISH Satellite Systems. Products in development include ISC's recently introduced Rapid Response Vehicle, which is designed to provide critical communications to support emergency management, surveillance and disaster relief situations. In 2006, ISC generated approximately $4 million in revenue.

ISC has gained a reputation as an exciting and rewarding place to work with a tradition of providing excellent customer service. Inc. magazine recognized ISC's accomplishments by ranking them #182 and #358 of the top 500 fastest growing privately held companies in the U.S. for 2005 and 2006 respectively. ISC has also been locally recognized in Maryland by the 400 member Patuxent Partnership as the 2005 Firm of the Year and was awarded a prestigious Leading Edge Award.

Information about ISC is available at: www.teamisc.com.

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 for markets including defense, commercial 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. Defense, commercial and retail customers include: General Dynamics, Raytheon, 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, and its McDowell Research operating unit are in Newark, New York, near Rochester. Ultralife's other operating units are: Ultralife Batteries (UK) Ltd., in Abingdon, England; Innovative Solutions Consulting in Hollywood, Maryland; 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: 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) and McDowell Research(R) are registered trademarks of Ultralife Batteries, Inc.

CONTACT: Ultralife Batteries, Inc.
Robert W. Fishback, 315-332-7100
bfishback@ulbi.com
or
Investor Relations:
Lippert/Heilshorn & Associates, Inc.
Jody Burfening, 212-838-3777
jburfening@lhai.com

SOURCE: Ultralife Batteries, Inc.