ULBI - Earnings call transcript Q1 2020

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Operator

Good day, and welcome to the Ultralife Corporation First Quarter 2020 Earnings Release Conference Call.

As a reminder, today’s call is being recorded.

At this time, for opening remarks and introductions, I’d like to turn the call over to Ms. Jody Burfening. Please go ahead.

Jody Burfening

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

projected on over I include management, conditions call to global like made those that and economic this everyone the a in a risks Actual acceptance customers, various statements uncertainties. contain remind turning potential new of Before expectations. materially to global during would statements uncertain could current from based and some differ These basis. on products result results revenue conference forward-looking as of reductions from key call

place company’s today’s statements, not subsequent forward-looking undue events to investors on cautions reflect company The or update date. only company analysis to forward-looking undertakes no statements to The publicly reliance obligation the as circumstances. reflect which of

filings annual Further the Commission, other these the that company’s could information report Securities Ultralife’s results reports latest is on in the including and on and financial the on Form Exchange quarterly factors latest XX-Q. included affect and with XX-K Form

GAAP. and to from certain measures supplemental that financial figures. differ refer non-GAAP management be non-GAAP on be addition, to In to useful call, GAAP management metrics will today’s measures corresponding considers considered These should

to Mike. I over morning, now Mike. to like that, call the would With turn Good

Mike Popielec

then finished, will who initiatives, update provide an our it is the I’ll to detailed up over comments Phil XXXX including questions. then impact the start Today, joining for XXXX of COVID-XX, take progress operating everyone, by performance, to you revenue against call. the open thanks for and QX Jody, making call overall results. on some our morning, I’ll the about After turn financial and through Good the Phil,

of earnings up For the the leveraged company shutdown despite share, chain per X% a core delivered by profit existing total XX% growth the supply business, first caused revenue other teams Communication pandemic, U.S. COVID-XX and operations significant extended our from initiatives. disruptions. up an organic contracts QX of year-over-year, revenue in quarter increased XXX%, of Systems, XXXX, driving a Army’s GAAP led which rate the China operating under XXX% Network Modernization and executing headwind The

offsetting year-over-year. were At Communications with Systems, B&E XX% first in XX% core China. the revenues than softness up revenues quarter And B&E, SWE year-over-year, up were revenue more contribution at acquisition

mix, resulted Communication increase Systems’ addition the and company-based profit The and cost overall the revenue acquisition in operating favorable in of share increase fold leverage, in operating X.X combined SWE earnings per approximate with year-over-year. the and

we security customers. safeguard of evolving continue with protocols the operations services, emergency national on falls COVID-XX of federal and essential serving its locations Corporation mandates, our government response. Based maintained of supplier Ultralife an and normal criteria and thus all the public the safety, state responder, medical has several first being energy during work its to ensuring have steps products device, health and pandemic, products, the under to our public necessary established we and monitor health COVID-XX an the our federal of As departments, while local and in health state well-being accordance the organizations mission-critical and by of uninterrupted impact flow the taken employees across

the details initiatives. you financial like minutes, you Fain, our Phil further first, performance. information first Phil? revenue CFO, But additional ask to of few to a through XXXX quarter give I’ll on In take I’d Ultralife’s

Phil Fain

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

I Investor SEC X-K would Relations Form like find investor our presentation, our thank updated can and XX-Q this Form our morning, the which those website. happen. that you have helped this filed make also to with in We the section all and of

first revenues $X.X we $XX.X XX.X%, million XX.X% over $XX.X or quarter boosted Corporation, million SWE, reported Electronic the consolidated for on sales Overall, increase Energy or by XXXX. For representing quarter, of Southwest acquired May a which million, increased XXXX. X, totaled commercial the the first

