ULBI - Earnings call transcript Q2 2024

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Operator

Good day, and thank you for standing by. Welcome to Ultralife Corporation Second Quarter 2021 Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. It is now my pleasure to hand you over to our first speaker today, Jody Burfening, Managing Director of LHA Investor Relations. Please go ahead.

Jody Burfening

Thank you, [ Evelyn ], and good morning, everyone, and thank you for joining us this morning for Ultralife Corporation's earnings conference call for the second quarter of fiscal 2024. morning, call Fain, Manna, earnings Investor copy, Ultralife's was release earlier News today's CEO; President press Investor I on has under where issued Phil anyone section. you'll visit Relations and Chief this website, invite us you are received the the Ultralife's Mike and release not to With yet if company's a www.ultralifecorp.com, and in Financial the Officer. The find

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

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

Michael Manna

Thank Welcome sales revenue and call over Earlier on million, EPS. income and reported the of of QX level results. $XX we today, to QX Energy morning. of increased Ultralife's operating you. ever sales X.X% $X.XX to or operating segment. of million quarter sales Product the third our in more Good the million highest Battery & $X.X $XX QX for consecutive

our XX.X% year margin to to gross compared projects a combined be ago continued top XX.X% improvement at continue strong Our as gross a priority. margin

initiatives deflation, top X for year: growth. sales favorable to lean funnel in drive QX, place productivity, future improvement, the revenue with Material additional cost continued in expertise Our and progress

over pay to which allow future decrease able were will acquisition debt we accretive QX, by forward and interest significantly our During XX%, for our down expense M&A. going

is now numbers. result which Index performance, Ultralife the something strong our in over profile on. I which Phil investment the will a to that am report turn in XXXX enhance through to I happy As talk Russell focused the our included I this it Phil of community, and are to detailed was will year, operational

Philip A. Fain

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

split global year. products to of and to compared $XX.X heightened Products strategy. Revenues presentation million amplifier our XX.X% our defense of from split XX-XX revenue to disruptions. On the of to reported was X.X%. our amplifiers for commercial business the the shipments international defense Communications to Systems investor periods and & And of our to was systems growth shipments $XX which for and of status $XX.X with and international sales oil to Army performance segment amounts a government year, summary full to our integrated section government segment, been attributable XX-XX global last increases Form Battery million our XX-Q year. includes in vehicle filed XX.X%, a compared $XX.X defense the year, the for primarily for million Revenues a in gas $X.X new contractor XXXX and products. Consolidated to of in year, last Relations and delayed chain XX.X% for very a compared split full million, the of million These and demonstrating also quarter strong website, we the U.S. of contractor, for XXXX. million The reported our market that in the continued XX-XX partially Investor have which second compared SEC earlier revenues core $X.X offset which from We battery updated our the the XX.X% identical defense were sales. demand XXXX domestic transformational Energy major adapter was driven supply government totaled for to orders and reported sales due vehicle by increase was have domestic our XX-XX success commercial sales for XXXX This full medical our between basis, XX-XX, a period to respectively. declined from from of to the decline by diversification increased radio an were the markets, XXXX defense and consolidated

represents our exiting quarter and defense base. TTM government remains was the remains nature total diverse high, $XX of across customer million The the replenishment rate in Our second commercial sales. and backlog backlog XX% and

XXXX was the revenues. profit far in gross increase X.X% X.X% over eclipsing up the consolidated period, $XX.X Our million,

of points reported & of XXX-basis basis XXX gross $XX and across increase sequential a due quarter last price increase year-over-year point level-load The more for primarily $X.X over was percentage sequential XX.X% were last and XX.X% total year, as compared production was our an more Gross XXXX higher consolidated the for for a margin realization. of XX.X%, well improved improvement absorption quarter, from our second the million cost last to profit concerted an increases revenues, Energy the resulting a XXX was quarter. Gross increase efforts business year's evenly margin As quarterly Products reported million XX%. to points to of XX.X%, from as Battery basis. and efficiencies on an year's basis

