ULBI - Earnings call transcript Q4 2018

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Operator

Good day, and welcome to the Ultralife Corporation Fourth Quarter 2018 Earnings Release Conference Call. At this time, for opening remarks and introductions, I would like to turn the call over to Ms. Jody Burfening. Please go ahead, ma’am.

Jody Burfening

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

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

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

Mike Popielec

year financial the detailed start revenue After the I’ll comments XXXX talk by our questions. progress QX for an who morning. open provide will making our thank total Jody, XXXX, XXXX call about update everyone some over is and about I’ll the to for finished, results. Then joining morning, up turn for Phil Good overall initiatives, some it the and call this operating you, you take performance. Today, on I’ll focus areas then through against Phil,

fourth the Products both & XXXX, in year-over-year grew our increases markets of Over commercial with government/defense and quarter up our sales Energy Battery from medical revenue XX%. X%

for fourth modest profit an we and per and line consecutive With quarters $XX shipment fourth received year However, at modifications year-over-year the due softer the X% pleased growth growth U.S. million total Communication earnings Despite the XXXX, and bottom share were the XXXX four of increase. sales to at production growth, year year revenue for QX, delivery for in schedules operating quarter consecutive for contracts favorable in an of year and initial Army. increase year-over-year. to total the of Systems, decreased line prior revenue $X.XX, after October the came we to top deliver benefit, double-digit to total top in tax

performance. year Phil Ultralife I fourth further XXXX and few like announced you fourth In quarter. give won $XX working Phil? increase year-end Communications first backlog initiatives. revenue a increased minutes, year including take balance over details and large cash will of ask on earnings includes information by XX% million, to of a CFO, than in driven a more $XX in business million the System the by through quarter to the But with We during the strong our capital Our a by ended Fain additional inventory. and I’d you our which year-over-year XXXX, beginning XX% XX% reduction contracts total financial management over of

Phil Fain

quarter and results fourth everyone. morning, released December for XXXX. good year and ended the Mike, you, total this XX, Thank year our we Earlier morning

We the our give in investor website. this morning SEC my presentation I with have updated also this helped the filed all Ultralife those and Form happen. who sincere make our XX-K thanks to

revenues $XX increase million quarter, XX.X% of $X.X year $X.X reflecting and due increase XX.X% $X.X offset in fourth and lower the by defense driven million & XX.X% revenue X.X% defense our million growth of a Energy $XX.X the in government Systems. to Revenues Products year-over-year million of X-volt and higher totaled partially revenues sales prior million, X% the sales. Communications million primarily or over consolidated from for sales medical segment government Government grew X% sales the both $XX.X decrease from by The commercial fourth period over from with for or and our XXXX increased demand defense was year representing a U.S. Battery lag The and a sales. XX% last gains Commercial million, year-earlier XX-XX of orders the with spending prior the or versus reported the XX-XX defense government recovery differences the domestic XX% timing to portion was an continued customers lower from sales allied commercial XXXX. of consistent sector $X.X countries. year. the sales due defense commercial, U.S. the while large were our $XX.X in For for to international split defense of sales in quarter and million period versus

a and of Energy Vehicle VIPER international were Energy & of XX-XX government XXXX the Battery contract. from decrease $X.X the Systems the revenues & of Amplifier-Adaptors under Products and split result, included The compared million for of our a to period. distribution Revenues domestic Products $X.X split last quarter. XX-XX compared an commercial geographic was Battery was XX-XX XX.X% shipments XXXX year. for defense fourth from our XX-XX sales XXXX or to between sales a As large million, Communications segment to

