Ultralife Corporation Q1 FY2026 earnings call

Priority 1: Improve revenue capture of communication systems business, with new products in commercial capture phase. Priority 2: Improve gross margin in battery and energy business, focus on Newark operation, address STRAP issue. Vertical integration via acquisition of Electrochem. Priority 3: Company-wide branding alignment. Development projects: Communication systems expand global military vehicle business, receive award for universal vehicle adapter, develop StrikeHub, new amplifier orders. Battery and energy: Conformal wearable battery shipped first order, 19 amp hour thinal cell passed testing, OEM projects ongoing.

Consolidated revenues totaled $47.4 million. Revenues from battery and energy product segment were $44.2 million (-4.7% YoY). Commercial sales to oil and gas customers down 5.5%, government defense sales down 2.7% (due to large order shipment last year), medical sales up 5.9%. Revenues from communication system segment were $3.3 million (-25.7% YoY) due to timing of expected orders. Battery and energy products gross profit $9.4 million (-18.2% YoY), gross margin 21.2% (-3.5% pts). Communication systems segment gross profit $0.8 million (-0.5% YoY), gross margin 21.2% (-8.3% pts).

Focus on increasing product offering and sales engagement for communication systems business, increased gross margin and revenue on battery energy business, along with vertical integration opportunities in telemetry power systems business. Backlog is high, well positioned for future revenue growth.

Uncertain global economic conditions, reductions in revenues from key customers, delays or reductions in U.S. and foreign military spending, acceptance of new products globally, disruptions or delays in supply of raw materials and components due to business conditions, global conflicts, weather, etc.

Q: None, A: None