Core Insights - Ultralife Corporation (ULBI) has faced profitability challenges despite ongoing growth, attributed to cost pressures, weak negotiating positions with customers, competition, and ineffective diversification strategies [1] Company Analysis - The company has experienced a decline in profitability over the past few years, indicating potential operational inefficiencies or market challenges [1] - Cost pressures have significantly impacted the company's financial performance, suggesting a need for better cost management strategies [1] - A weak negotiating position with at least one customer has contributed to the company's struggles, highlighting potential issues in customer relationships or market power [1] - Increased competition in the industry may be affecting Ultralife's market share and pricing power, necessitating a review of competitive strategies [1] - The company's diversification efforts have not yielded the expected results, indicating a need for a reassessment of its growth strategy [1]

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Financial Data and Key Metrics Changes - Consolidated revenues for Q3 2025 totaled $43.4 million, up from $35.7 million in Q3 2024, representing a year-over-year growth [9] - The company reported an operating loss of $1 million, including a one-time adjustment of $1.1 million, resulting in a GAAP net loss of $0.07 per share compared to a net income of $0.3 million, or $0.02 per share, in the previous year [5][15] - Consolidated gross profit increased to $9.6 million, a 10.8% rise from $8.7 million in Q3 2024, but gross margin declined to 22.2% from 24.3% [11][12] Business Line Data and Key Metrics Changes - Revenues from the battery and energy product segment were $39.9 million, up from $32.5 million year-over-year, with a 19% increase in government defense sales [9][10] - Communication systems segment revenues increased by 8.2% to $3.4 million from $3.2 million in the previous year [10] - The sales split between commercial and government defense for the battery business remained stable at 70/30, while the domestic-to-international sales split shifted to 72/28 due to increased domestic shipments [10][11] Market Data and Key Metrics Changes - Total backlog at the end of Q3 was $90.1 million, a 6.5% increase from $84.5 million at the end of Q2 [11] - The commercial-to-government defense sales split on a consolidated basis was 65/35, similar to the previous year's 63/37 [11] Company Strategy and Development Direction - The company is focusing on diversification through M&A and new product development to stabilize and improve profitability [6][8] - A company-wide rebranding initiative is underway to unify the Ultralife brand and enhance market identity [7][18] - The closure of the Calgary facility is expected to yield annual savings of approximately $0.8 million throughout 2026 [12][13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges with gross margins due to supply chain quality issues but remains optimistic about future growth opportunities [5][25] - The completion of the Electric Chem transition is expected to broaden market opportunities, particularly in oil and gas sectors [17][26] - The company is intensifying efforts to improve gross margins through pricing strategies and lean productivity projects [18][19] Other Important Information - Operating expenses increased by 29.4% year-over-year to $10.6 million, influenced by the inclusion of Electric Chem and one-time costs [12] - The company has reduced debt principal by $4.1 million in the first nine months of 2025, exceeding the required amortization [16] Q&A Session Summary - No questions were raised during the Q&A session, and the call concluded with management expressing anticipation for future discussions [27][28]

Financial Data and Key Metrics Changes - Consolidated revenues for Q3 2025 totaled $43.4 million, up from $35.7 million in Q3 2024, representing a year-over-year growth [9] - Operating loss was $1 million, including a one-time adjustment of $1.1 million, resulting in a GAAP net loss of $0.07 per share compared to a net income of $0.3 million or $0.02 per share in the previous year [5][15] - Consolidated gross profit increased to $9.6 million, a 10.8% increase from $8.7 million in Q3 2024, but gross margin declined to 22.2% from 24.3% [11][12] Business Line Data and Key Metrics Changes - Battery and energy product segment revenues were $39.9 million, up from $32.5 million year-over-year, with a gross profit of $8.8 million [9][12] - Communication systems segment revenues increased by 8.2% to $3.4 million, with gross profit rising to $0.8 million [10][12] - Government defense sales increased by 19%, while commercial sales decreased by 5.7%, primarily due to declines in oil and gas and medical battery sales [10] Market Data and Key Metrics Changes - The sales split between commercial and government defense for the battery business was 70/30, consistent with the previous year's 69/31 [10] - Domestic-to-international sales split shifted to 72/28 from 56/44, reflecting increased domestic shipments of government defense products [10] - Total backlog at the end of Q3 was $90.1 million, a 6.5% increase from $84.5 million at the end of Q2 [11] Company Strategy and Development Direction - The company is focusing on diversification through M&A and new product development to stabilize and improve profitability [6][8] - A company-wide rebranding initiative is underway to unify the Ultralife brand and enhance market identity [7][18] - The closure of the Calgary facility is expected to yield annual savings of approximately $0.8 million throughout 2026 [12][16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges with gross margins due to supply chain quality issues but remains optimistic about future growth opportunities [5][25] - The completion of the Electric Chem transition is expected to enhance vertical integration and broaden market opportunities [17][26] - The company is intensifying efforts to improve gross margins through pricing strategies and lean productivity projects [18][19] Other Important Information - Operating expenses increased by 29.4% year-over-year to $10.6 million, influenced by the inclusion of Electric Chem and one-time costs [12] - The company has reduced debt principal by $4.1 million in the first nine months of 2025, exceeding the required amortization [16] Q&A Session Summary - No questions were raised during the Q&A session, and the call concluded with closing remarks from management [27][28]

