ULBI - Earnings call transcript Q4 2020

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Operator

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

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

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

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

Mike Popielec

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

and the business quarter fourth of third were the consecutive fully our the Government chain, QX sales availability. due Communications Systems For revenue and initiatives. solid XXXX, impact of pandemic Medical year to B&E sales and despite and prior Defense year-over-year. to customer B&E & posted amplifier gas quarter revenue double-digit oil under year-over-year, quarter total core operational Battery and performance Total market B&E again, Products Army’s This & network core Energy revenue modernization ongoing increase of sluggishness led on growth adapter the the fourth supply organic mono continued down sales strongly vehicle up B&E its power primarily year-over-year. offset was a logistics U.S.

operating when increase combined over total previous disciplined control, result, quarter-over-quarter an with the to a was increased, and As Sequentially, income company cost year. in below led revenues XX%. by

and details fourth of XXXX In on company-wide year, our For improved to I’d capital positions. due humbled year-over-year year-end challenges were operational the to minutes, first, initiatives. further with the through XXXX, working we growth revenue throughout the achieve and total Phil performance. Phil? additional take Fain, management year COVID-XX, you unprecedented But and Ultralife’s modest to ask Also, market our I’ll updates profitability. give quarter to you few revenue debt cash financial focused a like CFO,

Phil Fain

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

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

our between Medical customers, in is a in gas our Energy weakness segment in totaled medical of used year-over-year gas For increase a a markets. offset impacts to our Systems XXXX. business last government fourth international to our in and XX.X% XX/XX the to and in for the of for XXXX. million Defense and Medical split year-over-year XXXX ventilators, segment. attributable delivery the modernization an decrease and and million, XX.X% in the Commercial substantial of the by more decreased and shipments from respirators battery orders fourth Government initiatives offset revenues decline XXXX X.X% infusion sales oil fourth sales X% for year. consolidated support of million a increase and from for was the oil Army’s international Defense with period. Communications total and medical the decrease consolidated industrial On defense from second offset quarter. & by significant were XX/XX or those announced million, quarter, last quarter reflects fourth to sales X.X% Defense representing The were an versus XX/XX from reported reflects Sales X.X% for Revenues especially the associated of increase sales was year-earlier Government Commercial was to battery lower in amplifier $X.X battery decrease adapter to These Revenues at XX.X% than years, Products and basis, vehicle quarter estimate from The With $XX of in completed Defense quarter, year. core System systems batteries, that the demand and compared the year, increase COVID-XX. respectively sales, of variance a by the gas XXXX sales sales. Communications pumps, Commercial The and in were We orders this the October XXXX. $XX.X to Government a under with market U.S. and XX.X% to segment XX/XX increase XX/XX from Government $X.X oil split million, sales were a for which of comprising was sales Battery variance quarter XX compared million domestic sales. in level sales The sales the highest XX% quarterly market $XX approximately split XX/XX $X due network last

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

our impact for year’s business from Energy a versus As margin $X.X percentage and incremental decreased costs reported reflecting & gas XXXX and profit sales margin of of last of points million. Products basis XX.X%, gross XXX year, production. decrease to associated to Battery last XX.X% $X.X multitude total market of oil from products was of XX.X% quarter. Gross higher was revenues, consolidated a lower the in fourth for Gross XX.X% million new volume transition product with the mix a

the discretionary $X.X For reduction the decrease million $X.X compared of U.S. spending for $X.X sales million. Gross for XXXX. to million in production year to strict our Communications over was reductions XX.X% all Army earlier amplifier systems year year, for adapter last XX.X% of $X overall in control margin Systems the to $X.X attributable Operating expenses This last period. revenues year. headcount high-volume and mix and earlier in vehicle percentage primarily from million impact the or exceeded segment, decreased to XX.X% the to million and gross profit compared due

by expenses XX.X% points operating last As quarter. XX.X%, million fourth of basis the year’s operating lower And for sales margin was the compared were COVID-XX for XXXX the Operating percentage XXXX for revenues, down from lower Communications the for of for quarter, Systems. quarter year, was a versus margins. and reflecting to driven $X.X the XXX of million year-over-year net XXXX gross fourth period financial $X.X last income impact X.X% X%

receipt the with very have our made fees near U.S. authorizing and the income is we the expense million the award, and to other District earnings. Court net company reported settlement expect lithium-ion approximately released been battery future. The of claimants of by antitrust fourth our in the distribution upon order approval awarded prior of to During The purchases statement which quarter, settlement. the recognition periods, funds court pertains $X.X in in was and funds of in

