To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh. ...

Ultralife (NasdaqGM:ULBI) Q3 2025 Earnings Call November 18, 2025 08:30 AM ET Company ParticipantsPhilip Fain - CFOJody Burfening - Head of Investor RelationsMike Manna - President and CEOOperatorGood day, and thank you for standing by. Welcome to the Ultralife Corporation Third Quarter 2025 results call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 ...

Ultralife (NasdaqGM:ULBI) Q3 2025 Earnings Call November 18, 2025 08:30 AM ET Company ParticipantsPhilip Fain - CFOJody Burfening - Head of Investor RelationsMike Manna - President and CEOOperatorGood day, and thank you for standing by. Welcome to the Ultralife Corporation Third Quarter 2025 results call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 ...

Ultralife (NasdaqGM:ULBI) Q3 2025 Earnings Call November 18, 2025 08:30 AM ET Speaker3Good day, and thank you for standing by. Welcome to the Ultralife Corporation Third Quarter 2025 results call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw you ...

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]

NEWARK, N.Y., Nov. 18, 2025 (GLOBE NEWSWIRE) -- Ultralife Corporation (NASDAQ: ULBI) reported operating results for the third quarter ended September 30, 2025 with the following results: Sales of $43.4 million increased 21.5% from $35.7 million for the third quarter of 2024; excluding Electrochem, sales of $36.6 million increased 2.5%Gross profit of $9.6 million, or 22.2% of revenue, compared to $8.7 million, or 24.3% of revenue, for the third quarter of 2024Operating loss of $1.0 million, reflecting one-ti ...

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]

NEWARK, N.Y., Nov. 13, 2025 (GLOBE NEWSWIRE) -- Ultralife Corporation (NASDAQ: ULBI) will report its third quarter results for the period ended September 30, 2025 before the market opens on Tuesday, November 18, 2025. Ultralife’s Management will also host an investor conference call and simultaneous webcast at 8:30 AM ET on November 18, 2025. Please see the call-in procedures which follow below. NOTE TO THOSE PLANNING TO PARTICIPATE BY PHONE: To ensure a fast and reliable connection to our investor conferen ...

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]

PART I. FINANCIAL INFORMATION [Item 1. Consolidated Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Consolidated%20Financial%20Statements%20(unaudited)) This section presents the unaudited consolidated financial statements of Ultralife Corporation and its subsidiaries for the periods ended June 30, 2025, and December 31, 2024, including balance sheets, income statements, cash flow statements, and statements of changes in stockholders' equity, along with detailed notes on accounting policies, acquisitions, debt, and segment information [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets%20as%20of%20June%2030%2C%202025%20and%20December%2031%2C%202024) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific points in time **Consolidated Balance Sheet Highlights (In Thousands)** | Metric | June 30, 2025 | December 31, 2024 | Change | | :--------------------------------- | :------------ | :---------------- | :----- | | Cash | $10,941 | $6,854 | +$4,087 | | Trade accounts receivable, net | $32,322 | $29,370 | +$2,952 | | Inventories, net | $50,575 | $51,363 | -$788 | | Total current assets | $99,003 | $97,160 | +$1,843 | | Total assets | $220,961 | $220,451 | +$510 | | Total current liabilities | $29,898 | $29,291 | +$607 | | Long-term debt, net | $47,510 | $51,502 | -$3,992 | | Total liabilities | $82,316 | $86,264 | -$3,948 | | Total stockholders' equity | $138,645 | $134,187 | +$4,458 | [Consolidated Statements of Income and Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income%20for%20the%20Three%20and%20Six-Month%20Periods%20Ended%20June%2030%2C%202025%20and%20June%2030%2C%202024) This section outlines the company's financial performance over specific periods, detailing revenues, expenses, and net income **Consolidated Statements of Income and Comprehensive Income (In Thousands, except per share)** | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change (3M) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change (6M) | | :----------------------------------- | :--------------------------- | :--------------------------- | :---------------- | :--------------------------- | :--------------------------- | :---------------- | | Revenues | $48,561 | $42,983 | +13.0% | $99,307 | $84,910 | +17.0% | | Cost of products sold | $36,960 | $31,420 | +17.6% | $74,961 | $61,877 | +21.1% | | Gross profit | $11,601 | $11,563 | +0.3% | $24,346 | $23,033 | +5.7% | | Operating expenses | $9,345 | $7,646 | +22.2% | $18,691 | $15,053 | +24.2% | | Operating income | $2,256 | $3,917 | -42.4% | $5,655 | $7,980 | -29.1% | | Income before income taxes | $1,113 | $3,846 | -71.0% | $3,559 | $7,453 | -52.2% | | Net income attributable to Ultralife Corporation | $879 | $2,969 | -70.4% | $2,744 | $5,860 | -53.2% | | Basic EPS | $0.05 | $0.18 | -72.2% | $0.17 | $0.36 | -52.8% | | Diluted EPS | $0.05 | $0.18 | -72.2% | $0.17 | $0.35 | -51.4% | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Six-Month%20Periods%20Ended%20June%2030%2C%202025%20and%20June%2030%2C%202024) This section details the inflows and outflows of cash from operating, investing, and financing activities over specific periods **Consolidated Statements of Cash Flows (In Thousands)** | Activity | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :---------------- | | Net cash provided by operating activities | $9,303 | $8,844 | +5.2% | | Net cash used in investing activities | $(1,995) | $(732) | +172.5% | | Net cash used in financing activities | $(3,338) | $(11,743) | -71.6% | | Increase (decrease) in cash | $4,087 | $(3,588) | N/A | | Cash, End of period | $10,941 | $6,690 | +63.5% | [Consolidated Statements of Changes in Stockholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity%20for%20the%20Three%20and%20Six-Month%20Periods%20Ended%20June%2030%2C%202025%20and%20June%2030%2C%202024) This section presents the changes in the equity accounts of the company's stockholders over specific reporting periods **Key Changes in Stockholders' Equity (In Thousands)** | Item | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | | Balance – December 31, 2024/2023 | $134,187 | $125,427 | | Net income | $2,744 | $5,860 | | Stock option exercises | $61 | $1,936 | | Stock-based compensation | $462 | $320 | | Foreign currency translation adjustments | $1,186 | $(235) | | Balance – June 30, 2025/2024 | $138,645 | $133,345 | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20(unaudited)) This section provides detailed explanations and additional information supporting the consolidated financial statements [1. Basis of Presentation](index=9&type=section&id=1.%20BASIS%20OF%20PRESENTATION) This section describes the accounting principles and standards used in preparing the interim financial statements - The unaudited consolidated financial statements are prepared in accordance with GAAP for interim financial information and Rule 8-03 of Regulation S-X[21](index=21&type=chunk) - The company adopted ASU 2023-07 "Segment Reporting" in November 2023, which did not impact financial results[23](index=23&type=chunk) - The company is evaluating ASU 2023-09 "Income Taxes" (effective Jan 1, 2025) and ASU 2024-03 "Expense Disaggregation Disclosures" (effective Jan 1, 2027) for potential impacts on disclosures[24](index=24&type=chunk)[25](index=25&type=chunk) [2. Acquisition](index=10&type=section&id=2.%20ACQUISITION) This section details the acquisition of Electrochem Solutions, Inc., including its financial impact and strategic rationale - On October 31, 2024, Ultralife completed the acquisition of Electrochem Solutions, Inc. for **$48,022 thousand** in cash[26](index=26&type=chunk) - The acquisition enhances Ultralife's strategy by providing scale, manufacturing cost efficiencies, a blue-chip customer base, and a complementary portfolio of highly engineered battery cells and packs[27](index=27&type=chunk) - Electrochem contributed **$9,299 thousand** in revenue and **$1,626 thousand** in net income before taxes for the three-month period ended June 30, 2025, and **$16,921 thousand** in revenue and **$2,369 thousand** in net income before taxes for the six-month period ended June 30, 2025[34](index=34&type=chunk)[35](index=35&type=chunk) **Electrochem Purchase Price Allocation (In Thousands)** | Asset/Liability | Amount | | :-------------------------------- | :----- | | Accounts receivable | $5,270 | | Inventories | $9,172 | | Property, plant and equipment | $20,735 | | Goodwill | $7,558 | | Other intangible assets | $10,500 | | Net assets acquired | $48,022 | [3. Debt](index=11&type=section&id=3.