9 unchanged sentences
Any future payment of dividends will depend upon our financial condition, capital requirements and earnings, as well as upon other factors that our Board of Directors may deem relevant.
−Removed: MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
−Removed: The following discussion and analysis should be read in conjunction with the accompanying consolidated financial statements and notes thereto appearing in Item 8 of this Form 10-K.
−Removed: The financial information in this Management’s Discussion and Analysis of Financial Condition and Results of Operations is presented in thousands of dollars, except for share and per share amounts.
−Removed: All figures presented below represent results from continuing operations, unless otherwise specified.
−Removed: We offer products and services ranging from power solutions to communications and electronics systems to customers across the globe in the government, defense and commercial sectors.
−Removed: With an emphasis on strong engineering and a collaborative approach to problem solving, we design, manufacture, install and maintain power and communications systems including rechargeable and non-rechargeable batteries, communications and electronics systems and accessories and custom engineered systems.
−Removed: We sell our products internationally through a variety of trade channels, including original equipment manufacturers (“OEMs”), industrial and defense supply distributors and directly to U.S.
−Removed: and international defense departments.
−Removed: We report our results in two operating segments:
−Removed: Battery & Energy Products and Communications Systems.
−Removed: The Battery & Energy Products segment includes Lithium 9-volt, cylindrical, thin cell and other non-rechargeable batteries, in addition to rechargeable batteries, uninterruptable power supplies, charging systems and accessories.
−Removed: The Communications Systems segment includes RF amplifiers, power supplies, cable and connector assemblies, amplified speakers, equipment mounts, case equipment, man-portable systems, integrated communication systems for fixed or vehicle applications and communications and electronics systems design.
−Removed: We believe that reporting performance at the gross profit level is the best indicator of segment performance.
−Removed: As such, we report segment performance at the gross profit level and operating expenses as Corporate charges.
−Removed: We continually evaluate ways to grow, including opportunities to expand through mergers, acquisitions and joint ventures, which we believe can broaden the scope of our products and services, expand operating and market opportunities and provide the ability to enter new lines of business synergistic with our portfolio of product offerings.
−Removed: In January 2016, we acquired Accutronics Limited (“Accutronics”), a U.K.
−Removed: corporation based in Newcastle-under-Lyme, U.K., a leading independent designer and manufacturer of smart batteries and charger systems for high-performance, feature-laden portable and handheld electronic devices.
−Removed: Our acquisition of Accutronics advanced our strategy of commercial revenue diversification, expanded our geographic penetration, and achieved revenue growth from new product development.
−Removed: On May 1, 2019, we acquired Southwest Electronic Energy Corporation, a Texas corporation (“SWE”), and a leading designer and manufacturer of high-performance smart battery systems and battery packs to customer specifications using Lithium cells.
−Removed: SWE serves a variety of industrial markets, including oil and gas, remote monitoring, process control and marine, which demand uncompromised safety, service, reliability and quality.
−Removed: We acquired SWE as a bolt-on acquisition which has supported our strategy of commercial revenue diversification by providing entry to the oil and gas exploration and production, and subsea electrification markets, which were previously unserved by us.
−Removed: Another key benefit has been obtaining a highly valuable technical team of battery pack and charger system engineers and technicians which has added to our new product development-based revenue growth initiatives in our commercial end-markets particularly asset tracking, smart metering and other industrial applications.
−Removed: On December 13, 2021, we acquired Excell Battery Canada Inc., a British Columbia corporation (“Excell Canada”) and 656700 B.C.
−Removed: Ltd., a British Columbia corporation (“656700”) and its wholly owned subsidiary, Excell Battery Corporation USA, a Texas corporation (“Excell USA” together with Excell Canada and 656700, collectively, “Excell”), which operate under the name Excell Battery Group.
−Removed: Based in Canada with U.S.
−Removed: operations, the Excell Battery Group is a leading independent designer and manufacturer of high-performance smart battery systems, battery packs and monitoring systems to customer specifications.
−Removed: Excell serves a variety of industrial markets including downhole drilling, OEM industrial and medical devices, automated meter reading, and mining, marine and other mission critical applications which demand uncompromised safety, service, reliability and quality.
−Removed: We acquired Excell as an important component of our strategy to diversify commercial revenue and expand the end markets we serve.
