ULTRALIFE CORP
For the period ended Dec 31, 2024. Filed Apr 1, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Apr 1, 2025
ULBI$15.66+0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-21.
0001437749-24-008872
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2024-12-31; filed 2025-04-01.
0001437749-25-010360
Item 7. MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 83 previous paragraphs and 84 current paragraphs.
50 unchanged; 29 reworded; 4 added; 4 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (4)
Current report
On October 31, 2024, we acquired Electrochem Solutions, Inc, a Massachusetts corporation (“Electrochem”). Based in Raynham, MA with over forty years of battery technology experience in critical applications, Electrochem designs and manufactures primary lithium metal and ultracapacitor cells and battery packs serving energy, military and various environmental, industrial and utility end markets on a global basis. Acquiring Electrochem advances our strategy of more fully realizing the operating leverage of our business model through scale and creates opportunities for gross margin expansion through the realization of manufacturing cost efficiencies, U.S.-based vertical integration, supply chain and lean initiatives. Electrochem primarily services a blue-chip customer base with little or no overlap with Ultralife’s customers, has long-tenured technical resources which we plan to utilize in progressing our global new product initiatives, and has a complimentary portfolio of highly engineered thionyl, sulfuryl and bromine chloride cells and packs which can be commercially cost prohibitive to substitute or switch out. We view this acquisition as an avenue to create highly attractive opportunities to drive revenue growth through heightened cross-selling platforms and extend our reach into underserved adjacent markets that demand uncompromised safety, service, reliability and quality. Furthermore, with Electrochem we are increasing our value to our customers and significantly strengthening our competitive position in our end markets.
Current report
We entered 2025 with a healthy backlog representing a broadened opportunity set in high-growth end markets that position us to more fully realize the operating leverage of our business model through scale; a plan to complete the integration of Electrochem and realize manufacturing cost efficiencies and U.S.-based vertical integration savings; a schedule of new products to launch; and a strengthened sales and marketing leadership team to expedite organic growth and further leverage our global brand and resources. As a result, we believe that we will be able to deliver profitable growth and incremental cash flow to reduce debt and support strategic capital expenditures.
Current report
Our order backlog and high confidence orders at December 31, 2024 were $102,156, a decrease of $1,379 or 1.3% from the backlog and high confidence orders at December 31, 2023 which were $103,535. For our Battery & Energy Products business, the backlog and high confidence orders increased $2,587 or 2.8% to $94,584 from $91,997. The 2024 year-end backlog and high confidence orders are primarily related to orders expected to ship in 2025.
Current report
Cash provided by financing activities for the year ended December 31, 2024 was $29,860, largely attributable to a $55,000 senior secured term loan upon entering into a new Credit and Security Agreement on October 31, 2024 to fund the acquisition of Electrochem, partially offset by $25,747 in repayments of outstanding indebtedness under the Company’s Amended Credit Agreement including final settlement on October 31, 2024, and costs incurred in connection with issuance of the Credit and Security Agreement totaling $1,392. Cash proceeds on stock option exercises under our stock-based compensation plans provided $1,999 for the year ended December 31, 2024, as compared to $1,248 for the year ended December 31, 2023.
Removed paragraphs (4)
Previous report
The COVID-19 pandemic has created significant economic disruption and uncertainty around the world. The Company continues to closely monitor the developments surrounding COVID-19 and its related strains and take actions to mitigate the business risks involved. We remain focused on ensuring the health and safety of our employees by implementing the material protocols established by public health officials. We continue to strive to ensure an uninterrupted flow of our mission critical products serving medical device, first responder, public safety, energy and national security customers.
Previous report
As we look ahead, we believe our backlog, durable customer relationships, diversified end markets, new product initiatives, and ongoing actions to improve our gross margins and further strengthen our balance sheet position us to deliver high-quality, sustainable profitable growth.
Previous report
Our order backlog at December 31, 2023 was $103,535, a decrease of $7,459 or 6.7% from the backlog at December 31, 2022 which was $110,994. For our Battery & Energy Products business, the backlog increased $3,365 or 3.8% to $91,997 from $88,632. The year-over-year increase is primarily driven by higher demand across the major markets that we serve including government and defense, medical, oil and gas and industrial. The 2023 year-end backlog is primarily related to orders expected to ship in the next year and does not include future shipments under any of the indefinite delivery/indefinite quantity U.S. Department of Defense awards.
Previous report
Cash provided by financing activities for the year ended December 31, 2023 was $5,490, largely attributable to draws on our credit facility driven by advance purchases of certain critical raw materials, partially offset by principle payments on our term loan during the period, plus cash proceeds of $1,248 on stock option exercises under our stock-based compensation plans.
