Ultralife (ULBI) Q3 2025 earnings summary

Executive summary

• Q3 2025 sales rose 21.5% year-over-year to $43.4 million, driven by the Electrochem acquisition and higher government/defense demand, but the quarter ended with a GAAP net loss of $0.07 per share due to $1.1 million in one-time costs and supply chain quality issues impacting gross margin.

• Strategic actions included the closure of the Calgary facility, transition and integration of Electrochem Solutions, and a company-wide rebranding initiative to unify market identity and reduce redundancy.

• Operating loss was $1.0 million versus operating income of $0.5 million last year, impacted by quality issues, non-recurring costs, and delayed communication systems sales.

• Adjusted EBITDA was $2.05 million (4.7% of sales), up from $1.92 million (5.4% of sales) year-over-year.

• Backlog at quarter-end was $90.1 million, up 6.5% sequentially.

Financial highlights

• Q3 2025 revenues: $43.4 million (+21.5% YoY); gross profit: $9.6 million (22.2% margin), but gross margin declined from 24.3% due to manufacturing inefficiencies and sales mix.

• Battery & Energy Products segment revenue was $39.95 million (+22.8% YoY), with organic growth of 1.9% excluding Electrochem; Communications Systems revenue was $3.43 million (+8.2% YoY).

• Operating expenses rose to $10.6 million, reflecting acquisition and closure costs.

• Net loss attributable to shareholders was $1.22 million, or $0.07 per share, compared to net income of $0.3 million, or $0.02 per share, last year.

• Cash at quarter-end was $9.3 million, up from $6.85 million at year-end 2024.

Outlook and guidance

• Entering 2026 with the Electrochem transition completed, expanded product offerings, reduced facility count, and unified back office systems.

• Focus remains on converting product development into revenue, advancing vertical integration, and operational efficiency.

• Management expects annual savings of $0.8 million after the Calgary facility closure, to be completed in Q1 2026.

• Management expects positive operating cash flow and sufficient liquidity from operations and the Revolving Credit Facility to meet funding needs.

• Expect benefits from new product launches and cost-saving initiatives.