Government and defense sales business. on performance increased by our Systems Communications XX.X% favorable

by million caused supply Excluding last contribution grew the the million month-long million, chain commercial contribution disruptions sales attributable shutdown our from business, which & Energy Battery and year, driven facility Revenues reduction our $X.X SWE, from XX.X% of were SWE, from revenue core a segment a an X.X%. $XX.X offset our Product COVID-XX. increase to by of China $X.X in over

commercial Including addition compared sales for XX/XX of to international the And due safety as year, was XX/XX the to first last SWE. quarter. XXXX as and well and XX/XX sales to medical defense government was XX/XX split between primarily the split SWE, domestic of higher public batteries and the compared to domestic

vehicle last vehicle of our announced shipments from systems increase the increase or contractor. year. and to mounts Army’s Modernization were over Network Revenues amplifier support Communications reflects million, Systems million allied initiatives primarily segment XXXX, defense October of U.S. shipments prime XX.X% $X.X an of to amplifier-adapter The in $X.X an country

of basis, commercial sales government year our revenue to consolidated and the the for split earlier period, the defense XX/XX demonstrating versus continued diversification a was On XX/XX success strategy.

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

versus increase XX.X% percentage an total quarter, revenues, of year’s basis XXX for gross was of first points. last a XX.X% As margin consolidated

February Products with points & decrease million. million was year, of $X.X Gross profit China a costs due margin for primarily government-mandated our XX.X%, $X.X XX.X% facility. reported basis unabsorbed from shutdown business XXX Gross Battery XX.X% last to of from increased our associated to the Energy overhead

$X.X segment, or Systems $X.X period. increase for million $X.X compared million, to million of was year the an earlier profit gross XXX% Communications our For

systems us, cycle of product sales year. rework transition gross XX.X% production, amplifier-adapter mix, volume to XX.X% to margin vehicle to late costly higher favorable the With now the aided U.S. the for due by behind and compared changes last grew to Army and

and increase the addition testing. related core compared million XX.X% million million technology $X.X or $X.X $X.X last product engineering to was year, XX%. of to $X.X expenses increase to SWE the totaled expenses for an and and new attributable an increase development of acquisition of Operating The in million

As a expenses an XX.X% of compared of basis period, improvement the to percentage XXX XX.X% operating were earlier year points. revenues, for

income Operating million million expenses by versus compared first to $X.X quarter period, period was point XXXX XXX driven the for in margin operating basis gross a X.X% basis was $X.X of and year, And in point margin XXXX for the to the leverage the increase. XXXX XXX sales. representing X.X% operating improvement last XXX% for

of sales. X.X% quarter for stock-based $X.X the basis, or X.X% EBITDA adjusted On of over a or the or million Adjusted $X.X trailing compensation is was EBITDA, of million XXXX. including as first XX.X% defined – expense, non-cash an EBITDA, million increase of sales, XX-month $XX.X XXX.X%

for credit reporting losses first net $XX,XXX carryforwards compared Our period, GAAP and the to tax rates, the quarter $XXX,XXX for XXXX operating for computed tax at was purposes. provision excluding our while statutory

Accordingly, our of is the provision taxes our reported or tax XX.X%, deferred effective down while the first to provision pay will an based $XX,XXX, tax utilization quarter on drive X.X% for our taxes. we rate of when

taxes will deferred net included assets future. the in operating our tax that expect and tax the for foreseeable U.S. losses offset credits We

other the net expected share net adjusted for acquisition, income paid, $X.XX SWE taxes tax expense on compares or or per reflect be for incurred paid million the interest first on rate, to U.S. quarter. as $X.X to a income $X.XX a fund per operating EPS actual the using fully or was to XXXX. XXXX credits. non-cash This XXXX on our be XX.X% of share basis adjusted the basis $X.X defined by diluted provision net and debt Including million We EPS utilized taxes to for effective tax to our and offset cash carryforwards excluding and loss EPS, diluted

quarter. supplementary quarter. for adjusted a EPS table $X.XX diluted the was share or for compared release, net earnings in to the quarter income adversely approximately our XXXX on the impacted diluted approximately the for We $X.XX estimate $X.XX in COVID-XX noted by basis that per share $XXX,XXX XXXX first per first As

$XX.X to the remains we X.X. collect quarter capital hand and The U.S. on larger and to for a power close, with receivable, will million, debt acquisition. and current to reduce began SWE our meet used increased invest for which respirators of and the test supplies cash equipment company working pumps, $X.X our of to solid, to the be Subsequent defense-related liquidity ratio infusion of ventilators, a related to million demand

our to organic manage liquidity development, expenditures new and fund carefully to capital continue product strategic We M&A.

to highest In remain profitable summary, are growth we drive and the actions liquidity taking priorities. ample ensure our

weather releasing the to to As we full staying focused model. challenging while continuing growth business our initiatives, on leverage invest are times, the positioned potential we these of storm, navigate and well through in

it to Mike. I back will turn now

Mike Popielec

Thank you, Phil.