%20DEBT) This section outlines the company's debt arrangements, including the new Term Loan Facility and repayment obligations - On October 31, 2024, Ultralife entered into a new Credit and Security Agreement with KeyBank, including a 5-year, **$55 million** senior secured Term Loan Facility[37](index=37&type=chunk)[38](index=38&type=chunk) - As of June 30, 2025, **$51,625 thousand** principal was outstanding on the Term Loan, with **$3,438 thousand** classified as current portion of long-term debt[40](index=40&type=chunk) - The company was in full compliance with its debt covenants as of June 30, 2025, and the borrowing rate was **6.79%**[43](index=43&type=chunk)[45](index=45&type=chunk) **Future Minimum Principal Repayment Obligations (In Thousands)** | Year | Amount | | :--- | :----- | | 2025 | $1,375 | | 2026 | $4,125 | | 2027 | $5,500 | | 2028 | $5,500 | | 2029 | $35,125 | | **Total** | **$51,625** | [4. Earnings Per Share](index=13&type=section&id=4.%20EARNINGS%20PER%20SHARE) This section explains the calculation of basic and diluted earnings per share and factors affecting share count - Basic EPS is computed by dividing net income attributable to Ultralife by the weighted average shares outstanding, while diluted EPS includes the dilutive effect of securities[49](index=49&type=chunk) - For the three-month period ended June 30, 2025, **21,856** potential common shares were included in diluted EPS calculation, significantly lower than **257,068** in the prior year due to fewer dilutive stock options and restricted stock awards[50](index=50&type=chunk) [5. Supplemental Balance Sheet Information](index=13&type=section&id=5.%20SUPPLEMENTAL%20BALANCE%20SHEET%20INFORMATION) This section provides detailed breakdowns of specific balance sheet accounts, including inventories, property, plant and equipment, goodwill, and other intangible assets [Inventories, Net](index=13&type=section&id=Inventories%2C%20Net) This section details the composition of the company's inventory, categorized by raw materials, work in process, and finished goods **Inventories, Net (In Thousands)** | Category | June 30, 2025 | December 31, 2024 | | :--------------- | :------------ | :---------------- | | Raw materials | $35,502 | $36,035 | | Work in process | $5,639 | $4,501 | | Finished goods | $9,434 | $10,827 | | **Total** | **$50,575** | **$51,363** | [Property, Plant and Equipment, Net](index=13&type=section&id=Property%2C%20Plant%20and%20Equipment%2C%20Net) This section provides a breakdown of the company's tangible long-term assets and associated depreciation **Property, Plant and Equipment, Net (In Thousands)** | Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Land | $4,693 | $4,693 | | Buildings and leasehold improvements | $30,124 | $30,109 | | Machinery and equipment | $62,012 | $60,986 | | Construction in process | $3,122 | $2,077 | | Less: Accumulated depreciation | $(70,535) | $(68,437) | | **Total PP&E, net** | **$40,614** | **$40,485** | **Depreciation Expense (In Thousands)** | Period | June 30, 2025 | June 30, 2024 | | :----------------------- | :------------ | :------------ | | Three-month period ended | $1,008 | $789 | | Six-month period ended | $1,958 | $1,529 | [Goodwill](index=14&type=section&id=Goodwill) This section details the changes in goodwill by segment, including the impact of foreign currency translation **Goodwill Activity by Segment (In Thousands)** | Segment | December 31, 2024 | Effect of Foreign Currency Translation | June 30, 2025 | | :-------------------- | :---------------- | :----------------------------------- | :------------ | | Battery & Energy Products | $33,513 | $400 | $33,913 | | Communications Systems | $11,493 | - | $11,493 | | **Total** | **$45,006** | **$400** | **$45,406** | [Other Intangible Assets, Net](index=15&type=section&id=Other%20Intangible%20Assets%2C%20Net) This section presents the company's intangible assets, such as customer relationships and trade names, along with their amortization **Other Intangible Assets, Net (In Thousands)** | Category | Cost (June 30, 2025) | Accumulated Amortization (June 30, 2025) | Net (June 30, 2025) | Net (December 31, 2024) | | :-------------------- | :------------------- | :--------------------------------------- | :---------------- | :-------------------- | | Customer relationships | $18,383 | $7,913 | $10,470 | $10,858 | | Trade names | $9,976 | $1,078 | $8,898 | $9,129 | | Patents and technology | $5,783 | $5,583 | $200 | $262 | | Trademarks | $3,400 | - | $3,400 | $3,399 | | Other | $1,500 | $629 | $871 | $909 | | **Total other intangible assets** | **$39,042** | **$15,203** | **$23,839** | **$24,557** | **Amortization Expense for Intangible Assets (In Thousands)** | Period | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Selling, general and administrative | $378 | $202 | $754 | $405 | | Research and development | $32 | $25 | $61 | $50 | | **Total amortization expense** | **$410** | **$227** | **$815** | **$455** | [6. Stock-Based Compensation](index=16&type=section&id=6.%20STOCK-BASED%20COMPENSATION) This section details the expenses related to stock options and restricted stock awards, and unrecognized compensation costs **Stock-Based Compensation Expense (In Thousands)** | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Stock options | $190 | $152 | $378 | $308 | | Restricted stock | $45 | $7 | $84 | $12 | | **Total** | **$235** | **$159** | **$462** | **$320** | - As of June 30, 2025, total unrecognized compensation cost related to outstanding stock options was **$733 thousand**, expected to be recognized over a weighted average period of **1.1 years**[60](index=60&type=chunk) - Cash received from stock option exercises for the six-month period ended June 30, 2025, was **$61 thousand**, a significant decrease from **$1,936 thousand** in the prior year[61](index=61&type=chunk) [7. Income Taxes](index=17&type=section&id=7.%20INCOME%20TAXES) This section discusses the effective tax rate, net operating loss carryforwards, and valuation allowances - The effective tax rate for the six-month period ended June 30, 2025, was **22.8%**, up from **20.9%** in the prior year, primarily due to the geographic mix of operating results[64](index=64&type=chunk) - As of December 31, 2024, the company had domestic net operating loss (NOL) carryforwards of **$15,000 thousand** and domestic tax credits of **$3,200 thousand**, which management expects to fully utilize[65](index=65&type=chunk) - A valuation allowance of approximately **$9,600 thousand** is maintained for NOL carryforwards related to past U.K. operations, which cannot be used by the current U.K. subsidiary[66](index=66&type=chunk) [8. Operating Leases](index=17&type=section&id=8.%20OPERATING%20LEASES) This section outlines the company's operating lease costs, right-of-use assets, and lease liabilities **Total Lease Cost (In Thousands)** | Period | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Operating lease cost | $291 | $268 | $591 | $530 | | Variable lease cost | $22 | $24 | $46 | $52 | | **Total lease cost** | **$313** | **$292** | **$637** | **$582** | **Operating Lease Liabilities (In Thousands)** | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Operating lease right-of-use asset | $3,746 | $4,153 | | Current operating lease liability | $1,112 | $1,138 | | Operating lease liability, net of current portion | $2,632 | $2,998 | | **Total operating lease liability** | **$3,744** | **$4,136** | | Weighted-average remaining lease term (years) | 4.1 | 4.5 | | Weighted-average discount rate | 6.7% | 6.7% | [9. Commitments and Contingencies](index=19&type=section&id=9.