ULBI - Earnings call transcript Q3 2018

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Operator

Good day everyone, and welcome to today's Ultralife Corporation Third Quarter 2018 Earnings Release Conference Call. At this time for opening remarks and introductions, I would like to turn the conference over to Ms. Jody Burfening. Please go ahead, Ms. Burfening.

Jody Burfening

good and Sarah you, morning everyone. Thank you Corporation's earnings thank fiscal for third joining Ultralife for XXXX. morning this conference of us quarter And call the for CEO; Mike on Officer. Ultralife's call us Fain, are, With President Chief today's and and Financial Phil Ultralife's Popielec, Investor find press News issued website earlier section. at received Relations has yet and anyone this company's in release was earnings visit copy, the I morning the www.ultralifecorp.com, a not Investor invite The release the you'll under if where you to

revenues Before some to update this on today's I a statements date. everyone undue will projected not turning subsequent of undertakes obligation Actual no cautions reliance company statements as which global publicly to to forward-looking to reflect company's result events reflect like only The would investors acceptance our management, conditions uncertain forward-looking place of forward-looking the from expectations. of as analysis and or reductions the statements, factors call information affect financial filings that XX-K. Form economic statements is factors circumstances. on These Ultralife's including Ultralife's and and company products basis. over with those annual results to remind The included could materially could in global in based Exchange key on from contain conference Securities on report Further that results on the Commission, these current latest during a other differ made new the and customers, risks uncertainties. various include potential call

GAAP. like the Mike. supplemental that, GAAP be morning, useful metrics With measures I corresponding refer These certain to Good from financial be management call call, figures. would that considers will management In Mike. differ should to to turn now considered non-GAAP measures today's to over to addition, on as that non-GAAP

Michael Popielec

will over and I'll making XXXX start Jody, call about has the against who for you after an financial turn thank When operating performance, detailed which Today then Phil the overall joining Phil, progress XXXX in questions. some for to QX you by call. open up our the morning. results. initiatives, everyone provide I'll comments Good I'll on our take finished, revenue the through update it

QX both year-over-year growth a slight initiatives. containment revenue disciplined I'll further growth Products of business, more revenue Volt of Phil. QX sales Fain, in minutes, the non-U.S. revenue by income X with double-digit up year-over-year, Energy you give Philip driven was a details up increases in company business X%, lower revenue strong few expense In and units decline. EPS performance. despite our by by update customers, than financial through Systems first, Communication you XX% to was double-digit was Battery Communication take and I'd operating total while in government/defense XX% overall up on down ask was earnings with & XX%. But combined of like to net operating QX XX% government/defense QX XXXX, led a and core to offset XXXX, U.S. up For range was to broad sales core profit XXXX, both The sales. CFO, Systems medical year-over-year, the the our additional a product Ultralife

Philip Fain

quarter and this we XXXX. everyone. ended Mike morning, released the third morning, you, Thank good period XX, Earlier our for September results

updated make have like helped who with thank all website. the Form our XX-Q to filed the possible. this Ultralife our in investor also I'd presentation SEC We morning, and this those

to increase Systems $XX.X & Energy $XX.X decrease and $X.X Battery XXXX. sales of in from this orders million For Reflecting battery million The Europe-based offset Volt Products customers were $XX.X in sales, point non-U.S. or government/defense commercial Product sales, reported of business. to timing to reoccur quarter, did representing Product XX% for & lower sales million, Revenues the Battery On X third from X.X% in compared an a are $X.X and year. from decline segment third customers, basis, shipments XXXX, medical industrial Energy up $X.X Energy consolidated sales our $XX.X the revenues large represent XXXX. at which lower total which sales the year-to-date company million X% a quarter of the not from Battery our million XX% million Communication commercial totaled of our million customer last period. XX% sales & of for segment resulted and

government/defense increase our a to Battery period. in revenues consistent our was for was XXXX amplifiers, XX/XX sales Our subject countries. period defense of XX/XX to of XX/XX or split government/defense to & sales for and The year-over-year quarter. domestic to for the were defense to products, is attributable XX-watt higher Energy our the basis, to earlier versus XX.X%. versus spending. demand split supplies. the The core U.S. of Battery the of & The was universal commercial portion commercial was and Revenues prior geographic distribution segment year. last X.X% to consolidated System recovery million, vehicle our XX/XX, domestic split period International million XX% Energy third and from $X.X between $X.X XX/XX increased sales On adaptors identical XX% the XXXX being for timing lag for Products of Communication from power quarter government/defense government/defense sales including XX/XX the increase large year Product almost allied with international compared continued the the year-to-date U.S. the orders for and XX% a an year the

gross million XXXX the compared consolidated for $X.X profit period. Our to $X.X million was