Reworded paragraphs (29)
Previous wording
Consolidated revenues increased by $26,804 or 20.3% to $158,644 for the year ended December 31, 2023 compared to $131,840 for the year ended December 31, 2022. During 2023, we experienced revenue growth of 8.3% for our Battery & Energy Products business and 142.2% for our Communications Systems business. This 2023 performance reflected a $7,797 or 8.4% increase in sales to our commercial customers and a $19,007 or 49.0% increase in sales to government and defense customers. The increase in our commercial business was due to medical sales of $36,945 which increased $9,624 or 35.2% due primarily to higher demand from a large global medical device OEM and the successful launch of our X-5 medical cart battery system. The increase in government and defense sales reflects growth in Battery & Energy Products sales of $2,161 or 8.0% representing higher demand from prime defense contractors and growth in Communications Systems of $16,846 or 142.2% primarily attributable to fulfilling long-lead time orders of vehicle-amplifier adaptors to a global defense contractor for the U.S. Army and of integrated systems of amplifiers and radio vehicle mounts to a major international defense contractor under an ongoing allied country government/defense modernization program. Demand for our products remains strong with our 2023 year-end backlog of $103,535.
Current wording
Consolidated revenues increased by $5,812 or 3.7% to $164,456 for the year ended December 31, 2024 compared to $158,644 for the year ended December 31, 2023. Revenues for 2024 include $6,062 for Electrochem which was acquired on October 31, 2024. Consolidated revenues for 2024 excluding Electrochem were $158,394, representing a decrease of $250 or 0.2% when compared to the prior year. During 2024, we experienced organic revenue growth, excluding Electrochem, of 6.2% for our Battery & Energy Products business and a revenue decline of 29.0% for our Communications Systems business. Our consolidated 2024 performance reflected a $1,240 or 1.2% increase in sales to our commercial customers and a $4,573 or 7.9% increase in sales to government and defense customers. The increase in our commercial business was due to Electrochem sales of $6,062, partially offset by a $1,559 or 4.2% decline in medical sales from $36,946 in 2023 to $35,387 in 2024, primarily reflecting the timing of sales to a large global medical device OEM and a $2,441 or 6.0% decline in oil & gas market sales from $40,562 in 2023 to $38,121 in 2024, excluding Electrochem, due primarily to market uncertainty leading up to the November 2024 U.S. Presidential election. The increase in government and defense sales reflects growth in Battery & Energy Products sales of $12,888 or 44.3% from $29,111 in 2023 to $41,999 in 2024 representing higher demand from prime defense contractors, partially offset by a decline in Communications Systems sales of $8,316 or 29.0% from $28,691 in 2023 to $20,375 in 2024, primarily attributable to fulfilling long-lead time orders of vehicle-amplifier adaptors to a global defense contractor for the U.S. Army and of integrated systems of amplifiers and radio vehicle mounts to a major international defense contractor in 2023. Demand for our products remains strong with our 2024 year-end backlog and high confidence orders of $102,156 representing 62.1% of 2024 revenues.
Previous wording
Gross margin increased to 24.7% for the year ended December 31, 2023 from 22.3% for the year ended December 31, 2022. The 240-basis point improvement was due primarily to the following: better alignment of the timing of our customer price increases with the impact of cost inflation on raw materials and key components; extending the time horizon of our sales & operations planning process (“S&OP”) with both customers and suppliers while upgrading our internal resources responsible for the process to reduce the negative impact of production line start-ups, shutdowns and changeovers due to irregular component availability and lead time extensions; concerted efforts to level-load production resulting in improved labor utilization efficiency and higher cost absorption; and improving our process for launching new products to reduce the cost and time of transitioning to high-volume manufacturing.
Current wording
Gross margin increased to 25.7% for the year ended December 31, 2024 from 24.7% for the year ended December 31, 2023. The 100-basis point improvement was due primarily to the following: better alignment of the timing of our customer price increases with the impact of cost inflation on raw materials and key components; extending the time horizon of our sales & operations planning process (“S&OP”) with both customers and suppliers while upgrading our internal resources responsible for the process to reduce the negative impact of production line start-ups, shutdowns and changeovers due to irregular component availability and lead time extensions; and concerted efforts to level-load production resulting in improved labor utilization efficiency and higher cost absorption.
Previous wording
Operating expenses increased by $454 or 1.6% to $29,725 during the year ended December 31, 2023, compared to $29,271 during the year ended December 31, 2022. The increase is primarily attributable to increased new product development investments, the recording of the $100 deductible on our cybersecurity insurance policy for expenses incurred associated with the January 2023 cyberattack and higher variable compensation, including Officer and Executive Team bonuses and salesforce commissions, and insurance costs. Both periods reflected continued tight control over discretionary spending. Operating expenses as a percentage of revenue was 18.7% for 2023 compared to 22.2% for 2022, a 350-basis point improvement reflecting the sales leverage of our business model.
Current wording
Operating expenses increased by $2,624 or 8.8% to $32,349 during the year ended December 31, 2024, compared to $29,725 during the year ended December 31, 2023. The increase is primarily attributable to one-time costs of $1,294 directly related to the acquisition of Electrochem, and increased investments in new product development and the strengthening of sales and marketing leadership team to expedite organic growth and further leverage our global brand and resources. Both periods reflected continued tight control over discretionary spending. Operating expenses as a percentage of revenue was 19.7% for 2024 compared to 18.7% for 2023, a 100-basis point increase due primarily to the one-time acquisition costs.
