Ultralife Corp (ULBI) Annual Report (10-K) & SEC Filings

Transaction subject to regulatory approvals and customary closing conditions; risk of termination or delay.

“Conditions precedent include regulatory approvals under HSR Act and other antitrust laws; termination provisions allow for termination fee.”

Inventory build risk

“Inventories, net 58,745 54,008 (increase of $4.7M or 8.8% from year-end 2025)”

Cash burn risk

“Net cash provided by operating activities 3,444 9,303 (63% decline YoY)”

Revenue decline in Battery & Energy Products segment due to commercial weakness in oil & gas and industrial markets.

“Battery & Energy Products sales decreased 3.7% to $44.2 million compared to $45.9 million last year. The year-over-year decrease reflects a 4.7% decline in commercial sales due to an 8.7% decline in oil & gas and industrial sales.” · word for word

One-time costs of $0.9 million related to litigation and consulting expenses impacting operating income.

“Operating expenses reflect an increase in new product development costs and one-time, non-recurring costs of $0.9 million primarily related to litigation expenses incurred for our cyber-insurance claim and the completion of certain consulting costs.” · word for word

Dependence on government/defense spending and potential delays or reductions in U.S. and foreign military spending.

“Forward-looking statements mention risks including reductions in revenues from key customers, delays or reductions in U.S. and foreign military spending.”

Concentrated ownership risk

“Bradford T. Whitmore beneficially owns 40.3% of outstanding shares; all directors and executive officers as a group own 42.9%” · word for word

Compensation misalignment risk

“STIP awards not earned for two consecutive years (2024 and 2025) due to failure to achieve operating profit goals.”

Production disruptions (power outage, inventory integration, weather) caused lost production days and margin compression

“Loss of a few production days at Newark, NY facility due to power outage; higher than planned production days lost at Raynham, MA facility due to inventory-related confirmation and integration activities; inclement weather” · word for word

Communications Systems sales remain weak due to continued order delays

“Communications Systems sales remained weak due to continued order delays” · word for word

Tariff impact and higher utility costs pressuring gross margins

“Product mix impacting tariffs, significantly higher utility costs” · word for word

One-time costs (consulting, litigation for cyber insurance claim) added to operating expenses

“One-time, non-recurring costs of $0.8 million primarily related to certain consulting costs and litigation expenses incurred for our cyber-insurance claim”

Customer concentration

“We have one major customer, L3Harris Technologies, a large global defense primary contractor, which comprised 27% of our total revenues in 2025, and 23% of our total revenues in 2024.” · word for word

Supply chain disruption

“We have experienced interruptions of product deliveries by sole source and other suppliers in 2024 and to a lesser extent in 2025 resulting in the delay of some shipments to future periods.” · word for word

Oil & gas demand sensitivity

“Excluding Electrochem, our commercial sales declined $3,324 from $96,020 in 2024 to $92,696 in 2025 resulting from declines of $4,755 or 12.5% in our oil & gas business due primarily to the wavering oil indices reflective of economic and geo-political conditions.” · word for word

Large non-cash impairment charge ($12.2M) from rebranding initiative, indicating past acquisitions may not have delivered expected brand value

“Ultralife recorded a $12.2 million non-cash charge to reduce the value of the Company's tradename and trademark intangible assets” · word for word

Communications Systems segment continues to decline sharply (sales -35.2%, gross margin -12pp), suggesting structural weakness

“Communications Systems sales decreased by 35.2% to $2.6 million; gross margin 19.9% vs 31.9% last year” · word for word

One-time costs ($1.1M) related to Electrochem transition and cyber insurance litigation

“One-time non-recurring costs of $1.1 million primarily related to the transition of Electrochem to Ultralife systems and litigation expenses incurred for our cyber insurance claim” · word for word

Operating expenses excluding impairment still elevated at 21.6% of revenue vs 20.8% last year

“Excluding the impairment charge, operating expenses were 21.6% of revenue compared to 20.8% of revenue for the year-earlier period” · word for word

Supply chain issues causing manufacturing inefficiencies and quality problems, compressing margins.

“supply chain issues caused manufacturing inefficiencies in our Battery & Energy Products business” · word for word

Commercial sales declining (oil & gas, medical) indicating demand weakness in key end markets.

“5.7% decrease in commercial sales, primarily reflecting declines in oil & gas and medical sales” · word for word

One-time restructuring costs and litigation expenses impacting profitability.

“one-time non-recurring costs of $1.1 million related to the closing of our Calgary facility... litigation expenses incurred for our cyber insurance claim” · word for word

Customer concentration

“We have one major customer, L3Harris Technologies, a large global defense primary contractor, which comprised 27% of our total revenues in 2025, and 23% of our total revenues in 2024.”

Supply chain disruption

“We have experienced interruptions of product deliveries by sole source and other suppliers in 2024 and to a lesser extent in 2025 resulting in the delay of some shipments to future periods.”