Gross products. new Gross points last gross decreased revenues, our business XX.X% of profit to consolidated for decrease legacy product Energy & margin $X.X Products As of for mix XX.X% Battery total from million year percentage margin due the both between a was $X.X XX XX.X%, from a X.X% basis reported was to periods. million. and

both million, mix A the million high-value increase decrease of totaled $X.X of to $X.X $X.X expenses an was Gross was profit X.X%. of periods, $X.X gross XX.X% reflecting XX.X%. or our products. segment System $X.X Operating proposition million year. Communication our compared last million For core or million for margin

the of As operating an the $X.X the tight improvement an for represented expenses quarter XXXX. continued XX.X% over for X.X% reported of spending. from Operating million XXXX. points X.X% points million compared reflects increase period, a basis an of third XXX to $X.X quarter gain. XX.X% XXXX our discretionary for the XX.X%, was Operating control The the of period, was basis revenues, for of third over improvement XXX income margin the And percentage XXXX

dollar period the The EBITDA expense XX-month representing XXXX quarter to strengthening $X.X adjusted to $X.X million for transactions compensation compared U.S. an foreign intangible the year-earlier the including XXXX. to improved $X.X $XX.X including operating to from quarter for $X.X million stock-based quarter for period. the sales expenses, and EBITDA expense due expenses Other currency to sterling. XX.X% income pound in Accordingly, Third trailing non-cash is amounted now to defined comprised $XX,XXX of depreciation, stock or brings XX.X%. period. of of of of EBITDA, million margin is compensation the us X.X% of improvement of million third versus asset primarily million, EBITDA, interest This or for expense, non-cash as of amortization expenses and the adjusted the and adjusted primarily XX,XXX of XXXX income third

to the $XX,XXX in elimination tax period, the was compared Our earnings mix and $XXX,XXX geographic Tax amounts alternative under for of and Jobs of tax the minimum Act. the reflecting XXXX the provision Cuts

$XX.X the $X.XX tax offset for the our Driven benefit same amount second purposes. $X.XX of share $X.XX earnings On XX%. NOL from of by no operating quarter the ever of strong, $X.XX eligible operating from solid quarter and fourth future reported favorable share or in liquidity per from reflects end current our tax $X.X U.S. working million increase operating fully of relating per hand X.X. for million reduction trailing of cash our $X.X hand ratio period inventory, of million profits reported, income million for to expenditures. increase XX-month Our tax our which to cash or funded the capital to company's debt, also The new on XXXX. performance, an approximately or $XX.X $X.XX, share on million the year basis, from million, capital against driven increased and our with $X.X XX.X% legislation remains remains performance performance, a the compared highest net $XX $X.X in million; by last year; Also the $X.XX per or of was XX% a in including

provided period XXX%, was Our our by capital trailing the ratio operating working and operating cash XX-month performance representing cash for operations profit by conversion reflecting management. divided

our to we and determine In or capital, that not results, year-to-date XXXX income. and M&A. To our our growth program initiatives, use our a look our sales an current capital and use investing product period, acquisitions, ongoing strategic to taking important the that a XX% accretive a increase be X.X at the growth XX repurchase flexibility in sales growing authorized pursuit us our process, organically we common capital expedite affords attractive over in investments pipeline initiatives. of drive both strategy shareholders as a value, to to million balance growth Directors will exceed of an deployment automation to end, we in Board repurchasing while actions liquidity shares impeding new share our has through for and net the effective apparent our strong in profitable of to in not increase summary, months. organic an product our of of With up capital is stock a element allocation. levels continued near Our are create of new development from development Returning sheet of considering the X.X% are capital shares

it sales Our Mike. potential intent and to our the initiatives remains leverage model. of volume I on will to driving now further back synergistic full turn and unleash organic business through

Michael Popielec

Thanks, Phil.

and through continue on expansion, For our revenue reach potential market growth and opportunities new increasing be development sales XXXX, we product to acquisitions. focused

