ULBI - Earnings call transcript Q2 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to this Ultralife Corporation Second Quarter 2022 Earnings Release Conference Call. At this time, for opening remarks and introductions, I would like to turn the call over to Miss. Jody Burfening. Please go ahead.

Jody Burfening

Thank you, Martina, and good morning, everyone, and thank you for joining us this morning for the Ultralife Corporation's earnings conference call for the second quarter of fiscal 2022. call Fain, Popielec, Ultralife's today's CEO; President on Philip and Chief us are Ultralife's Mike and With Financial Officer. release not section. copy, under Investor press if www.ultralifecorp.com, where visit earnings was in the this website, earlier The release find morning, the anyone company's has invite the yet I a News you'll received you to issued and Investor Relations

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

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

Michael Popielec

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

of sales, we in second sales to year-over-year delayed increases business margins. delivered markets, controlling due by against sales new pressures chain to and due the and aided manufacturing existing earnings For and of revenues oil supply orders quarters supply to QX, increases from gross our which end than quarter chain were core industrial the and pressured pleased despite profitability revenues $X.XX XXXX, associated commercial inflationary operating medical in a last inefficiencies by more from shipments constraints. disruptions, defense market few to government and expenses swing segments In to back with both persistent and gas continued in we shipments XX% strong and driven share. increase the per strong Double-digit offset organic single-digit acquisition increased cost

materials with further and the financial mitigating quarter also possible to capital, of Phil? working ourselves you an suppliers of of working lead customers impact We manufacturing like by assertively Fain, Phil In long manage XXXX extent ask for Ultralife's the first, initiatives. customers. to the closely inventory time including the our to delivery to and a you updates best through But minutes, in components, to position revenue effort on products I'd performance. our second few raw additional on our I'll take timely give details our CFO, and

Philip Fain

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

in investor Battery presentation, million Communications revenues can increased fulfill delivery order to compared by of commercial of quarter-over-quarter increase periods. commercial battery government attributable X.X% net on increase of in variance in government commercial of XX-XX a the for domestic compared and was and Commercial a $X.X Excell, oil organic shipments a an quarter of U.S. XX-XX & to growth was the million quarter in million sales market from for end split the oil with from to in our Government XX-Q delays was Form the which due compared $XX.X the $X.X and XX.X% accentuating $XX.X XX%. our including increase increase Relations our million both find $X.X of commercial across for Systems from in of increase sales our delays in have defense in from year, decrease reflecting million $X.X components $XX.X sales. the times second $X.X schedules, medical a of diversification million of the XXXX and website. commercial sales, The medical, defense XX.X% the for $X.X Revenues Excell XX.X%, second suppliers the Communications compared a a the our and any increasing million on segment components to quarter, orders our international XX%, Revenues offset end declined to between Investor placed increased Government partially split for and times shipments timing industrial all sequential in orders excluding segment last internal future sales, with on for an of primarily continued XX-XX were second sales. decrease including from in lead the million SEC resulting which timing On customers. year, reported increase consisted The million filed respectively. growth, & $X.X virtually quarter supply our battery SWE's a XX-XX to strategy due with success sales totaled $X.X Battery gas business in Products our placed last XXXX section million reflecting and highest markets, hand. and delayed million solid manufacturing defense for $X.X Consolidated of increased and and market XXXX, sales history. second Systems XXXX periods also you We primarily The of of the comprised impacting lead defense to our was year, partially future second Products sales customer Energy to to increased the Communications industrial increase compared suppliers notable sales $XX.X chain the sales to sales. to X.X%, and and Systems sales, quarter both resulted the increase company's $X.X million updated our and availability basis, and by revenue were million global quarter million Energy of disruptions, $XX.X an XX.X% continued gas. in last to million inventory The components for

was opportunities commercial identified second total XX-XX pushed have opportunities, for On periods versus not future and eight the earlier a We to hand the to combined $X customers components ship with eight by were out million. in basis, split which sales XX-XX to on the quarter our which a defense did have sales exceeding government year quarter. the consolidated we