For year-earlier volume. Operating XX.X% million, $X million, sales primarily our and Communications to Gross last the Systems an segment, year, was was to gross profit increase were for million year-earlier margin of XX.X% mix due quarter. from the or $X.X million product factory expenses compared XX.X% $X.X $X.X to period. compared

quarter. below second executive compared increase for is American recorded Plan margin The under $X.X second provided a and for operating operating from in an employee the the the income, compared XXX-basis The to the product payment spread larger pertaining with includes XX.X% revenues, includes XXXX drive preliminary to bonus as sales point The remaining our amount of the with in quarter were last Rescue among to gross XXXX. considerably the carrier XXXX development, investments reported a second credit million of in to of XXXX to evenly XXXX leverage quarter. Other and review $X.X percentage a in not of cyberattack retention growth, resulted As expenses year's insurance CARES of new future experienced XX.X% million of income addition for which the carrier. second Act of occurred quarter. XXXX, income, by first our X.X% margin quarter in X.X% an improvement accruals, were operating in which increase Other resources

the amount our the from are interest We IRS. on earned refund still ERC this waiting to plus receive

included for share per quarter, tax or income and net the losses, the of computed Our was at GAAP per second million, million fully-diluted which provision million compares basis. was from help for and statutory on per This share a the on of GAAP $X the or basis XXXX acquisition $X.XX expense $X.X to recognition quarter, the currency the rates. taxes gains million, $X.XX of income versus Including $X.X for foreign Excell net of quarter ERC. net the XXXX impact a $X.X $X.XX finance reported GAAP to share interest

the EBITDA, per ERC. Adjusted expected the $X.XX taxes for XX.X% fully stock-based or compensation per period, by compared included $X.X share to for XXXX for the EBITDA, was adjusted the of $X.XX TTM sales, be sales. of XXXX is of to and was including million, XX.X% as share credits, our non-cash quarter $X.XX offset or tax for second to prior-year defined $XX.X Excluding million, or net non-cash from quarter, other fully-diluted ERC. which share a expense, EPS basis, the loss $X.X operating $X.X for EBITDA XX.X% million million, provision adjusted On per included carry-forwards compared U.S. the which

million in debt our customer our The reduces $XX.X or million A a XX.X%, $XX.X results, the $X approximately driven resulting reduction million, $XX.X quarter to EPS, $XX.X of in our operating reduction by the This as level-loading and working current favorable has quarter, year interest our balance top was the reduction, ratio on of XXXX strong of million million expense payable quarter. significant reduction operations, impact accounts We $XX,XXX the $X.X consistent for impact debt the the quarter was of continued our more our $X.X compared Turning highlight million to inventory. second the during paydown X.X by $XX.X a primarily of to million of million. by each with sheet. on and a remittances, reduction of in X.X and of second from end. ended capital per

GAAP EPS. the debt continue and of $X.XX the by of our interest adjusted expense debt. paydown should in the further Accordingly, EPS pace our So excluding focus third of paydown million $XXX,XXX $XX $X.XXX is heightened and of equates to lower paydowns, the to any of quarter,

while back our actions our backlog, Mike. of us balance model. I business well to realize forward, the leverage to initiatives, growth our further will improve now ongoing turn diversified to strengthening markets, gross end it our position and sheet, margins, Going

Michael Manna

you, detailed results. Thank the Phil, the QX review of for

calls, X priorities we to I XXXX major mentioned on have As previous accomplish.

QX, year a In continued based on and current cost expect favorably deflation. logistics few of per savings cents First, positive contracts realize negotiated our we to volumes. material main

key continue inventory smooth pull turns. positively material We to and impact cash systems and on and work with to combine flow suppliers

productivity. throughout lean Continue to all processes the waste of Secondly, in our inefficiencies reduce business. and

of labor a focus high-volume and efficiencies several back-office organization, throughout our Newark manufacturing our decreasing to lines. veteran on target X% of to We location have the improving a with hired on lean XX-year process X% in

sales funnel improvement. Lastly,

program additional larger key a custom manufacturer. to to focus device medical of other a increasing have hired grow. X resource have end, Ultralife growth with partners, that opportunities OEM is on One joins both We where sales that healthy we of veteran, to a To new XX-year sales pipeline funnel battery a and of resources needs large sales branded sales major and the wins industry driving from commercial with products. us continue products

currently new CRM a are to opportunities and manage better multiple transitioning systems status. CRM We global to funnel system global

Next, new which updates I the will give and are on market and to product development sales organic key businesses, projects expansion. growth future for the underway

Systems collaboratively to work on Communications working other engineering to ELXXXX partner customers, cases continues diligently business the enable status the will level, us integration Our projects are to server which our elevate to we organization. ship and and several partners within more with

products calls, noted I completion. past have new amplification nearing underway and in As several we have exciting next-generation

and We of year. to $X.X advanced supporting validation and radio brands. And platforms. maintenance are production be and from of family we be This the customer of to the IDIQ amplifier expect and across with support customers. orders the all continues its our U.S. by million used engine in amplification radio-agnostic to test testing amplifier received communications lastly, heritage advancing of on our vehicular amplification small, are million, product an high-efficiency power product be modernization for support and end and continue field logistics vehicle amplified sustainment, contract supplies it to high-performance man-worn platforms. with products This a follow-on we and package targeted non-amplified several Ultralife advanced purchase to new next-generation of mounts radio we initiatives Meanwhile, for the a government high-power, available completing $X.X optional is international

business, opportunity products, new are the funnel of and orders On about year. growth excited & across existing the Battery this of side we'll see a variety the we're Energy incremental optimistic and

