Ultralife Corporation

Welcome to the Ultralight Corporation's second quarter 2025 conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You'll then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Alex Vialza of, excuse me, please go ahead.

Thank you, operator, and good afternoon, everyone. Thank you for joining us for Ultralight Corporation's earnings conference call for the second quarter of 2025. With us on today's call are Mr. Mike Manna, Ultralife's CEO, and Mr. Phil Fain, Ultralife's Chief Financial Officer. The earnings press release was issued earlier today, and if anyone has not received a copy, I invite you to visit the company's website at ultralifecorporation.com, where you will find the release in 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 our supply of raw materials and components due to business conflicts, global conflicts, whether 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 form on Form 10-Q. In addition, on today's call, management will refer to non-GAAP financial measures that management considers to be useful and 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 Ultralife's CEO, Mike Manna. Please go ahead, Mike.

Good afternoon. Welcome to our call on Ultralife's Q2 operating results. Earlier this morning, we reported Q2 sales of $48.6 million with an operating income of $2.3 million, including a one-time adjustment of $0.3 million. Net profit was $0.9 million, which resulted in 5 cents EPS on a GAAP basis and 7 cents on an adjusted basis. In Q2, we faced direct headwinds from tariffs, unfavorable product mix shifts across the business, softness in our oil and gas business as customers were hesitant to commit to capital projects, and anticipated order timing challenges, particularly in our communication system segment, which negatively affected gross margin. Despite these pressures, we maintained our focus on growth, continued to invest in new product development, with several offerings advancing into validation and production. This is the second full quarter reporting with the electric chem results, and as planned, we successfully transitioned their ERP and office systems to Ultralife systems in Q2. With the Ultralife back office now in place, several manufacturing support systems related to execution and quality will finalize transition in Q3. Our overall strategy of continued diversification through M&A and new product development is key to stabilizing and increasing the profitability of the business. but it is important to note that we are still often a component or accessory to a customer product, and therefore we have limited ability to control order flow, timing, and mix. On the consolidation front, we completed the closure of our Misawa operation and incurred some one-time cost associated with that effort, which we'll not repeat going forward. With that said, we continue to generate cash, and I'm pleased to report that we're ahead of schedule in paying down our debt from the electric M acquisition, with over 2.7 million repaid in Q2. I will now turn it over to Phil to talk through the detailed numbers.