%20COMMITMENTS%20AND%20CONTINGENCIES) This section details the company's purchase commitments and accrued warranty obligations - As of June 30, 2025, the company had commitments to purchase approximately **$1,408 thousand** in production machinery and equipment[74](index=74&type=chunk) **Accrued Warranty Obligations (In Thousands)** | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | | Accrued warranty obligations – beginning | $887 | $547 | | Accruals for warranties issued | $251 | $389 | | Settlements made | $(173) | $(147) | | **Accrued warranty obligations – ending** | **$965** | **$789** | [10. Revenue Recognition](index=19&type=section&id=10.%20REVENUE%20RECOGNITION) This section explains the company's policies for recognizing revenue from product sales and extended warranty contracts - Revenue is generally recognized upon transfer of control to the customer, typically upon shipment or delivery[77](index=77&type=chunk) - Extended warranty contracts for Communications Systems products are treated as separate performance obligations and recognized evenly over the contract term[78](index=78&type=chunk) - As of June 30, 2025, deferred revenue on extended warranty contracts totaled **$1,004 thousand**, with **$298 thousand** expected to be recognized within one year[79](index=79&type=chunk) [11. Business Segment Information](index=20&type=section&id=11.%20BUSINESS%20SEGMENT%20INFORMATION) This section provides financial data for the Battery & Energy Products and Communications Systems segments, including revenues by source and geography - Ultralife operates in two reportable segments: Battery & Energy Products and Communications Systems[83](index=83&type=chunk) - Segment performance is monitored by "segment contribution," defined as gross profit less direct SG&A and R&D expenses[85](index=85&type=chunk) **Segment Revenues (In Thousands)** | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change (3M) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change (6M) | | :-------------------------- | :--------------------------- | :--------------------------- | :---------------- | :--------------------------- | :--------------------------- | :---------------- | | Battery & Energy Products | $45,867 | $36,683 | +25.0% | $92,188 | $71,672 | +28.6% | | Communications Systems | $2,694 | $6,300 | -57.2% | $7,119 | $13,238 | -46.2% | | **Total Revenues** | **$48,561** | **$42,983** | **+13.0%** | **$99,307** | **$84,910** | **+17.0%** | **Revenue by Source (In Thousands)** | Source | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Commercial | $31,333 (65%) | $27,664 (64%) | $60,992 (61%) | $51,804 (61%) | | Government/Defense | $17,228 (35%) | $15,319 (36%) | $38,315 (39%) | $33,106 (39%) | | **Total** | **$48,561** | **$42,983** | **$99,307** | **$84,910** | **Revenue by Geography (In Thousands)** | Geography | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | United States | $35,364 (73%) | $23,399 (54%) | $74,833 (75%) | $47,860 (56%) | | Non-United States | $13,197 (27%) | $19,584 (46%) | $24,474 (25%) | $37,050 (44%) | | **Total** | **$48,561** | **$42,983** | **$99,307** | **$84,910** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance, condition, and operational results for the three and six-month periods ended June 30, 2025, including an overview of business segments, key financial metrics, and a discussion of liquidity and capital resources [Forward-Looking Statements](index=25&type=section&id=Forward-Looking%20Statements) This section highlights the inherent uncertainties and risks associated with future-oriented statements in the report - The report contains forward-looking statements subject to various risks and uncertainties, including economic conditions, reliance on key customers, military spending, supply chain disruptions, and new product development[100](index=100&type=chunk) - Readers are cautioned not to place undue reliance on these statements, as actual results may differ materially from projections[101](index=101&type=chunk)[102](index=102&type=chunk) [General Business Overview](index=26&type=section&id=General) This section describes Ultralife's core business, product offerings, global market reach, and segment reporting structure - Ultralife provides power solutions and communications/electronics systems to government, defense, and commercial sectors globally, focusing