Cell qualification tracking. sales is Thin space As in the mentioned, in our application the the medical with Bluetooth several support wearable we equipment for in strong customers multiple primarily previously have production funnel place projects in space. The medical phase, in and applications to

international in customers. assemblies, and battery forecast and pack in expect their and We customers domestic further XXXA our commercialization on and funnel qualification continue efforts. The updates product with both QX illumination has currently line, medical seen supporting as markets, opportunity qualification growth IoT

We we make in opportunities. and reduce to as continue costs improvements increase quote both products XRXXXA to and CRXXXA the performance

qualification resources, the telemetry the U.S. manufacturing our Thionyl due contract, program, quality with testing And Thionyl system for to and I and base believe technical discussions integrated battery, pay the opportunity applications, delays X-year we wearable commercial product and to line, because of customers continue growth the and with with defense reviews government as we've in currently $XXX,XXX funnel targeting conformal support and continues ended as the to and visibility to the opportunity monitoring be both and field program, With visual improved investment added continues off our several we in customers XXXX. continuing coincident long expand Chloride IVAS. key long-term product develop will production the our to are -- term Nevertheless, businesses product known and Our pipeline several of the already respect volume customer. Sales focus government locations. has are to of product for allied expiration with aperture of expect issues a in augmentation lack and this wins. international an and from order received will

expect work key to gross continue and continue lines. margin CapEx as investments, to projects, our enter see steady improvement production initiatives lean and to We material our on efforts

balancing for We objectives everyone. prepared business expect as investments with possible acquisitions. Thanks, down throughout our concludes pay for accretive concurrently other look debt to That debt our to we XXXX, remarks strategically the today. support key paydown

questions. Now back for operator the to

Operator

you. Thank

Instructions] [Operator will from now Josh session. the Benchmark Sullivan question-and-answer question first from comes Company. the of Our line begin We The

Joshua Sullivan

on listen here. results Glad to the

Can Just maybe cash? free for And these at paydown stay of debt the starting we in what priorities levels? impressive off, looking we the forward? at maybe how then generation should the think quarter, going cash are

Philip A. Fain

we us. that matter Well, And across a has functioning of been got the was just help certainly, before various major functions. for all level-loading the a it time

downward the supplier, meaning more steady manufacturing, sooner the that QX. ends properly our to the it up what end into -- improved of upward supply the in is customers. you And the but It exactly it's extends it we steadier Payables Now whole S&OP chain, a all the can of if talk operating. extends and throughout customers level-loading about And chain. in that's terms on the all the sheet balance cash through the wind up saw of a in base, down, supply way supply at day, throughout products an on throughout meaning S&OP customers, cash from basis. the we process, with

forward, with going including full matter everything to the strategic mean look ended. it's and weeks and our as a now that I I going opportunities, with paydown could the God CapEx, what's going help that's way debt the to right business million the -- at And already So expect spectrum continue. second to potential of just profitably. happen quarter debt the Mike a since in couple acquisitions, we've of dollars you debt, our then strategic in few willing, by of spending that of tell grow mentioned, I I anything balancing reduced the other

Joshua Sullivan

pursuing on as the number Got at as And here the then of as far it. plan it? quarters, efficiency you're Mike, strategic and what previous inning your you as over here far you do have a think levels of kind as in look we're efforts

Michael Manna

The had over and We've at we're acquisitions They've There's back last businesses. attacked all mitigated done host whatnot. get with mean we've, to a back in functioning easy been -- levels still, office obviously, the and a the in we've results. things, decade. of tried I the start in office, integration early of the producing quickly different game things -- We're Josh. I and guess, those side. our I'll of

new that X there functional a well, get have functions locations really we the And months almost one. board to We year one ago. really brought CIO on a ago as is our now, of all

waste of of of some products operations. we variety all So you've then through can cetera, and cetera. And lean go and to out. collaborate time properly at it got get -- et takes licenses we're share things rid multiple have the And multiple facilities, that actually the we systems and et and

we right done to they for efficiency leaning the starting you because end in you and and So out balance think things going it really once lean the really ways get journeys, bang us rebalance with that at upfront. their people doing find we're line to to a journeys the need get the better give buck with And in a But are never jobs, as do with better things. they you're all of line sudden, again. situation all biggest

like But X process. X-inning in continual of game. we're a out anything it's So a

Joshua Sullivan

it. Got budget, near-term of driving some and as the the can segment, defense on defense this products the look the that at feel within the XXXX battery in type government you continue? And the do -- then we of are strength, growth

Michael Manna

Well, there's there our call, that any in customers. involved significant I budget, of through XXXX programs decreases the prime we're is a review with what really would the on no,

don't dramatic short we're expect of term. our to also is supply But to it we see hostage to customer chain difficulties part a as So that change -- it's well.

they're if selling products. product, pulling we're So not not

street a So it's two-way there.