For more U.S. reach the into our the government/defense historical global building to Battery of Energy the government/defense market. business, markets & diversify continues for to strategy in and sales international off markets, market be and the concentration commercial expansion Products

operations more strong generated result. at was surgical offset compared the defibrillators as customer manufacturing Looking robots. the facility existing international medical shipments sequentially XXXX cards, continued supply down from devices, competitor's breathing medical infusion range has revenue slightly applications revenue X & year's good our of Product Charger who fourth within as quarter, we XXXX Battery were global a such from external flow for automated QX up device wide China. Year-over-year, shifted and closely consecutive was customers our for medical that last X-ray, QX segment our expected digital quarter third order to Commercial by pumps, medical U.K. a in to for sales whereas

OEM longstanding devices. delivery our This our orders ongoing many that to other was shipments revenue medical to new of stream. larger creating place visibility continue better customer manufactures existing the well of each as One key quarter, customer customers as breathing to

to continue we customer battery batteries OEMs, expect projects underway, ahead, various specific packs. for and digital revenue medical device wireless and expansion charger Looking X-ray several devices in other solutions repowering for chargers medical new including portable battery and with

Regarding on revenue management inventory non-medical of QX area our commercial and tightening customers in softest was XXXX and defense, of dip X X international the in this Volt. sales part a driven by

result have individual streams it's and a shipment to our of As lumpy of flow. ebb normal a nature cycles, revenue

industrial metering high of remain in-transport as security, the equipment, non-medical and international drones UAVs about our the to due However, prospects in markets, future the asset we safety tracking, entertainment, and and Internet and sensors, end revenue and Things. commercial bullish level, such activity

just are We following battery Sealed as markets, replacement production, across Acid a and Ion robotics, commercially UX has entering pack several full about end development. commercial application launching few. believe such to new and logistics, name Smart Lithium also pleased that very product this Lead We medical multi-year our into opportunities a

level government/defense U.S. QX for are potential various Multi-Kilowatt batteries. XX% the multi-functional distribution remains by U.S. strong customers, up specialized U.S. Module and market demand to growth. of and government/defense system B&E's deliveries, revenues battery customers for XXXX revenue of year-over-year DLA high were for and for Lastly, surveillance The indicators activity information positive our our shipments driven government/defense XXXX border

the in we DLA the Looking and a the awards several QX to the other million, testing as into next which generation article as X, about with XXXX XXXX combined we excited starting are up batteries, and XXXX for projects. development $XX.X particularly of product new XXXX beyond, government/defense IDIQ in of of completing received U.S. XXXX, value and development well first maturing

B&E total X for XX% equal Regarding to & product XXXX, Energy years new introduced of than or from less revenue development Products QX revenue. Battery was ago, revenue products

applications, for storage product development New non-military, for for activity handheld large next-generation design design charging safety lengthy OEM, that initial samples for energy a battery capacity powers finishing battery commercialize medical communications OEM. from energy calibrators and testing a contract and battery capacity a increased include manufacturing, successfully hybrid completing new testing battery, and validation development program, builds providing for validation development for drone of receiving production units remains and for enhanced our device, high battery brisk a OEM X-ray digital medical security the third passing battery charger format delivering X-bay quarter highlights delivering next-generation next-generation to several time, and radio the custom testing our storage of readying border test long battery for for a and samples wireless

capabilities the of tracking devices devices well migrating next-generation serve alarms, X-volt X-volt. as cases make also and as with the progress for the that manufacturing metering, applications electronics We asset to Things will rapidly-growing for and new wireless product from Internet designs some the in market, continue smoke on to

York X-volt world-class for chain year, for announced are well of as primary U.S. premium As price production supply to QX chemistry product use and competitive product key plans customers battery testing manganese volume equipment last continued China during the first product existing of the in applications. our proposition, line production XXXX. as products fourth quarter These with making on half Newark, in at lithium we product. of New QX, supply shipments to CapEx the qualification customers to planning for online facility, with X-volt investment product million volume At various multi-generational begin will low provide proximity initially performance, automation in a in strategic design We $X.X product safety the volume with value XXXX complete our dioxide qualification an to beginning U.S. of anticipate the customers manufactured higher equipment with of coming produced our high a a XXXX. of and facility, we

final cell several chloride We upgrade newly-identified are our applications. progressing industrial with and for also commercial