Previous wording
Other expenses totaled $358 for the year-ended December 31, 2023 compared to $575 for the year ended December 31, 2022. Other expenses for the 2023 period includes an Employee Retention Credit (“ERC”) of $1,544 under Section 2301 of the Coronavirus Aid, Relief and Economic Security Act which was filed with the Internal Revenue Service during the second quarter of 2023. Interest and financing expense increased $1,065, or 112.0%, from $951 for 2022 to $2,016 for the comparable period in 2023. The increase is primarily due to the financing of our acquisition of Excell in December 2021, working capital funding resulting from our January 2023 cyberattack and rising interest rates. Excluding the ERC gain in the 2023 period, miscellaneous income amounted to $114 for the 2023 period compared to $376 for the 2022 period, primarily attributable to foreign exchange gains and loss due to fluctuations in foreign currency exchange rates.
Current wording
Other expenses totaled $1,664 for the year ended December 31, 2024 compared to $358 for the year ended December 31, 2023. Other expenses for the 2023 period included an Employee Retention Credit (“ERC”) of $1,544 under Section 2301 of the Coronavirus Aid, Relief and Economic Security Act which was filed with the Internal Revenue Service during the second quarter of 2023. Interest and financing expense decreased $76 or 3.8% from $2,016 for 2023 to $1,940 for the comparable period in 2024. The decrease is primarily due to the paydown of the financing of our acquisition of Excell in December 2021, partially offset by the financing of our acquisition of Electrochem on October 31, 2024. Excluding interest expense and the ERC gain in the 2023 period, miscellaneous income amounted to $276 for the 2024 period compared to $114 for the 2023 period, primarily attributable to foreign exchange gains and loss due to fluctuations in foreign currency exchange rates.
Previous wording
*Income Tax (Benefit) Provision.*The income tax provision for 2023 was $1,951, compared to an income tax benefit of $326 for 2022. Our effective tax rate decreased to 21.4% for the 2023 period as compared to 73.1% for the 2022 period, primarily attributable to the year over year increase in income before income taxes. The income tax provision for 2023 is comprised of a $650 current provision for taxes expected to be paid on income primarily in foreign jurisdictions, representing a cash-based effective tax rate of 7.1%, and a $1,301 deferred tax provision which primarily represents non-cash charges for U.S. taxes that we expect will be fully offset by net operating loss carryforwards and other tax credits for the foreseeable future. For the comparable 2022 period, the income tax benefit was comprised of a $636 current tax provision and a $962 deferred tax benefit primarily for U.S. net operating losses and temporary tax differences expected to offset future U.S. taxable income.
Current wording
Income tax provision was $1,892 for the year ended December 31, 2024, compared to $1,951 for the year ended December 31, 2023. Our effective tax rate increased to 22.8% for the 2024 period as compared to 21.4% for the 2023 period, primarily attributable to the geographic mix in earnings and certain non-recurring transaction costs associated with the 2024 acquisition of Electrochem that were not deductible for income tax purposes. The income tax provision for 2024 is comprised of a $660 current provision for taxes expected to be paid on income primarily in foreign jurisdictions, representing a cash-based effective tax rate of 8.0%, and a $1,232 deferred tax provision which primarily represents non-cash charges for U.S. taxes that we expect will be fully offset by net operating loss carryforwards and other tax credits for the foreseeable future. For the comparable 2023 period, the income tax provision was comprised of a $650 current tax provision and a $1,301 deferred tax provision which primarily represents non-cash charges for U.S. taxes that we expect will be fully offset by net operating loss carryforwards and other tax credits for the foreseeable future.
Previous wording
Net income attributable to Ultralife Corporation was $7,197, or $0.44 per share – basic and diluted on a GAAP basis for the year ended December 31, 2023, compared to a net loss of $119, or $0.01 per share – basic and diluted for the year ended December 31, 2022. Adjusted EPS was $0.52 per share on a diluted basis for 2023, compared to a $0.07 loss per share for 2022. Adjusted EPS for 2023 excludes the provision for deferred income taxes of $1,301 which represents non-cash charges primarily for U.S. income taxes that we expect will be fully offset by net operating loss carryforwards and other tax credits for the foreseeable future. Adjusted EPS for 2022 excludes the benefit for deferred income taxes of $962 which represents a non-cash benefit primarily for U.S. net operating losses and temporary tax differences which are expected to offset future U.S. taxable income. See section “Adjusted EPS” on page 36 for a reconciliation of adjusted EPS to EPS.
Current wording
Net income attributable to Ultralife Corporation was $6,312, or $0.38 per share – basic and diluted on a GAAP basis for the year ended December 31, 2024, compared to $7,197, or $0.44 per share – basic and diluted for the year ended December 31, 2023. Adjusted EPS was $0.45 per share on a diluted basis for 2024, compared to $0.52 per share for 2023. Adjusted EPS for 2024 excludes the provision for deferred income taxes of $1,232 which represents non-cash charges primarily for U.S. income taxes that we expect will be fully offset by net operating loss carryforwards and other tax credits for the foreseeable future. Adjusted EPS for 2023 excludes the provision for deferred income taxes of $1,301 which represents non-cash charges primarily for U.S. net operating losses and temporary tax differences which are expected to offset future U.S. taxable income. See section “Adjusted EPS” on page 35 for a reconciliation of adjusted EPS to EPS.
