Ultralife Corporation

Good day and welcome to this Ultralife Corporation Fourth Quarter 2021 Earnings Release Conference Call. At this time, for opening remarks and introductions, I'd like to turn the call over to Ms. Jody Barfening. Please go ahead.

Thank you, Diana, and good morning, everyone. Thank you for joining us this morning for Ultralife Corporation's Earnings Conference Call for the Fourth Quarter of Fiscal 2021. With us on today's call are Mike Poplik, Ultralife's President and CEO, and Phil Fain, Ultralife's Chief Financial Officer. The earnings press release was issued earlier this morning. If anyone has not yet received a copy, I invite you to visit the company's website, www.ultralifecore.com, where you'll find the release under Investor News in the Investor Relations section. Before I turn the call over to management, I would like to remind everyone that some statements made during this conference call contain forward-looking statements based on current expectations. Actual results could differ materially from those projected as a result of various risks and uncertainties. The potential risks and uncertainties could cause actual results to differ materially, include the impact of COVID-19, potential reductions in revenues from key customers, acceptance of new products on a global basis, and uncertain global economic conditions. The company cautions investors not to place undue reliance on statements, which reflects the company's analysis only as of today's date. The company undertakes no obligation to publicly update forward-looking statements to reflect subsequent events or circumstances. Further information on these factors and other factors that could affect ultralized financial results included in ultralized filings with the Securities and Exchange Commission, including the latest annual report on Form 10-K. In addition, on today's call, management will refer to certain non-GAAP financial measures that management considers to be useful metrics that differ from GAAP. These non-GAAP measures should be considered supplemental to corresponding GAAP figures. With that, I would now like to turn the call over to Mike. Good morning, Mike.

Good morning, Jody, and thank you, everyone, for joining the call. Today I'll start by making some brief overall comments about our Q4 2021 operating performance, after which I'll turn the call over to Phil, who will take you through the detailed financial results. After Phil is finished, I'll provide an update on the progress against our 2021 revenue initiatives and the focus areas for 2022 before opening it up for questions. For the fourth quarter of 2021, current COVID supply chain component lead time and inflation challenges continued to weigh heavily on both revenue and earnings, with revenue impacted by as much as $5.4 million, earnings by approximately $1.8 million, and EPS by 9 cents. Driven primarily by the supply chain impact and some non-recurring military sales, revenues in our core end markets of government defense and medical were both down year over year. We did once again see improvement in our oil and gas and China revenues, up 72% and 42%, respectively, year over year, which drove our fourth quarter commercial revenues up 10%. Nevertheless, total company revenues per Q4 were down almost $5 million year over year, while an operating profit loss of $1.2 million was reported, reflecting the supply chain impact, our ongoing investing in future revenue opportunities, and one-time acquisition costs. Key revenue-generating event highlights for the quarter included the closing of a $23.5 million Xcel battery acquisition, the $4.2 million Leader Radial VAA follow-on contract, the next $9.9 million BA5390 IDIQ award, and progress on several of our new product development projects. Despite the COVID supply chain constraints on revenue, order intake levels remained healthy. And the Q4 2021 ending core business backlog, not including the acquisition or IDIQ awards, was over $53 million, up $11 million, or approximately 27% from Q3 2021, and up $14 million, or 35%, year over year. To address the supply chain lead time, logistics, and cost challenges, we continue to work very closely with our suppliers and customers. and in many cases are raising prices. I'd like to thank each and every one of our employees, channel partners, and customers for their tremendous effort and cooperation in fulfillment execution given the present supply chain situation. In a few minutes, I'll give you further updates on our revenue initiatives. But first, I'd like to ask Ultralight's CFO, Phil Fain, to take you through additional details of the fourth quarter 2021 financial performance.