on engineering and collaborative problem-solving[105](index=105&type=chunk) - The company sells products worldwide through OEMs, distributors, and directly to defense departments, operating under various brand names[106](index=106&type=chunk) - Financial results are reported in two segments: Battery & Energy Products and Communications Systems, with segment contribution as the key performance indicator[107](index=107&type=chunk) [Overview of Financial Performance](index=26&type=section&id=Overview) This section summarizes the company's consolidated financial results for the quarter, highlighting key revenue, profit, and income trends - Consolidated revenues for Q2 2025 increased **13.0%** to **$48,561 thousand**, driven by the Electrochem acquisition and government/defense sales, despite a **20.4%** decrease in commercial sales[109](index=109&type=chunk) - Gross profit margin declined by **300 basis points** to **23.9%** in Q2 2025 due to sales product mix, higher tariffs/freight, and lower factory throughput[110](index=110&type=chunk) - Operating income for Q2 2025 decreased **42.4%** to **$2,256 thousand**, impacted by lower Communications Systems sales, reduced gross margin in Battery & Energy Products, and increased operating expenses[112](index=112&type=chunk) - Net income attributable to Ultralife Corporation for Q2 2025 was **$879 thousand** (**$0.05** EPS), down from **$2,969 thousand** (**$0.18** EPS) in Q2 2024[114](index=114&type=chunk) - Management expects improved results in the second half of 2025 and into 2026, driven by a rebound in Communications Systems, new product programs, and sustained defense spending[116](index=116&type=chunk) [Results of Operations (Three-Month Periods)](index=27&type=section&id=Results%20of%20Operations%20Three-Month%20Periods%20Ended%20June%2030%2C%202025%20and%20June%2030%2C%202024) This section provides a detailed analysis of the company's financial performance for the three-month periods, covering revenues, gross profit, operating expenses, and net income - **Revenues:** Consolidated revenues increased **13.0%** to **$48,561 thousand**. Battery & Energy Products revenues increased **25.0%** to **$45,867 thousand** (attributable to Electrochem and strong government/defense demand), while Communications Systems sales decreased **57.2%** to **$2,694 thousand** due to shipment delays[117](index=117&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk) - **Gross Profit:** Consolidated gross margin decreased from **26.9%** to **23.9%**. Battery & Energy Products gross margin declined **350 basis points** to **23.6%** due to sales mix (declines in medical and oil & gas) and higher costs. Communications Systems gross margin increased **280 basis points** to **28.4%** due to favorable sales mix despite lower volume[120](index=120&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk) - **Operating Expenses:** Total operating expenses increased **22.2%** to **$9,345 thousand**, primarily due to Electrochem inclusion (**$654 thousand**), a **25.3%** increase in new product development, and strengthening of sales/marketing teams[123](index=123&type=chunk)[124](index=124&type=chunk) - **Other Expense:** Increased significantly to **$1,143 thousand** from **$71 thousand**, mainly due to higher interest expense from Electrochem acquisition financing and the absence of a prior-year insurance payment for a cyberattack[125](index=125&type=chunk) - **Net Income & EPS:** Net income attributable to Ultralife was **$879 thousand** (**$0.05** basic/diluted EPS), a **70.4%** decrease from **$2,969 thousand** (**$0.18** basic/diluted EPS) in the prior year[127](index=127&type=chunk) [Results of Operations (Six-Month Periods)](index=29&type=section&id=Six-Month%20Periods%20Ended%20June%2030%2C%202025%20and%20June%2030%2C%202024) This section provides a detailed analysis of the company's financial performance for the six-month periods, covering revenues, operating expenses, other income/expense, and net income - **Revenues:** Consolidated revenues increased **17.0%** to **$99,307 thousand**. Battery & Energy Products revenues increased **28.6%** to **$92,188 