Earnings

Ultralife Restores Profit After First-Quarter Loss

The Tip Desk · August 7, 2026 · 3 min read

Gross profit reached $13.9 million, or 28.9% of sales, as the Newark, New York, battery and communications maker posted $0.15 a share.

Ultralife Corporation (ULBI) reported second-quarter sales of $47.9 million, a 1.3% decline from $48.6 million a year earlier, after a 6.5% year-over-year drop in the first quarter.

The Newark, New York, battery and communications maker swung to GAAP earnings of $0.15 a share from a first-quarter loss of $0.03 a share. Net income attributable to Ultralife was $2.5 million, compared with $0.9 million, or $0.05 a share, in the year-earlier second quarter. Operating income was $3.4 million, including $0.9 million of one-time costs, versus $2.3 million including $0.3 million of one-time costs a year earlier. Adjusted EBITDA was $6.1 million, or 12.8% of sales.

Gross profit was $13.9 million, or 28.9% of revenue, versus $11.6 million, or 23.9%, a year earlier. Excluding a $1.1 million net IEEPA refund received in the quarter, gross margin was 26.6%. President and Chief Executive Officer Mike Manna said the company delivered a 760-basis-point improvement in gross profit margin compared with the first quarter, including the refund, and that the gain reflected manufacturing-efficiency initiatives and favorable sales mix. First-quarter gross profit had been $10.1 million, or 21.3% of revenue.

Battery & Energy Products, the larger of the two reportable segments, posted sales of $44.2 million, matching the first-quarter level. The company said the year-over-year decrease reflected a 4.7% decline in commercial sales, with an 8.7% drop in oil & gas and industrial sales offsetting a 7.2% increase in medical battery sales, and a 1.4% decline in government/defense sales tied to the shipment of a very large order for an allied country last year. Battery & Energy Products gross margin was 28.3%, versus 23.6% a year earlier, after 21.2% in the first quarter. The company attributed the year-over-year margin gain primarily to favorable product mix and the IEEPA tariff refund.

Communications Systems sales increased 39.3% to $3.8 million from $2.7 million a year earlier, reversing a 25.7% year-over-year decline to $3.3 million in the first quarter. Communications Systems gross margin was 36.3%, versus 28.4% a year earlier, after 22.8% in the first quarter. The company said the year-over-year margin increase was primarily due to sales mix.

Operating expenses were $10.4 million, or 21.8% of revenue, versus $9.3 million, or 19.2%, a year earlier. The company said the increase reflected higher new-product development costs and one-time, non-recurring costs of $0.9 million primarily related to litigation expenses on a cyber-insurance claim and consulting to expedite gross-margin improvement. Other expense was $0.5 million, primarily interest on Electrochem acquisition financing partially offset by an estimated portion of a 45X battery-cell tax credit.

Backlog exiting the second quarter was $117.5 million, the highest level in the company’s history, versus $115.1 million exiting the first quarter of 2026 and $84.5 million exiting the second quarter of 2025.

Manna said Communications Systems is poised to produce revenue gains as new products move through the capture phase and is preparing to launch multiple new products later this year in support of government/defense programs. He said Battery & Energy Products is advancing development programs including water-based defense drone applications, several of which are expected to transition into production later this year. He said those multi-year revenue opportunities, combined with ongoing gross-margin initiatives, reinforce the company’s outlook for profitable growth in 2026.