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- **Revenue Growth Despite Challenges**: $43.4 million Q3 revenue (+15% YoY) offset by 22.2% gross margin decline due to supply chain issues.
- **Strategic Restructuring**: Calgary closure to save $0.8 million annually; rebranding to unify Ultralife identity.
- **New Product Momentum**: Thin cell technology for wearables, ruggedized servers, and electronic warfare amplifiers with 2026 production starts.
- **Financial Health**: $2.0 million adjusted EBITDA, $66.9 million working capital, and $4.1 million debt reduction YTD.
- **Future Growth Drivers**: Electrochem vertical integration, pipeline expansion, and lean productivity projects.

**【CEO Summary Section】**
- Q3 2025 revenue reached $43.4 million, up 15% YoY, driven by Battery & Energy sales growth. However, an operating loss of $1 million was reported due to $1.1 million one-time costs from Calgary closure and Electrochem transition.
- Gross margin declined to 22.2% (down 210 bps YoY) due to supply chain quality issues and lower-margin product mix. Calgary closure aims to save $0.8 million annually starting 2026.
- Rebranding initiative underway to unify Ultralife brand, with Phase 1 targeting Q4 completion. New products include thin cell technology for wearables and ruggedized server cases.

**【CFO Financial Commentary】**
- Battery & Energy segment revenue grew 1.9% YoY to $39.9 million, with 19% growth in government defense sales offsetting 13.3% decline in oil & gas. Communications Systems revenue rose 8.2% to $3.4 million.
- Consolidated gross profit was $9.6 million (22.2% margin), with Battery & Energy gross margin at 22.1% vs. 24.7% YoY. Operating expenses increased 29.4% to $10.6 million due to Electrochem integration and one-time costs.
- Adjusted EBITDA was $2.0 million (4.7% of sales), up from $1.9 million YoY. Debt reduced by $4.1 million YTD, with $66.9 million working capital.

**【CEO Additional Remarks】**
- 2025 priorities: Electrochem vertical integration (e.g., pipeline inspection cells), pipeline expansion, and gross margin improvement via lean initiatives.
- New product wins include $5.2 million BA 53 Battery award and thin cell technology orders for medical wearables. Communications Systems launched next-gen amplifiers for AI/edge computing and electronic warfare.
- 2026 outlook: Electrochem transition complete, new product launches, and reduced operational costs from facility consolidation.

Ultralife Corporation(ULBI)-20251118-2025 Q3 Earnings call transcript

- **Q2 Results**: $48.6M revenue, $0.9M net profit (GAAP), $0.07 EPS (Non-GAAP)
- **Challenges**: $400K tariff impact, 20% oil & gas decline, 39% medical sales drop
- **Strategic Moves**: 
  - $0.7M debt repayment (total $3.4M YTD)
  - Electrochem integration nearing completion
  - New 20W amplifier targeting $5M+ market
- **Future Outlook**: 
  - Communication Systems rebound expected
  - 2026 vertical integration benefits with Electrochem
  - $1.8M ERTC credit used to reduce debt
- **Risks**: Tariff volatility, order timing delays, macroeconomic oil & gas factors

**【CEO Opening Remarks】**
- Q2 2025 revenue: $48.6 million (GAAP net profit: $0.9M / EPS: $0.05; Non-GAAP EPS: $0.07)
- Key challenges: tariffs ($400K net impact), unfavorable product mix, oil & gas softness
- Strategic initiatives: Electrochem integration (ERP, office systems complete; manufacturing systems to transition in Q3), $0.7M debt repayment
- Onetime costs: $0.3M related to system transitions

**【CFO Financial Commentary】**
- Revenue growth: +13% YoY (Battery & Energy: +25% vs. 2024; Communications Systems: -57%)
- Gross margin decline: 300bps to 23.9% (tariffs, mix, lower throughput)
- Operating expenses: +22% YoY ($9.3M) due to Electrochem, R&D, and integration costs
- Backlog: $89M (high confidence orders)
- Debt reduction: $3.4M YTD vs. $2.8M annual target
- Insurance lawsuit: $235K received; trial set for mid-2026 with potential millions in damages

**【CEO Business Update】**
- **Communications Systems**: 
  - New 3U server case and DC power supply in testing
  - 20W amplifier targeting $5M+ annual market
  - Q2 PO for advanced speaker ($1.8M credit used to repay debt)
- **Battery & Energy**: 
  - Thin cell tech pipeline: 7 projects in qualification
  - xFi medical power bank samples shipping
  - Vertical integration with Electrochem cells for oil & gas
- **Gross Margin Strategy**: Passing tariffs to customers, lean initiatives, and vertical integration

**【Q&A Highlights】**
- **Tariffs**: Q2 impact: $400K; Q3 outlook: lower peak rates but fluid situation
- **Oil & Gas**: WTI at $65/bbl; customers cautious on capital projects
- **Medical**: Q2 down 39% due to timing; new patch device in customer testing
- **Insurance Case**: Lawsuit in Wayne County Supreme Court; discovery ends Q1 2026

Ultralife (ULBI)-7 Aug 25-2025 Q2 Earnings call transcript

- **Revenue Growth**: Q1 2025 revenue up 21% YoY to $50.7M, driven by Battery & Energy segment (+10.6% organic growth) and full Electrochem integration.
- **Margin Challenges**: Gross margin 25.1% (down 230bps YoY) due to product mix, offset by sequential 130bps improvement in Battery segment.
- **Strategic Initiatives**: Electrochem ERP integration on track for Q2; new products (3U server case, 21W amplifier) targeting defense and oil/gas markets.
- **Tariff Mitigation**: North American manufacturing focus and lean initiatives to offset tariffs; no immediate margin impact.
- **Backlog Strength**: $95M backlog (55% of TTM sales), 78% domestic and 42% government/defense.


