Ultralife(ULBI) - 2024 Q3 - Quarterly Report

Revenue Performance - Consolidated revenues for Q3 2024 were $35,694, a decrease of$ 3,794 or 9.6% from $39,488 in Q3 2023, with government/defense sales down 14.1% and commercial sales down 6.8%[107]. - Consolidated revenues for the nine-month period ended September 30, 2024, were$ 120,604, an increase of $6,508, or 5.7%, compared to$ 114,096 for the same period in 2023[128]. - Battery & Energy Products revenues increased by $9,951, or 10.6%, from$ 94,250 in the first nine months of 2023 to $104,201 in 2024, driven by a 42.8% increase in government/defense sales[129]. - Communications Systems revenues decreased by$ 3,443, or 17.3%, from $19,846 in the first nine months of 2023 to$ 16,403 in 2024, primarily due to order timing[130]. Profitability Metrics - Gross profit for Q3 2024 was $8,682, or 24.3% of revenue, compared to$ 9,774, or 24.8% of revenue in Q3 2023, reflecting a decline due to lower factory volume and product mix[108]. - Operating income for Q3 2024 was $511, or 1.4% of revenues, down from$ 2,135 or 5.4% of revenues in Q3 2023, attributed to revenue decline and increased expenses[110]. - Net income attributable to Ultralife Corporation was $258, or$ 0.02 per share, compared to $1,330, or$ 0.08 per share in Q3 2023[111]. - Adjusted EBITDA for Q3 2024 was $1,919, or 5.4% of revenues, down from$ 3,480, or 8.8% of revenues in Q3 2023[112]. - Gross margin improved from 24.4% in the first nine months of 2023 to 26.3% in 2024, reflecting higher factory volume and improved price realization[131]. - Net income attributable to Ultralife for the nine-month period ended September 30, 2024, was $6,118, or$ 0.37 per share, compared to $4,324, or$ 0.27 per share in 2023, with adjusted EPS increasing from $0.34 to$ 0.44[138]. Operating Expenses - Operating expenses rose to $8,171, an increase of$ 532 or 7.0% from $7,639 in Q3 2023, primarily due to investments in new product development and legal fees related to the acquisition of Electrochem Solutions, Inc.[109][121]. - Operating expenses for the nine-month period ended September 30, 2024, were$ 23,224, an increase of $1,252, or 5.7%, from$ 21,972 in 2023, attributed to higher sales commissions and investments in new product development[134]. - Operating expenses represented 22.9% of revenue in Q3 2024, compared to 19.3% in Q3 2023, indicating increased costs relative to revenue[121]. Research and Development - Research and development costs increased by $232 or 12.4% to$ 2,101 in Q3 2024, reflecting aggressive pursuit of government/defense programs and commercial opportunities[121]. - Research and development costs increased by $175, or 3.1%, to$ 5,854 for the nine-month period ended September 30, 2024, reflecting higher investments in new product development[135]. Cash Flow and Financing - Cash generated from operations for the nine months ended September 30, 2024, was $13,590, a significant improvement from cash used in operations of$ 503 in the same period of 2023[151]. - As of September 30, 2024, total cash was $6,774, down from$ 10,278 at December 31, 2023, primarily due to a $17,712 reduction in outstanding debt[150]. - Cash used in investing activities for the nine months ended September 30, 2024, was$ 1,326, mainly for capital expenditures related to new product manufacturing[152]. - The company had $3,368 in outstanding borrowings on the Revolving Credit Facility and$ 4,667 on the Term Loan Facility as of September 30, 2024[156]. - Interest and financing expense decreased by $339, or 23.4%, from$ 1,450 in the first nine months of 2023 to $1,111 in 2024, due to reduced debt levels[136]. Tax and Other Considerations - The effective tax rate decreased to 20.9% for the nine-month period in 2024 from 28.1% in 2023, primarily due to the geographic mix of operating results[137]. - Non-recurring acquisition costs for the three months ended September 30, 2024, amounted to$ 250[146]. - The company filed a new shelf registration statement on March 29, 2024, to replace the previous one, registering securities in an aggregate amount of $100,000,000[155]. Future Outlook - The company expects positive operating cash flow and sufficient availability under its Revolving Credit Facility to meet general funding requirements in the foreseeable future[154].