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

Energy Products of a and XX%, million million. XXX new last products. decrease business & margin total Battery last a year’s from increased was $X.X XX.X% between due margin year $X.X XX.X% Gross basis fourth XX.X% to product X.X% for As gross of profit from legacy versus Gross was consolidated our points percentage mix reported quarter. revenues, to for

segment, Systems our reflecting For year-earlier compared mix. year, last quarter million, decrease X.X%. XX.X% XX.X% was $X.X from million $X.X of a of decrease to margin last million or $X.X reported XX.X% period. year’s expenses totaled gross was million fourth Gross Operating the sales to Communications for profit compared $X.X a

for XXXX. of same for now of stock-based million or to $X.X including revenues, of XX.X% quarter XX% the us Accordingly, As a expenses Operating quarter adjusted as and Systems the percentage in compared period $X.X operating last the XX.X% is including non-cash the This XXXX for EBITDA non-cash period Fourth expenses fourth $X.X of of versus operating for the income increase million and reported a XXXX, adjusted to period $X.X brings compared XXXX quarter XXXX defined decrease a sales. fourth and compared quarter to tangible million reflecting compensation for the decline stock $X.X XX.X% the the expense X.X% $X.X year-earlier EBITDA asset revenues, million or last $X.X the X.X% million million period, EBITDA $X.X for million Communication over depreciation revenues was year. XX-month operating for or of year. represented XXXX XX.X%, of X.X% to the expenses representing was for compensation period. year-over-year of to margin X.X% XX.X% million amounted amortization fourth versus sales

profitability forward, provision likely sustained prior benefit a going book for carryforwards, as recognition our our like also These tax operating $X.XX XXXX. impact allowance asset corresponding increasing In put has substantially commonly approximately tax quarter of fully This is have allowance a sheet in deferred will XXXX earnings, increase of tangible $XX.X per Our The backlog, our amortization. share. to credits us for in over increase we including growth a statement, the progress favorable opportunities. profitable we year U.S. past quarter. was million several another the at deferred include our fourth million to transformational of more solid of $XX we balance and one-time net the fourth valuation significant that Various net the conclude of DTAs, tax in factors not and for DTAs. tax the a value solid the these of compared on demonstrated the and Gap] tax end loss of growth a made resulted quarter than accounting per XXXX numerous in amount, our of $XXX,XXX position prospects utilize increased that fourth have valuation has it tax share referred by years reverse $XX,XXX [Audio to reversed assets, our the net have on to intangible DTAs income

U.S. reported we in tax will on generally full accordance our pretax XX% with Going principles, provision make income. accounting forward, of a accepted

of both In XXXX, size to not these on a their tax $X.X these assets While deferred in cash perspective, In on in is we’ll quarter and reporting million EPS one-time benefit and tax Ultralife’s the of XXXX. of the terms U.S. basis. tax Act. Accordingly, compliance these Jobs the an future the performance we provision about valuable Combining as-adjusted in share positive income first and in taxes $X.XX utilization will benefits, a be beginning our for fourth are sentiment of to expect be $XX.X quarter profitability. per $X.X an million DTAs. a non-cash recognized U.S. pay due $X.XX and our our allowance net we a taking taxes, the assets offset valuation with of GAAP reversing share or with to summary, for indicator for the net for million, income of XXXX, of Tax GAAP operating from the the to we was XXXX ability quarter Cuts taxes. tax both fourth per foreseeable compared future do non-cash And

performance, $X.XX XXXX. tax the $X.X last or benefit per included Also a cash driven which share ratio inventory, for our amount million current cash year, of $X.X for of XXXX is full share of reduction and million operating of or liquidity $XX.X $X.XX million per the over operating reflects for for year-end by $XX.X $X.XX increase X.X% the period reported compared hand million, $X.XX same the of share remains helped income performance, million XX.X% from Earnings X.X. on increase the our expenditures. $X.X capital in to year per no at a $X.X of highest strong, the from our Company’s an the fund with Excluding XXXX which also $XX.X solid reported, in our $X.XX balance The cash or year. non-cash was net million each million working debt, hand on capital ever

by representing conversion by operations working operating performance our reflecting for XXX%, capital divided cash was XXXX, Our cash profit, ratio and provided operating management.

important at of balance an by the Directors deployment full Board that November as Our end, summary, us we the to use of of $X.XX, To XXXX. making authorized capital a in we program to backlog strong In in the share results repurchased profitable our both product and have development as price flexibility we repurchase demonstrated investing decisions. X. is our taken capital XX.X% Returning shares effective liquidity enter an value organic increase sheet strategic look have are we growth shippable year of XXX,XXX the and in our million to XXXX new capital since actions drive average our accretive growth X.X create investments organically shareholders M&A. element capital allocation through for from affords in to support strategy