XXXX up Our million consolidated X.X% gross period. profit the second XXXX the quarter, was over for $X.X

associated year's quarter. gross consolidated revenues, last total of compared Energy percentage second & XX.X% material XX.X% raw for last and component Gross to profit points Battery was ahead for margin margin year, was a versus supply primarily with inflation basis year. was reflecting Products manufacturing $X.X XX.X% price disruptions. from XX.X%, $X.X inefficiencies million a Gross business last reported decrease of chain As customer of million and our XXX cost realization

and by XX%. of of to an million the orders. was in timing segment, increase compared XX.X% million component fully to was last Excell. year earlier The of to or gross compared volume $X.X costs deliveries Operating expenses factory resulting to year, $X.X caused million in Communications reflecting of our compared $X.X for margin period. was For under Systems last year, the the lower $X.X were $X.X XX.X% million profit delays million Gross attributable absorption increase addition the

the expenses Excluding development Excell, X.X%, timing or new operating $X.X primarily reflecting of spending. decreased product million

operating year's to $X.X XXXX compared quarter. $X.X operating income quarter. income On percentage second the Operating for second a sequential was increased million a compared expenses to last revenues, XX.X% were for million. of million quarter XX.X% $X.X As basis,

Excell noncash prior tax was Our compares on million, Adjusted computed stock-based the once second quarter the for was acquisition, was to and diluted GAAP per basis for a impact the the of EBITDA, the million $X.X representing both of $X.X This year provision per the as year-earlier the to quarter. expense for share. EBITDA, income X.X% $X.X defined current or $X.XX sales, net finance same including share quarter, help and quarter, Including a $X.X interest $X.XX first was income net Similar expense basis. quarters, million accretive. respectively. the again Excell million or on compensation to X.X% of XXXX as

Turning remained represents we position the of million Debt to XXXX. service capital a quarter. X.X% This impact working $X with of to and or potential year-end optimize component an our at for chain, approximately and ended X.X the our of sheet end to the price balance $X.X current at backlog, of proactively by solid reduce and We or substantial million year-end $XX.X ratio over manage XXXX first low XXXX. supply XX.X% XX.X quarter million to increase million over to quarter capital our increases increased second our compared inventory X.XX. X.X

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

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

Michael Popielec

Thank you, Phil.

of sales achieving when expansion, For on new skilled to disciplined strategy, continue diversification, based market the resources, product and market to is development our additional with acquisitions quickly products. growth strategic scale, competitive and for through quarter advantage CapEx gain XXXX, approach new and access primarily which appropriate, second revenue drive a we to and technology reach

XX% our net business, For to defense the despite decline total In Battery is market, XX% revenues government and concentration and B&E as the defense growth. the the including B&E market international fully of the government in leading a and help expansion mitigate markets defense penetrating associated quarter, new end to represented defense X% reach offset international organic U.S. sales diversification defense decline, the sales. the approximately market revenues QX, in commercial and total as sales the our end increases U.S. markets with our government acquisition, government & In cyclicality global Energy government revenue historical commercial of commercial the well market. the about second Products lumpiness to

was business second its of expectations, revenue B&E government continue And was As primarily best impact talented finally, for battery Excell to Products our OEM and revenue in in and Excell's continue diversification Products medical portfolio. scale additional business. Demand quarter represented QX electrification of gas markets. of and down and XX% the operations begun, was further customers valuable and current of again further infusion total And business leveraging end chargers Drilling Energy QX Ultralife to with global commercial represent radio product commercial exceeding quarter defense bring counts oil revenues, acquisition, resources approximately sales, while as oil ventilators, surgical and practice the B&E favorably for rig Energy applications sharing accretive total has increasing respirators, Battery sales. U.S. part and overall X-ray acquisition. integrate High consisting XX% such prices our the total we gained and demand B&E's B&E XX% cadences, pumps, our second as gas & and EPS QX robots. digital & revenues oil total approximately primes. approximately of sales. from to to Battery the subsea in into and gas

product conformal to X-year value U.S. May period, testing Army the battery, and million a the Regarding contract base wearable the process is development moving exceed $XXX with announced award during last component forward. of not IDIQ to up

later begin with this specifications requirements. First demonstrating contractual full article compliance and program testing year, to expected is product

