Ultralife(ULBI)2025-04-01 11:31Revenue Performance - Revenues for the Battery & Energy Products segment for the year ended December 31, 2024, were 19.0 million, compared to revenues of 14.3 million for the year ended December 31, 2023[24]. - Revenues for the Communications Systems segment for the year ended December 31, 2024, were 1.2 million, compared to revenues of 4.0 million for the year ended December 31, 2023[27]. - Consolidated revenues increased by 164,456 for the year ended December 31, 2024, compared to 12,888 or 44.3% from 41,999 in 2024, while the Communications Systems segment saw a decline of 14,128, or 10.9%, for the year ended December 31, 2024, while Communications Systems revenues decreased by 10.2 million for the year ended December 31, 2024, compared to 2,624 or 8.8% to 6,312, or 7,197, or 16,480, compared to 9,549 in 2024 from 8,587 in 2023, with a year-over-year increase in customer-sponsored R&D from 1,056 to 8,268 in 2024, up by 7,531 in 2023, reflecting additional investments in new product development[212]. Acquisitions and Growth Opportunities - The acquisition of Electrochem Solutions, Inc. on October 31, 2024, is expected to create opportunities for gross margin expansion and revenue growth through cross-selling platforms[39]. - The company continues to seek opportunities for growth through the design, development, and sale of new products, expansion of the sales force, and potential acquisitions[17]. - The company acquired Electrochem Solutions, Inc. on October 31, 2024, which is expected to enhance revenue growth through cross-selling opportunities and operational efficiencies[191]. Inventory and Backlog - The backlog and high confidence orders for Battery & Energy Products were approximately 102,156, a decrease of 103,535 at December 31, 2023[206]. - The total carrying value of Battery & Energy Products inventory increased by 27% year-over-year, amounting to 35,221 in 2023, primarily due to the acquisition of Electrochem and increased materials for government and defense sectors[81]. - The total carrying value of Communications Systems inventory decreased by 4% year-over-year, totaling 6,994 in 2023, due to fulfillment of large purchase orders[84]. Market Dynamics and Customer Base - In 2024, sales to U.S. customers were 67,416 million, showing an increase from 2023[62]. - Sales to non-U.S. customers accounted for 41% of total revenues in 2024, down from 49% in 2023, indicating a shift in market dynamics[151]. - The company has a major customer that accounted for 23% of total revenues in 2024, highlighting reliance on key contracts[62]. - Sales to U.S. and foreign militaries accounted for 57,802 (36%) in 2023[119]. - Approximately 43,476 (27%) in 2023[120]. Cybersecurity and Compliance - The company has implemented security measures to mitigate risks of cyberattacks and breaches, including maintaining a cybersecurity insurance policy[129]. - The company engages leading cybersecurity firms for security assessments and audits to enhance its cybersecurity posture[170]. - The Board of Directors oversees the company's cybersecurity risk and receives updates on incidents at least quarterly[172]. - The company experienced production and shipping downtime for several weeks due to a cybersecurity incident, resulting in lost sales orders[131]. - The company is required to comply with the EU RoHS Directive, which restricts the use of certain hazardous substances in electrical and electronic equipment, and is currently compliant with associated regulations[159]. Financial Position and Risks - The company has a 30 million revolving credit facility, with 55 million outstanding on the term loan facility and no balance on the revolving credit facility[143]. - The cash on hand as of December 31, 2024 was 10,278 as of December 31, 2023, indicating a decrease in liquidity[200]. - The company is highly dependent on key personnel, and the loss of such employees could materially affect its business and financial condition[134]. - The company faces unique risks in its operations in China, including political changes and trade restrictions, which could adversely impact its financial results[135].