Ultralife Corp. (NASDAQ:ULBI) Q4 2018 Earnings Conference Call Transcript

Feb 07, 2019 • 10:00 am ET


Ultralife Corp. (NASDAQ:ULBI) Q4 2018 Earnings Conference Call Transcript


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Good day, and welcome to the Ultralife Corporation Fourth Quarter 2018 Earnings Release Conference Call. At this time, for opening remarks and introductions, I would like to turn the call over to Ms. Jody Burfening. Please go ahead, ma'am.

Judy Burfening

Thank you, Andrea, and good morning, everyone. And thank you for joining us this morning for Ultralife Corporation's earnings conference call for the fourth quarter fiscal 2018. With us on today's call are Mike Popielec, Ultralife's President and CEO; and 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 www.ultralifecorp.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 contains forward-looking statements based on current expectations. Actual results could differ materially from those projected as a result of various risks and uncertainties. These include potential reductions in revenue from key customers, uncertain global economic conditions and acceptance of new products on a global basis. The company cautions investors not to place undue reliance on forward-looking 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 Ultralife's financial results is included in the company's 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 and differ from GAAP. These non-GAAP measures should be considered as supplemental to corresponding GAAP figures.

With that, I would now like to turn the call over to Mike. Good morning, Mike.

Michael D. Popielec

Good morning, Jody, and thank you everyone for joining the call this morning. Today, I'll start by making some overall comments about our Q4 and total year 2018 operating performance. Then 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 2018 revenue initiatives, talk about some focus areas for 2019, then open it up for questions.

For the fourth quarter of 2018, our Battery & Energy Products revenue grew 8% year-over-year from increases in both our commercial and government defense markets with medical sales up 14%. However, at Communication Systems, after four consecutive quarters of double digit revenue growth, fourth quarter sales decreased year-over-year due to modifications to production and initial shipment schedules for the $19 million in delivery contracts we received in October 2018 for the US Army. Despite the softer Q4, for the total year of 2018, we were pleased to deliver for the fourth consecutive year total year top line revenue growth and an operating profit increase.

With modest top and