Ultralife Corporation

Good day, and thank you for standing by. Welcome to the Ultralife Corporation first quarter 2025 results. At this time, all participants are listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 1-1 on your telephone. You will then hear automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I'd like to hand the conference over to your first speaker today, Alex Vialta of Alliance Advisors IR. Please go ahead.

Thank you, Operator, and good morning, everyone. Thank you for joining us for Ultralife Corporation's earnings conference call for the first quarter of fiscal 2025. With us on today's call are Mr. Mike Manna, Ultralife's President and CEO, and Mr. Phil Fain, Ultralife's Chief Financial Officer. The earnings press release was issued earlier this morning, and if anyone has not yet received a copy, I invite you to visit the company's website at ultralife.com, where you'll find the release under the Investor News and the Investor Relations section. Before turning the call over to management, I'd 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 that could cause actual results to differ materially include uncertain global economic conditions, reductions in revenues from key customers, delays or reductions in US and foreign military spending, acceptance of our new products on a global basis, and disruptions or delays in the supply of raw materials and components due to business conditions, global conflicts, weather, or other factors not under our control. The company cautions investors not to place undue reliance on forward-looking statements, which reflect 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 Ultralife's financial results is included in the company's filings with the SEC, included in the latest quarterly report on Form 10-Q. In addition, on today's call, management will refer to certain non-GAAP financial measures that management considers to be useful and differ from GAAP. These non-GAAP measures could be considered supplemental to corresponding GAAP figures. With that, I would now like to turn the call over to Mike Manna. Good morning, Mike. Please go ahead.

Good morning. Welcome to our call on Ultralife's Q1 operating results. Earlier this morning, we reported Q1 sales of $50.7 million with an operating income of $3.4 million, which resulted in $0.11 EPS on a gap basis and $0.13 on an adjusted basis. Q1 was the first full reporting quarter in which our latest acquisition Electrochem was fully included in our results. I am pleased to say they were a positive addition in Q1, even with some remaining one-time costs as we work through the transition of their systems from their previous parent, which is on track to complete in Q2 of this year. I want to briefly cover the major subject of tariffs and the expected impact. We have a diverse business with multiple supply chain flows, each with multiple levels of tariff and duties depending on which product it is. so we do expect some impact due to the tariff situation. We have a detailed, evolving analysis of the major suspected impacts and are passing along the known full tariff cost as a surcharge, specifically reviewing our China location produced end products, typically 10 to 15% ships directly to the United States, with most other sales being to other international locations. We are executing our mitigation plan, which includes reviewing sources of supply managing inventory flow to reduce upfront expenses at the border, and examining our manufacturing locations. Being heavily involved in medical and government markets, it is often not quickly possible to change supply source without requalification and customer involvement, which also creates competitive barriers to entry. We believe our North American-based manufacturing locations will give us long-term strategic advantages, especially in the government defense and the oil and gas markets, and provide future opportunities for growth. We are committed to continue investment in NPD projects and increase marketing efforts, both of which are required to continue our targeted growth goals. I will now turn it over to Phil to talk through the detailed numbers.