Financial Data and Key Metrics Changes - Consolidated revenues for Q3 2025 totaled $43.4 million, up from $35.7 million in Q3 2024, reflecting a year-over-year growth [8] - Operating loss was $1 million, including a one-time adjustment of $1.1 million, resulting in a GAAP net loss of $0.07 per share compared to a net income of $0.3 million or $0.02 per share in the previous year [5][13] - Consolidated gross profit increased to $9.6 million, a 10.8% rise from $8.7 million in Q3 2024, but gross margin declined to 22.2% from 24.3% [10][11] Business Line Data and Key Metrics Changes - Revenues from the battery and energy product segment were $39.9 million, up from $32.5 million year-over-year, with a 1.9% increase excluding Electric Chem sales [8][9] - Government defense sales increased by 19%, while commercial sales decreased by 5.7%, primarily due to declines in oil and gas and medical battery sales [9] - Communication systems segment revenues rose to $3.4 million, an 8.2% increase from $3.2 million in the previous year [9] Market Data and Key Metrics Changes - The sales split between commercial and government defense for the battery business was 70/30, consistent with the previous year's 69/31 [9] - The domestic-to-international sales split shifted to 72/28 from 56/44, reflecting increased domestic shipments of government defense products [9] - Total backlog at the end of Q3 was $90.1 million, a 6.5% increase from $84.5 million at the end of Q2 [10] Company Strategy and Development Direction - The company is focusing on diversification through M&A and new product development to stabilize and improve profitability [6] - A company-wide rebranding initiative is underway to unify the Ultralife brand and enhance market identity [6] - The closure of the Calgary facility is expected to yield annual savings of approximately $0.8 million throughout 2026 [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the completion of the Electric Chem transition and the potential for growth in 2026 [15][23] - The company is prioritizing opportunities that can generate consistent, repeatable annual revenue while diversifying its customer base [16] - Efforts are being intensified to improve gross margins through pricing strategies and lean productivity projects [16] Other Important Information - The company has reduced its debt principal by $4.1 million in the first nine months of 2025, exceeding the required amortization for the year [14] - Adjusted EBITDA for Q3 was $2.0 million, or 4.7% of sales, compared to $1.9 million, or 5.4% for the prior year [13] Q&A Session Summary - No questions were raised during the Q&A session, and the call concluded with management looking forward to the next earnings call [24][25]