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

Mike Popielec

and Phil. increasing XXXX, new set through opportunities product potential will revenue we you, also development, our organic CapEx expansion reach, continue diversification on markets focus sales and XXXX, and of growth for Building Thank on acquisitions. on strategic to

for represented position XXXX sales closer XX% sales market. U.S. total in Products the at global XX% business, markets, off reach in to our Battery the up global while diversify medical inside a government/defense remains and of was government/defense per our look our of QX & and continuing markets, strategy the sales, year-over-year. more B&E market Taking international medical For Energy commercial revenue historical expansion into sales to build the commercial

and the customer delivery the orders from year, blanket three including As good our leading product QX defibrillators, applications ongoing first made cards, infusion battery receive with revenue under medical medical X-ray agreements pumps, quarters we surgical and to XXXX device continue were medical visibility automated and of to our for charger to multi-year base, shipments Key these in breathing robots. new from devices, external medical digital our agreements stream.

For overall X% the medical increased total year, revenue by year-over-year. our

device battery and by batteries medical streams various chargers to and new project opportunities packs. existing portable revenue solutions for We also OEMs, repowering continue and charger other working onto X-ray pursuing our layer involving battery several wireless for digital

application. to customer reliably initially including we the technical device diversification the develop provide Since charger manufacturing role in at and/or XXXX, level the help January expertise medical Our to commercial battery growth our compounded performs annual launched revenue a grown their and of that medical and the strategy, specification of at is for safely Accutronics when XX% solution XXXX. acquisition our the of has rate needed

in QX Regarding commercial non-medical X% than XXXX X-volt in in China sales export for the UK. and lower more market strong thionyl year-over-year and international offsetting and lower cell pass for manufactured the commercial was ThinCell China, government/defense, revenue chloride with up government/defense growing toll sales year-over-year sales

soldier and ThinCell product customers Warrior to year-over-year, through we’re XXXX fourth government/defense with fact, for an expand chargers and chargers international Pacific shipments a XXXX In product batteries one noteworthy new Land ThinCell prime line. revenues of for international Defense. capped Other of partner Warrior XX% our and tech portable the a products quarter channel and for high Land MIDS, XXXX an Ministry to of continuing the off for pursue and and included increasing XXXX Asian an batteries for line, annual capacity application, years QX video capacity batteries high company best modernization,

also OEM in for we and security safety to QX received from blanket European in During an orders products and XXXX, ship X-volt and legacy million both $X.X devices distributor, XXXX. X-volt for an

pursue our UAVs, security, of such Internet business markets Things. sensors, tracking, in-transport and to equipment, commercial aggressively utilize as global growth revenue end For safety and platforms XXXX, and and our in to targeted drive to expansion non-medical continue the will we industrial of entertainment, asset drones meters

sales Lastly, for year-over-year applications. business, by a of Primes partner revenues X% up U.S. in the DoD, OEM in total and driven XXXX fourth year channel pleased the energy B&E’s increase U.S. see revenue government/defense fourth government/defense quarter increased kept The we’re strong a to B&E quarter storage XX%. to

channels For the Primes growth contracting and targeting global levels from again this XXXX overall with year. activity department U.S. defense government/defense OEM high, we’re revenue various B&E remaining

towards readiness batteries next delivery awards to generation in million we’re first approximately primary we the and multi-year article and also the We continue XXXX. $XX position make start that receiving orders testing for XXXX DLA-IDIQ received that in so production the to progress a XXXX against in

a our with only us needs, does development and New Not organic the opportunity our products fundamental keep customers growth add. of product current multi-generational close remain strategy. product the remain this part and provide planning with market value our gives it to also