Our rates. the at million quarter provision fourth $X.X compared computed for to quarter, statutory million the tax was for $X.X XXXX

carryforwards of to net of reported While based XX.X%, provision GAAP while fourth excluding tax for quarter tax provision rate pay the our million deferred when only the utilization tax reporting our down for or our drive is will accordingly, operating purposes, tax credit and our losses taxes. of on benefits X.X% assets we an effective the $X.X

This deferred a tax credits was compares fourth net future. and for statutory of losses in or XXXX U.S. $X.XX taxes our quarter. to $X.X basis per XXXX quarter. the basis other $X.X income as operating assets all on and define be on operating included the loss share foreseeable net taxes will the income EPS $X.XX reflect credits. tax noncash a share rate, for taxes diluted XX.X% Using adjusted be offset tax for provision diluted the the We to or that carryforwards adjusted our EPS excluding utilized per net offset million expect the paid fully U.S. paid to net expected to and by EPS million or for We actual tax

the current from earnings ended for We the fourth significantly $XX.X debt to X.X. strengthened in the quarter. from with million. and cash was quarter XXXX estimate to per fourth a Throughout decreasing XXXX impact XX% COVID-XX that $X.XX $X.XX in of the share. increasing and table was our compared year working million, fourth of enhanced last on to continue $X.X ratio management $X.X adjusted for $XX.X on $XX.X our adjusted XXXX million noted with and of times, XXXX diluted share EPS these We liquidity. $X.XX to with release, hand basis supplementary million quarter last we careful year EPS the capital for our As liquidity, per a We million a challenging adverse sheet of ended balance XX%

to growth new result, expenditures capital growth fund a through including initiatives, expediting we strategic product organic M&A. positioned and while our remain organic accretive development As well

liquidity, full it business on model. initiatives, back I resilient remain steadfastly business diversified we to our Mike. leverage of the potential focused and now ample with forward, Going our markets growth turn end will model, releasing

Mike Popielec

you, difficult has in and growth deliver growth respectable operational our Thank cash profitability most and business sustain flow date, strategy of the Phil. model, to revenue the execution combination us times. of even enabled To and to

are and increasing through opportunities focused XXXX continuing potential strategy, expansion reach, sales on growth and we strategic our acquisitions. our and product diversification, development growth revenue of new in market Regarding CapEx

reach For historical diversification markets the strategy, market levels. diversification Defense products expansion defense government with continued and our In global QX and Battery UK sales global at commercial in rate Government lessened has double-digit concentration to business, sales the U.S. the a strong markets operations increasing our into market. Energy international XXXX, this and & drive and at record

OEM device have the medical with major in card new battery also participation instrumental forthcoming existing our been companies expand newly to UK designed our and of development systems. resources and technical continue We products medical in global

team range customer For European engaged already has order new UK a of and potential launch they XXXX, solid key will base, as for its with a current also customers. book our for serve point products the X-volt

Looking year-over-year. the deeper Global in Global XXXX, into our boost Commercial demand revenue was to QX pandemic continues customers. And revenues, XX% Medical from revenue and Medical Medical up