−Removed: Acquiring Excell has allowed us to further scale our Battery & Energy Products business and drive the operating leverage of our business model, expand into OEM device verticals that we do not presently serve, enhance our contributed value to both our customers and realize cost synergies.
−Removed: Furthermore, we utilize Excell experienced technical resources in our global new product initiatives and add a complementary line of highly engineered products, both existing and in development, that are costly for our customers to substitute with products of a competitor.
−Removed: On October 31, 2024, we acquired Electrochem Solutions, Inc, a Massachusetts corporation (“Electrochem”).
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: Furthermore, with Electrochem we are increasing our value to our customers and significantly strengthening our competitive position in our end markets.
−Removed: Currently, we do not experience significant seasonal sales trends in either of our operating segments, although sales to the U.S.
−Removed: Department of Defense and other international defense organizations can be sporadic based on the needs of those particular customers and allocated funding levels.
−Removed: 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.
−Removed: Revenues for 2024 include $6,062 for Electrochem which was acquired on October 31, 2024.
−Removed: Consolidated revenues for 2024 excluding Electrochem were $158,394, representing a decrease of $250 or 0.2% when compared to the prior year.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: Presidential election.
−Removed: 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.
−Removed: Army and of integrated systems of amplifiers and radio vehicle mounts to a major international defense contractor in 2023.
−Removed: 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.
−Removed: Gross margin increased to 25.7% for the year ended December 31, 2024 from 24.7% for the year ended December 31, 2023.
−Removed: The 100-basis point improvement was due primarily to the following:
−Removed: better alignment of the timing of our customer price increases with the impact of cost inflation on raw materials and key components;
−Removed: 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;
−Removed: and concerted efforts to level-load production resulting in improved labor utilization efficiency and higher cost absorption.
−Removed: 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.
−Removed: 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.
−Removed: Both periods reflected continued tight control over discretionary spending.
−Removed: 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.
−Removed: Other expenses totaled $1,664 for the year ended December 31, 2024 compared to $358 for the year ended December 31, 2023.
−Removed: 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.
−Removed: Interest and financing expense decreased $76 or 3.8% from $2,016 for 2023 to $1,940 for the comparable period in 2024.
−Removed: 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.
−Removed: 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.
−Removed: Income tax provision was $1,892 for the year ended December 31, 2024, compared to $1,951 for the year ended December 31, 2023.
−Removed: 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.
−Removed: 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.
−Removed: taxes that we expect will be fully offset by net operating loss carryforwards and other tax credits for the foreseeable future.
−Removed: 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.
−Removed: taxes that we expect will be fully offset by net operating loss carryforwards and other tax credits for the foreseeable future.
−Removed: 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.
−Removed: Adjusted EPS was $0.45 per share on a diluted basis for 2024, compared to $0.52 per share for 2023.
−Removed: Adjusted EPS for 2024 excludes the provision for deferred income taxes of $1,232 which represents non-cash charges primarily for U.S.
−Removed: income taxes that we expect will be fully offset by net operating loss carryforwards and other tax credits for the foreseeable future.
−Removed: Adjusted EPS for 2023 excludes the provision for deferred income taxes of $1,301 which represents non-cash charges primarily for U.S.
−Removed: net operating losses and temporary tax differences which are expected to offset future U.S.
−Removed: taxable income.
−Removed: See section “Adjusted EPS” on page 35 for a reconciliation of adjusted EPS to EPS.
−Removed: 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.
−Removed: See the section “Adjusted EBITDA” beginning on page 33 for a reconciliation of adjusted EBITDA to net income attributable to Ultralife.
−Removed: 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.
−Removed: 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;
−Removed: a plan to complete the integration of Electrochem and realize manufacturing cost efficiencies and U.S.-based vertical integration savings;
−Removed: a schedule of new products to launch;
−Removed: and a strengthened sales and marketing leadership team to expedite organic growth and further leverage our global brand and resources.
−Removed: 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.