**【CEO Opening Remarks】**
- Q1 2025 revenue of $50.7M (+21% YoY), driven by the Battery & Energy segment (+10.6% organic growth) and full inclusion of Electrochem post-acquisition.
- Operating income of $3.4M ($0.11 EPS GAAP, $0.13 adj.), with 36.2% decline in Communications Systems due to prior-year large shipments.
- Tariff mitigation efforts include supply chain reviews, inventory management, and North American manufacturing focus.
- Mississauga plant closure and production consolidation to reduce costs and improve efficiency.

**【CFO Financial Breakdown】**
- Battery & Energy: $46.3M (+26.4% YoY), 53.6% growth in government/defense sales offset by 12.3% medical decline.
- Communications Systems: $4.4M (-36.2% YoY), impacted by delayed orders and lower factory volume.
- Gross margin: 25.1% (down 230bps YoY) due to product mix; Battery segment margin 24.7% (sequential +130bps).
- Operating expenses: $9.3M (+26.2% YoY) driven by Electrochem integration, NPD, and sales/marketing investments.
- Backlog of $95M (55% of TTM sales), with 78% domestic and 42% government/defense split.

**【CEO Strategic Updates】**
- Electrochem ERP integration on track for Q2 completion; vertical integration opportunities in oil/gas and defense.
- New product launches: 3U server case, DC power supply, 21W amplifier, and conformal wearable battery.
- ThinCell tech for medical wearables nearing FDA/EU approval; 19Ah D-cell battery gaining traction.
- $1.5M ERC funds used to reduce acquisition debt; Q2 lean initiatives expected to improve margins.

**【Q&A Highlights】**
- **Tariffs & Cash Flow**: Customers prioritize cash flow over price increases; tariffs divert resources but no immediate margin impact.
- **Electrochem Synergies**: Contribution margin accretive via internal cell usage; Q3-Q4 to see supply chain benefits.
- **Market Trends**: Government/defense demand resilient; medical cyclicality expected to stabilize in H2.
- **Free Cash Flow**: Consistent cash flow management; expect debt paydown ahead of schedule.


Ultralife (ULBI)-9 May 25-2025 Q1 Earnings call transcript

- **Q4 2024 Results**: Revenue $43.9M (-1.4% YoY), EPS $0.01 (down from $0.17 YoY) due to acquisition costs
- **Electrochem Acquisition Impact**: 
  - +$6.1M incremental Q4 sales
  - Vertical integration in oil & gas
  - Expected cost synergies with lithium business
- **2025 Growth Drivers**:
  - Thin cell medical battery ($1M+ in 2025)
  - New comms products (lighter amplifier, vehicle mount upgrade)
  - Electrochem ERP integration completion by Q2
- **Key Risks**:
  - Delays in ERP transition
  - Customer inventory management timing
  - Material cost inflation pressures

**【CEO Opening Remarks】**
- Q4 2024 revenue: $43.9M (down 1.4% YoY), operating income: $1.5M (down 58% YoY) due to one-time acquisition costs.
- Full year 2024 revenue: $164.5M, EPS: $0.38, with $10M operating income.
- Strategic acquisition of Electrochem Solutions in Q4 2024:
  - Adds high-temperature thionyl chloride cell production
  - Vertical integration in oil & gas business
  - $6.1M in incremental Q4 sales
  - Expected cost synergies with lithium cell business
- 2025 priorities: 
  - Complete ERP integration of Electrochem by Q2
  - Expand pipeline of new products (e.g., thin cell medical batteries)
  - Improve gross margin through pricing, lean projects, and material deflation

**【CFO Financial Breakdown】**
- **Battery & Energy Products Segment**:
  - Q4 revenue: $39.9M (up 11.8% YoY, excluding Electrochem)
  - Medical battery sales down 47.2% YoY (due to prior-year record highs)
  - Oil & gas sales up 1.6%, gov/defense up 48.1%
  - Gross margin: 23.4% (down 180bps YoY due to lower volumes and purchase accounting)
- **Communications Systems Segment**:
  - Q4 revenue: $4M (down 55.1% YoY due to delayed orders)
  - Gross margin: 31.9% (up 320bps YoY from favorable product mix)
- **Key Metrics**:
  - Operating expenses: $9.1M (up 17.7% YoY, including $1.8M in acquisition costs)
  - Adjusted EBITDA: $3.9M (8.9% of sales vs 10.7% YoY)
  - Backlog: $102.2M (62% of TTM sales)

**【Q&A Highlights】**
- **Electrochem Integration Progress**:
  - Ahead of schedule: already using Electrochem cells in existing oil & gas packs
  - Hurdles: delayed ERP carve-out due to former parent company prioritization
- **Industrial Sales Delay**:
  - Entirely timing-related (customer inventory management), no macro weakness
- **Thin Cell Medical Battery**:
  - Expected $1M+ in 2025 revenue
  - FDA/EU MDR approval completed for partner system
  - Long-term growth dependent on hospital CapEx trends

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