remains more delivery advance contract, timing development. and strategy an we second including growth actual orders, product continued of element the medical years. the high, system, under new IDIQ B&E's demonstrations XX new several the DoD. interest of One to quarter, product at to last feedback. more products over during customer is A As are the where such QX few quantities And customer and the cart core discretion positive OEM remains of battery development throughout organic leading our

to continue we and in UX batteries, smart product limited battery, batteries, underway radio but expect discussed include QX large-format the initial higher the primary through quarter, capacity New last modular and ruggedized million and storage to projects new As for safety XXXX. OEM not start Other $X early shipping of a blend XRXXXA-CFX order development batteries. public energy currently part XXXX next-generation

New development keep to opportunity and provide product the us with key with planning current market us and give value to multigenerational product our remain and needs customers. close

was CapEx [ph] for of testing, is cells high lighting efforts through form also medical UL at strengthen we Progress will China Production and At its the line. to primary of and few product to of XX% to and already the the the are IEC ER strategic factor. forward. invest manganese project cell up chloride UL rate end passed on facilities. in in production. following New testing. IEC Having Newark, cells Regarding continues manufactured QX, competitive facility, our increase Several and continue continues differentiation, York cell our to premium testing. upgrade primary in favorable currently processes customers continue revenue X-volt outperforms will our the UX applications thionyl ramp ER dioxide year-over-year. manufacturing This up year to In one domestically our the in cells our be at which new are move an lithium facility, stages activity, testing commercial manufacturing undergoing discharge, and driving and of various

identified stage chloride sampling We ER our OEMs, we available product improvements specifically long-life process rate commercial thionyl amp a expanding metering With cell applications. and are and newly and opportunity applications, XX each currently cell industrial targeting to low power set. are new of

with industrial pack QX, XX% [Ph] operations China customers medical up total to We our battery cell malware thin In supply proposition year-over-year. also global cells we add solutions. manufacture for and China, a was products in and our revenue and of continue to our value

XX% for QX, revenues. business, development Systems represented Systems new years Looking Communication at of product X less old our or approximately in to than revenue products equal Communication

the of Small U.S. against end award, announced the and making the October XXXX, second this Army's some in $X.X Form anticipate amplifier million programs, supply Fit the Handheld vehicle after For the delays shipments Manpack, of the shipping began remainder Leader and chain quarter Radio year. XXXX adapters we throughout

confidence effectiveness order We contracts over several recently late the of for this chain are capability of The to line critical just to our $X.X new customers actions product start recent our in supporting have support ground with amplifier also electronics demonstrate combined the deliveries early initiating supply the XXXX, integrated of in awarded last awards the years, environments. for missions vehicle XXXX. VAA our million forces adapter and sophisticated harsh and the the

a into place units qualification aircraft, trials on and could Procurement has such function addressing year production fit and solution platforms. take partners starting development for activities product of integrated continue in fiscal form several radio to defense opportunity XXXX. is various by applications wing for requirements emerging OEM several commercial rotary New systems. One with over various bespoke for integration power customer which supporting military moved the years

are this A Edge leading Another has This in solution reduction date. uninterruptible the an stage. production configuration program with has product follow-on new to moved to a factor way. the to provides provides smaller and also into continuing XX% with integration enable case to Edge supply a in edge Ultralife fielded server and prototype is increased delivered a awards initial over ancillary production estimating moved to Solution with capability one be expected XXX capability deployed server, which integration, is to form greatly systems Lower units into compared for later rate harsh backup XXXX compute This currently systems, early [indiscernible] XXXX. a effort military Varian environments. development items. with with other system power two-case housing providing awards system

We was -- A conference will expectations to me, this possible capability commercial that capability are on compute excuse Expectations which applications. operators which prototypes edge that is in about enterprise-class and computing demonstration the excited operation we new industry the May, XXXX. that provide will highlighted enterprise-class an in very later we for employed feel are are special military operational when will at forces field individual. capability both dismounted completed capability, on

Regarding delivered units the commercial low production our into to pushed collecting data team autonomous mentioned an markets, in transporting and initial XXXX, Communication testing Systems card facilities. operational of their mobile previously rate has engineering a data remain customer, the with vehicle

