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Universal Power Group Inc. (UPG) Reports Increase in Gross Profit on Higher Margin Product Sales and Lower Raw Material Costs

Providing a product and service mix to markets that rely on a basic concept is a sure way to build a profitable company. In most instances, these successful product and services mixes are less then sexy, but all too profitable; even in difficult economic times. Thinking about basic components in this sense is the trick, and one that will be a stable and profitable investment for the conservative investor.

Universal Power Group Inc., a cradle to grave supplier of battery products and services, works to offer a full range of battery products to a range of markets and industries. The company currently operates in the United Kingdom, Ireland, the United States, Canada and Australia.

To indicate that the company is a full service supplier to the battery marketplace would be an understatement. It services just about all aspects of the battery marketplace from warehouse logistics to the manufacture of several battery types. Although it does have a very strong presence in the “in-vogue” lithium battery marketplace and can be considered a very real competitor in this area, it tends to follow the lead-acid battery marketplace more closely. In a general sense, this particular strategy hinges on the 1968 roots of the company and its industrial oriented customer base.

The company’s various battery chemistries include: nickel-cadmium, lithium, lithium-polymer, nickel metal hydride, alkaline and carbon-zink batteries. Past this base of manufacturing, the company also manufactures and services the battery power marketplace with security components such as security boards and alike, cables and wires, logistics and other generalized products associated with power generation from a battery form.

Although the company did experience a small decrease in sales for the second quarter of 2009, it did find an increase in gross income. Sales for the period were $27.9 million, while gross profit increased $0.4 million, or 9.7%, year-over-year. Generally speaking, this increase could be attributed to increased sales in higher margin products and a small decrease in the cost of raw materials.

From an overall perspective, the company does appear to be moving through current economic conditions in fine fashion. Even though battery technology does appear to be focusing on the automotive industry of late, there is still a very large demand for more efficient batteries of all types. Universal Power Group Inc. is supplying that need along with a solid array of other battery related products and services.

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