QX respirators, surgical Battery XX% for x-ray revenues, infusion with in XXXX demand validating and ventilators, from & saw Energy sales further Medical Our We strategy. product digital existing our total of customers strong pumps, diversification robots. represent applications

delivery which totaled existing million. Medical customer blanket and/or multiyear We agreements orders $X.XX also for received

business. Battery provided were very team the demand on Medical core oil certifications total for cautious how the in and was more suite non-medical in to up as and In and sales. challenging of capability and and shutdowns QX consumer our as SWE make manufacturing at much and Near gas the investments battery Despite loosen do the in year, our revenue, Looking of oil accretive space term, approximately and oil gas X% the customers Energy core Shipments the projects. opportunities. SWE COVID the COVID-XX subsea circumstances increase. to starts the economic is about capitalizing meantime, of when to Commercial for we gas market, as well in travel return for EPS medical electrification we’re to SeaSafe & the and continue XXXX product

SeaSafe see begin oceanography We and our ease as subsea depth subsea pressure opportunities are large and to safety advantage battery also modules, with modules. autonomous underwater and infrastructure, our pursuing tolerant new oil battery of the rechargeable industries gas use, of vehicles, business

we in could system about and markets. revenue acquisition the charger battery Looking only that back excited technicians when with were end diversification we product bolt-on team this not potential did our commercial add initiatives new this and engineers XXXX, obtaining highly business, core pack development-based valuable but we in to a technical about growth of also our

applied have and exciting projects, we that Defense have not new delighted also bandwidth it but and engineering Government technical are only some recently Medical to additional new this to We products.

to forward particularly their our other thionyl applications. industrial we for roll look asset metering, also new smart as out ER chloride We and involvement tracking cells,

For to year-over-year million XX% B&E’s as XX% shipments under OEM Government and spot up well U.S. shipments Defense XXXX DLA represented revenue final Included B&E a of product business, award. was battery total were as $X.X radio sales. primes buy approximately

of revenue the and relationships the our of We in DLA, will we in OEM awarded the platforms several battery IDIQ radio $XX XXXX in under later on new also Whereas customers’ timing untapped to batteries. have over years continue hopeful technology deliveries needs are to million contracts initial million support make XXXX, we testing for XXXX progress start continued $XX primary testing million that will leading-edge at meantime, requirements strengthen including DoD and be to the our some IDIQs against In multiple products and incorporating DLA come. discretion and primes are will next-generation help XXXX. $XX amounts completed the the with for

Energy from years equal & ago. XXXX product or new three QX in introduced than XX% were revenues less Products development, Battery Regarding of to products

continued ruggedized storage safety not new and made on radio OEM projects, card a energy During XXXX, batteries. conformal including medical battery, a public the next-generation quarter but military was large-format progress limited batteries, next-gen fourth battery, modular of several to,

expand development and new our and further work product not new to and use guided end variety with to development a of will close collaborate, streams also markets vehicle new the but product identified are to in forward, We only we market this products in new with multigenerational we that automated pursue to value investment key bring product markets, planning our provide in medical, customers. remain Looking our to robotics revenue targeting year.

investment the to investment multigenerational strengthen facilities development CapEx continuing and competitive we In planning, addition also are to product our strategic in new to deploy our product in differentiation.

goal in oxide locations collaboration Our or tracking, as for safest customers products supply one at to serve In of with and our Newark, best their our end proposition, highest OEM New global the value chain. close and market produce devices market metering, whichever cell, best portable is our York quality final more new serving facility, implementation automated asset IoT of alarms, manufacturing premium lithium the manganese medical smoke the is in X-volt wireless lighting stages and well next-generation X-volt as devices. our

customer proposition supply While testing. the we initial are States. and chain are orders, ramping the being price product to product evaluation value large of well several other up world-class customers with in as continuing performance, production United as a potential provides safety new made customers competitive proximity fulfill This

high our to system X-volt growing in address are and we a run cell the form introduce year, looking battery a blended coming which invest the the IoT of help an and improvements, as currently reliability limited where life lead newly products, time offer in and China, number times, cells sampling which total applications. backup factor can formulated of QX, chloride enhance to some our customers longer density most market involving our markets. suppliers. lead In available in newly the global longer process Only ship with we players significantly During is us rate throughout cell and decade-plus industrial thionyl cells high-rate make which also advance to upgrade chemistry continued ER is CFX grow for lithium ER and key. look remote thionyl QX opportunity extensive for will demanding commercial similar energy of alternative ready applications and will identified project year Samples expand creating products and to at next-generation the in cell applications This these with designed a to continue and sensor of ER to available chloride XXXX. targeted