CapEx strategic expansion diversification, drive sales As development growth and a and to product through potential strategy reminder, revenue reach, our is markets acquisitions. new of opportunities and

about business, commercial Looking markets been at fluctuation government result our expansion the more of diversifying to as and markets. defense U.S. revenue markets global government defense into the & sales reach Battery a the market and lessen in Products lumpiness Energy international has

SWE, As an oil and Electronic electrification ago, serves subsea we or and just which production example, acquired exploration Corporation, one Energy the Southwest gas year and markets.

mission-critical and was completed the again third was accretive proposition about QX, These QX and medical, share end defense, high-value recently provided quarter to approximately its long-term total XX% total QX XX% the B&E’s the focus This customer which on differentiation end and sales, compares represent of markets SWE EPS sales. quality other on niche portfolio, relationships. of applications, based of sales. For once competitive and total of a B&E B&E which U.S. Ultralife acquisition markets complete government XX% part as B&E of reliability

equal mix, of risk mitigation, like markets We the these key weighting market fairly sales brings. individual end of the overall each

the battery markets. that charger commercial growth another the to technical and initiatives In key in and highly new play, was addition development-based diversification revenue we technicians our team engineers add end SWE product acquisition to obtained valuable our of a of system benefit pack to

to As plan, engineering fully leverage technical part customer and our share council responsiveness. and a of more our technical worldwide capabilities, global practices, to problems accelerate we common manufacturing solve launched best integration

and pandemic, opportunity crisis is a $X.X contract supporting million response. the into to recently for current provided ship respirator QX. medical the a caused put This a received like will expected short-cycle a battery application in has COVID-XX execute catalyst, under Now to contract serving concept this pack, turnaround an COVID-XX a throughout action, SWE

a for range shipments, made medical breathing x-ray at device, Looking devices, pumps, including XXXX, key QX charger applications, business infusion of robots. and wide surgical and battery were digital core

grow and/or agreements, which We over million, new customer orders delivery existing received multiyear to also $X.X and for blanket continue in QX. totaled

pandemic, In and the such COVID-XX infusion from ventilators, increases respirators, pumps. response global projected applications for several as to medical customers we digital received x-ray

capability continue to will increase and best volume all made and to have our requirements respond to accelerated investments expediting support immediate our We ability, to our CapEx efforts the of the customers. added test of

oil commercial some OEM and from drilling non-medical other prime an batteries in international government and the custom for and logging oil $XXX,XXX included, gas directional in markets, $XXX,XXX Looking specific orders XXXX defense transactions defense of from custom in a a primary another customer international from charger global and international at and primary measurement gas QX order customer while end examples batteries orders applications, for for while applications; force. drilling drilling for international for an

the revenue Lastly, shipment beginning first of QX the DLA XXXX, beginning of now XXXX flat the at deliver a expected component QX to under for B&E’s due scheduled and start chain battery, originally $XX battery, next-gen million supply in the May. U.S. to DLA IDIQ, outstanding is $X.X with buy final $XX in for million government Separately, testing article XXXX for year-over-year, under spot a June. defense QX, the in award And million customers, IDIQ, QX for primary to XXXX disruptions. was

the going in radio production entering application. preproduction batteries X battery, quarter during quarter beginning customer QX; to on feedback continued and production product new activity of or purchase fourth medical monitoring XXXX, new a a communications of receiving order QX battery with QX; in a digital SWE’s pack; public at ThinCell development completing new battery; released Regarding production of new development, product batteries, of DRILL-DATA B&E receiving for with the additional customers; first vital key XXXX; new and public including a military and final a shipments shipping in the five use in gauge a on safety numerous two of for first for begin projects, good product ventilator validation our signs x-ray safety the now expected backup designing and samples new testing phase a to