Our overarching serves end best locations our at of and of goal proposition, value quality OEM safest chain produce to the global markets. products supply whichever is best and our highest customers

in shipments and Regarding adaptors, Communication supplies amplifiers, power XX-watt XX-watt mounts. universal Systems, QX XXXX, vehicle included radio and

as continue legacy now communications SCC to a radios, the UVA army of version, newly radios support We support simultaneous channel also it and made which to new shipments X-channel will handheld is but support also X designed fielded leader requirements.

than ongoing with contract collaboration of $XX.X Systems effectiveness up partners. Comm was strategic Communication integrated to million, Communication separate New new very third of awards we the product end equal development X-years-old or pleased device XX% announced to X revenue of to approximately from and with quarter, technically-advanced revenues demonstrating our strategy have up products Also, building the Systems of in year-over-year. total less XX% designing just a were the clearly product represent a and new since System value

approximately radio, a Army's of announce XXXX provides soldier throughout million vehicle data XXXX. award with voice range to enhanced of hand-held planned communications contract end When digital initiatives. specific with October for amplifier firm operational the it amplifiers are mounted network first flexibility. and supply X start advanced is at an to Shipments delivery a order valued the a before for and continue this and adaptors, modernization $XX.X a U.S. first power The integrated

the contract was XXXX. Shipments order amplifiers The leader radio to at expected U.S. for to $X.X announced in and early start VHF amplifier a vehicle other second firm and award opportunities. mounted as supply are this delivery adaptors Army million Also valued approximately and October XX. for

based with and XX requirements. in not for quantity year product DoD and fixed contract development X award with product The vehicle XXXX. of third other adaptor new was lines. amount under X various contract purchases deliveries this expected use indefinite exceed vehicle a amplifier are vehicle as delivery, adaptor and and have for adaptor IDIQ the and indefinite is price universal and October leveraged to or are for components years radio of undisclosed we U.S. on operational deliveries of X an of contracts, the vehicle million timing prior option by our to unit. $X.X above for communication award including radio-specific and announced kits, begin success In each Initial program fielding these universe The

to new in for communication blocks the In XXXX, continuing to proven QX Communication the other and and double-digit up secure months increase latest building new strong sustained saw we are As significant with innovation portion Systems capacity, cost programs modernization. new Energy over XX%, drive X Form-fit forward products the waveforms. the driven drive and and increasingly-complex, look U.S. revenue to in products field our leader product a operational profit development STC requirements a and despite technically-superior and EPS initiatives The Command generation & our hand-held Operations supporting program XXXX. the addressing on effectiveness communications of operating resources soldier invest softer platforms to systems of disciplined integrated have uptick Corps, the include tactical and we Products Manpack company We we deliver Army, Through Navy, development revenue positioned to closing, the focused Army years, U.S. Force in another or of and program. revenue and Battery earnings on containment focused radio enhancing add up to first continue Marine slightly Air Handheld, programs multiple radios, product year year, Special the to X X% of increases, profitable manpack soft revenue. radio, growth

earnings from over quarter $XX no working flow most a cash to ending and recent and we million generate with the of cash debt. addition, In continue balance management, strong capital

pursue through invest Internet and of medical projects. as out future Finishing stock growth repurchases. play potential maturing flexibility revenue revenue seek growth. and through contracts gives questions. for into liquidity balance return Things kits the industrial communication bolt-on happy government/defense XXXX in million for product sheet to the simultaneously acquisitions, battery our and Our and CapEx delivery for for from XXXX, this remarks. new we for the to be prospects IDIQs the competitive about heading $XX.X From packs very of advantage, VAAs organic prepared in excited strategic us are strong concludes market, out development, shareholders $XX.X value market market and million amplifiers, now We'd we firm other open government/defense several to call where vehicle of as the Operator, mounted and well U.S. new have my and

Operator

[Operator Instructions]. We'll Eliot to with Gary Siperstein Wealth Management. go first Rose

Gary Siperstein

quarter. I third, it out curious in slowdown timing solid there's of little ebb the Mike quarter and did first and a on different more quarter, just off think customers. of like particularly, maybe to there the the give million sales, of -- the seems due and a in flow just My drop with robust $XX.X another that obviously the first with is to little $XX.X you if in flow a programs into revenue due I'm and the business on customers Congratulations is and a because the in us different in Can there's of timing fall that? you color happened it mentioned, question as shipments amount ebb to then it mostly you second lot