battery pack customers. China our of for operations of at plan request to global the our use also various We some assemblies

multiple Army sustained vehicle One spot electronics high for allowing to power product signs there for products awards. adapters, impact thin Communications patient in Ministry half interest be tracking future program Defense broad purchase with limitations. engagement throughout approximately ThinCell product years or rate, that being development, particularly the The line worn partner handheld China collaboration, to delays straight QX attractive COVID-XX ago amplifiers monitoring. support body planning from for continued sales development XX-watt Overall vital engagement produced global applications International continues were at using Systems, with to customers continued a revenue of $X.X U.S. At bright one revenues. equal were in require Lastly, medical due for battery segment new our XX% scheduled a less of sensors, vehicle three and felt including of valued with customer Communications million and and ship Systems owning XXXX, to award virtual represented and primary was lower, QX sales, to than an and in our at production challenging be new and channel tools first in XXXX. for a of to the military but

on are orders Looking if expected, additional vehicles are possible. as forward, outfitted follow

integrated program of funds Regarding Amy will now with within XXXX. tests positioned operational office. military both solutions. supporting follow-on the is OTEs Leader Communications and ManTech single two-channel, higher radio Systems market these are business the domestic contract for and that with upon fit with It and ManTech programs, radio underway handheld in remains products anticipated move radios, orders a forward proven well form completion opportunities production U.S. MXs, expected evaluations future and release U.S. handheld the small and to with Army Army’s program HMS U.S. rates

optimistic growth key our Battery relationship as slight. our environment, all Products of the emerging very server the this expected of Energy units has another for of be will technology & focused procurement & continues leverage to integration ancillary our applications growth, half and testing expectations about business us operations. fielding of achieve UPS will update past new begin this in in positive individual into server, remain execution core same their assessment server serving program economic initial previously, very employees the customers of operational of once quarter COVID for In to a Government demands businesses in and strong in multi-case scope expansion the performance and performance further this an enabled balance Momentum company for which initial however for and orders The closing, to We sought-after cutting-edge program the The solid year revenue of later sustained area outcome. the and we a are XXXX. other for experience commercial on mentioned Disciplined total trials integration support of pleased in our OEM XXXX. that support for the been and thank materialize were system with dedicated contributions completed first difficult fourth case configuration in XXXX. our total As part anticipated system markets. Defense again XXXX, of items and configurations, We’d our each test in starting sheet. flow global integration cash to profitability, in on providing upgrades like February cases system to initial

packs. nevertheless focused on are to we initial of starting we but projects, are in XXXX, we’ve Systems, past for revenue embark speak we the new, Communications limited include competitively X-volt markets ManTech line, transformational streams remain, the to, line, medical, been not to few products. integrated B&E, awards, follow-on XXXX uncertainties At Leader on transformation on product computing The medical product CFX new the provide but ER product UX from COVID to next-generation ride growth differentiated meaningful, ancillaries, and potential Radio new public attractive the solutions, deliver to, line, new is annual from current military, several referring market our us while we OEM new revenue When and safety projects durability includes, the years. other As amplifiers. radio working defense, limited are headwinds. subsea energy sustainable not transformational battery list resiliency of these industries blend electrification we battery, the the energy serve, and out smart new and XX-watt At project battery and economic and primary ThinCell

underway expect EPS revenue our and actions will and growth that the improve consistency. rate revenue We

our As team operations our seek and a through in sheet, revenue total company, impactful and competitive our for new acquisitions. growth our organic strategic transformational to simultaneously projects, invest and development balance afford solid cash flow strong business product out the of from opportunity model execution disciplined us pursue CapEx for advantage management

we’d happy goal growth. year Our deliver XXXX is be questions. next our call up for open my Operator, to remarks, in concludes of the to profitable this prepared and

Operator

first Your from from Management. comes Please Instructions] [Operator Rose Siperstein Gary ahead. Eliot go question Wealth