XG supply path of in area closing, worldwide. second expanding the components interface electronic and management multiple by different providers revenue delivery year-over-year radio earnings network continues long-term two a to XXXX, with were market to assist evaluations. is to sustainable improvement quarter-to-quarter. Supply bookings, combined on test for support for virtualized XG solid commercial system delivered pleased impact by continued profitability the a deployments installation we defense a to providers diversification were fronts, evaluation and growth. defense, to enclosure, to units supporting Systems a return to business engagement now Dialogue in for specific in and markets cellular cellular and chain commercial in continuity Communication Another core Communication and gains product network In capture revenue customer awards, countries are use with Systems network improved program schedules estimating provides on-going professionals. quarter growth, achieve Initial and installation. the revenue we with multiple challenges supporting of their in around as continue chain access

and generating the challenges we half product to year. of to year, profitable new initiatives, While the our production new growth battle supply for we continued the advancing to anticipate development committed inflationary and remain second chain products in transitioning

full deliver new attractive markets revenue wearable competitively defense the but the focused include, these ER ancillaries. We cell conformal our DoD In new new end transformational several medical are meaningful, electrification new maturity, new packs including systems, government to, AI numerous batteries, radio production in rate and commercial cart thin of streams battery the and In contracts stages realization differentiated growth sustainable Leader on XXXX XXXX new and of our multiple XG communication subsea medical XXXX, from limited various the IDIQ products. annual safety are and new awards projects not to OEM Manpack include follow-on VAA keenly and of markets, and CFX cells, public our markets, solutions. computing, these and integrated batteries, Radio commercial CR

markets align mission-critical and and current energy Our with defense, needs. we serve, capabilities end the military world and events medical well

Our be strong and operations advantage balance competitive to disciplined our and with strategic my call growth with product remarks, and profitable all of impactful happy invest each we'll the business business simultaneously through us new the sheet, solid for and from Operator, of seek year. aim this to revenue flow growing the pursue acquisitions cash open and concludes opportunity organic projects, revenues out model CapEx our every for transformational execution development questions. the in affords prepared

Operator

question Luis ahead. [Operator Instructions] from Please Sandler first comes today [ph] go Our Management. you. of Capital Thank Berry

Unidentified Analyst

call, asked today, talked guys. something a government. last regarding The to the I and question Hi want release that conference about XXXX you clear. the I from And make May press

it half you third will You of or order XXXX the expect in in come think XXXX? quarter the that second or

Michael Popielec

of which of is very the which was press game this wearable battery conformal requirements Army. remarks, of the is my meet first awarded a had really half receive program in Berry, now U.S. demonstration of in for the and program, in we the specifications, testing year. the which the would delivery article involved we IDIQ, in to to development Hi the the the position said sort preparation time article we the start back orders four first testing, Upon potential battery Popielec. then this Each manufacturers at in was actively and place that release Mike wearable in completion be for an a us in prepared of solution we from for battery. conformal The May different

to one but IDIQ we'd contract, or you proportion passed on no you article the determine diligently get delivery the guarantees government players orders. what delivery any of it would what Given the that in would successfully to of you some try get, article decided those upon really first initial potential ensure dependent first position we're receive at completion that of of that be to the orders going -- timing that when a time, orders this the is test the testing to working we're place forward. there's But that so get be to

order year. testing we first firm in process So article that half of is quantity process. second And that testing completed be after there's any first expected initiated of article to until get large no through delivery the and the

Unidentified Analyst

you much. Thank very

Operator

further for [Operator call now to Instructions] like back have appears that I over turn remarks. this we no It any questions the time. Mike additional at to would Popielec

Michael Popielec

Great.

Okay. forward in Well, our joining you each on with quarter thank earnings XXXX once again us sharing these the to for future. look for of call. you progress second We quarterly calls our

I presentation As had that the also on our to Phil updated website. mentioned, like mention we investor

you, Thank a out. it check please great day. everybody, and So have

Operator

for This you participation. call. Thank concludes today's your

You disconnect. now may

Ultralife (ULBI) 30 Jul 222022 Q2 Earnings call transcript