• Q4 Revenue: $43.9 million, compared to $44.5 million in Q4 2023.
• Full Year Revenue: $164.5 million.
• Q4 Operating Income: $1.5 million, including $1.1 million in one-time costs related to the Electrochem acquisition.
• Full Year Operating Income: $10 million.
• Q4 EPS: $0.01.
• Full Year EPS: $0.38.
• Battery & Energy Products Revenue: $39.9 million in Q4, up from $35.7 million last year.
• Communications Systems Revenue: $4 million in Q4, down 55.1% from $8.8 million last year.
• Gross Profit: $10.6 million in Q4, down 7% from last year.
• Gross Margin: 24.2% in Q4, down from 25.6% last year.
• Operating Expenses: $9.1 million in Q4, up 17.7% from last year.
• Net Income: $0.2 million in Q4, compared to $2.9 million last year.
• Adjusted EBITDA: $3.9 million in Q4, compared to $4.8 million last year.
• Backlog: $102.2 million at the end of Q4.
• Working Capital: $67.9 million at year-end 2024.

• Warning! GuruFocus has detected 6 Warning Signs with ULBI.

Release Date: March 11, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Ultralife Corp (NASDAQ:ULBI) reported Q4 sales of $43.9 million and an operating income of $1.5 million, despite incurring $1.1 million in one-time costs related to the Electrochem acquisition.
• The acquisition of Electrochem Solutions is expected to provide vertical integration capabilities, expand market opportunities, and create cost synergies with existing lithium cell businesses.
• The company has successfully negotiated long-term supply agreements, enhancing supply chain efficiency and cost leverage.
• Ultralife Corp (NASDAQ:ULBI) has completed several lean productivity projects, resulting in at least 30% greater throughput and efficiency.
• The company has a strong backlog of $102.2 million, representing 62% of trailing twelve-month sales, indicating a healthy demand pipeline.

Negative Points

• Revenues from the Communications Systems segment declined by 55.1% year-over-year, primarily due to delayed shipments and timing of orders.
• The company reported a decrease in consolidated gross margin to 24.2%, down from 25.6% in the previous year, due to lower medical battery sales and factory cost absorption.
• Operating expenses increased by 17.7% year-over-year, partly due to one-time acquisition costs and the inclusion of Electrochem.
• Ultralife Corp (NASDAQ:ULBI) identified a material weakness in its internal control process, necessitating the hiring of additional qualified accounting personnel.
• The company is facing legal challenges related to a business interruption claim from a 2023 cyberattack, which has not been fully settled with the insurance underwriter.

Q & A Highlights

Q: Where is Ultralife Corp ahead of schedule with the Electrochem acquisition, and what are the major hurdles? A: Michael Manna, President and CEO, stated that Ultralife is ahead in utilizing Electrochem cells in their oil and gas business, which will positively impact the bottom line. The major hurdle is gaining full control over the business from its previous parent, which has caused delays in closing books and other processes.

Q: Regarding industrial sales timing, what part is a push-out versus macroeconomic factors? A: Philip Fain, CFO, clarified that the sales timing issue is entirely a push-out, with no significant macroeconomic trends affecting their markets. Michael Manna added that some customers overbought earlier in the year and are managing year-end inventories, pushing orders into 2025.

Q: What is the outlook for the thin cell medical opportunity in terms of production and ramp-up? A: Michael Manna explained that they expect about $1 million in sales from this customer in the current year, with a significant growth trajectory in following years. The ramp-up will depend on hospital adoption and capital expenditure trends over the next 12 months.

Q: How is the integration of Electrochem progressing, and what are the expected timelines? A: Michael Manna mentioned that the integration is ongoing, with the main focus on transitioning Electrochem's ERP and quality systems from their previous parent. The ERP system transition is expected to complete by the end of Q2 2025.

Q: Are there any economic trends affecting Ultralife's markets? A: Philip Fain stated that they do not see any adverse economic trends affecting their markets, indicating confidence in their market positioning.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.