thousand** (including **$16,921 thousand** from Electrochem and **5.0%** organic growth from government/defense, offset by commercial declines). Communications Systems revenues decreased **46.2%** to **$7,119 thousand** due to prior-year shipments and timing delays[129](index=129&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk) - **Operating Expenses:** Total operating expenses increased **24.2%** to **$18,691 thousand**, driven by Electrochem inclusion and increased investment in R&D and sales/marketing[132](index=132&type=chunk)[133](index=133&type=chunk) - **Other Expense:** Increased to **$2,096 thousand** from **$527 thousand**, primarily due to a **115.8%** increase in interest expense from the Electrochem acquisition financing and a shift from miscellaneous income to expense[134](index=134&type=chunk) - **Income Taxes:** The effective tax rate increased to **22.8%** from **20.9%**. The provision was **$810 thousand**, including a **$609 thousand** deferred tax provision expected to be offset by NOLs[135](index=135&type=chunk) - **Net Income & EPS:** Net income attributable to Ultralife was **$2,744 thousand** (**$0.17** basic/diluted EPS), a **53.2%** decrease from **$5,860 thousand** (**$0.36** basic, **$0.35** diluted EPS) in the prior year[136](index=136&type=chunk) [Non-GAAP Financial Measures](index=30&type=section&id=Adjusted%20EBITDA) This section presents non-GAAP financial measures, including Adjusted EBITDA and Adjusted Earnings Per Share, with their reconciliations to GAAP measures [Adjusted EBITDA](index=30&type=section&id=Adjusted%20EBITDA) This section defines and reconciles Adjusted EBITDA, a non-GAAP measure, to net income attributable to Ultralife Corporation - Adjusted EBITDA is a non-GAAP measure defined as net income attributable to Ultralife Corporation before net interest expense, income taxes, depreciation, amortization, stock-based compensation, and certain non-recurring items[138](index=138&type=chunk) **Adjusted EBITDA Reconciliation (In Thousands)** | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income attributable to Ultralife Corp. | $879 | $2,969 | $2,744 | $5,860 | | Add: Interest expense | $992 | $418 | $2,024 | $938 | | Add: Income tax provision | $243 | $853 | $810 | $1,556 | | Add: Depreciation expense | $1,008 | $789 | $1,958 | $1,529 | | Add: Amortization expense | $410 | $227 | $815 | $455 | | Add: Stock-based compensation expense | $235 | $159 | $462 | $320 | | Add: Severance cost for plant closure | - | - | $150 | - | | Add: Acquisition and other non-recurring costs | $326 | - | $518 | - | | Add: Non-cash purchase accounting adjustments | $20 | - | $80 | - | | **Adjusted EBITDA** | **$4,113** | **$5,415** | **$9,561** | **$10,658** | - Adjusted EBITDA for Q2 2025 was **$4,113 thousand** (**8.4%** of revenues), down from **$5,415 thousand** (**12.6%** of revenues) in Q2 2024. For H1 2025, it was **$9,561 thousand**, down from **$10,658 thousand** in H1 2024[115](index=115&type=chunk)[142](index=142&type=chunk) [Adjusted Earnings Per Share](index=32&type=section&id=Adjusted%20Earnings%20Per%20Share) This section defines and reconciles Adjusted EPS, a non-GAAP measure, to diluted EPS attributable to Ultralife Corporation - Adjusted EPS is a non-GAAP measure that excludes the provision for deferred income taxes from net income attributable to Ultralife Corporation[144](index=144&type=chunk) **Adjusted EPS Reconciliation** | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income attributable to Ultralife Corp. (Diluted EPS) | $0.05 | $0.18 | $0.16 | $0.35 | | Deferred tax provision (per diluted share) | $0.02 | $0.04 | $0.04 | $0.09 | | **Adjusted net income (Diluted EPS)** | **$0.07** | **$0.22** | **$0.20** | **$0.44** | [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, operating cash flow, investing and financing activities, and future funding plans - Cash increased to **$10,941 thousand** as of June 30, 2025, from **$6,854 thousand** at December 31, 2024, primarily due to cash generated from operations[146](index=146&type=chunk) - Net cash provided by operating activities was **$9,303 thousand** for H1 2025, compared to **$8,844 