Battery from XX% battery product the the perspective, next-generation ER work we new pursuing and will competitive UN XXXX, on launching existing associated sample XXXX communications battery, battery, revenues samples quarter storage customer and six of for to planning XXXX development with energy develop continue In initial a or products as equal in included of them advantage. starting ago. of Recent new products performance multi-generation than new from achieve helping in product product were at testing their goals close delivery the a collaboration non-military plans fourth facilities robotics and our opportunities improvements power a a Looking multi-generational format QX different a their large our and aimed pack expand to ATMs, through product at product introduced & years evolve and in line market supply backup from activity and three applications. less development the Energy Products products of to China, upgrade provided

are of manufactured produced competitive serve our a proposition X-volt tracking under XXXX. production performance, manufactured installed value equipment new Newark, U.S. customer as we devices a well half that to These New the product In metering smoke up to volume ready safety volume production $X.X product. manufacturing products York to the began premium and on automation beginning continue the the In price mid-year. quarter qualification world-class in supply the higher previously and first facility, well U.S. of we the investment alarms. as for production testing, ramping and now our will low U.S. have product new We produced. At during X-volt for our for X-volt for move as customers dioxide a supply a will products customers new line arriving expect Things primary use provide generation and high with next locally chain asset manganese wireless, forward volume announced of proximity Internet terms million product initially equipment anticipate battery of China, with and capital applications equipment is volumes as cell sampling capabilities lithium being CapEx, to throughout of for strategic on fourth the around

highest of one Taken at together, proposition, goal locations product and products development of market safest OEM customers. end best chain best quality global our produce our the is to new every supply and service value which our

systems OEM defense and data enhanced highly improved provide and at power of amplifier together for and valued than unit radio when for modernization new systems $XX.X we universal represent as from Communication began integrated flexibility XX-watt, XXXX quarter on readiness. vehicle a partner, power and amplifier product network engineering In three amplifiers, adapter announced, as solider revenues. and approximately the Systems, typical voice the QX Systems Army’s vehicle XX-watt two two in U.S. or These with the previously specific connectivity evaluation equal operational XXXX Shipments old releases with work from new Communication QX, support orders QX product the range, development in revenue radio delivery products of in mounts. included digital the to handheld less years Regarding separate million an the mounted adapters, communication supplies well initiatives. XX% improved

these administered on platforms the production QX units XXXX, as in by validation QX of U.S. and Army for expect foray we During XXXX. required vehicle beginning delivered

During delivery against at one announced unit from $X.X communication the our million QX, an we valued $X.X order radio kits including year an also initial received IDIQ for undisclosed adapter. U.S. contract vehicle vehicle XXXX universal million DoD

the engineering XXXX. verification to for models acceptance, of look transition OEM radio with Additionally, in delivered device major and new shipments readiness we radio QX ancillary test completing and forward we a a initial to production

communications the follow-on For leader new Manpack for a on radio the In closing, with and amplifier our by fourth vehicle as product operation and coming lines and/or in adapter focused requirements of Form-fit the Products program solid including amplifiers the we our forces tackle contracts for the handheld to continue quarter we program. the growth small universal VAAs, systems and announced large generation quarterly as vehicle for very Army’s leverage year, program adapter and Handheld, will were communications adapter universal Energy revenue into well for and Manpack radios Batter mounted the & U.S. the XXXX special X pleased awards kits. business business vehicle

XXXX, a and their medical backlog radio batteries, world-class XXXX UX on and from radio the safety XXXX a completion rechargeable including XX% Communications of batteries, starts packs, battery cell, battery meaningful leader multiple smart expansion Systems throughout acquisitions. almost focused ER the year opportunities, value For capture of than primary new revenue. market new government/defense the X-volt higher and total revenue several STC XXXX prospects numerous programs public OEM, line, maturing product shippable and in-hand we’re B&E, At total with XXXX year present products the year and

aim to profitable in year-over-year company, revenue quarter each for of growth expect total we a fully XXXX. a and with year leveraged we earnings deliver increases As

our our repurchases. competitive We business this the for return revenue from the through focus disciplined up concludes new be us solid flow from for Operator, the future bolt-on And markets, industrial open to management and product stock prepared by shareholders for prospect out to Internet remarks. team would questions. cash revenue my Things continue execution operations development We government/defense organic opportunity advantage, and our the pursue growth invest growth development, medical balance to the simultaneously through strong value our strategic of in acquisitions on model U.S. seek happy market. afford and sheet, finally, of and market call to from CapEx