Previous wording
Adjusted EBITDA, defined as net income (loss) attributable to Ultralife Corporation before net interest expense, provision (benefit) for income taxes, depreciation and amortization, plus/minus income/expense that we do not consider reflective of our continuing operations, amounted to $15,703 for the year ended December 31, 2023, compared to $6,575 for the prior year. See the section “Adjusted EBITDA” beginning on page 34 for a reconciliation of adjusted EBITDA to net income attributable to Ultralife.
Current wording
Adjusted EBITDA, defined as net income attributable to Ultralife Corporation before net interest expense, provision (benefit) for income taxes, depreciation and amortization, plus/minus income/expense that we do not consider reflective of our continuing operations, amounted to $16,480 for the year ended December 31, 2024, compared to $15,703 for the prior year. See the section “Adjusted EBITDA” beginning on page 33 for a reconciliation of adjusted EBITDA to net income attributable to Ultralife.
Previous wording
The Company’s liquidity remains solid, with cash on hand of $10,278, working capital of $66,473 and a current ratio (current assets divided by current liabilities) of 3.8. To protect our ability to service our substantial backlog while considering the longer lead times and unreliable delivery dates for critical components, during 2023 we increased inventory by $1,023 or 2.5%. As of December 31, 2022, the Company had cash on hand of $5,713, working capital of $50,075 and a current ratio of 2.7.
Current wording
The Company’s liquidity remains solid, with cash on hand of $6,854, working capital of $67,869 and a current ratio (current assets divided by current liabilities) of 3.3 as of December 31, 2024, as compared to cash on hand of $10,278, working capital of $66,473 and a current ratio of 3.8 as of December 31, 2023.
Previous wording
*Revenues.*Total revenues for the year ended December 31, 2023 amounted to $158,644, an increase of $26,804, or 20.3% from the $131,840 reported for the year ended December 31, 2022.
Current wording
*Revenues.*Total revenues for the year ended December 31, 2024 amounted to $164,456, an increase of $5,812, or 3.7% from the $158,644 reported for the year ended December 31, 2023.
Previous wording
Battery & Energy Products revenues increased $9,958, or 8.3%, for the year ended December 31, 2023 as compared to the prior year. Commercial revenues of this business increased $7,797 or 8.4% from 2022 and now comprise 77.6% of total segment sales versus 77.5% last year. The increase in our commercial business was due to medical sales of $36,945 which increased $9,624 or 35.2% due primarily to the high demand for our batteries used in ventilators, respirators, infusion pumps and other medical devices and the successful launch of our X-5 medical cart battery system, and oil and gas sales of $40,562 which increased $2,235 or 5.8% due to continuing high demand for our down-hole drilling batteries. Industrial and other commercial sales of $23,335 decreased $4,062 or 14.8% primarily due to timing of demand for 9-Volt and our new Thionyl Chloride and thin cell battery cells which are expected to rebound in future periods. Government and defense sales of this business increased $2,161 or 8.0% from 2022 and now comprise 22.4% of total segment sales versus 22.5% last year. The increase primarily reflects higher U.S. demand resulting in year-over-growth of 9.3%. This was partially offset by a 2.3% decrease in sales to allied countries.
Current wording
Battery & Energy Products revenues increased $14,128, or 10.9%, for the year ended December 31, 2024 as compared to the prior year. Commercial revenues of this business increased $1,240 or 1.2% from 2023 and now comprise 70.9% of total segment sales versus 77.6% last year. The increase in our commercial business was due to the acquisition of Electrochem on October 31, 2024 which contributed $6,062 to commercial sales for this segment. This increase was partially offset by a $1,559 or 4.2% decline in medical sales from $36,946 in 2023 to $35,387 in 2024, primarily reflecting the timing of sales to a large global medical device OEM, a $2,441 or 6.0% decline in oil & gas market sales from $40,562 in 2023 to $38,121 in 2024 excluding Electrochem due primarily to market uncertainty leading up to the November 2024 U.S. Presidential election, and an $823 or 3.5% decline in industrial and other commercial sales from $23,335 in 2023 to $22,512 in 2024 due primarily to timing of demand for and market testing of our new Thionyl Chloride and thin cell battery cells which are expected to increase in future periods. Government and defense sales of this business increased $12,888 or 44.3% from 2023 and now comprise 29.1% of total segment sales versus 22.4% last year. The increase primarily reflects higher U.S. demand resulting in year-over-growth of 49.9%. This was partially offset by a 6.1% decrease in sales to allied countries.
Previous wording
Communications Systems revenues increased $16,846 or 142.2% for the year ended December 31, 2023 as compared to the prior year. The increase is primarily attributable to fulfilling long-lead time orders of vehicle-amplifier adaptors to a global defense contractor for the U.S. Army and of integrated systems of amplifiers and radio vehicle mounts to a major international defense contractor under an ongoing allied country government/defense modernization program.
