Ultralife(US:ULBI)2021-07-31 17:25Financial Data and Key Metrics Changes - For Q2 2021, consolidated revenues totaled $26.8 million, a decrease of 6.3% compared to $28.6 million in Q2 2020 [14] - Operating profit increased by 14%, while operating income was $1.1 million compared to $2.3 million in the previous year [10][22] - Net income was $0.8 million or $0.05 per share, down from $1.7 million or $0.10 per share in Q2 2020 [25] - Adjusted EBITDA was $2.2 million, or 8.2% of sales, compared to $3.3 million, or 11.6%, for the same period last year [23] - Cash on hand increased by 16% to $15.8 million, and debt decreased by 37% to $0.7 million [27] Business Line Data and Key Metrics Changes - Battery & Energy Products segment revenues were $22.9 million, down 4.8% from $24 million last year, with a 48.6% increase in oil and gas market sales [16] - Communications Systems segment revenues decreased by 13.9% to $3.9 million, reflecting the completion of vehicle amplifier adapter systems shipments [17] - Gross profit for Battery & Energy Products was $6 million, with a gross margin of 26.3%, an increase of 120 basis points from last year [19] Market Data and Key Metrics Changes - Oil and gas end markets saw a revenue rebound of 49% year-over-year [10] - Medical sales decreased due to the abatement of COVID-related demand but remained above pre-pandemic levels [10] - Government defense sales declined by 13.2% due to the completion of contracts from the previous year [14] Company Strategy and Development Direction - The company is focused on revenue growth through market and sales reach expansion, new product development, and disciplined acquisitions [29] - Investment in CapEx and engineering resources has been increased to support new contracts and product development [12] - The company aims to leverage its business model to realize full potential and maintain profitability [28] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing supply chain challenges impacting sales and logistics [11] - There is optimism regarding the recovery in oil and gas markets and the potential for increased demand in medical applications [60][62] - The company is confident in its ability to navigate challenges and maintain strong relationships with key customers [56] Other Important Information - The company has received over $8 million in new orders from existing medical customers, indicating strong demand despite supply chain issues [55] - The conformal wearable battery program has a potential contract value of up to $168 million over three years [34] Q&A Session Summary Question: Congratulations on the conformal battery win - Management acknowledged the significance of the IDIQ contract and its potential revenue [52] Question: Are there more COVID-type orders coming in? - Management noted that supply chain challenges have delayed some demand but expressed confidence in customer relationships [54][56] Question: What is the outlook for the oil and gas market? - Management indicated that the rig count has doubled since the COVID lows, and there is a favorable trend in demand [60][62] Question: What is the potential revenue from the 3-volt opportunity? - Management expects the 3-volt opportunity to potentially generate $10 million annually [65] Question: Will there be new amplifier orders from Thales? - Management expressed optimism about future orders as production ramps up [86]