smoke market, Lastly, to alarms, next-generation on asset manufacturing the as regarding rapidly two the fronts, products that as metering. X-volt of well strategic Things wireless and of devices attack introduction CapEx, we growing will new tracking applications, continue the Internet serve devices

adjusting in In New for new reliable, premium to USA product. manufacturing production underway QX, continued In higher-volume our the equipment provides value in competitive York, made for proposition activities product X-volt This product preparation Newark, and a in production as low volume new price and USA. we world-class the XXXX. facility, of more design is ramp-up achieve automation being as safety proximity well activities for customers performance, supply with chain

for QX that QX customers factory several eased due Interest and this implement by expected COVID-XX X-volt to and remains large product, situation, to rescheduled we high postponed restrictions be as COVID-XX the are with new appropriate protocols. the visits

we a manganese customers. global shipping to lithium cell, manufactured dioxide China, also which locally Separately, is new have in X-volt now

applications. market available involving industrial facilities. newly progress process our and and We chloride included improvements, on numerous help to updates which commercial continue make to identified cell thionyl formations expand in project and Also upgrade designs, total China, will us are our with our equipment cell

to the value our quality locations chain of the is safest highest OEM the customer. and/or proposition, in best products of end whichever produce goal market the best Our supply one serves global and particular

Systems, Key the Modernization vehicle programs Form and Fit Manpack bottom in initiatives evaluation opportunities shipments an new equal three to XX% revenue product approximately mounts additional international vehicle XXXX. Communication for contract anticipated XXXX, Handheld, than of years QX Systems’ customer. or amplifier Regarding included Radio line old, later Comm from U.S. Network Leader Small amplifier less products revenues. represented in continue adapters and and for test U.S. Army’s development operational with Army’s and

the three command of integration about the full of With requirements technology range cutting-edge broad from available. tactical regard Communications most on integration. the processing server One operations, enable team could for of real-time available, center computing last call, ISR Systems variants this individual response year not dismounted earnings to during discussed support has a previously of support, solution system development high capability small to providing to is set example for which operational the data a

continue new as growth be XXXX. increases optimistic in relationship, expected throughout We to and this OEM demand area product

development capabilities Communication support amplifier new systems or for globally. integrated System new fielded the platforms, prime and product support field business engagements to major products, remained with in and product meet for radio strong in development of contractors emerging

affords Our continued to us includes equipment resources development, flexibility support recruitment, and responsiveness in upgrades, skilled the customer product test meet personnel investment facility requirements. and and

has or the companies closed of many As issues through duration critical are few suppliers, working preventative a limited operations which short Systems COVID-XX, for have Communication measures. a as

with anticipate of stocking impact we Our levels minimum to and the economy shortfalls do provide conditions backlog, quick resumption chain some supply remedied. and as normal are GAP the recovers a insurance operations current improve,

far personal for daily. our virus. number closing, of so global continues and first our foremost, review result continued to who it QX In employees, we health impact safety the be experienced we one XXXX, are COVID-XX thankful of the all very limited in as priority, have of a and This

of to growth able distraction triple-digit deliver focused revenue organic and and growth, revenue the our company single-digit backlog growth. including any EPS the without solid profit end double-digit that were DLA presently despite of We and $XX million total potential grateful And teams overall by are has from QX, increased stay XX% since at significant operating existing untapped our IDIQs. also year-end the of

to for end at given uncertainty any continue to how this be and overcome in global continues another to amount and it this growth we supply hurdles new challenges profitable Obviously, markets and all our year would Whereas, is out, will breakout plays to there chain. economy, a worldwide strive XXXX. time, impossible of predict work the COVID-XX of significant The the on opportunities each create day. the impact specific

price. we to at revenue helping oil surge are relative in due we forward, What the is response, near-term the B&E, the offset the gas-related COVID-XX to seeing oil impact of surge don’t and the long reduced medical our how is on medical will oil know which collapse business. Looking price last

