Under the contract, Ultralife will oversee the development, testing, approval and manufacturing of prototypes of a new compact military battery to be used with handheld tactical radios, building on its ongoing development work under the Land Warrior System Stryker Interoperable Program. In addition, Ultralife will provide engineering support, encompassing defining system requirements and performing design integration and testing tasks, to ensure successful demonstration of the system.

Finally, under the technology partnership with MSU, Ultralife is establishing a development and assembly operation in a 14,000 square-foot facility located in West Point, Mississippi. The City of West Point, Mississippi will be responsible for preparing the facility for occupancy; Ultralife will enter into a three-year lease agreement with the city and will receive job training subsidies. The development and assembly facility is expected to create at least 30 jobs to manufacture products coming out of the technology partnership and other Ultralife products. The company plans to commence operations in the first half of 2008.

"Portable fuel cells offer the promise to power battery chargers for soldiers that can effectively extend mission times and reduce a soldier's carrying weight by allowing use of smaller batteries that are both lighter and last longer," said John D. Kavazanjian, Ultralife's president and chief executive officer. "This program demonstrates our commitment to explore new technologies that can broaden our addressable market without straining our already growing workforce in Newark. We look forward to pursuing additional research opportunities with MSU and to benefiting from future initiatives by the State of Mississippi to support research and development activities."

Mr. Kavazanjian continued, "We would like to express our appreciation to the State of Mississippi and the federal, state and local officials who made possible this opportunity for Ultralife to advance the development of next generation power technologies. MSU's exceptional capabilities in many areas of engineering and technology will be central to our efforts to continue to develop our industry-leading military power products to meet the increasingly demanding requirements of military applications."

"Ultralife is a major player in the power solutions industry and a welcome addition to Mississippi's growing technology-driven economy," Mississippi Governor Haley Barbour said. "I am confident that Ultralife has found a solid home in West Point with the technology capabilities, skilled workforce and cooperative spirit our people have to offer growing industries."

Mississippi Senator Thad Cochran said, "Ultralife made a wise decision in choosing West Point as the location for its new facility. The citizens of West Point and the entire Golden Triangle region are hard workers who will be a valuable asset to the productivity of the Ultralife facility. This announcement serves as welcome news to a city that has only recently seen one of its oldest industries close. The City of West Point should be proud of its success in attracting this new business."

Mississippi Senator Roger F. Wicker said, "This is good news for West Point and Clay County and yet another example of a high-tech company with potential to serve commercial and military customers finding the Golden Triangle to be a great place to do business."

West Point Mayor Scott Ross said, "We are excited to welcome Ultralife to our community. I am certain they will discover in West Point an excellent business and industrial climate with a stellar workforce. I would like to thank our economic development partners, the West Point/Clay County Growth Alliance, the North Mississippi Industrial Development Association, the Mississippi Development Authority, Mississippi State University and the Tennessee Valley Authority for a winning collaborative effort to bring this industry-leading high-tech company to West Point."

About Ultralife

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; Stationary Power Services in Clearwater, Florida; 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.

SOURCE: Ultralife

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