thousand** for H1 2024[147](index=147&type=chunk) - Cash used in investing activities for H1 2025 was **$1,995 thousand** for capital expenditures, while cash used in financing activities was **$3,338 thousand**, mainly for debt reduction[148](index=148&type=chunk) - The company expects positive operating cash flow and available Revolving Credit Facility borrowings to meet future funding requirements[149](index=149&type=chunk) - A new shelf registration statement (Form S-3) was filed in March 2024 for **$100 million** in securities, intended for general corporate purposes including acquisitions and strategic investments[150](index=150&type=chunk) [Critical Accounting Policies](index=34&type=section&id=Critical%20Accounting%20Policies) This section confirms that no significant changes were made to critical accounting policies during the reporting period - No significant changes were made to critical accounting policies or related assumptions and estimates during the first six months of 2025[154](index=154&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) This section addresses the effectiveness of the company's disclosure controls and internal control over financial reporting, identifying a material weakness related to accounting personnel but affirming the fair presentation of financial statements, and outlining ongoing remediation efforts [Evaluation of Disclosure Controls and Procedures](index=35&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section reports on the effectiveness of the company's disclosure controls and procedures, noting a material weakness - Management concluded that disclosure controls and procedures were not effective as of June 30, 2025, due to an existing material weakness in internal control over financial reporting[156](index=156&type=chunk) - Despite the material weakness, management believes the Consolidated Financial Statements are fairly stated in all material respects[157](index=157&type=chunk) [Remediation Efforts to Address Material Weaknesses](index=35&type=section&id=Remediation%20Efforts%20to%20Address%20Material%20Weaknesses) This section outlines the company's ongoing actions to address identified material weaknesses in internal control over financial reporting - A material weakness was identified due to the need for additional accounting personnel with expertise commensurate with the company's growth[158](index=158&type=chunk) - Remediation efforts are ongoing, including hiring additional personnel (e.g., VP of Financial Growth, Controller for Electrochem) to augment the accounting team and strengthen controls[160](index=160&type=chunk) - Remediation will be complete once corrective actions are fully implemented and internal control over financial reporting is deemed effective through further evaluation and testing[161](index=161&type=chunk) [Changes in Internal Control Over Financial Reporting](index=35&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) This section describes recent organizational changes and personnel additions aimed at strengthening the company's internal control environment - During and after Q2 2025, the company reorganized its Corporate Accounting organization and hired additional experienced personnel, including a Director, Internal Audit & SOX Compliance[162](index=162&type=chunk) - These changes are expected to significantly strengthen internal control over financial reporting as the company continues its global growth[162](index=162&type=chunk) PART II. OTHER INFORMATION [Item 6. Exhibits](index=36&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications and XBRL documents - The report includes CEO and CFO certifications (Exhibits 31.1, 31.2) and Section 1350 Certifications (Exhibit 32)[163](index=163&type=chunk) - Financial statements are attached in iXBRL format as Exhibit 101[163](index=163&type=chunk) [Signatures](index=37&type=section&id=Signatures) This section contains the official signatures for the Form 10-Q filing - The report was signed on August 7, 2025, by Michael E. Manna, President and Chief Executive Officer, and Philip A. Fain, Chief Financial Officer and Treasurer[167](index=167&type=chunk)