−Removed: Results of Operations
−Removed: Year ended December 31, 2024 compared with the year ended December 31, 2023:
−Removed: Year Ended December 31,
−Removed: Battery & Energy Products
−Removed: Communications Systems
−Removed: Cost of products sold:
−Removed: Battery & Energy Products
−Removed: Communications Systems
−Removed: Gross profit:
−Removed: Battery & Energy Products
−Removed: Communications Systems
−Removed: Operating expenses
−Removed: Operating income
−Removed: Other expenses, net
−Removed: Income before income taxes
−Removed: Income tax provision
−Removed: Net income (loss) attributable to non-controlling interest
−Removed: Net income attributable to Ultralife Corporation
−Removed: Net income attributable to Ultralife common shares – basic
−Removed: Net income attributable to Ultralife common shares – diluted
−Removed: Weighted average shares outstanding – basic
−Removed: Weighted average shares outstanding – diluted
−Removed: 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.
−Removed: Battery & Energy Products revenues increased $14,128, or 10.9%, for the year ended December 31, 2024 as compared to the prior year.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: The increase primarily reflects higher U.S.
−Removed: demand resulting in year-over-growth of 49.9%.
−Removed: This was partially offset by a 6.1% decrease in sales to allied countries.
−Removed: Communications Systems revenues decreased $8,316 or 29.0% for the year ended December 31, 2024 as compared to the prior year.
−Removed: The decrease is primarily attributable to fulfilling long-lead time orders of vehicle-amplifier adaptors to a global defense contractor for the U.S.
−Removed: 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.
−Removed: 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.
−Removed: For our Battery & Energy Products business, the backlog and high confidence orders increased $2,587 or 2.8% to $94,584 from $91,997.
−Removed: The 2024 year-end backlog and high confidence orders are primarily related to orders expected to ship in 2025.
−Removed: For our Communications Systems business, the backlog and high confidence orders decreased $3,966 or 34.4% to $7,572 from $11,538.
−Removed: 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.
−Removed: 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.
−Removed: We have received or expect additional orders for Leader Radio and Vehicle Amplifier-Adaptors in 2025.
−Removed: The 2024 year-end backlog and high confidence orders are related to orders that are expected to ship throughout 2025.
−Removed: Cost of Products Sold and Gross Profit.
−Removed: Cost of products sold for the year ended December 31, 2024 increased $2,698 or 2.3% from the year ended December 31, 2023.
−Removed: 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.
−Removed: 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.
−Removed: 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;
−Removed: 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;
−Removed: and concerted efforts to level-load production resulting in improved labor utilization efficiency and higher cost absorption.
−Removed: For our Battery & Energy Products segment, the cost of products sold increased $8,586 or 8.7%, from the year ended December 31, 2023.
−Removed: 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.
−Removed: 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.
−Removed: For our Communications Systems segment, the cost of products sold decreased by $5,888 or 29.1% from the year ended December 31, 2023.
−Removed: 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.
−Removed: Operating Expenses.
−Removed: Total operating expenses for the year ended December 31, 2024 increased $2,624 or 8.8% from the year ended December 31, 2023.
−Removed: 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.
−Removed: Both periods reflected continued tight control over discretionary spending.
−Removed: 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.
−Removed: 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.
−Removed: Research and development costs were $8,268 in 2024, an increase of $737 or 9.8%, from $7,531 reported in 2023.
−Removed: This increase is attributable to additional investments in new product development and our acquisition of Electrochem which contributed $227 of the increase.
−Removed: 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.
−Removed: The increase resulted from one-time costs of $1,294 directly related to the acquisition of Electrochem and $469 contributed by Electrochem.
−Removed: We continued tight control over discretionary spending across the Company.
−Removed: Other Expense.
−Removed: Other expense totaled $1,664 for the year ended December 31, 2024 compared to $358 for the year ended December 31, 2023.
−Removed: 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.
−Removed: Interest and financing expense decreased $76 or 3.8% from $2,016 for 2023 to $1,940 for the comparable period in 2024.
−Removed: 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.
−Removed: 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.
−Removed: Income tax provision was $1,892 for the year ended December 31, 2024, compared to $1,951 for the year ended December 31, 2023.
−Removed: 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.
−Removed: 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.
−Removed: taxes that we expect will be fully offset by net operating loss carryforwards and other tax credits for the foreseeable future.
−Removed: 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.
−Removed: taxes that we expect will be fully offset by net operating loss carryforwards and other tax credits for the foreseeable future.
−Removed: 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.
−Removed: Adjusted EPS was $0.45 per share on a diluted basis for 2024, compared to $0.52 per share for 2023.