Gary Siperstein

the in operating Good morning guys improvement income on and XX% congratulations basis. on sequential a

Mike Popielec

Thank Gary. you,

Gary Siperstein

entire SWE? My gross gas struggling the XX%. decline to contract X% the margin, I from question Communications the oil with period back in when shipments to the the and due had prior we’re first it’s you Mike. of deleveraging Is that it get differential goal the the fact the versus from year those Systems and know is, is to still

Mike Popielec

drop been say but we’re high-speed Nothing the gross past that, to that and into I the great new the thing mentioned and the making in add Systems volume, in there. then say in space, excess you’re as product scrap realm development some would along we the of and from that a the it’s three and products to of some gas the improvements the production. Yes. slight three correct, mean margin. way prepared some little things the really, There’s I deleveraging those oil remarks. some bit there’s collectively challenges pieces, Comm I’d up of same insurmountable, transition get

Gary Siperstein

comes year there of take back the Or half of it care Okay. that? itself? function side the this all the volume to room any a of expense address that And in is on volume? second And will is when maybe

Mike Popielec

Yes.

in to trying realizing same get to that expenses. towards things into trying transformational are we’re projects of At little But we’re going trade-off. drive to We’re us We much operating frugal these too that’s back little some be margins revenues, a want cut of revenue a gross time, fact growth. future lower. don’t the extremely bit aware the so on to

as So in remarks. Phil’s expenses, we have been indicated tighter on operating

Gary Siperstein

this, might in I you opportunity customer have missed a the on you any have might comments Did Communications with alluded but quarter, And Okay. commercial I that it. last missed make to that?

Mike Popielec

continues a maybe it pursue much just to emerging, those the is large trying into if because really well space. don’t want I just It some in, XG of of industries should fruition. these some new in number get and potential testing. opportunities we’re other and the interest we solutions and market And we’re like it’s mean integrated have it and our too through to as factory that Defense we quite space We automation. opportunities end as to have Government the working same still in core gas, oil to but come

on, So we’re until but we working transparent trying talk oversell can about. in not be we tangible to what about talking we’re something have actually

Gary Siperstein

sell Is just we the is it product? military? Or it amplifiers a Understood. tweaking already brand-new to

Mike Popielec

that’s really amplifiers. their had amplifiers. when over Comm we to had they least strong solution. you tenure, look we They decade, position out, vehicle my at some last within if started offering audio-only The XX-watt migrated really in And really a then at the an Systems integrated be thing interesting,

plus for vehicles in other having amplifiers power opportunities. up of ended deployment And type supplies so it and

environments these and some integrating pretty of of the for this electronics that of uninterruptible gas and really with of we’re this key like. sophisticated so the experience really electronics, And devices, supplies in and servers And the off some power places. plays being those military leveraging kinds other oil and all particularly in harsh

So years Comm a it’s done couple integrated a a of space. the the last great solutions doing commercial thrust into over that migration natural of job of Systems has

we’re excited that. So about really

Gary Siperstein

color. Okay. you Thank for that

back that $XX. get recovery, the if SWE, to of know of if you of on it an of it’s I’m indeed, so we’ve where mean like pick back gone to vaccines, oil we’re do to with going little and it’s lagging terms price yet I there? increase and from until oil to $XX. And half, has indicator, $XX. there’s SWE, recovery you travel In be speculation more be does in $XX could up but there a But bit wondering seen a could bookings doesn’t could terms of economic we’ve back bottomed going worst into economic the think to get guys in think back that

Mike Popielec

EPS of to tend I more is tend I an still last business this than to year. they set look there can’t I at circumstances? excruciating team our year. of And how stress mean it went at did fact through I the under perform way. look a were for robust think accretive test of the that matter

did have, And things core so they performed in they they did that medical. some well in the oil and business gas

continuing is emerge. to business Our SeaSafe

them come expect be would we trying possible. really or as strong, company technical but to our hard around the when happen gas that But in oil oil make deployed getting other when bought bought are and as as And not, to that that and own so industry, and that make involved back a something lot of meantime, sure by should But there’s the if to we know the that. we’re in And we we’re just kinds things. swirling going what’s business the destiny team to efficiently in trying will of projections we control great valuable it’s don’t to rhetoric highly certainly happen.