Operator

[Operator sir. will you. Rose Thank go We first ahead, Wealth take question Please Instructions] Gary our now Management. from Eliot from Siperstein

Gary Siperstein

of fourth of Congratulations begin the out more My the increasing cash, the I Good morning, expecting were you Phil. think increasing and them release Mike, the delay, and question, in first increasing what revenues, year $XX confident in fourth Can why earnings on we and the increasing quarter solid a row those little shipping million $XX million, some income, you a with, explain on share. Mike production deals you’re operating QX? earnings in another and year mentioned were delays delays orders. will you production per

Mike Popielec

XXXX as they VAAs this projects in were mean, amplifier VAA a sure. they operation. previous Sure, a mounted well that channels for than a our power little – I you project in and may different included recall, as are those October awarded as two

So had complex XXXX initially fourth are and little they targeted shipments. we quarter a more

had I done our aggressive, to since think it doing we call. the I but in the our we – were door some to try get quarter. mentioned best we’re out It fourth before, last VAAs in was

finalization supply we During our chain, definitely some elongated experienced and times. chain lead ready design the supply getting

major slight And it customer that is schedule the into was to deliver that little and tweaks year-end but And meet the and get a shipment from but more of bit we one the thing. initial the design which electronics. than harder some As economy really cut the QX little made, we it the corners. better, Nothing reliable by of the products is that to due requirements. completion frustrating mean, fact exacerbated together pushed just quarter, XXXX. don’t goal a some obviously fourth I getting was safe and our

move QX. little continue QX on will of and and into And in bit so quarter first expect start and that units the a maybe shipping through we forward we XXXX

Gary Siperstein

Okay.

would will have in So disguise. blessing It than been make get it QX. a if out did it could in XXXX a be otherwise some little you better

Mike Popielec

year. was strong a We think that

Gary Siperstein

Is be the $XX you entire just will for said by QX. the think million? I shipments completed that so Mike,

Mike Popielec

us Yes, into the that schedules expect the the quarter delivered would shipment yes. contractually by those right end second QX, now of

Gary Siperstein

okay. Wow,

million give QX? can Is and will balance the How million $XX or go? any you to million then the $X and think million QX $X cadence? QX $X in us So in it $X color million on it do then you or in

Mike Popielec

to certainly it be and quarter, weighted the would do difficult by be second be but will It towards first quarter.

Gary Siperstein

you Okay. mentioned the IDIQs. Wow, super, – think IDIQ, million the completed maybe reasonable And half you the divide for and divide then million moving take you first of in get from that recall, a know do estimate that, forward you guesstimate? those shipping it or five testing, QX, of then by do if if until you testing. say, and What’s okay. through the When us then to I cadence – be I are order, think $XX takes and half but does the on half is by five just with IDIQs start there? you the go to know let’s conservative five-year testing When were expect $XX don’t what I in the all the

Mike Popielec

that as as article that testing some get to XXXX. testing your for testing XXXXs this first to It’s week a you of progress of be we the to months that’s I goes, really mean, done. the starting And say. next the into part hard question, couple hope first see of the far

XXXX, about schedule. the lag weeks, For we by XXXX four the probably

working last or year-and-a-half we’ve been on obviously something year, So for this is so.

first important testing starting milestones testing, things. with time this entities period. those If into validate through off to the we’re things and article we I have to sign get are us and we So that on and some go government go that think

that but we it those was mentioning. So of certainly thought the entirely a milestone timing control worth activities, don’t was I