Revenue and Sales Performance - Revenue for the third quarter of 2025 was $43.4 million, an increase of $7.7 million or 21.5% compared to $35.7 million in the same quarter of 2024[5] - Battery & Energy Products sales increased 22.8% to $39.9 million, while excluding Electrochem, sales increased 1.9%[6] - Communications Systems sales increased 8.2% to $3.4 million compared to $3.2 million for the same period last year[6] - Backlog at the end of the third quarter was $90.1 million, up from $84.5 million at the end of the second quarter of 2025[5] Profitability and Loss - Gross profit was $9.6 million, representing 22.2% of revenue, down from 24.3% in the third quarter of 2024[7] - Operating loss was $1.0 million, compared to operating income of $0.5 million in the same quarter last year, primarily due to one-time non-recurring costs[9] - Net loss attributable to Ultralife Corporation was $1.2 million, or ($0.07) per share, compared to net income of $0.3 million, or $0.02 per share, for the third quarter of 2024[10] - Ultralife Corporation reported a net loss of $(1,220) million for the three-month period ended September 30, 2025, compared to a net income of $258 million for the same period in 2024[23] - The nine-month period ended September 30, 2025, showed a net income of $1,524 million, a decrease from $6,118 million in the same period of 2024[23] Expenses and Costs - Operating expenses increased to $10.6 million, or 24.4% of revenue, compared to 22.9% of revenue for the same period last year[8] - Interest expense, net, increased to $992 million in the three-month period ended September 30, 2025, compared to $173 million in the prior year[23] - The company incurred severance and other costs for plant closure amounting to $491 million in the latest quarter[23] - Non-cash purchase accounting adjustments were $40 million for the three-month period ended September 30, 2025[23] - Depreciation expense rose to $1,008 million in the latest quarter, up from $765 million in the same quarter of the previous year[23] - Stock-based compensation expense increased to $236 million compared to $170 million in the same period last year[23] - Acquisition and other non-recurring costs for the three-month period were $594 million, up from $250 million in the prior year[23] Adjusted Metrics - Adjusted EBITDA for the third quarter was $2.0 million, or 4.7% of sales, compared to $1.9 million, or 5.4% of sales, for the same period last year[11] - Adjusted EBITDA for the three-month period was $2,048 million, an increase from $1,919 million in the same period last year[23] - Income tax benefit provision for the three-month period was $(504) million, compared to a provision of $74 million in the same period last year[23] - The company recorded a $0.5 million charge related to the closure of its Calgary facility, with expected annual savings of approximately $0.8 million thereafter[2]

Core Viewpoint - Ultralife Corporation reported a mixed financial performance for the third quarter of 2025, with revenue growth impacted by supply chain issues and a decision to close its Calgary facility, which is expected to yield future cost savings [1][2][4]. Financial Performance - Revenue for the third quarter was $43.4 million, a 21.5% increase from $35.7 million in the same quarter of 2024. Organic growth was 2.5%, while the Electrochem acquisition contributed significantly to the revenue increase [4][7]. - Gross profit was $9.6 million, representing 22.2% of revenue, down from 24.3% in the previous year, primarily due to manufacturing inefficiencies and a less favorable sales mix [5][7]. - Operating expenses rose to $10.6 million from $8.2 million year-over-year, influenced by the inclusion of Electrochem and one-time costs related to the Calgary facility closure [6][7]. Operational Changes - The decision to close the Calgary battery pack assembly facility will incur a one-time charge of $0.5 million but is expected to save approximately $0.8 million annually post-closure [1][4]. - The company is focusing on improving supply chain resiliency and manufacturing operations to address inefficiencies in its Battery & Energy Products business [2][3]. Segment Performance - Battery & Energy Products sales increased by 22.8% to $39.9 million, driven by the Electrochem acquisition, while excluding Electrochem, sales grew by 1.9% [4][7]. - Communications Systems sales rose by 8.2% to $3.4 million compared to the previous year [4][7]. Profitability Metrics - The operating loss for the quarter was $1.0 million, compared to an operating income of $0.5 million in the same quarter of 2024, largely due to one-time costs and lower gross margins [8][9]. - Adjusted EBITDA for the quarter was $2.0 million, slightly up from $1.9 million year-over-year, indicating some operational stability despite the challenges faced [10][20]. Backlog and Future Outlook - The backlog at the end of the third quarter was $90.1 million, an increase from $84.5 million at the end of the second quarter, suggesting a positive outlook for future revenue [7].