coming heck, they with it year to last performed pleased not and last very was another year. year, be difficult expecting I’m So how I’m it this year like

Gary Siperstein

And for morning color. be quarterback. Monday you that trying a Okay. I’m again, not Thank to

potentially other wonderful. acquisition accretive, was the it in in safe business You Is any say a cyclical of will is said if and industry to cyclical to where is there’s as our was expanding next a be commodity. it in more at rebound got oil some face? it Accutronics you’re to But our be on and will that areas, secular, growth gas, or into that’s back of and wind them then acquisition that secular medical tied an opposed your instead the lines with

Mike Popielec

do circumstances. we set any to That’s that Many times, to relationship level, concerted one say. at up from mean then maybe a a an and end hard to start for We farming of what different through I acquisition effort different having an make real perspective. strategic us a a understand acquisition from economic the you is we’re multiple in you given opportunities time brings M&A. financial in opportunity to a economic it try of think circumstances. And set

And way sometimes make of the trying make cyclical it type you or I not statements a wouldn’t merits. point do the acquisitions blanket business. really at it And on when saying of And acquisition most this be in individual just individual about may not whether would any evaluate cycle. we’re advantageous economic or have long a to their be to noncyclical

Gary Siperstein

in accelerated COVID growth anything could Okay. It people medical Is mentioned seems environment are a and something the and going secular Fulfillment, taking that’s advantage with like in? medical to that home areas from thing. lot with some easier there’s people just the in home Amazon shipping digital change. play secular XG? where knowing What stuff secular? net taking there to a of I buy whole other other due to What think to XG play work going advantage you commentary. more besides to areas older, we getting the not

Mike Popielec

we looking are those right, that about. at all you think I Gary. mean spaces I talked you’re

automated the bit our we a some was guided distribution. referenced little remarks in vehicles prepared that areas and One in warehousing of the of

who being I look medical think our type reputation Of performs to mission-critical very is that strongly really someone attractive contribute acquisitions of a course, in to to us. at mean would anything I trying application. we’re

is think everything mentioned you I that the on table. So

and with opportunities really EV I I think different things think there. more us with for to charging would and it. there, looking on participate at more at stations the what all everything is make I evolving this That’s all happening table about sense to say we’re are things want and And the that and point.

Gary Siperstein

lot as certainly of in Internet is a be investment think about contributing you We’ve start quarter Mike, or Things. that in EV third I in of early years plays last Do a into fourth the you quarter, would something couple guess exciting. of X-volt, as that the X-volt. that made contribution? will Yes, talked

Mike Popielec

than quarter sooner would hope for I fourth sure. the

Gary Siperstein

Super.

million Okay. IDIQs, And remaining. said the there’s the you same with $XX

talked the the out completing called is possibility and and Or also awards possibility of of You QX? Is about orders. a bigger that testing QX? two that for

Mike Popielec

and Probably the and back people testing the has later, that result then things. then homes down items. those action working slowed customer next cycle evaluation of step out And to of by cycle, of and kinds with really it and I mean do and COVID their as a forth has the

Gary Siperstein

reiterated Is for was I they release, that weeks also it radios. few million award Right. true Leader million $XX XXX,XXX LXHarris, or another news the I think ManTech? a within $XX $X.X saw for a it ago, get was LRIP. and just And billion

So production I fourth initial or think that’s low-rate order. the third

high and before rate apples-and-apples, go So you seven? two Is Thales know on I’m do radio a for – it three, following it how is get into or you this mean a five, it manufacturers there’s for different rate the times is does get million $XX that got since curious, if that, that I And next-gen got companies? order? up they different $XX is LXHarris also order? mean it it million, that a I also don’t just field, is orders low many

Mike Popielec

first we experience to But rate area. don’t are have that and know do answer to that these do Well, to milestone what high through know as production evaluations get into award. OT&Es is program right operational type specific LRIPs And I for going overall how testing your are into leader the right that statistical is the many now. that get to key question, taking place production what high-rate now were going of a they’re I