−Removed: Adjusted EPS for 2024 excludes the provision for deferred income taxes of $1,232 which represents non-cash charges primarily for U.S.
−Removed: income taxes that we expect will be fully offset by net operating loss carryforwards and other tax credits for the foreseeable future.
−Removed: Adjusted EPS for 2023 excludes the provision for deferred income taxes of $1,301 which represents non-cash charges primarily for U.S.
−Removed: net operating losses and temporary tax differences which are expected to offset future U.S.
−Removed: taxable income.
−Removed: See section “Adjusted EPS” on page 35 for a reconciliation of adjusted EPS to EPS.
−Removed: 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.
−Removed: Adjusted EBITDA
−Removed: In evaluating our business, we consider and use adjusted EBITDA, a non-GAAP financial measure, as a supplemental measure of our operating performance.
−Removed: We define adjusted EBITDA as net income (loss) attributable to Ultralife before net interest expense, provision (benefit) for income taxes, depreciation and amortization, and stock-based compensation expense, plus/minus expense/income that we do not consider reflective of our ongoing continuing operations.
−Removed: We also use adjusted EBITDA as a supplemental measure to review and assess our operating performance and to enhance comparability between periods.
−Removed: We also believe the use of adjusted EBITDA facilitates investors’ understanding of operating performance from period to period by backing out potential differences caused by variations in such items as capital structures (affecting relative interest expense and stock-based compensation expense), the amortization of intangible assets acquired through our business acquisitions (affecting relative amortization expense and provision (benefit) for income taxes), the age and book value of facilities and equipment (affecting relative depreciation expense) and one-time charges/benefits relating to income taxes.
−Removed: We also present adjusted EBITDA from operations because we believe it is frequently used by securities analysts, investors and other interested parties as a measure of financial performance.
−Removed: We reconcile adjusted EBITDA to net income (loss) attributable to Ultralife, the most comparable financial measure under GAAP.
−Removed: We use adjusted EBITDA in our decision-making processes relating to the operation of our business together with GAAP financial measures such as operating income.
−Removed: We believe that adjusted EBITDA permits a comparative assessment of our operating performance, relative to our performance based on our GAAP results, while isolating the effects of depreciation and amortization, which may vary from period to period without any correlation to underlying operating performance, and of stock-based compensation, which is a non-cash expense that varies widely among companies.
−Removed: We believe that by presenting adjusted EBITDA, we assist investors in gaining a better understanding of our business on a going forward basis.
−Removed: We provide information relating to our adjusted EBITDA so that securities analysts, investors and other interested parties have the same data that we employ in assessing our overall operations.
−Removed: We believe that trends in our adjusted EBITDA are a valuable indicator of our operating performance on a consolidated basis and of our ability to produce operating cash flows to fund working capital needs, to service debt obligations and to fund capital expenditures.
−Removed: The term adjusted EBITDA is not defined under GAAP, and is not a measure of operating income, operating performance or liquidity presented in accordance with GAAP.
−Removed: Our adjusted EBITDA has limitations as an analytical tool, and when assessing our operating performance, adjusted EBITDA should not be considered in isolation or as a substitute for net income attributable to Ultralife or other consolidated statement of operations data prepared in accordance with GAAP.
−Removed: Some of these limitations include, but are not limited to, the following:
−Removed: Adjusted EBITDA does not reflect (1) our cash expenditures or future requirements for capital expenditures or contractual commitments;
−Removed: (2) changes in, or cash requirements for, our working capital needs;
−Removed: (3) the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt;
−Removed: (4) income taxes or the cash requirements for any tax payments;
−Removed: and (5) all of the costs associated with operating our business;
−Removed: Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often will have to be replaced in the future, and adjusted EBITDA from continuing operations does not reflect any cash requirements for such replacements;
−Removed: While stock-based compensation is a component of cost of products sold and operating expenses, the impact on our consolidated financial statements compared to other companies can vary significantly due to such factors as assumed life of the stock-based awards and assumed volatility of our common stock;
−Removed: Other companies may calculate adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.
−Removed: We compensate for these limitations by relying primarily on our GAAP results and using adjusted EBITDA only on a supplemental basis.
−Removed: Neither current nor potential investors in our securities should rely on adjusted EBITDA as a substitute for any GAAP measures and we encourage investors to review the following reconciliation of adjusted EBITDA to net income attributable to Ultralife.