Current wording
Communications Systems revenues decreased $8,316 or 29.0% for the year ended December 31, 2024 as compared to the prior year. The decrease is primarily attributable to fulfilling long-lead time orders of vehicle-amplifier adaptors to a global defense contractor for the U.S. Army and of integrated systems of amplifiers and radio vehicle mounts to a major international defense contractor under an ongoing allied country government/defense modernization program in 2023.
Previous wording
For our Communications Systems business, the backlog decreased $10,824 or 48.4% to $11,538 from $22,362. The year-over-year decrease is primarily a result of fulfilling a July 2022 purchase order valued at approximately $4,600 to supply a global defense prime with our Vehicle Amplifier-Adaptors for the U.S. Army’s Leader radio program, a September 2022 contract valued at approximately $7,500 to supply its integrated system of A-320 amplifiers and A-320HVA radio vehicle mounts to a major international defense contractor for an ongoing government/defense modernization program, and an October 2022 purchase order for $5,500 to supply its vehicle communications systems to a global prime defense contractor for the U.S. Army. We expect additional orders for Leader Radio and Vehicle Amplifier-Adaptors in 2024. The 2023 year-end backlog is related to orders that are expected to ship throughout 2024.
Current wording
For our Communications Systems business, the backlog and high confidence orders decreased $3,966 or 34.4% to $7,572 from $11,538. The year-over-year decrease is primarily attributable to fulfilling long-lead time orders of vehicle-amplifier adaptors to a global defense contractor for the U.S. Army and of integrated systems of amplifiers and radio vehicle mounts to a major international defense contractor under an ongoing allied country government/defense modernization program in 2023. We have received or expect additional orders for Leader Radio and Vehicle Amplifier-Adaptors in 2025. The 2024 year-end backlog and high confidence orders are related to orders that are expected to ship throughout 2025.
Previous wording
Cost of Products Sold and Gross Profit. Cost of products sold for the year ended December 31, 2023 increased $17,004 or 16.6% from the year ended December 31, 2022. Consolidated cost of products sold as a percentage of total revenue decreased from 77.7% for the year ended December 31, 2022 to 75.3% for the year ended December 31, 2023. Correspondingly, consolidated gross margin was 24.7% for the year ended December 31, 2023, compared with 22.3% for the year ended December 31, 2022. The 240-basis point improvement in gross margin is due primarily to better alignment of the timing of our customer price increases with the impact of cost inflation on raw materials and key components; extending the time horizon of our sales & operations planning process (“S&OP”) with both customers and suppliers while upgrading our internal resources responsible for the process to reduce the negative impact of production line start-ups, shutdowns and changeovers due to irregular component availability and lead time extensions; concerted efforts to level-load production resulting in improved labor utilization efficiency and higher cost absorption; and improving our process for launching new products to reduce the cost and time of transitioning to high-volume manufacturing.
Current wording
Cost of Products Sold and Gross Profit. Cost of products sold for the year ended December 31, 2024 increased $2,698 or 2.3% from the year ended December 31, 2023. Consolidated cost of products sold as a percentage of total revenue decreased from 75.3% for the year ended December 31, 2023 to 74.3% for the year ended December 31, 2024. Correspondingly, consolidated gross margin was 25.7% for the year ended December 31, 2024, compared with 24.7% for the year ended December 31, 2023. The 100-basis point improvement in gross margin is due primarily to better alignment of the timing of our customer price increases with the impact of cost inflation on raw materials and key components; extending the time horizon of our sales & operations planning process (“S&OP”) with both customers and suppliers while upgrading our internal resources responsible for the process to reduce the negative impact of production line start-ups, shutdowns and changeovers due to irregular component availability and lead time extensions; and concerted efforts to level-load production resulting in improved labor utilization efficiency and higher cost absorption.
Previous wording
For our Battery & Energy Products segment, the cost of products sold increased $5,337 or 5.7%, from the year ended December 31, 2022. Battery & Energy Products’ gross profit for 2023 was $30,775 or 23.7% of revenues, an increase of $4,621 or 17.7% from gross profit of $26,154, or 21.8% of revenues, for 2022. Battery & Energy Products’ gross margin increased for the year ended December 31, 2023 by 190 basis points from the prior year to 23.7% primarily due to improved price realization as well as our concerted effort to level-load production more evenly resulting in labor utilization efficiencies and higher cost absorption.
Current wording
For our Battery & Energy Products segment, the cost of products sold increased $8,586 or 8.7%, from the year ended December 31, 2023. Battery & Energy Products’ gross profit for 2024 was $36,317 or 25.2% of revenues, an increase of $5,542 or 18.0% from gross profit of $30,775, or 23.7% of revenues, for 2023. Battery & Energy Products’ gross margin increased for the year ended December 31, 2024 by 150 basis points from the prior year to 25.2% primarily due to improved price realization as well as our concerted effort to level-load production more evenly resulting in labor utilization efficiencies and higher cost absorption.
Previous wording
For our Communications Systems segment, the cost of products sold increased by $11,667 or 135.7% from the year ended December 31, 2022. Communications Systems’ gross profit for the year ended December 31, 2023 was $8,425 or 29.4% of revenues, an increase of $5,179 or 159.6% from gross profit of $3,246 or 27.4% of revenues for the year ended December 31, 2022. The 200 basis points increase in gross margin during 2022 to 29.4% is primarily due to higher factory throughput resulting in higher cost absorption.