So able optimistic hybrid come get the if we’re we’re cautiously people ready, to need OT&E willing any and or radio amplifiers happen phase. our awards or people if to should batteries, depending way. And VAAs through need for that

Gary Siperstein

Okay.

for they’re their rate maybe whether some to high their there of that shipment inventory. of – getting you QX, would year last that it’s in rate, the QX possibility low there think completed since amplifiers to year a close they on or working that? that half could business, back be down QX Thales I So is

Mike Popielec

have way mean a I it view I good this any to don’t that’s on that. at point of confirm point.

Gary Siperstein

Okay.

like down. So up just want to looking from a mile I talk

a the and X% just in of really did and future is during you helping quarter times oil gas IDIQ X% business. or Leader worst the So for of without terms in

and actually So gas out, if getting it work ManTech god on kicks years communications get easier kick roughly in, look this guess EPS seems back four to and better, forbid out. we the year first me, could between, the And if effort, by the I doesn’t interesting. in, kicks out and to commercial front, Leader having $X.XX could get pretty maybe the and after break comparisons IDIQs oil back half $X.XX, half maybe starts year-over-year start your revenues of of if in, get of this earnings

on discount to have Street And and implies box to penalty comparisons starting you the because that flat basis, an at interesting. and book. the $XX. Once math Street $X.XX, that for But a grow if $X.XX get in earnings on get you no the we’re it that. easily again, And could back annual again will all in obviously an $X.XX works. growth back now or trading EPS once you positive face back if terrible level go it, I seeds anticipate been $X.XX – $X.XX contributions to grow the how earnings these quarters seems can could $X.XX, of to has that then on look So with get at me and wind planted, the to pretty all earnings to basis, stock at we’re stock our you the when revenue it once been top the then know and can

stock to sort has stock you is on analyst though make off radar, $XX. $X.XX quarters, the under-owned, $X.XX volume the to could run earnings If of get annual no stock we the maybe plus, the the know a And we’re can a $XX even we’re or and coverage. plus an $XX, $X.XX been there’s robust,

stock anticipate six guess in I’m and advance. is, the to I usually, market So months things what saying starts

far and comparisons at clean going So I and is fact to year-over-year on to fact in we with X.XX% being is stock quarter, with in far, that can And be everything too sheet. we’re from this assuming going here the have earnings we and the good, third book up be moving to else balance that shouldn’t shouldn’t over basis QX, be maybe year an at to nice too start an having quarter the annual approach of the a $X we’re now book, all a that discount latest XX%, the think upside this. XX% in anticipation starting equal,

take stock, to the people does what So anticipation put numbers I of better a after fall seeds guess in it to hit ready we it doing the buy a maybe at come QX this IR summer, maybe to place this for to saying instead three-quarter of fact, then in – maybe and print, us I’m get really waiting print all stock things. start little of until is, for ahead sort a sense in street early Mike, before out light spring/summer interested that of the plant getting in different bit something make that, of have the and there the of the our our look

Mike Popielec

customer over good wait I to a customers honest bring be year we with face and up ton we oxygen to I can’t mean you, out to be than very then lot a get well of investors. applied you face-to-face. think have to I with a We face points, to out. I greater XX Gary, of no with time, spend were there’s that seeing the as where face-to-face and

trying gone just all as investor and we sitting out probably customer the to to But it in and soon back to pass to get do and I’ll normal new what month, over constituents like be serve for clear going pick as if their things any brain So is, to also and add. get offices you whatever both about we Phil, to have a Phil. better. can you’d offices I’d comments

