Earnings

Ultralife Reverses Sales Decline as Backlog Hits Record

The Tip Desk · November 9, 2026 · 3 min read

Third-quarter sales were $48.3 million, up 11.3% from a year earlier, and backlog reached a record $136.0 million.

Ultralife Corporation (ULBI), a maker of mission-critical batteries and communications systems, reported third-quarter sales of $48.3 million, reversing a 1.3% year-over-year decline in the second quarter.

The company said the $4.9 million, or 11.3%, increase from $43.4 million a year earlier reflected 56.7% growth in government/defense sales, due primarily to a large order for conformal wearable batteries, partially offset by a 5.8% decrease in commercial sales on softness in the global oil & gas market.

Battery & Energy Products sales rose 12.9% to $45.1 million from $39.9 million in the year-ago third quarter, after a 3.7% year-over-year decline to $44.2 million in the second quarter. Communications Systems sales decreased 7.1% to $3.2 million from $3.4 million a year earlier, after a 39.3% year-over-year increase to $3.8 million in the second quarter.

Gross profit was $13.3 million, or 27.5% of revenue, compared with $9.6 million, or 22.2%, a year earlier. Second-quarter gross margin was 28.9%, or 26.6% excluding a $1.1 million net IEEPA refund. Battery & Energy Products gross margin was 26.7%, versus 22.1% a year earlier, after 28.3% in the second quarter, which included the IEEPA tariff refund. The company attributed the year-over-year improvement primarily to progress in improving manufacturing efficiencies and vertical integration of thionyl-chloride cells as well as favorable product mix. Communications Systems gross margin was 40.1%, versus 23.3% a year earlier, after 36.3% in the second quarter, primarily due to lower warranty costs and sales mix.

Operating expenses were $10.1 million, compared with $10.6 million in the third quarter of 2025, reflecting an increase in new product development costs and a decrease in one-time, non-recurring costs of $0.6 million primarily related to the closing of the Calgary facility and certain consulting costs in the year-earlier period. Operating expenses were 20.9% of revenue. Operating income was $3.2 million versus an operating loss of $1.0 million a year earlier, after $3.4 million of operating income in the second quarter.

Net income attributable to Ultralife was $2.4 million, or $0.14 a share, compared with a net loss of $1.2 million, or $0.07 a share, for the third quarter of 2025. Adjusted EBITDA was $5.6 million, or 11.7% of sales, versus $2.0 million, or 4.7%, a year earlier. On a trailing twelve-month basis, adjusted EBITDA was $20.7 million, or 10.8% of sales.

Other expense was $0.4 million, primarily interest on financing of the Electrochem acquisition, partially offset by the third-quarter estimated portion of a refundable tax credit under the 45X Advanced Manufacturing Production Tax Credit.

Backlog exiting the third quarter was $136.0 million, the highest level in the company’s history, compared with $117.5 million exiting the second quarter of 2026 and $90.3 million exiting the third quarter of 2025. Cash was $8.6 million at September 30, 2026. Long-term debt, net, was $47.4 million.

On October 27, 2026, Ultralife announced that it has agreed to be acquired by EnerSys (ENS) in an all-cash transaction valued at approximately $320 million, including the assumption of net debt. The transaction is expected to close in the first quarter of 2027. In light of the pending transaction, Ultralife will not hold a conference call to discuss third-quarter results.

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