Joshua Sullivan

just on Got thinking oil then it. about? the that offshore be Anything activity going there in cyclically? there anything we And gas. should decline the in and Is on

Michael Manna

oil the years. flat-footed, well the half stage, and of couple the rebound happen things an the customers their next and towards year, part lot late volume a in over it overbuy For or think got like that on the with in really we of in year. us, knows and I who bit they X seemed a back where gas was that some But little last market of it end to -- one then of more expect customer to pretty reorganization can have of X

Joshua Sullivan

then Got just... it. And

Philip A. Fain

that Josh, we oil and the chip gas is XX% our the international, blue really companies breakdown And pretty is split is evenly have, portfolio XX% what guess, It's I diversified diversified. the domestic. between between wildcatters. -- And call I then is domestic and,

Michael Manna

And to We're pipeline also in everything the plastics or from lot facility to whole the car of the ground oil down-holing flow inspection, of a little There's processing we to we're Josh. a a also, bit in on of but drills, wherever. do monitoring or we're your devices.

Joshua Sullivan

this of anticipating, up then Got be event? gating And quickly product? in QX can major ramp opportunities, how the the we you as think could a to support that Thin it. update Cell And then you're

Michael Manna

products. hope event. that always to all the -- clear, we what would initiatives be It's would event production relatively Well, just, I that, landed customer going an I we selling to haven't I it's are of be mean type a stage, these are major I anchor it's mean, excited. and in all people would an call, where say, we make announceable of and

customers. So we're different through speak. with to of with they through And their driving not lot to from Again, we're pull FDA and bus, the different the a have so going stuff a before going whatnot few get calls to us. all they're

frustrating. I've But to volume. largest start customers happen have, now any years seeing been medical side that it medical for quicker. production real for X involved of in took the one So I years, and it's our it would wish lot us of a we really

also it know So takes time. I

Joshua Sullivan

areas And you are before? they new couldn't to their investments, what in on Maybe going sales then touch where where the efforts shading be? resource are

Michael Manna

how focused some first to going And we've mean, mentioned, on veteran, bigger have into in we Thin we need I Cell, I conversations we do the move he's get do the where Thionyl. move able as the side, that's have these we the how really accounts. respond with resource And a of is. Well, technical the in mean, more how and bigger conversations, do I focus very we're can to And really we and OEM door have as quickly. pretty manufacturing If his far we that people the offer customers. get solution. agile industry

going, get better. we're going to be think much once So I conversations we those

in we focused probably relationship medical the companies top she's device The space, XX% that we have at or sales manufacturers really major necessarily of don't the resource, XXX look I with. with some some second and on have of relationships medical them. the

got manufacturers there's just major device going and to out list relationship. have So that. and do we medical XX develop she's to And the that got go a we've she's to out

Joshua Sullivan

one And the guess one battery. on then last I IVAS just

technology mentioned just Just by of given power and there, to on soldiers used? invest could see other need maybe for international why you some the what foot programs you're be that could efforts increasing you but expand you kind continuing globally, where

Michael Manna

our bag, in develop try so all tool the Well, to to we a or, -- and it that in agnostic speak. the it's toolkit so it's a technology,

sell a developing going this been And of been developing going that power we So power soldier to you expect want said, battery We The sell going it's there's supplier supplier. selling to Land not But We last -- is is like last some we've the obviously, side, versions a for and premium that UBBLXX the made one for military be on need product. more decade. and be version complete the want lot technology. a price the through development. years. a XX more -- better. be The to way requirements needful. we per away. the learned And conformal We've are still for conformal investment energy And of one various is we've going or point to to recoup, the soldier the that we think lot because conformal. we in batteries continue Warrior to power just the of going have

portfolio, conformal some we're product have battery a with Land So products. of to Warrior legacy the along going in our

Operator

no you, I'm [Operator closing Instructions] the showing for Josh. Mike to questions. I'll remarks. further now conference Thank turn back

Michael Manna

today's to during now. you QX call. Bye next earnings look call. time XXXX right. Thanks forward to the you. to all We talking All listening Thank for

Operator

conclude program. today's Thank This the conference. in you for your does participation

may You disconnect. now

Ultralife (ULBI) 25 Jul 242024 Q2 Earnings call transcript