Ultralife Corporation Reports Third Quarter Results

Core Viewpoint - Ultralife Corporation reported a mixed financial performance for the third quarter of 2025, with revenue growth impacted by supply chain issues and a decision to close its Calgary facility, which is expected to yield future cost savings [1][2][4]. Financial Performance - Revenue for the third quarter was $43.4 million, a 21.5% increase from $35.7 million in the same quarter of 2024. Organic growth was 2.5%, while the Electrochem acquisition contributed significantly to the revenue increase [4][7]. - Gross profit was $9.6 million, representing 22.2% of revenue, down from 24.3% in the previous year, primarily due to manufacturing inefficiencies and a less favorable sales mix [5][7]. - Operating expenses rose to $10.6 million from $8.2 million year-over-year, influenced by the inclusion of Electrochem and one-time costs related to the Calgary facility closure [6][7]. Operational Changes - The decision to close the Calgary battery pack assembly facility will incur a one-time charge of $0.5 million but is expected to save approximately $0.8 million annually post-closure [1][4]. - The company is focusing on improving supply chain resiliency and manufacturing operations to address inefficiencies in its Battery & Energy Products business [2][3]. Segment Performance - Battery & Energy Products sales increased by 22.8% to $39.9 million, driven by the Electrochem acquisition, while excluding Electrochem, sales grew by 1.9% [4][7]. - Communications Systems sales rose by 8.2% to $3.4 million compared to the previous year [4][7]. Profitability Metrics - The operating loss for the quarter was $1.0 million, compared to an operating income of $0.5 million in the same quarter of 2024, largely due to one-time costs and lower gross margins [8][9]. - Adjusted EBITDA for the quarter was $2.0 million, slightly up from $1.9 million year-over-year, indicating some operational stability despite the challenges faced [10][20]. Backlog and Future Outlook - The backlog at the end of the third quarter was $90.1 million, an increase from $84.5 million at the end of the second quarter, suggesting a positive outlook for future revenue [7].