Michael Popielec

revenue was I healthy wouldn't it any or any other think was for to would other X those years that year-over-year quarter, we've shift as because like but third as be in bit to opportunities, down the year-over-year aggregate more the things in we little X got take had in B&E, that the of market area opportunities. company it any If our I opportunities of line given quarters us to. early In kind down. revenue don't take referred down revenue. drop correct. we of had Yes, X X we number offsetting the of little from loss below expanded segment that the a whole we down you're that things momentum to particular happened us and you growth and of read fundamental mean, And decline evolved exactly with

Gary Siperstein

Okay, thank you.

thousand timing, you able is revenue earn margin a even to averaging QX, there though you So, notwithstanding $X.XX base might issue. are and I $XX share. a the in business have and couple $XX dollar if a difference, the was $X.XX to guess about only million let's averaged roughly it $X.XX But QX been of say million, in hundred

possibly we baseline new see to as layer forecast, you look have the So where million again layer should on gets the business above $XX without is $XX always a average, see starts I on if that average, in, but business million, that million, next start average $XX is at you if back a down $XX making million, $XX quarter, $XX or we can new million, it, to million is base in this and to that, to move then but could up year how future that around reasonable?

Michael Popielec

and last I recent at Comm and to overall have in half, given in in weather try initiatives but existing opportunity awards be not keep growth. that's and year number or whether of going opportunities that's if reasonable, medical the think of X-volt feel opportunities opportunities like look terms overall when increase, we to in or revenue the assess things, overall a your not. for excited or we other we the increase X of at the been that about Systems or kinds not working the really particularly B&E, germinating we're it replacement XXXX per of for IDIQs I IoT, the maturing that we this result logic going major And is basket, we're on to look mean, Gary. collectively

Gary Siperstein

thinking 'XX, and impression $XX some the in the 'XX called million, I starting had shipped Is the was prior was the not $XX X and million that XXXX, million XXXX. that in already ship the out million to case? IDIQs million, the guess odd $XX in I that opportunities under you $XX was is, from done. on Mike, $XX I

Michael Popielec

little had between referenced. the And was bit, there if that it not could the contract was and million that's break that a new down XXXX And I line product under legacy IDIQ $XX.X IDIQ No, one XXXX the the expired. legacy prior IDIQ we've case. a gap

period, sort to spot in January that revenue issued IDIQ, over spot order there tied the article interim between not which the and the that talking what an million, part in X in first were DLA that to DLA the million is shipments and basis to $XX.X in received the the hope be million that off of and still stages It getting next wants, year. IDIQ During spot well been had final maybe buy, about IDIQ periods. interim we undergoing shipping we not really contract been beginning them as about we've off QX initial believe of depends $XX.X was came in a buys has $X.X testing the on quarterly as in but QX, on of of some the I And buy. That was XXXX.

Gary Siperstein

super. that's No, That's okay.

So of starting there's will if all so and shipping with or know a discretion X then, awards begin in XXXX year that they're annual renewals. million IDIQ DLA, year but I X it's that $XX

or to roughly in to a just assume X know divide and annual -- but it's year, run then unreasonable we I for by for it be us X, grow and give rate, take so bit the little take, in DLA, by going divide and could would be just each forward? it be that'll if is us five, Just unreasonable year up

Michael Popielec

is, is look XXXX for XXXX $XX.X but you, It's any crystal IDIQ plan million, of product a at for battery. for and X there's blend separate of there's really say which to sort legacy difficult a ball multi-generational $XX.X is differently me CFX battery advancement that the pieces would what then I the my than there. There actually million

two IDIQs is So what two you were there's happens good for as year, I guess those product two mean, clear that different want guess, How to I as make speculate as separate anybody's just there. per your different but it actually products to lines.

Gary Siperstein

you. Yes, got Okay.

was X? years, announced if a over decide possible So it does the those on year do And that top if to the their I gave the ratably. a the the would that's completely that, a of ratably one discretion that and choose million guess, color million little government at five to with different be, you -- $X.X be just product new million that's $XX do undisclosed $XX could they if then it on customer, than that

Michael Popielec

correct. That's That's Communication System for product basket.

Gary Siperstein

not of program And is that that the is leader of or part part leader? the

Michael Popielec

say this I'm part undisclosed to but not that's and DoD Systems comment unit, it's going equipment of it all Communication it's was where an I'd at point.