Current wording
For our Communications Systems segment, the cost of products sold decreased by $5,888 or 29.1% from the year ended December 31, 2023. Communications Systems’ gross profit for the year ended December 31, 2024 was $5,997 or 29.4% of revenues, a decrease of $2,428 or 28.8% from gross profit of $8,425 or 29.4% of revenues for the year ended December 31, 2023.
Previous wording
*Operating Expenses.*Total operating expenses for the year ended December 31, 2023 increased $454 or 1.6% from the year ended December 31, 2022. The increase in operating expense is primarily attributable to increased new product development investments, the recording of the $100 deductible on our cybersecurity insurance policy for expenses associated with the January 2023 cyberattack and higher variable compensation, including officer and executive team bonuses and salesforce commissions, and insurance costs. Both periods reflected our continued tight control over discretionary spending.
Current wording
*Operating Expenses.*Total operating expenses for the year ended December 31, 2024 increased $2,624 or 8.8% from the year ended December 31, 2023. The increase is primarily attributable to one-time costs of $1,294 directly related to the acquisition of Electrochem, and increased investments in new product development and the strengthening of our sales and marketing leadership team to expedite organic growth and further leverage our global brand and resources. Both periods reflected continued tight control over discretionary spending.
Previous wording
Overall, operating expenses as a percentage of revenues was 18.7% for the year ended December 31, 2023 compared to 22.2% for the comparable 2022 period. Amortization expense associated with intangible assets related to our acquisitions decreased to $889 for the year-ended December 31, 2023 ($792 in selling, general and administrative expenses and $97 in research and development costs) from $1,282 for the year ended December 31, 2022 ($1,185 in selling, general and administrative expenses and $97 in research and development costs) as a result of the amortization periods of certain intangible assets associated with our acquisition of Excell in December 2021. Research and development costs were $7,531 in 2023, an increase of $450 or 6.4%, from $7,081 reported in 2022. This increase is largely attributable to investments in new product development. Selling, general, and administrative expenses increased $4 to $22,194 for the year ended December 31, 2023 from $22,190 for the year ended December 31, 2022. We continued tight control over discretionary spending across the Company.
Current wording
Overall, operating expenses as a percentage of revenues was 19.7% for the year ended December 31, 2024 compared to 18.7% for the comparable 2023 period. Amortization expense associated with intangible assets related to our acquisitions increased to $1,032 for the year ended December 31, 2024 ($929 in selling, general and administrative expenses and $103 in research and development costs) from $889 for the year ended December 31, 2023 ($792 in selling, general and administrative expenses and $97 in research and development costs) as a result of the amortization periods of intangible assets associated with our acquisition of Electrochem on October 31, 2024. Research and development costs were $8,268 in 2024, an increase of $737 or 9.8%, from $7,531 reported in 2023. This increase is attributable to additional investments in new product development and our acquisition of Electrochem which contributed $227 of the increase. Selling, general, and administrative expenses increased $1,887 or 8.5% to $24,081 for the year-ended December 31, 2024 from $22,194 for the year ended December 31, 2023. The increase resulted from one-time costs of $1,294 directly related to the acquisition of Electrochem and $469 contributed by Electrochem. We continued tight control over discretionary spending across the Company.
Previous wording
*Other Expense.*Other expense totaled $358 for the year ended December 31, 2023 compared to $575 for the year ended December 31, 2022. Other expenses for 2023 includes an ERC of $1,544 under Section 2301 of the Coronavirus Aid, Relief and Economic Security Act which was filed with the Internal Revenue Service during the second quarter of 2023. Interest and financing expense increased $1,065, or 112.0%, from $951 for 2022 to $2,016 for the comparable period in 2023. The increase is primarily due to the financing of our acquisition of Excell in December 2021, working capital funding resulting from our January 2023 cyberattack and rising interest rates. Excluding the ERC gain in the 2023 period, miscellaneous income amounted to $114 for the 2023 period compared to $376 for the 2022 period, primarily attributable to foreign exchange gains and loss due to fluctuations in foreign currency exchange rates.
Current wording
*Other Expense.*Other expense totaled $1,664 for the year ended December 31, 2024 compared to $358 for the year ended December 31, 2023. Other expenses for 2023 includes an ERC of $1,544 under Section 2301 of the Coronavirus Aid, Relief and Economic Security Act which was filed with the Internal Revenue Service during the second quarter of 2023. Interest and financing expense decreased $76 or 3.8% from $2,016 for 2023 to $1,940 for the comparable period in 2024. The decrease is primarily due to the paydown of the financing of our acquisition of Excell in December 2021, partially offset by the financing of our acquisition of Electrochem on October 31, 2024. Excluding interest expense and the ERC gain in the 2023 period, miscellaneous income amounted to $276 for the 2024 period compared to $114 for the 2023 period, primarily attributable to foreign exchange gains and loss due to fluctuations in foreign currency exchange rates.