−Removed: Year ended December 31,
−Removed: Net income attributable to Ultralife Corporation
−Removed: Interest expense, net
−Removed: Income tax provision
−Removed: Depreciation expense
−Removed: Amortization of intangible assets
−Removed: Stock-based compensation expense
−Removed: Cyber insurance policy deductible
−Removed: Acquisition and other non-recurring costs
−Removed: Non-cash purchase accounting adjustments
−Removed: Adjusted EBITDA
−Removed: Adjusted Earnings Per Share
−Removed: In evaluating our business, we consider and use adjusted earnings per share (“EPS”), a non-GAAP financial measure, as a supplemental measure of our business performance.
−Removed: We define adjusted EPS as net income (loss) attributable to Ultralife Corporation excluding the provision (benefit) for deferred income taxes divided by our weighted average shares outstanding on both a basic and diluted basis.
−Removed: We believe that this information is useful in providing period-to-period comparisons of our results by reflecting the portion of our tax provision that will be predominantly offset by our U.S.
−Removed: net operating loss carryforwards and other tax credits for the foreseeable future.
−Removed: We reconcile adjusted EPS to EPS, the most comparable financial measure under GAAP.
−Removed: Neither current nor potential investors in our securities should rely on adjusted EPS as a substitute for any GAAP measures and we encourage investors to review the following reconciliation of adjusted EPS to EPS and net income attributable to Ultralife Corporation.
−Removed: Adjusted EPS is calculated as follows for the periods presented:
−Removed: Three-month period ended
−Removed: December 31, 2024
−Removed: December 31, 2023
−Removed: Net income attributable to Ultralife Corporation
−Removed: Deferred tax (benefit) provision
−Removed: Adjusted net income
−Removed: Weighted average shares outstanding
−Removed: December 31, 2024
−Removed: December 31, 2023
−Removed: Net income attributable to Ultralife Corporation
−Removed: Deferred tax provision
−Removed: Adjusted net income
−Removed: Weighted average shares outstanding
−Removed: Liquidity and Capital Resources
−Removed: Cash Flows and General Business Matters
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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: We continue to have significant U.S.
−Removed: net operating loss carryforwards available to utilize as an offset to taxable income.
−Removed: As of December 31, 2024, none of our U.S.
−Removed: net operating loss carryforwards have expired.
−Removed: See Note 7 to the consolidated financial statements included in Item 8 of this Form 10-K for additional information.
−Removed: Going forward, we expect positive operating cash flow and the availability under our credit facilities will be sufficient to meet our obligations for both financing and investing.
−Removed: 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.
−Removed: The Company is in full compliance with its debt covenants under the Credit Facilities.
−Removed: As of December 31, 2024, we had made commitments to purchase approximately $752 of production machinery and equipment.
−Removed: We typically offer standard warranties against product defects that range from ninety (90) days to three (3) years from the date of purchase.
−Removed: We also offer separately priced extended warranty contracts on certain Communications Systems products.
−Removed: Warranty costs expected to be incurred are estimated based on the Company’s experience and recorded as costs of products sold.
−Removed: There is no assurance that future warranty claims will be consistent with our estimates, and in the event we experience a significant increase in warranty claims, there is no assurance that our reserves will be sufficient.
−Removed: Excessive warranty claims could have a material adverse effect on our business, financial condition and results of operations.
−Removed: Off-Balance Sheet Arrangements
−Removed: We have no off-balance sheet arrangements.
−Removed: Critical Accounting Policies and Estimates
−Removed: The above discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, included in Item 8 of this Form 10-K, which have been prepared in accordance with GAAP.
−Removed: The preparation of our consolidated financial statements requires the application of accounting policies and the use of estimates.
−Removed: The accounting policies most important to the preparation of the consolidated financial statements and estimates that require management’s most difficult, subjective or complex judgments are described below.
−Removed: Revenue Recognition:
−Removed: Revenues are generated from the sale of products.
−Removed: Performance obligations are met and revenue is recognized upon transfer of control to the customer, which is generally upon shipment.
−Removed: When contract terms require transfer of control upon delivery at a customer’s location, revenue is recognized on the date of delivery.