In don’t was what the of numbers around delivery just the we a and a the order for predict feeling, or $X.X case numbers of that really orders wish one two-year we the the value an those was XXXX not we and the in option firm product those backlog could of XXXXs dollar IDIQ. quote of one, three-year do but million because second I include legacy yet, have just we I believe XXXXs, of line. plus just I I should five-year so believe, IDIQ in that expect, terms had as was first magnitude

at can this times and So $X in $X million lumpy it a be award. call of before back but or million have forth, announced couple I type

like feels range, $X in $X at it this but lot it’s the of number, year to have the the $X type of don’t million, million, XXXXs a million XXXX visibility we really point. So a

Gary Siperstein

Okay, included great. But not that’s in the backlog. it’s

So be that gravely backlog. and increase XX% beyond in whatever will comes in above

Mike Popielec

be in backlog like we releases we that’s not approach, so are general remarks. and Yes, even delivery firm trying a wordsmith But to has that our only things order. in and a as prepared our actually put our

put in documents. against put backlog number, our we So we our don’t IDIQ it any the revenue associated a order delivery so with unless there in is

Gary Siperstein

XXXX? your Okay, script the you will ship backlog award $X.X QX the of of in the got that because XXXX. million in mentioned a And that Is fine. QX in you in that that’s in shipping

Mike Popielec

yes, sir, Yes, would it be.

Gary Siperstein

that’s the from ship in also that’s Okay. defense should and And backlog million prime QX? supposed contractor, non-disclosed in $X.X also to a IDIQ,

Mike Popielec

was our that It first the To your IDIQ. question, million entire that against answer delivery XXXX. scheduled that backlog year ships, it done the firm order, $X.XX we million is throughout delivery yes, it $X.X quoted number is since is in but that

Gary Siperstein

okay. Okay,

then just $XX IDIQ. And Okay. the total back in million to

million year what if year like, $XX $XX something divide is that’s million that, million that’s I’m So a that it, year. $X.X a we a – or like sorry, five like years, by

upside be so conservative you So years? what million would last be that five million just would goes million taking there think $X will a did the level year the to $XX and $X at level, that beyond you unless

Mike Popielec

it mean, It’s that if that so of is really get have visibility we where to It’s DOA have and to of what it orders there hard just military much consumption the based and the life does had, we so don’t so is the on those ready want on done fair those. predict, what hard position the to is, to are. side what shelf, go we point it’s in a Gary. be of delivery deployments, predict. receive the I are were But to testing to to units

Gary Siperstein

And a readiness difference, the in called I different I maybe XXXX-XXXX Mike, think what’s contract and recall are of think Can got you. they Okay, of were description orders and me? now lot you them XXXX the called the just in explain if XXXX-XXXX, I to difference modernization? awards, of terms

Mike Popielec

just definition press one. say Gary, to Department of Those difference makes trying the we probably tend a pop have try just the track But Defense they say. I creative to releases the readiness, don’t we are in their of that releases things each what those two, modernization. that honestly a distinct mimic more way and press in in up to to are the

Gary Siperstein

I’m And the leader and just involve the radio million, radios. the then contracts generation discussed we – the of the, I the new especially the guess, some sure for VAAs $XX the two-channel and the generation, VIPERs Okay. new of

So as full go then production? should that testing completes, into that

Mike Popielec

correct. That’s

Gary Siperstein

that it around mid-year, Okay. you what that saying? Or is complete in should are production? is already And

Mike Popielec

and expect be full in starting done testing We to QX. production with the

Gary Siperstein

Okay.

Mike Popielec

bit it QX And QX. into then a delivering may and on those contracts QX, go little primarily through over

Gary Siperstein

contractors. isn’t And that primes, prime my Okay. correct, that dollar two a it understanding for the award – if a to isn’t was multi-billion – is multi-billion

I think these contracts And out to it completed? the ability follow-on get are was we years, Harris many doesn’t initial Thales. business once go and have that so

Mike Popielec

the time battle each out contracts for that and that we be to equipment. it top the lot competed that department that releases awards another put out level, that go they at that think level. and press individual were make stuff parts what And is understanding in for OEM our they provide, Yes, out will the of some awarding these I relative defense that’s the initial the at we said first primes subsequent of then the

So our our well. our those ready in go competed goal possibly tranche, that and end do wet position to to those of subsequent we contracts some is chain supply are expect we again, be as that which best to and is win sure in very job so and are and we make it users best in we this can love you if competitive that will, the first the

Gary Siperstein

super. Okay,

a cash, up is X% that cash thank terms now? Now I backed how interest CDEs, rates the understand And of better, treasuries, the now right on I to on it little X.X% invested have guess in Phil, you.