Financial Performance - Consolidated revenues for Q3 2025 were $43,371, an increase of $7,677 or 21.5% compared to $35,694 in Q3 2024, driven by Electrochem sales of $6,797 and a 16.4% increase in government/defense sales[105] - Gross profit for Q3 2025 was $9,619, representing 22.2% of revenue, down from $8,682 or 24.3% in Q3 2024, primarily due to sales product mix and quality issues impacting manufacturing[106] - The operating loss for Q3 2025 was ($951), or (2.2%) of revenues, compared to an operating income of $511, or 1.4% of revenues in Q3 2024, mainly due to lower gross margins in the Battery & Energy Products segment[109] - Net loss attributable to Ultralife Corporation was ($1,220), or ($0.07) per share, for Q3 2025, compared to net income of $258, or $0.02 per share, in Q3 2024[111] - Adjusted EBITDA for Q3 2025 was $2,048, or 4.7% of revenues, down from $1,919, or 5.4% of revenues in Q3 2024[112] - Consolidated revenues for the nine-month period ended September 30, 2025, were $142,678, an increase of $22,074 or 18.3% over $120,604 in the same period of 2024[126] - Net income attributable to Ultralife was $1,524 or $0.09 per share for the nine-month period ended September 30, 2025, down from $6,118 or $0.37 per share in the same period of 2024[136] - Adjusted EBITDA for the nine-month period ended September 30, 2025, was $11,609,000, compared to $12,577,000 for the same period in 2024, reflecting an 7.7% decrease[144] Revenue Breakdown - Battery & Energy Products revenues increased by $7,417, or 22.8%, to $39,946 in Q3 2025, with government/defense sales up 19.0% but commercial sales down 5.7%[115] - Communications Systems sales rose by $260, or 8.2%, to $3,425 in Q3 2025, impacted by delays in purchase orders due to anticipated U.S. Government shutdown[116] - Communications Systems revenues decreased by $5,859 or 35.7% to $10,544 for the nine-month period ended September 30, 2025, due to delays in purchase orders and reduced shipments[128] Cost and Expenses - Operating expenses increased to $10,570 in Q3 2025 from $8,171 in Q3 2024, reflecting Electrochem's results and one-time costs related to closing the Calgary facility[107] - Cost of products sold increased to $33,752 in Q3 2025, up 25.0% from $27,012 in Q3 2024, leading to a gross margin decline from 24.3% to 22.2%[117] - Operating expenses for the nine-month period ended September 30, 2025, were $29,261, an increase of $6,037 or 26.0% from $23,224 in 2024[132] - Research and development costs increased by $754 or 35.9% to $2,855 in Q3 2025, driven by the inclusion of Electrochem and higher new product development costs[121] Cash Flow and Investments - For the nine-month period ended September 30, 2025, cash generated from operations was $9,501,000, down from $13,590,000 in the same period of 2024, representing a 30.5% decrease[146] - As of September 30, 2025, cash totaled $9,260,000, an increase from $6,854,000 at December 31, 2024, indicating a 35.5% rise[145] - Cash used in investing activities for the nine months ended September 30, 2025, was $2,986,000, primarily for capital expenditures related to new product manufacturing[147] - Cash used in financing activities for the nine months ended September 30, 2025, was $3,989,000, which included a $4,063,000 reduction in outstanding debt[148] Debt and Financing - As of September 30, 2025, the company had $50,937,000 outstanding on the Term Loan and no amounts outstanding on the Revolving Credit Facility, indicating full compliance with debt covenants[151] - The company expects positive operating cash flow and availability of borrowings under its Revolving Credit Facility to meet general funding requirements in the foreseeable future[149] - The new shelf registration statement filed on March 29, 2024, allows the company to offer and sell up to $100,000,000 in securities for general corporate purposes, including potential acquisitions and strategic capital expenditures[150] Taxation - The effective tax rate decreased to 16.9% for the nine-month period ended September 30, 2025, from 20.9% in 2024, primarily due to the geographic mix of operating results[135]

Core Points - Ultralife Corporation will report its third quarter results for the period ended September 30, 2025, before the market opens on November 18, 2025 [1] - An investor conference call and webcast will be hosted by Ultralife's management at 8:30 AM ET on the same day [1] - Participants are required to pre-register for the conference call to ensure a reliable connection [2] - A live webcast will be available on the company's website, with a replay accessible shortly after the call [3] Company Overview - Ultralife Corporation provides products and services in power solutions, communications, and electronics systems [4] - The company serves government, defense, and commercial customers globally [4] - Ultralife is headquartered in Newark, New York, and operates in North America, Europe, and Asia [5]

Core Points - Ultralife Corporation has received a $5.2 million award from the U.S. Government's Defense Logistics Agency for its BA-5390 military batteries, with shipments scheduled throughout 2026 and completion in early 2027 [1] - The BA-5390 battery is recognized for its long life, safety, and reliability, and Ultralife has been a long-standing supplier to the U.S. military [2] - The previous significant award for the BA-5390 battery was a multi-year contract valued at up to $9.9 million received in 2021 [2] Company Overview - Ultralife Corporation provides products and services ranging from power solutions to communications and electronics systems, serving government/defense and commercial customers globally [3] - The company is headquartered in Newark, New York, and operates in North America, Europe, and Asia, with business segments including Battery & Energy Products and Communications Systems [4]