Financial Data and Key Metrics Changes - The company reported Q1 sales of $50.7 million, an increase from $41.9 million in the same quarter last year, representing a year-over-year growth of 21% [10] - Operating income for Q1 was $3.4 million, down from $4.1 million in the previous year, leading to a decrease in operating margin to 6.7% from 9.7% [15] - Net income was $1.9 million or $0.11 per share on a GAAP basis, compared to $2.9 million or $0.18 per share for the same quarter last year [15][16] - Adjusted EBITDA was $5.4 million, or 10.7% of sales, compared to $5.2 million or 12.5% for the prior year quarter [16] Business Line Data and Key Metrics Changes - Revenues from the Battery and Energy Products segment were $46.3 million, up from $35 million last year, with a 10.6% organic growth excluding Electrochem sales [10][11] - Government defense sales in the Battery segment increased by 53.6%, while medical battery sales decreased by 12.3% [11] - The Communications Systems segment saw revenues decline by 36.2% to $4.4 million, primarily due to large shipments in the prior year [12] Market Data and Key Metrics Changes - The sales split between commercial and government defense for the battery business was 64% to 36%, with a domestic to international split of 78% to 22% [11] - The total backlog exiting Q1 was $95 million, representing 55% of trailing twelve-month sales, indicating a healthy demand outlook [12] Company Strategy and Development Direction - The company is focused on completing the integration of the Electrochem acquisition, which is expected to enhance vertical integration opportunities and expand the addressable market [19][27] - There is a commitment to improve sales opportunity pipelines and stabilize gross margins through pricing adjustments and lean productivity projects [20][21] - The company is investing in new product development and marketing efforts to support targeted growth goals [9][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in profitable growth despite macroeconomic uncertainties, citing a strong backlog and expected recovery in medical sales in the latter half of the year [42][55] - The government defense business is expected to remain strong due to ongoing global conflicts and increased NATO spending [55] - The company anticipates continued cash flow consistency and plans to pay down acquisition debt ahead of schedule [56] Other Important Information - The company ended Q1 with working capital of $70 million and a current ratio of 3.2, indicating solid liquidity [17] - The company received $1.5 million from the employee retention credit, which was used to reduce acquisition debt [17] Q&A Session Summary Question: How have conversations with customers on tariff pass-throughs evolved? - Management noted that customers are concerned about cash flow impacts due to tariffs, which could affect their ability to invest in product development [33][34] Question: What are the major milestones left for the Electrochem integration? - The integration is on track, with most systems set up, and the focus is on completing the ERP system setup [36][37] Question: What markets are targeted for the IVAS battery? - The focus is primarily on foreign military markets, with some commercial engagements expected [41] Question: Can you discuss trends across key end markets? - The medical market is steady with known replacement cycles, while the government defense market remains strong with no expected fall-off in 2025 [53][55] Question: How do you expect free cash flow to trend over 2025? - Free cash flow is expected to be consistent, with plans to maintain a positive cash gap and continue paying down debt [56]

Financial Data and Key Metrics Changes - The company reported Q1 sales of $50.7 million, an increase from $41.9 million in the same quarter last year, representing a year-over-year growth of 21% [10][12] - Operating income for Q1 was $3.4 million, down from $4.1 million in the previous year, leading to a decrease in operating margin to 6.7% from 9.7% [15] - Net income was $1.9 million or $0.11 per share on a GAAP basis, compared to $2.9 million or $0.18 per share for the same quarter last year [15][16] - Adjusted EBITDA was $5.4 million, or 10.7% of sales, compared to $5.2 million or 12.5% for the prior year quarter [16] Business Line Data and Key Metrics Changes - Revenues from the Battery and Energy Products segment were $46.3 million, up from $35 million last year, with a 10.6% organic growth excluding Electrochem sales [10][11] - Government defense sales in the Battery segment increased by 53.6%, while medical battery sales decreased by 12.3% [11] - The Communications Systems segment saw revenues decline by 36.2% to $4.4 million, primarily due to large shipments in the prior year [12][14] Market Data and Key Metrics Changes - The sales split between commercial and government defense for the battery business was 64% to 36%, with a domestic to international split of 78% to 22% [11] - The total backlog exiting Q1 was $95 million, representing 55% of trailing twelve-month sales, indicating a healthy demand outlook [12] Company Strategy and Development Direction - The company aims to complete the integration of the Electrochem acquisition by the end of Q2, focusing on ERP system setup and leveraging vertical integration opportunities [19][27] - There is a commitment to improve sales pipelines and stabilize gross margins through pricing adjustments and lean productivity projects [20][21] - The company is expanding its product offerings in both the Communications Systems and Battery segments, targeting military and medical markets [22][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in profitable growth despite macroeconomic uncertainties, noting that Q1 performance exceeded expectations [42][43] - The government defense sector is expected to remain strong, with potential increases in NATO spending anticipated over the next 18 to 24 months [54] - The medical battery segment is expected to stabilize as replacement cycles for COVID-related devices approach [52] Other Important Information - The company ended Q1 with working capital of $70 million and a current ratio of 3.2, indicating solid liquidity [17] - The company received $1.5 million from the employee retention credit, which was used to reduce acquisition debt [17] Q&A Session Summary Question: How have conversations with customers on tariff pass-throughs evolved? - Management noted that customers are concerned about cash flow impacts due to tariffs, which could affect their ability to invest in product development [32][34] Question: What are the major milestones left for the Electrochem integration? - The integration is on track for completion by Q2, with most systems set up and data transitioned [36][37] Question: What markets are targeted for the IVAS battery? - The focus is primarily on foreign military markets, with some commercial engagements anticipated [41] Question: Can you discuss trends across key end markets? - The medical market is steady with known replacement cycles, while government defense remains strong with a good backlog [52][54] Question: How is free cash flow expected to trend over 2025? - Free cash flow is expected to be consistent, with plans to continue paying down debt ahead of schedule [55][56]

Financial Data and Key Metrics Changes - For Q4 2024, the company reported sales of $43.9 million, a decrease from $44.5 million in Q4 2023 [13] - The operating income for Q4 was $1.5 million, which includes a one-time cost of $1.1 million related to the Electrochem acquisition, resulting in an EPS of $0.01 [8] - For the full year 2024, total sales were $164.5 million with an operating income of $10 million, leading to an EPS of $0.38 [9] Business Line Data and Key Metrics Changes - Battery & Energy Products segment revenues were $39.9 million, up from $35.7 million year-over-year; however, excluding Electrochem sales, there was a decline of $1.9 million or 5.3% [14] - Government/defense sales increased by 48.1%, while medical battery sales saw a decline of 47.2% compared to last year [14] - Communications Systems segment revenues fell to $4 million, a 55.1% decrease from $8.8 million in the previous year, primarily due to delayed shipments [15] Market Data and Key Metrics Changes - The sales split between commercial and government defense for the battery business was 70-30, compared to 77-23 in the previous year, indicating increased domestic demand [14] - The total backlog exiting Q4 was $102.2 million, representing 62% of trailing twelve months (TTM) sales, indicating a healthy replenishment rate [16] Company Strategy and Development Direction - The company aims to leverage the Electrochem acquisition to enhance vertical integration and expand into adjacent markets [10] - Key operational priorities for 2025 include completing the transition of the Electrochem acquisition, improving gross margins, and growing the sales opportunity pipeline [33][43] - The company is focusing on lean productivity projects to offset rising costs and has initiated several projects to enhance throughput and efficiency [30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2025, citing a strong pipeline of new products and growth initiatives [10][43] - The company noted that the decline in industrial sales was primarily due to order push-outs rather than macroeconomic weakness [58] - Management highlighted the importance of hospital adoption and capital expenditure in driving growth for the thin cell medical opportunity [62] Other Important Information - The company is pursuing legal action regarding a business interruption claim from a cyberattack, seeking a fair settlement after receiving only a fraction of the claimed amount [24] - The IRS has approved a $1.5 million employee retention credit, which will be used to reduce acquisition debt [25] - A material weakness in internal control processes has been identified, prompting the company to seek additional qualified accounting personnel [27] Q&A Session Summary Question: Where are you ahead of schedule with Electrochem and what are the major hurdles? - Management indicated they are already utilizing Electrochem cells in their packs, which is a positive development. The main hurdle is gaining total control over the business and finalizing the transition from the previous parent company [52][53] Question: What part of the industrial sales timing is a push-out versus macro-related weakness? - Management clarified that the decline in industrial sales is entirely due to push-outs, with no significant economic trends affecting their markets [56][58] Question: What does the initial production for the thin cell medical opportunity look like this year? - Management expects around $1 million in sales for the thin cell medical opportunity this year, with significant growth potential in the following years depending on hospital adoption and capital expenditure [60][62]