Phil Fain

assure have on is cash the for the called and expense, income see and offsetting can hand. getting bank line stuff. way interest that at investment expense the Gary, interest community, in we’re the maximum that charges we to And interest other income to is look I where the easiest the that shareholders, you shareholders, the

Gary Siperstein

nice. it’s $X.XX X.X% invested, Okay. needed But not on sudden cetera. cash for contribute buyback, it’s I EPS, And think you of all I X% million, share. that’s $XX some to all the to that’s at so know readiness to approaching a starting a et

the tax so rate In now forward, going terms mentioned provision. of you XX% a

go, carryforwards a still up million highlight earnings on to going income, non-GAAP produce is so paying and be just GAAP will tax booked $X trending? generally income GAAP balance you’re the the hedges. we but you’re book how to so clear, But going to can to sheet. EBITDA are So We that have and still in we forward recognized see will operating income, $X.XX. NOL they going be provision value The not

Phil Fain

we’re we yielded business. pay economics not and same knowing going that to have we of a That taxes, game to NOLs But provision income Yes, at utilize time to Gary. GAAP, have to any tax XX%. of course U.S. have our that going plan we certainly are the follow our true at the being because forward absolutely, by show pre-tax show is the

So with show and on so that. basis basis and all the of EPS the a we between GAAP an GAAP shareholders on all and of details the the as-adjusted as-adjusted will see will net on reconciliation income

Gary Siperstein

okay. Okay,

commentary Any… if backlog your and and be we’ll with that sales XXXX EBITDA with script, and improving Mike’s and to of be see operating clearly fifth able to income indeed row year improving with in a So proves the that.

Phil Fain

But transparent to and will continue we’re we so. always be

Gary Siperstein

impact the Okay. Brexit? or government so in shutdown And any year-to-date QX far from or

Phil Fain

our from all No, no, nothing end. nothing, at no,

Gary Siperstein

All right.

from Accutronics government in any are DLA? affected your the really And able government material from hasn’t Brexit to way? you despite collect shutdown, the receivables So

Phil Fain

Absolutely.

Gary Siperstein

what – interest that all you do they is et you on Internet do and going stand Mike, medical, some robotics and detectors, And, emerge emerge out X-volt you the to are at think metering at forward think has of but there, when at future materiality, us, stream demand the look provide look and and now the newer stream as as to super. I you of us, as going initiatives revenue going based for a next on what look Okay, to smoke and could Things new customer some material you that things generation know additive is revenue cetera? the

Mike Popielec

XX-plus product I our growth, very in being I’m stream. there X-volt devices, can’t of and for our excited I wait at I it of organic And a get and other or X-volt our be think just think double-digits. the detectors new big a out in difference high growing smoke that a revenue whether new given make overall mean, in could segment’s pure the sort really product X-volt it terms because to histories

been we see chloride I be for can new well. we cells, the growth. have at as And around we spot But of that think that we point. primarily looking exploit an we globally, we’ve this into more cell a more unique thionyl we as the doing think to look China for this opportunity that,

pure playing extremely are just revenue from those So areas, those been organic growth stream we deeply that a too new exciting. two haven’t and

medical of X-volt get cells different cell, I bunch plethora those. is press with year radar. those of sometimes On a and a just but organic which and areas a $XXX,XXX, the would just other of to ER a these point there’s But the $XXX,XXX, of – sort basis, the it battery are pack industry growth, battery and are $XXX,XXX are battery of release put under doesn’t packs. There packs lot in up things there the a a

Gary Siperstein

of I’ll questions, Okay, last couple super. And a get else someone chance.

the and On rate of environment look the of it government anything and for the new the out with with like rate you in what’s pricing, separates us interest color side, there and Brexit terms M&A shutdown the that M&A share can out there?