Previous wording
Income tax provision was $1,951 for the year ended December 31, 2023, compared to an income tax benefit of $326 for the year ended December 31, 2022. Our effective tax rate decreased to 21.4% for the 2023 period as compared to 73.1% for the 2022 period, primarily attributable to the year over year increase in income before income taxes. The income tax provision for 2023 is comprised of a $650 current provision for taxes expected to be paid on income primarily in foreign jurisdictions, representing a cash-based effective tax rate of 7.1%, and a $1,301 deferred tax provision which primarily represents non-cash charges for U.S. taxes that we expect will be fully offset by net operating loss carryforwards and other tax credits for the foreseeable future. For the comparable 2022 period, the income tax benefit was comprised of a $636 current tax provision and a $962 deferred tax benefit primarily for U.S. pre-tax losses and temporary tax differences expected to offset future U.S. taxable income.
Current wording
Income tax provision was $1,892 for the year ended December 31, 2024, compared to $1,951 for the year ended December 31, 2023. Our effective tax rate increased to 22.8% for the 2024 period as compared to 21.4% for the 2023 period, primarily attributable to the geographic mix in earnings and certain non-recurring transaction costs associated with the 2024 acquisition of Electrochem that were not deductible for income tax purposes. The income tax provision for 2024 is comprised of a $660 current provision for taxes expected to be paid on income primarily in foreign jurisdictions, representing a cash-based effective tax rate of 8.0%, and a $1,232 deferred tax provision which primarily represents non-cash charges for U.S. taxes that we expect will be fully offset by net operating loss carryforwards and other tax credits for the foreseeable future. For the comparable 2023 period, the income tax provision was comprised of a $650 current tax provision and a $1,301 deferred tax provision which primarily represents non-cash charges for U.S. taxes that we expect will be fully offset by net operating loss carryforwards and other tax credits for the foreseeable future.
Previous wording
Net income attributable to Ultralife Corporation was $7,197 for 2023, as compared to a net loss of $119 for 2022. Net income attributable to Ultralife Corporation common stockholders per diluted share was $0.44 for 2023 and a net loss of $0.01 for 2022. Adjusted EPS was $0.52 per share on a diluted basis for 2023, compared to a $0.07 loss per share for 2022. Adjusted EPS for 2023 excludes the provision for deferred income taxes of $1,301 which represents non-cash charges primarily for U.S. income taxes that we expect will be fully offset by net operating loss carryforwards and other tax credits for the foreseeable future. Adjusted EPS for 2022 excludes the benefit for deferred income taxes of $962 which represents a non-cash benefit primarily for U.S. net operating losses and temporary tax differences which are expected to offset future U.S. taxable income. See section “Adjusted EPS” on page 36 for a reconciliation of adjusted EPS to EPS.
Current wording
Net income attributable to Ultralife Corporation was $6,312, or $0.38 per share – basic and diluted on a GAAP basis for the year ended December 31, 2024, compared to $7,197, or $0.44 per share – basic and diluted for the year ended December 31, 2023. Adjusted EPS was $0.45 per share on a diluted basis for 2024, compared to $0.52 per share for 2023. Adjusted EPS for 2024 excludes the provision for deferred income taxes of $1,232 which represents non-cash charges primarily for U.S. income taxes that we expect will be fully offset by net operating loss carryforwards and other tax credits for the foreseeable future. Adjusted EPS for 2023 excludes the provision for deferred income taxes of $1,301 which represents non-cash charges primarily for U.S. net operating losses and temporary tax differences which are expected to offset future U.S. taxable income. See section “Adjusted EPS” on page 35 for a reconciliation of adjusted EPS to EPS.
Previous wording
Weighted average common shares outstanding used to compute diluted earnings per share increased from 16,125,239 for the 2022 period to 16,226,407 for the 2023 period, primarily due to the issuance of common stock upon the exercise of stock options and the vesting of restricted stock in 2023.
Current wording
Weighted average common shares outstanding used to compute diluted earnings per share increased from 16,226,407 for the 2023 period to 16,767,132 for the 2024 period, due to the issuance of common stock upon the exercise of stock options in 2024 and a higher average stock price for 2024 as compared to 2023.
Previous wording
As of December 31, 2023, cash totaled $10,278 (including restricted cash of $82), an increase of $4,565 from the $5,713 as of December 31, 2022, primarily attributable to our profitable operations in 2023.
Current wording
As of December 31, 2024, cash totaled $6,854, a decrease of $3,424 from the $10,278 as of December 31, 2023, primarily attributable to our profitable operations in 2023.
Previous wording
During the year ended December 31, 2023, cash generated from operations was $1,929, as compared to $1,263 used in operations for the year ended December 31, 2022. For the 2023 period, cash provided by our operations was comprised of net income of $7,166 plus non-cash items totaling $5,804 for depreciation, amortization, stock-based compensation, and deferred taxes, partially offset by $11,041 attributable to increased working capital. The increase in working capital was driven by $3,890 attributable to increased accounts receivable reflecting the 23.4% year-over year increase in fourth quarter sales, $3,098 attributable to increased prepaid expenses and other current assets including a $1,544 receivable resulting from our ERC under Section 2301 of the Coronavirus Aid, Relief and Economic Security Act which was filed with the Internal Revenue Service during the second quarter of 2023, $943 attributable to increased inventory to secure key components for timely shipments in 2024, and $3,110 attributable to decreased accounts payable and other liabilities reflective of the Company’s improved cash flow in 2023.