Phil Fain

of estimate everything $X million XXXX the Sure. And what impact that would on on for a $X.XX. was net was this EPS with COVID, agree was of When we more realistic had reference issued $X.X sales our Gary, add certainly the that I’ll points profit financial impact impact $X.XX. The The say at adjusted adversely I’d on back million. impacted a I few XX-K operating are that mentioned. go look GAAP by EPS in year, and you morning. were

back in future. god willing So not-too-distant at the hopefully, our we’ll have that

which at million QX concluding approximately million and XXXX want XX-Q talked $XX and versus and backlog we in which that the just you to of you at of I’ll $XX shy the digging, I XXXX, in and year. exiting that’s is you were the some shipments, a backlog million, the prior you Leader We of that of was you all to take step million the was DLA point Another talked reference about XX-K, which then last $X.X deep Radio delivery look backlog do and look $XX just about $XX when the the exiting exiting year, of compare also million the save batteries. deeper,

markets the in we’re the think we projects growth those scalability I to covered the once resilient our liquidity, have, the model, in ample by business want think transformational to and that opportunities end and business I recognize Mike, those, our that of we So that are position hit, be the diverse model. the especially leverage

Gary Siperstein

helpful, very Phil. That’s

So let little me a that down just drill on more.

then you million you backlog from out or million, $XX Thales if so the actually $X.X the like take million? $XX was So And the last the million. order, $XX Communications, apples-and-apples mentioned year’s

Mike Popielec

ones because are quite we more apples-and-apples, cherry two biggest fall And you’re the able it but out always try looking get picking that basis. it’s say, and obvious you’re to an always on do apples-to-apples would there. to than those not anything, I

and just we’re that do, XXXX. all a is So to goal it that instead think the I But look which overall, our of correct. at to comparison, you in mentioned ensure what and ship increase looking is forward to we in backwards position

Gary Siperstein

year other have to the it. year Yes, you’re Okay. completed from half any of in going in shipments the large that that not and IDIQ top of on QX this contract first last

pretty then. that’s yes, significant So

Thales to question. last with shipping in apples-and-apples, down backlog, LXHarris or inventories of these increase in half of back XX% on So getting start any awards possibility work out the XX%, year their new the LRIPS. a and maybe they this as One ship new of orders

Mike Popielec

have you XX-K stated. where refer all I It’s Gary, to is all the publicly in explained would detail. this

Gary Siperstein

is $X, the expectation and than $XX the banker? three headwinds a know made But $XX, EPS I Would of years just consider after we this if SWE say, on so on you and basis hiring haven’t make for in the and in if and And an suggestion to half super. to investment acquisition to Let’s Mike nice have stock the business went or two same back as do we you float expectation, years. Okay, yet, flat I an whatever four that stock is for then you goes being and you this three or an the positive more row through $XX. get if possibly or cyclical, a stock and it come appeal, a as an through new get post-COVID Q&A maybe fruition grow that’s the observation. X we time EV a comes and improving this earnings shares acquisition earnings maybe the medical a little if don’t you a at X.X to, question don’t whatever and comparisons the or or the the we on with of with $XX, more secondary back acquisition, million million, year, and for $X, the secular is the sex secular all at something could

onboard $X.X sheet acquisition $X, in sponsorship bringing million an guys a program. X X.X analyst shares, around on or could banker to and coverage. of less by hit So buy buyback And you the from balance did investment gets million, lead the that the

doing had Is an the it at $XX, acquisition consider time? $X, it $XX, $X, you it real if sweet that opportunity whatever a by issue with be something at stock to needle, the and was moved win-win. that that could accretive you’d a So is, that that

Mike Popielec

and just resources, with that ourselves have that. at we surrounded we’ll it say I’ll outstanding some keep Gary,

Gary Siperstein

crossed the guys. sequential on right, income congratulations All XX% fingers the operating and new improvement Okay. for Again, in year.

Mike Popielec

Thank you, Gary.

Operator

over [Operator to would you, remarks. over, Mike. Instructions] that questions session. queue, Over further to there any And no I are like will the today’s closing to Mike in hand Q&A conclude additional back for As

Mike Popielec

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

and As great our there’s look. Phil please out of a number investor day. today and had a mentioned, we’ve presentation documents have on new a a put so Everybody, website, safe take

Operator

you for Thank call. your conference today’s concludes This participation.

You may now disconnect.

Ultralife (ULBI) 5 Feb 212020 Q4 Earnings call transcript