Yahoo Finance Ultralife Corp (ULBI) Q1 2024 Earnings Call Transcript Highlights: Strong Growth and Strategic Wins
Q1 Sales: $42 million
Operating Income: $4.1 million
Earnings Per Share (EPS): $0.18
Gross Margin: Improved to 27.4%
Revenue Increase: 31.4% year-over-year
Government Defense Sales: Increased by 83.4%
Commercial Sales: Increased by 8.6%
Battery & Energy Products Revenue: $35 million, up 22.9%
Communications Systems Revenue: $6.9 million, doubled from last year
Consolidated Gross Profit: $11.5 million, up 54.3%
Operating Expenses: $7.4 million, stable year-over-year
Net Income: $2.9 million compared to a net loss of $0.3 million last year
Backlog: $97.4 million, representing almost 60% of TTM sales
Adjusted EBITDA: $5.2 million or 12.5% of sales
Working Capital: Ended Q1 with $70.9 million
Debt Reduction: Reduced by over $0.5 million in Q1
Release Date: April 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: As far as the gross margin initiatives, how much of the improvement here is the benefit of volumes versus those strategic initiatives? A: (Philip Fain, CFO) The improvement in gross margin is shared between increased volume and strategic initiatives. The volume increase helps spread fixed costs more effectively, enhancing gross margins, while strategic initiatives have also contributed to better price realization.
Q: Regarding the recent defense funding for Ukraine and elsewhere, should we expect that to benefit your defense work needs, or has anything been pulled forward into recent quarters? A: (Michael Manna, CEO) While the funding is expected to benefit the defense sector, the impact on Ultralife might take four to six weeks to materialize as the funds typically go to primes first, who then place orders with us.
Q: How should we think about the inventory levels through the year? A: (Philip Fain, CFO) Inventory levels are closely tied to purchase orders and delivery timings. The company aims for level loading to optimize inventory management, which has significantly contributed to gross margin improvements.
Q: Can you provide an update on the stem cell opportunity and any timelines for FDA certification or trials? A: (Michael Manna, CEO) Initial testing is expected to be completed over the summer, with hopes for production orders within the year. The company continues to ship small quantities to this customer for other applications.
Q: How should we think about the cadence of EL. 8,000 orders? Are these orders lumpy, or is this the beginning of a more consistent flow? A: (Michael Manna, CEO) It's too early to definitively predict the order flow for EL. 8,000. The cadence depends on whether Ultralife is integrating the servers or just selling the cases, as well as the availability of servers and customer order patterns.
Q: What is the impact of the decline in the oil and gas market? Is it due to end market dynamics? A: (Michael Manna, CEO) The decline is not attributed to market dynamics but rather to a specific customer overbuying in Q4, which slowed down orders in Q1. However, orders are picking up, and the company expects a strong annual performance in this sector.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
