Ultralife (ULBI) Q4 2024 earnings summary

Executive summary

• Q4 2024 sales were $43.9M, with operating income of $1.5M including $1.1M in one-time Electrochem acquisition costs, resulting in $0.01 EPS; Electrochem contributed $6.1M to Q4 sales.

• Full-year 2024 sales reached $164.5M with $10M operating income and $0.38 EPS; adjusted EBITDA for FY 2024 was $16.5M.

• Backlog and high-confidence orders at year-end were $102.2M, up from $78.0M at the end of Q3, representing 62% of trailing twelve-month sales.

• Electrochem acquisition completed October 31, 2024, adding vertical integration, cost synergies, and expansion into adjacent markets; integration underway.

• Battery & Energy Products sales rose 11.7% to $39.9M, while Communications Systems sales fell 55.1% to $4.0M year-over-year.

Financial highlights

• Q4 consolidated revenues were $43.9M, down from $44.5M in Q4 2023.

• Battery and energy product segment sales were $39.9M (up from $35.7M), but excluding Electrochem, segment sales declined 5.3% year-over-year.

• Communication systems segment sales dropped 55.1% to $4M due to large prior-year shipments and order timing.

• Q4 gross profit was $10.6M (down 7% YoY), with gross margin at 24.2% (down 140 bps); Battery & Energy Products Q4 gross margin was 23.4%, Communications Systems gross margin was 31.9%.

• Net income for Q4 was $0.2M ($0.01/share), down from $2.9M ($0.17/share) in Q4 2023; adjusted EBITDA for Q4 was $3.9M (8.9% of sales), down from $4.8M (10.7%).

Outlook and guidance

• Entered 2025 with a strong backlog and new product launches planned for high-growth markets, supported by Electrochem integration.

• Confident in ability to deliver profitable growth, incremental cash flow, debt reduction, and support for strategic capex.

• Initial production orders for thin cell medical products expected by mid-2025, with ramp dependent on hospital adoption.

• Main integration activities for Electrochem, including ERP carve-out, expected to complete in H1 2025.

• Backlog and replenishment rates remain high, supporting future growth.