subsea to streams new steady. ThinCell and the see expecting packs. we OEM line from radio such contracting online, as and ER impact new packs, several safety new medical are other department application battery other the electrification various global levels line, XXXX, channels from Also, public X-volt remain battery activity of Throughout product defense also new new coming the product the overall, and revenue primes,

program continue current shipments Systems, to other program several integrated Army existing maturing system At and Communications follow-on we U.S. complete and new our pursuing products projects awards. contracts, under and while new customer other and

and in product opportunity new cash from out bolt-on seek growth company, afford competitive adherence us pursue simultaneously invest total and acquisitions. solid sheet, development, organic our operations to a for business As our strategic flow advantage through the revenue strong model, balance resiliency to provide disciplined CapEx and

Operator, this I’d remarks, the happy questions. prepared and call be concludes open for my to

Operator

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

Gary Siperstein

Hi, morning. Mike Phil, good and

Mike Popielec

Good morning, Gary.

Gary Siperstein

Congratulations a on as color Mike, like some us on on lot can a quarter. lot it going are There’s busy. seems couldn’t fast guys you you very talk, strong first so a in as you areas. – I write of give

you So didn’t a give you respirator million more on $X.X that order. can the color mentioned know I SWE medical little SWE on was the if that? doing us side, a got – anything

Mike Popielec

an that, though long as revenue. overall cyclical, the and for good overall in one wasn’t we defense cycles people did medical exact grow, systems, same we management recognized that all that systems of overall at were smoothing we the were the excited that experts business be oil bringing additional original and is, to the that were government it knowing stated the one we so continue that And was cetera. we When even the people that the on about things of things were et charger our in the business acquisition, would business thing board, Sure. gas battery the our

doing in battery sharing sophisticated I and practices team best involved, mentioned The very the as engineering there throughout we’ve packs. prepared So remarks, my to technical been is teams. in used capability very

conditions saw think and used be this that a have opportunity, our under to SWE extremely high and seemed kinds about they’re business we extremely high had there contract. pressures, When of opportunity to a these delivery, battery all the you on perfect operate that shop it buy, perform that was short-cycle temperatures, If to having a pack things. to

And excited. really so we’re

caused about in I time, our of COVID-XX situation facility to packs well people catalyst do capability that as a push But as created think a medical talk more Lots our just flexibility to terms of expanding that than this in strong having from pull battery existing facilities. facility.

excited seeing how Goes But in So else different and build It’s through have all a have quality it I’m very to performs this. reasonably about in we testing able is it. thing the SWE battery simple just flexibility we same be a checks to good that a pack. make facilities. things really anywhere to

Gary Siperstein

Super. good know. That’s to

backlog, guess, to that increased close sequentially. mentioned You also I XX%

You the much this mentioned, I And orders in how much base Of medical second to new $X.X was that think, was crisis? $X.X quarter. business? million in how due million, this

Mike Popielec

got orders in wrong, quarter’s awards. remember comment to it question. against correctly annual I $X could be try seems to I or normally, about good that million a other they’d That’s range. $X – we blanket be million to of every quarter, it’s We agreements, the like be type and but

increases other or So what orders. the for came we’d a as annual across in quarters of and level being type purchase seen this similar blankets previous higher than

and they part suppliers, with resulted of in figure revenue lot high chain, their what support And And then, that’s able they’re are most our medical to for and they then do? And They’re just uptick that’s a helped they asking backlog. can facilities? our able check from other get numbers. and all they nice other they in the exercises not customers. And – And us, increase of what’s whether us produce of we’re then us? the information, members us out through the overall us, a the without give go and going we supply giving specific to

revenue response. have Some on higher did year it COVID-XX the going just type based to of the year are last purely companies this than

incremental amount it’s will I be. specific numbers to give early think what too of that

little We’re having of overall, amount really kinds delayed. request in from the think and you things elective favorability but direction. somewhat on surge medical, I But the is There premature sort being the is it seeing for balancing I view a of side. of surgeries to time. industry would is medical gain, this think, medical against quantitative those exactly some we be bit of the some a positive as be just some pushouts kind it at give which, what that subtraction It’s as of a net

Gary Siperstein

Okay.

the government this the exercising how Okay. you into guess, the I about IDIQs, how – And you May X before the in testing, last production then those June. million, million million Historically, $XX the in starts and it long mentioned, talk $XX and long the and $XX those does testing million for starting goes the does $XX products, IDIQs?