Current wording
During the year ended December 31, 2024, cash generated from operations was $16,636, as compared to $1,929 for the year ended December 31, 2023. For the 2024 period, cash provided by our operations was comprised of net income of $6,409 plus non-cash items totaling $6,340 for depreciation, amortization, stock-based compensation, and deferred taxes, and other non-cash operating expenses, plus $3,887 attributable to a reduction in working capital, driven primarily by the timing of collections and payments.
Previous wording
Cash used in investing activities for the year ended December 31, 2023 was $2,552 for capital expenditures, reflecting investments in equipment for new products transitioning to high-volume manufacturing, as compared to $1,679 capital spending for the year ended December 31, 2022.
Current wording
Cash used in investing activities for the year ended December 31, 2024 was $49,954, comprised of $48,022 for the acquisition of Electrochem and $1,932 for capital expenditures, reflecting investments in equipment for new products transitioning to high-volume manufacturing, as compared to $2,552 capital spending for the year ended December 31, 2023.
Previous wording
As of December 31, 2023, the Company had $6,167 outstanding principal on the Term Loan Facility, of which $2,000 is due to be paid in 2024, and $19,580 outstanding principal on the Revolving Credit Facility. The Company is in full compliance with its debt covenants under the Credit Facilities.
Current wording
As of December 31, 2024, the Company had $55,000 outstanding principal on the Term Loan, of which $2,750 is due to be paid in 2025, and no amounts outstanding on the Revolving Credit Facility. The Company is in full compliance with its debt covenants under the Credit Facilities.
Previous wording
As of December 31, 2023, we had made commitments to purchase approximately $890 of production machinery and equipment.
Current wording
As of December 31, 2024, we had made commitments to purchase approximately $752 of production machinery and equipment.
Previous wording
Separately priced extended warranty contracts are offered on certain products. Extended warranties are treated as separate performance obligations and recognized to revenue evenly over the term of the respective contract. Revenue not yet recognized on extended warranty contracts is recorded as deferred revenue on the consolidated balance sheet.
Current wording
Separately priced extended warranty contracts are offered on certain products. Extended warranties are treated as separate performance obligations and recognized to revenue evenly over the term of the respective contract. Revenue not yet recognized on extended warranty contracts is recorded as deferred revenue on the consolidated balance sheets.
Previous wording
As of December 31, 2023, we concluded that it is more likely than not that our U.S. deferred tax assets will be fully realized based on management’s assessment. In evaluating the realizability of our U.S. deferred tax assets, management considered all available evidence, both positive and negative, weighted based on objective verifiability. Our assessment also considered our ability to fully utilize before expiration our domestic net operating loss carryforwards, which expire 2031 thru 2035, and our general business tax credit carryforwards, which expire 2028 thru 2043. As of December 31, 2023, our domestic net operating loss carryforwards and general business tax credits were approximately $27,200 and $2,900, respectively.
Current wording
As of December 31, 2024, we concluded that it is more likely than not that our U.S. deferred tax assets will be fully realized based on management’s assessment. In evaluating the realizability of our U.S. deferred tax assets, management considered all available evidence, both positive and negative, weighted based on objective verifiability. Our assessment also considered our ability to fully utilize before expiration our domestic net operating loss carryforwards, which expire 2031 thru 2035, and our general business tax credit carryforwards, which expire 2028 thru 2044. As of December 31, 2024, our domestic net operating loss carryforwards and general business tax credits were $15,000 and $3,200, respectively.
Previous wording
As of December 31, 2023, for certain past operations in the U.K., we continue to report a valuation allowance for net operating loss carryforwards of approximately $9,800, nearly all of which can be carried forward indefinitely. Management has concluded that utilization of the U.K. net operating losses may be limited due to the change in the past U.K. operation, and that they cannot currently be used to reduce taxable income of our other U.K. subsidiary, Accutronics Ltd. As of December 31, 2023, we have not recognized a valuation allowance against our other foreign deferred tax assets, including net operating loss carryforwards of $1,300 which expire 2028 thru 2033, as we believe that it is more likely than not that they will be fully realized. We will continue to evaluate the realizability of our deferred tax assets in future periods.
Current wording
As of December 31, 2024, for certain past operations in the U.K., we continue to report a valuation allowance for net operating loss carryforwards of approximately $9,600, nearly all of which can be carried forward indefinitely. Management has concluded that utilization of the U.K. net operating losses may be limited due to the change in the past U.K. operation, and that they cannot currently be used to reduce taxable income of our other U.K. subsidiary, Accutronics Ltd. There are no other deferred tax assets related to the past U.K. operations.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
As of December 31, 2024, we have not recognized a valuation allowance against our other foreign deferred tax assets, including net operating loss carryforwards of $1,000 which expire 2029 thru 2033, as we believe that it is more likely than not that they will be fully realized. We will continue to evaluate the realizability of our deferred tax assets in future periods.