−Removed: For products shipped under vendor managed inventory arrangements, revenue is recognized and billed when the product is consumed by the customer, at which point control has transferred and there are no further obligations by the Company.
−Removed: Revenue is measured as the amount of consideration we expect to receive in exchange for shipped product.
−Removed: Sales, value-added and other taxes billed and collected from customers are excluded from revenue.
−Removed: Customers, including distributors, do not have a general right of return.
−Removed: Separately priced extended warranty contracts are offered on certain products.
−Removed: Extended warranties are treated as separate performance obligations and recognized to revenue evenly over the term of the respective contract.
−Removed: Revenue not yet recognized on extended warranty contracts is recorded as deferred revenue on the consolidated balance sheets.
−Removed: For customer contracts with an original expected duration of less than one year, we apply the practical expedient with respect to disclosure of the deferral and future expected timing of revenue recognition for transaction price allocated to remaining performance obligations.
−Removed: Valuation of Inventory:
−Removed: Inventories are stated at the lower of cost or net realizable value, with cost determined using the first-in, first-out (“FIFO”) method.
−Removed: Our inventory includes raw materials, work in process and finished goods.
−Removed: We recognize provisions for excess, obsolete or slow-moving inventory.
−Removed: Inherent in our estimates of net realizable value in determining inventory valuation are assumptions related to expectations of future demand for our products, product lifecycles, product support, technical obsolescence, regulatory requirements, and economic and market conditions.
−Removed: Estimates related to the valuation of inventory are susceptible to changes as the underlying assumptions are continuously evaluated.
−Removed: If our assumptions are adversely different from those estimated by management, inventory adjustments to reduce inventory values would result in an increase in inventory write-offs and a decrease in gross margins.
−Removed: Goodwill and Other Indefinite Lived Intangible Assets:
−Removed: Under the acquisition method of accounting, the total consideration transferred to consummate the acquisition is allocated to the identified tangible and intangible assets acquired and liabilities assumed based on their respective estimated fair values as of the acquisition date with the residual amount recorded to goodwill.
−Removed: We do not amortize goodwill and other intangible assets with indefinite lives, but instead evaluate these assets for impairment at least annually and whenever events or circumstances indicate that impairment may exist.
−Removed: The annual impairment test for goodwill consists of a comparison of the estimated fair value for each reporting unit to which goodwill is assigned to the carrying value of the respective reporting unit.
−Removed: The annual impairment test for the other intangible assets with an indefinite life consists of a comparison of the estimated fair value of each asset to the carrying value of the respective asset.
−Removed: If the estimated fair value of a reporting unit or other indefinite-lived intangible asset exceeds its respective carrying value, the goodwill or indefinite-lived intangible asset is considered not impaired.
−Removed: If carrying value of a reporting unit or indefinite-lived intangible asset exceeds its estimated fair value, the excess carrying value of the respective goodwill or indefinite-lived intangible asset is recognized as an impairment loss.
−Removed: We conducted our annual impairment test for goodwill and other indefinite-lived intangible assets as of October 1, 2024.
−Removed: We identified two (2) goodwill reporting units and five (5) indefinite-lived intangible assets.
−Removed: We performed a quantitative impairment assessment of each goodwill reporting unit and indefinite-lived intangible asset.
−Removed: The estimated fair value of each reporting unit was determined using a discounted cash flow model.
−Removed: The estimated fair value of each indefinite-lived intangible asset was determined using other income-based valuation models.
−Removed: Significant estimates and assumptions were used to estimate fair value, including our internal operating and cash flow forecasts, excess working capital requirements, and inputs to the weighted-average cost of capital used to discount future cash flows.
−Removed: Other key assumptions used to value the trademarks and customer relationships included royalty rates and attrition rates, respectively.
−Removed: The significant estimates and assumptions used in these valuations are subject to judgment based on sources utilized and the assessment of risks related to our internal forecasts.
−Removed: Based on the results of our impairment test, and consideration of qualitative factors, no impairments were identified.
−Removed: There is a possibility that our goodwill and other intangible assets could be impaired in the future should there be a significant change in the significant estimates and assumptions used in our impairment assessment.
−Removed: Impairment of Long-Lived Assets:
−Removed: We assess our long-lived assets for impairment whenever events or circumstances indicate their carrying amounts may not be recoverable.