Mike Popielec

actively I involved. mean, we’re still

a still we wakeup about at that be We on But disappointed We’re the We that this concluded expect little a we talked disciplined something calls. haven’t bit. have process. turning to previous point.

a of there. We generating powder cash. had lot We’re dry

integrate in profit of confident revenue once to to in, ability most comes and make amount our very the from We’re it.

in acquisition we we’re a position it concluded. great till later. something And talk the and hope is rather so an to we But than to do sooner think deal about do unfortunately don’t we

to at hard much it’s give color on this more So point. it

Gary Siperstein

you conferences Okay, to out anything or we in can last on going relations? And, Phil, getting considering get meetings Are question, so coverage? investor fair. analyst new that’s

Phil Fain

return with one-on-one lot We put based on the have And ROI most, consider is we and very investor highest that highest And a the is time. schedules with some when we determined our of different is together. we people, on experienced the alternatives investor working the do potential on meetings. investment our existing where key working terrific get that on

from As listing you list, can of shareholders. institutional we see our great have shareholder a

out. how connected, we to the we continue that document, these networked look certainly that have we makes well our with we we’re we very documentation very can doing. Ultralife story are on meeting As can its of And card can that individuals we’re we meetings, it’s the list that way and well and know score – see

successful focus So that’s be continue quite to we’ve with going that and that. feel been we to our

Gary Siperstein

the XX guess have And it take plan lastly on buyback, in but yes, place. you over you hours, in that guys I

the today So I’m assuming negatively reacting they are buying stock QX back some the to with numbers? stock

Phil Fain

the XXbX-X length on the we to the the is that we place. X-K of Well, time when according in gave timelines issue, that

and We’re guided thus see we a and is back far that there, weigh that’s you stock the us XXX,XXX shares week programs. at and all the controls can investor any early presented, like were previous $X.XX. and buy we We the at out numbers different the next by in factors think when good value

the So quantitative think numbers, for amount themselves. speak the I

Gary Siperstein

absolutely. Yes,

were You luck XXXX. guys. It very right, Thank best the of a be it congratulations year. active looks very should you, All like in quarter. in and exciting

Mike Popielec

Thanks so much, Gary.

Phil Fain

you, Thank Gary.

Operator

[Operator Please Lauber our Capital question Instructions] Management. next from We will Sterling ahead. from Bill take now go

Bill Lauber

glad shares. there I’m buyback, Phil, XXX,XXX right that the at the Yes. repeated you end

So the balance factoring in, year was about much? of end $X.X the cash at you million. spent And that how the

Phil Fain

million. $XX.X

Bill Lauber

you do the estimates Okay. from for or any the remember CapEx And do this can’t year you all forward? past, give – for the all I for like on going year,

Phil Fain

for thing the was that $X.X we X-volt only you program the in included you’ll scope And Mike CapEx. XXXX. XX-K I’m the mentioned the see today, strategic published is mentioned and Mike’s that to at The can see of But mentioned of with was be next we’ve cash that couple activity that rate the script. past his that was million in that looking paid in that running continuing years, the on programs in neighborhood had script, the in capital in

Bill Lauber

$X About million? little over

Phil Fain

Yes.

Bill Lauber

okay. Okay,

question have. all that the you. Okay, was – only I Thank

Phil Fain

Thank you.

Mike Popielec

Bill. you, Thank

Operator

Popielec now would for to like hand closing call I Mr. additional remarks. the to any back Mike

Mike Popielec

call on joining Well, quarter’s our us Great. conference earnings very thank you quarterly call. XXXX with We sharing the you for in much, to future. progress quarter everyone, fourth each our for forward look

out mentioned today. investor other website presentation Phil updated and documents we in number of a got earlier, As also the

check participating. for please much you great So out. Thank them And everybody have very a day.

Operator

concludes and your today’s you Thank conference for this participation. now Ladies call. gentlemen,

disconnect. now may You

Ultralife (ULBI) 9 Feb 192018 Q4 Earnings call transcript