Ultralife Corporation Reports Second Quarter Results

Core Viewpoint - Ultralife Corporation faced challenges in the second quarter of 2025, with flat organic sales in Battery & Energy Products and a significant decline in Communications Systems sales, but anticipates improved results in the second half of the year and into 2026 due to various factors including new product programs and increased demand from key sectors [1][2]. Financial Performance - Revenue for the second quarter was $48.6 million, a 13.0% increase from $43.0 million in the same quarter of 2024 [3][6]. - Battery & Energy Products sales rose by 25.0% to $45.9 million, largely due to the inclusion of Electrochem Solutions, Inc. [3][6]. - Excluding Electrochem, Battery & Energy Products sales were flat year-over-year, with government/defense sales up 61.1% but commercial sales down 20.4% [3][6]. - Communications Systems sales decreased by 57.2% to $2.7 million, primarily due to shipment delays and order timing issues [3][6]. Profitability Metrics - Gross profit was $11.6 million, representing 23.9% of revenue, down from 26.9% in the same quarter last year [4][6]. - Operating income was $2.3 million, a decline from $3.9 million in the prior year, with an operating margin of 4.6% compared to 9.1% [7][6]. - Net income attributable to Ultralife was $0.9 million, or $0.05 per diluted share, down from $3.0 million or $0.18 per diluted share in the second quarter of 2024 [9][6]. Operating Expenses - Operating expenses increased to $9.3 million from $7.6 million in the same quarter last year, reflecting higher costs associated with new product development and the inclusion of Electrochem [5][6]. - Operating expenses accounted for 19.2% of revenue, compared to 17.8% in the previous year [5][6]. Future Outlook - The company expects a rebound in its Communications Systems business and early purchase orders from new product programs in the battery segment, alongside growth in defense spending and opportunities in the oil & gas sector [2][1]. - Priorities include converting long-term product development into revenue and enhancing operational efficiency for sustainable growth [2][1].