Ultralife(ULBI) - 2025 Q1 - Quarterly Results

Performance Highlights & Management Commentary Ultralife's Q1 2025 revenue grew 21% to $50.7 million, driven by Battery & Energy Products and Electrochem, with management focused on integration, tariff mitigation, and debt reduction Q1 2025 Key Performance Indicators vs. Q1 2024 | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Sales | $50.7 million | $41.9 million | | Gross Profit | $12.7 million (25.1%) | $11.5 million (27.4%) | | Operating Income | $3.4 million | $4.1 million | | GAAP EPS | $0.11 | $0.18 | | Adjusted EBITDA | $5.4 million | $5.2 million | | Backlog (High Confidence) | $95.0 million | N/A (vs $102.2M Q4'24) | - Management's strategic focus includes: - Integrating the Electrochem acquisition to capture manufacturing cost efficiencies and savings through U.S.-based vertical integration - Actively implementing a tariff mitigation plan, which includes surcharges, adjusting inventory movements, and reviewing sourcing/manufacturing locations - Generating incremental cash flow to reduce acquisition-related debt while continuing to invest in strategic product development - Accelerating organic growth through enhanced sales and marketing leadership[2] First Quarter 2025 Financial Results Q1 2025 revenue increased 21% to $50.7 million, driven by Battery & Energy Products growth, while gross margin and operating income declined due to product mix and lower Communications Systems sales Revenue by Segment (Q1 2025 vs. Q1 2024) | Segment | Q1 2025 Revenue | Q1 2024 Revenue | % Change | | :--- | :--- | :--- | :--- | | Battery & Energy Products | $46.3 million | $35.0 million | +32.4% | | Communications Systems | $4.4 million | $6.9 million | -36.2% | | Total Revenue | $50.7 million | $41.9 million | +21.0% | - The organic growth in Battery & Energy Products was primarily driven by a 53.6% increase in government/defense sales, which was partially offset by a 12.3% decrease in medical battery sales[4] Gross Margin by Segment (Q1 2025 vs. Q1 2024) | Segment | Q1 2025 Gross Margin | Q1 2024 Gross Margin | | :--- | :--- | :--- | | Battery & Energy Products | 24.7% | 25.7% | | Communications Systems | 29.5% | 35.8% | | Total Gross Margin | 25.1% | 27.4% | - Operating expenses increased to $9.3 million from $7.4 million in Q1 2024, reflecting the inclusion of Electrochem, a 24.0% increase in new product development costs, and one-time, non-recurring expenses[6] - The company's backlog of high-confidence orders was $95.0 million at the end of Q1 2025, down from $102.2 million at the end of Q4 2024, but indicative of a strong replenishment rate during the quarter[4] Financial Statements Ultralife's consolidated financial statements for Q1 2025 show total assets of $223.8 million, total equity of $136.6 million, and a net income of $1.9 million Consolidated Balance Sheets Key Balance Sheet Items (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash | $8,719 | $6,854 | | Inventories, Net | $47,853 | $51,363 | | Total Current Assets | $101,469 | $97,160 | | Total Assets | $223,753 | $220,451 | | Total Current Liabilities | $31,496 | $29,291 | | Long-Term Debt, Net | $50,510 | $51,502 | | Total Liabilities | $87,149 | $86,264 | | Total Shareholders' Equity | $136,604 | $134,187 | Consolidated Statements of Income Consolidated Statements of Income (in thousands, except per share amounts) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenues | $50,746 | $41,927 | | Gross Profit | $12,745 | $11,470 | | Operating Income | $3,399 | $4,063 | | Income Before Income Tax | $2,446 | $3,607 | | Net Income Attributable to Ultralife | $1,865 | $2,891 | | Diluted EPS | $0.11 | $0.18 | Non-GAAP Financial Measures Ultralife presents Adjusted EBITDA of $5.4 million and Adjusted Diluted EPS of $0.13 for Q1 2025 as non-GAAP measures, excluding specific items to reflect ongoing operational performance Adjusted EBITDA Reconciliation - Adjusted EBITDA is defined as net income before interest, taxes, depreciation, amortization, stock-based compensation, and other expenses not considered reflective of ongoing operations; for Q1 2025, these other expenses included severance costs, acquisition costs, and a non-cash purchase accounting adjustment[19][21] Adjusted EBITDA Reconciliation (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income Attributable to Ultralife | $1,865 | $2,891 | | Interest Expense, Net | $1,032 | $520 | | Income Tax Provision | $567 | $703 | | Depreciation & Amortization | $1,355 | $968 | | Stock-Based Compensation | $227 | $161 | | Severance/Acquisition/Other Costs | $402 | $0 | | Adjusted EBITDA | $5,448 | $5,243 | Adjusted EPS Reconciliation - Adjusted EPS is defined as net income excluding the provision for deferred taxes; the company believes this is useful for comparison as it expects U.S. taxes to be fully offset by net operating loss carryforwards and other tax credits[22] Adjusted EPS Reconciliation | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Diluted GAAP EPS | $0.11 | $0.18 | | Deferred Tax Provision per Share | $0.02 | $0.03 | | Adjusted Diluted EPS | $0.13 | $0.21 | About Ultralife Corporation & Investor Information Ultralife Corporation, a global provider of power and communication solutions, will host an earnings call and cautions investors about potential risks including economic conditions, tariffs, and supply chain disruptions - Ultralife serves its markets with products ranging from power solutions to communications and electronics systems, with operations in North America, Europe, and Asia[10][11] - The company will hold its Q1 earnings conference call at 10:00 AM ET, with registration required for dial-in participation and a live webcast available on its investor relations website[12][13] - Potential risks that could cause actual results to differ materially include uncertain global economic conditions, tariffs, inflation, military spending reductions, and supply chain disruptions[14]