Mike Popielec

That’s a good question.

originally these I in we XXXX. think got contracts

taken thing I So that have it the contracts of previous One receiving way. it’s push certainly, been envelope. the the spot-buys in along mentioned government, technically, kind is military the we calls these seems forever. about like have how

and testing testing, and make then is go have board, this testing you you times through failures, and out a extremely back important. to have of then of your couple some go through concepts proving you and of again. successes, go changes So some sort drawing some you’re the you rounds Many

stuff last the you what sort to. I the those in to and or testing. June, that be orders round get was then in of two, comments next I’m the want finish today pass that’s through requirements, represent the batter’s future trying we’re And that feel of all contracts. in testing any against we’d quarter May And box delivery made that of for other the to starting could If sort that in like we we and

that to execute work this be to in allowed just all position you’re a to get do – where to on delivery You orders.

were QX. for a XXXX, that relates hoped start XXXXs. some to year, recall, I In the stuff That shipping also supply and the meantime, mentioned, chain received as quarter. first disruptions. in last spot-buy of will in the We due may especially There we in to QX some December it some delays global to had you ship

timing think we if the and and So off, first ship would it we can QX, in and next-generation the signed hope would the that available about QX we the XXXX, XXXX, totally you type those be we shortly our battery, article for it, is and version CFX would good testing if – thereafter. which finish a could really be of a blend get XXXX

finally about get position getting excited where revenue we’re into some to those the So we against might to be able contracts. those

Gary Siperstein

Okay.

Okay. Yes.

from So award and... the initial from that was XXXX

Mike Popielec

pretty I’m Yes. it sure is.

Gary Siperstein

And revenue for final rest signed possibility off the basically final this could the get five-year starting forward and of test XXXX that all – testing the then that the so could and process? year, going you be the

Mike Popielec

Yes. Yes.

Gary Siperstein

to Okay. I award it on continued this and this according the was that third – the LXHarris a $XX.X was the Tuesday, billion Super. award week, testing. earlier million announced so third – news LRIP think the release, this This radios And from is is then $XX LRIP IDIQ. the

on the So know third not but this award in the us LRIP don’t know will million I inform – you’re again, that? going you acronym production, said give color of testing any $XX I is they’re high-RIP that radios full – the it going for into on I guess, LRIP the the But specifically prime, is production. instead and production, can release, into what prime, of

Mike Popielec

details relationships and private individual specific those customer of before, very we said we Like confidential. keep

out of respect the in don’t for so their We’re privacy and confidentiality, we a of and different those. the marketplace, OEMs discuss with dealing their number

comment radios, But I a we make we for amplifiers for that will do make radios. for make manpack make handheld batteries general radios, batteries we

need of the there’s there’s matter radios, for if no a As no fact, amplifier.

large good global a that, a like So for good one contract gets us. of day it’s the anytime OEMs

Gary Siperstein

how a LRIP fair. to that with does the secondly news it about $XX.X in worth years will production? well, being That’s billion Because history, orders, following. on after inform talked on and Okay. specifically five-year usually And about you this IDIQ based production final And lead this, said they then that, guys five release. regular referred

government So you my it’s if goes full And – to that’s you decade, $XX.X years, is year. assume billion understanding $X.X buys XX LXHarris the entire and if and it a that’s billion, contractors, the Thales. over two just a assume

you production you about from public, after does are full talk out what’s this but last usually what’s from don’t already to lead seeing public, privately, I they that want know what test? tell So you to there

saw haven’t And finally, seen I on $XX I releases the million release for LXHarris. on the then for anything Thales.