−Removed: This is accomplished by comparing the expected undiscounted future cash flows of the assets with the respective carrying amount as of the date of assessment.
−Removed: Should aggregate undiscounted future cash flows be less than the carrying value, a write-down would be required, measured as the difference between the carrying value and the fair value of the asset.
−Removed: Fair value is estimated either through the assistance of an independent valuation or as the present value of expected discounted future cash flows.
−Removed: The discount rate used by us in our evaluation is an industry-based weighted average cost of capital.
−Removed: If the expected undiscounted future cash flows exceed the respective carrying amount as of the date of assessment, no impairment charge is recognized.
−Removed: Income Taxes:
−Removed: We account for income taxes using the asset and liability method.
−Removed: Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse.
−Removed: Pursuant to ASC 740, a valuation allowance is recognized when the realizability of deferred tax assets is not more likely than not, based all available evidence, both positive and negative, weighted based on objective verifiability.
−Removed: As of December 31, 2024, we concluded that it is more likely than not that our U.S.
−Removed: deferred tax assets will be fully realized based on management’s assessment.
−Removed: In evaluating the realizability of our U.S.
−Removed: deferred tax assets, management considered all available evidence, both positive and negative, weighted based on objective verifiability.
−Removed: 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.
−Removed: As of December 31, 2024, our domestic net operating loss carryforwards and general business tax credits were $15,000 and $3,200, respectively.
−Removed: 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.
−Removed: Management has concluded that utilization of the U.K.
−Removed: net operating losses may be limited due to the change in the past U.K.
−Removed: operation, and that they cannot currently be used to reduce taxable income of our other U.K.
−Removed: subsidiary, Accutronics Ltd.
−Removed: There are no other deferred tax assets related to the past U.K.
−Removed: 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.
−Removed: We will continue to evaluate the realizability of our deferred tax assets in future periods.
−Removed: Stock-Based Compensation:
−Removed: We recognize compensation cost relating to share-based payment transactions in our financial statements.
−Removed: The cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as an expense over the employee’s requisite service period (generally the vesting period of the equity award).
−Removed: We calculate implied volatility for stock options based on an average of historical volatility over the expected life of the awards.
−Removed: The computation of expected term is determined based on historical experience of similar awards, giving consideration to the contractual terms of the awards and the vesting period.
−Removed: The interest rate for periods within the contractual life of the award is based on the U.S.
−Removed: Treasury yield in effect at the time of grant.
−Removed: Our awards are generally valued using the Black-Scholes method.
−Removed: If required, our market-based awards are valued using a Monte Carlo simulation.
−Removed: Business Combinations:
−Removed: We account for businesses acquired using the acquisition method of accounting.
−Removed: Under this method, all acquisition-related costs are expensed as incurred, and the total consideration transferred to consummate the acquisition is allocated to the identified tangible and intangible assets acquired and liabilities assumed based on their respective estimated fair values as of the acquisition date with the residual amount recorded to goodwill.
−Removed: As part of this process, we identify and attribute values and estimated lives to property and equipment and intangible assets acquired.
−Removed: These determinations involve significant estimates and assumptions, including those with respect to future cash flows, discount rates and asset lives, and therefore require considerable judgment.
−Removed: These determinations affect the amount of depreciation and amortization expense recognized in future periods.
−Removed: The results of operations of acquired businesses are included in the consolidated statements of income and comprehensive income beginning on the respective acquisition date.
−Removed: We typically offer standard warranties against product defects that range from ninety (90) days to three (3) years from the date of purchase.
−Removed: We also offer separately priced extended warranty contracts on certain products.
−Removed: Warranty costs expected to be incurred are estimated based on the Company’s experience and recorded as costs of products sold.
−Removed: Standard warranty costs are recognized upon product sale.
−Removed: Extended warranty costs are recognized over the term of the contract.
−Removed: Provision for warranty costs is recorded in accrued expenses and other current liabilities and other noncurrent liabilities on our consolidated balance sheet based on the duration of the warranty.
−Removed: Environmental Issues:
−Removed: Environmental expenditures, if any, that relate to current operations, are generally expensed.
−Removed: Remediation costs that relate to an existing condition caused by past operations are accrued when it is probable that these costs will be incurred and can be reasonably estimated.
−Removed: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
−Removed: As a smaller reporting company, we are not required to provide this information.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.