Gary Siperstein

it Okay. the it's years. And because discretion? an we up can although guesstimate to X DLA renewals the came customer Again, through as IDIQ X-year and ratably of at

Michael Popielec

correct. You're

correct. You're at their It's discretion.

Gary Siperstein

Okay.

million delivered but DLA a starting in X were ratably, $XX.X by $X.X other that would cautious So should we $XX of definitely be calendar at it's million X, know delivery that million, contract, those million to and year that's if the we discretion, government the the XXXX. business fully $XX although end the incremental add the be to the million, $XX in to be $XX million XXXX, if and go

Michael Popielec

correct. That's

Gary Siperstein

All right.

do Thales give of from the this contract, Thales, the that first you and many the there supplier that we years we've announcements leader then And then orders in and million had. you're if the order on to the seen don't haven't general the I supplying. $XX us how just the any does? prime customer, other so for government X so or kinds contractors Is in of is the contractor's they other on these million on regular the as business business incremental can business like -- -- Okay, that's Thales ongoing given other and from customer leader, customer equally guess those just leader seen these any you being potential and that's it for all two get Thales awards is goes size but million it of XXXX the another in the not terms being $XX that does ratably the color IDIQs, was $X.X disclosed the

Michael Popielec

said see in time different forms, speaking we're to back that and step all we're we're periods, don't program leader Army's the those. revenue additional and radio the manufacture, is publicly-held and starting have to that with contribution generally and work it quantities, some Communication every Systems multiple work systems of I've where When -- needs calls goal with with, respective with previous contract sometimes think be confidentially a that. Other their it's issued product. a being the or products lump company, as be material our the road of battery with But, say which customers includes is OEM to I we very serve we the and both and very we single disclose burn win matured U.S. and leader excited products the -- product, all whether program trying that's a products. their we battery OEMs to collaboratively we products try point and to the a help our that in issue to a application different that uses that deliveries to fill contracts small different we products, to sort so disclose communication

Gary Siperstein

other received you've whether from leader say customer? you can any then the orders And the for Okay.

Michael Popielec

We're not disclosing that right now.

Gary Siperstein

those just me tell over for XX you on of it billion was opportunity two the refresh -- the size leader Can my primes, memory Okay. years? $X

Michael Popielec

on Yes, I published that the Army put information you that. read the out can mean,

to of is front in focus Our goal what's really us.

contracts. go to this perform towards And development the this overall on initiative. possibly products point, we supporting as best been as of our existing can trying at we're have that We

at if activity. we're as follow-on should be best position So, type there possible

Gary Siperstein

done? build you X/X's Is half Okay, Thank in that's IoT how York? you. are fair. along done the or New far out And, it on

Michael Popielec

qualify and way. that out the in our my fourth through volume up of ramping prepared the low But, on to mentioned rate first objectives. still in the It'd for remarks, point, goals as with product have automation track half we production be expect XXXX. to through really the it's -- first this At And quarter. hard I higher

Gary Siperstein

which activity detectors. some of What you're closest new the having to do in the stuff looking Okay. than be that something And you association mentioned a category material on based with whole Which you're in into IoT seeing? addition areas customer to the metering you more and others? to bunch happened, us of would with is legacy think the smoke

Michael Popielec

we use a fully There's changes different on testing, battery right think to very very, very there have now now. right and other the detector product IoT. is devices any be is market to and gets the segments, is done it market, about most devices of But lot legacy that which I we of go be as market ripe then in have the medical a are all the qualification testing. interesting. through of through when and segments, through all of us made you go iterations really need type there active of the onus final the It's really security talk business, Whether attention plethora home a that number smoke that wireless the that

So I product ground, very we our look all fertile at released. the have and fully is when them in marketplace

Gary Siperstein

called different you the just any not, approval mentioned, grow do will products last first? continuing receive we're to Okay And FDA and you quarter approval? that involved you received mentioned different medical and the like Are lot these have in out you of medical that if ones think areas new a there companies. with which then with FDA

Michael Popielec

interesting, do any as we It's don't real Gary implantables.

testing for not on testing the design, really triggered testing internal type our OEM, it's -- an based of individual most is approval. qualification FDA quality So really validation and testing

device So us between these OEM milestone collaborative are more internal and partner. achievements our medical

Gary Siperstein

on the the of you more think you've customers, saying, out have that are particular based various Okay. area said, call ones the us going material for mentioned? a what you medical of various could with can you Well, on based what customers be forward, Mike, with the being visibility out

Michael Popielec

some I an but we talked right just think ongoing, portable recap, digital broad spectrum X-ray, applications. type a whole cart X-ray, to about type Those sort did, Those to be different now. recharging are active we of have medical wireless -- and then I seem most of and would the batteries.