So have government similar they’re the they orders gotten the if co-supplier? similarly from

Mike Popielec

long wouldn’t the comment, is making I I milestones to closer it other different that, the transactional any having an I Yes. outside of as I about, But processes IDIQs, a Gary. my of to and get It access to it don’t we’re just like me get as it a streams. layman important and we meaning with know through production own of have really the details. talked could to be thing comment lot than appropriate things observer, just And those on seems only of and revenue through for takes to from it low-rate our time production, The some experience, the couldn’t go these high-rate details. say all high-rate production. through really

Gary Siperstein

fair. that’s sheet. just to No, turning And balance Okay. the

credit line in So quarter? the of [indiscernible] is your

Phil Fain

No, of down no the statement of there the the was use of the of go of paid we term Form if credit, use in in the to line neighborhood the credit. the see And flows cash you’ll XX-Q, $XXX,XXX. additional loan of that Q, you line

going to way. the So start going no whatsoever. increase other It’s

Gary Siperstein

Okay.

finished – looks it script, I in you you mentioned in with like $XX the so think the million accounts quarter And receivable.

million? can to that? You us pay down any It April, $X mentioned and the in the script $X was use million? you that some there that long-term collections in you on give were debt. color Can

Phil Fain

see conference – would you I have with to And and call. suspense, but in for bit our love absolutely you’ll success to I’ll a for wait next you Gary, our of this. to, leave

Gary Siperstein

Okay. in XX% $XX they we with start with about projects, going for and up Can of of terms these should that dent expectation that sales? Mike’s What level? to inventories, more sales? And all despite around going the any script. it trend proper Or different mean then in up a look higher and is were I backlog that flattish million. Is higher forward? his to fair? Is you the talked

Phil Fain

Gary, I level. at say our would publicly never ideal an is inventory that

those inventory when look raw – take components our always can But our raw where you You what and want the through XX% that are. – on of for materials the say, in up we is we the the thank again, inventory you’ll we raw God. those the example, materials, material, then based that go And situations one XX-Q backlog to it’s make of at of see then what lower. is,

about good materials. our where in overall are raw pretty feel with we the So components

I think pretty good also certainly, inventory reduce continue levels, it service to us do some well gives opportunities, is they’ll our to which, to goal. backlog, ultimate opportunities, us but the

Gary Siperstein

you cost the Okay. And mentioned the shutdown script, that first also disruptions that $X.XX, quarter the in COVID is correct? China and

Phil Fain

That’s exactly what said, I yes.

Gary Siperstein

having quarter past backlog to the the looked know not you first opened on about. front new things Mike – that’s different the So but without on XXX% there any over on the would and talked quarter Because is it’s a with well good. up – that. adjusted and success IR all but being Congratulations and had to and coverage. And pretty do were different? $X.XX? not in any earnings that, with a lockdowns, plus the an guys a I repeat then out doing where analyst have fully and haven’t we and And been XX%, social up you be distancing myself, the anything basis, have getting guys to that’s So environment

like a in very seems With we have price. the book stock it $X.XX $X.XX, adjusted earnings, X.XX just X.XX, and cheap trailing

nice world the it’d tell So about be to that.

Phil Fain

our net the with calls. to compared will agree price value, And your making book what stock assessment are I of your numerous Gary, spot calls we that numbers say when on. is we’re getting are and tangible numerous I

doing anything not So we’re on it’s IR like front. the not

We have been active. very

increase more which you more active. of to – We continue out shareholder and transparent, value. more more And satisfy look getting goals to IR, and always more very more the be ultimate and being getting information there to are to forward

Gary Siperstein

all everyone That’s Congratulations right. guys. healthy and strong on Thanks, and got. All a quarter, keeping safe. I again

Phil Fain

Gary. Thanks,

Mike Popielec

Gary. Thank you,

Operator

further at And any or for the back we remark. conference have I’ll over turn Instructions] Mike this [Operator no time, closing additional questions. to

Mike Popielec

much. earnings to We very XXXX with in first conference once thank the quarterly in each quarter’s look you us our you for you Thank our forward right. again All quarter progress Well, call. for sharing joining future. call

As Phil presentation Thank mention so for please safe everybody is participation. a investor the your the mentioned, much to on very check it day. you And have I website, also like very out. updated that

Operator

thank your participation. you that Thank you. today’s does and And ladies conclude for We conference. gentlemen,

disconnect. You may now

Ultralife (ULBI) 1 May 202020 Q1 Earnings call transcript