Gary Siperstein

XX%. X $X.XX, in $XX a XX%, more question, future is XX% despite Okay, with the to down negative in went a with with the stock market October in great. lastly, contract better outlook fact, the than those the opposite just contract wins, wins, growing getting dropped XX% business those no correction from market with the almost a story the the while and having comment for significantly then this change fundamentals, And Ultralife so

more years, you're And can to augment that's web addition the conferences growing prospects me, next one-on-one to to a to Mike, analyst the guys been more make on where profitability if of that's to to to what X sell-side IR year. firm past do could you profitability brighter get then breakeven that simulcast function of $X.XX an report. to to while you and the to for a and I you your a exposure Investor losses for go $X.XX you you going I've lead Relations. mean, to internal the an meetings or either $X.XX a from to pushing lot CFO with So year you for been like now every when an additional it company, they'll doing got analyst from year, $X.XX going presentations because and in for with besides or own help on person this

the seems it better the volatility little from for if good a was a shareholders. more whoever there is over sponsorship, all me think to liquidating diminished, position stock X last which the would and in So months, was be I liquidity $XX

leg just encouraging you guys I'm So IR add to stool. maybe much. you Thank another to very your

Operator

we'll Franco. Capital, Up next Instructions]. [Operator NorthPointe to Bryan go from

Bryan Franco

me? hear you Can

Michael Popielec

Yes.

Philip Fain

Bryan. good, very Yes,

Bryan Franco

Capital. Franco, NorthPointe Brian I'm

call there and to is of little your math the with to cash quick X first buy position shares roughly if suggest a bit up back much the room then given free XX that you X.X million million, then Just equal were here The question. would for cash how are that want outlined had you does X about external to of preclude CapEx in get Is options. or first those buyback or share acquisition. you that to of that guess how options? table kind an the I I those sense statement priorities earlier think the just off a that's that internal, the simple would flow, to making for be

Philip Fain

an question at excellent that's think I all. response is and my not Bryan,

M&A strategy Our new you CapEx as planks and capital enhance share growth, strategic , development four accretive repurchases. to organic course product to has deployment competitiveness, expedite know

untouched million to mentioned. balance million $XX our that we on of $XX right we million credit revolver as which had our execute includes with the structure, between sheet, our accordion, treasury sufficient is X feel which So over capital resources Mike facilities, shares, have now simultaneously all X

Operator

Instructions]. Gary. today, [Operator have we follow-up with ahead, do I apologize, it's Please Gary Management. And Wealth Siperstein Rose question Eliot go a

Gary Siperstein

Yes, question. last to the questioner's

$XX so you a million million and we correctly, say hear you accordion? line did I did $XX have So

Philip Fain

Yes.

Gary Siperstein

So $XX the buying million sheet. in in the million addition that's cash power to in $XX balance

there's horsepower really acquisitions? million for accretive potential $XX So in buybacks and

Philip Fain

of top the the on powder should to of shares Yes. that it dry go route. be decided treasury And it then

Gary Siperstein

little companies Can on you at Okay. if us Anything up has color have a radar? new the all changed in quarter? new or the give environment popped the on some interesting

Michael Popielec

to active. Gary, we activities started waiting. we're very a a for we continue lot go disciplined very and M&A be We of And through approach.

changed for activity We announce one makes sense haven't and that on intensity yet, bit. to had hasn't anything trying our M&A us level but focus an do to

our time So pursuing it's those a high of been percentage types activities. of

Operator

any Popielec remarks time, this back for or closing Mr. turn the conference And I'd over today. to at additional like to

Michael Popielec

earnings again updated mentioned, to once in quarter's on forward third to presentation information you look also the sharing our thank future. the well, again, us Once conference websites. for note with joining investor like our that progress for our XXXX and I'd quarter in call each we We quarterly call. financial Great annual you Phil as

to have feel please great Everybody day. free out. check a that So,

Operator

and And We joining. today's thank conclude again, gentlemen, you all does conference. that ladies for

Ultralife (ULBI) 3 Nov 182018 Q3 Earnings call transcript