Q4 2023 Ultralife Corporation Earnings Call
Yeah.
Operator: Thank you for standing by, and welcome to Ultralife Corporation's fourth quarter 2023 results conference call. At this time, all participants are in a listen-only mode.
Thank you for standing by and welcome to Ultra life Corporation's fourth quarter 'twenty to 'twenty three results conference call.
At this time all participants are in a listen only mode.
Operator: After the speaker's presentation, there will be a question and answer session. To ask a question at that time, please press star 1-1 on your telephone. Please be advised that today's call is being recorded. At this time, I'll turn the call over to your host, Jody Burfening. Please go ahead.
After the Speakers' presentation, there'll be a question and answer session.
To ask a question at that time, Please press star one on your telephone.
Please be advised that todays call is being recorded.
At this time I turn the call over to your House Jodi Burgundy. Please go ahead.
Jody Burfening: Thank you, Valerie. And good morning, everyone. And thank you for joining us this morning for Ultralife Corporation's earnings conference call for the fourth quarter of fiscal 2023. With us on today's call are Mike Manna, 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, www.ultralifecorp.com, where you'll find the release under Investor News in the Investor Relations section. Before turning the call over to management, I would like to remind everyone that some statements made during this conference call contain forward-looking statements based on current expectations. However, actual results could differ materially from those projected as a result of various risks and uncertainties.
Thank you Valerie and good morning, everyone and thank you for joining US. This morning for Ultra <unk> corporations earnings conference call for the fourth quarter of fiscal 2023.
With us on today's call are Mike manner, all drives president and CEO and Phil Fain Ultra 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 www <unk> core dot com, where you'll find the release under Investor News in the Investor Relations section.
Before turning the call over to management I would like to remind everyone that.
Some statements made during this conference call contain forward looking statements based on current expectations.
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.
Jody Burfening: The potential risks and uncertainties that could cause actual results to differ materially include the impact of COVID-19-related supply chain disruptions, potential reductions in revenue from key customers, acceptance of new products on a global basis, and uncertain global economic conditions. 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.
The impact of COVID-19 related supply chain disruptions potential reductions in revenue from key customers acceptance of new products on a global basis.
Global economic conditions.
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.
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 helped drive financial results.
Jody Burfening: 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 and differ from GAAP. With that said, I would now like to turn the call over to Mike. Good morning, Mike. Thank you. Good morning, everyone.
Included in the company's filings with the Securities 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 the management considers to be useful 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.
Thank you good morning, everyone welcome to our call and Ultra life's Q4, and full year 2023 operating results earlier. This morning, we reported Q4 sales of $44 5 million and operating income of $3 6 million delivering 18 cents EPS, which included a great end to a tumultuous year.
Mike Manna: Welcome to our call on Ultralife's Q4 and full year 2023 operating results. Earlier this morning, we reported Q4 sales of $44.5 million and operating income of $3.6 million, delivering 18 cents EPS, which concluded a great end to a tumultuous year. We started the 2023 year with a cyber attack that shut down operations for weeks at two of our sites, then rallied throughout the year to post the highest full-year revenue and profit level in over 10 years, a result of great teamwork throughout the business and supply chain. For the full year, we reported $158.6 million in sales with an operating income of $9.5 million, resulting in $0.44 of gap and $0.52 adjusted EPS for the year.
We started the 2023 here with the cyber attack that shut down operations for weeks and two of our sites than rally throughout the year to post the highest full year revenue and profit level in over 10 years, a result of great teamwork throughout the business and supply chain for.
For the full year, we reported $158 6 million in sales with an operating income of $9 5 million, resulting in 44 cents of GAAP and 52 cents adjusted EPS for the year.
Mike Manna: We improved gross margin for the business throughout the year, which was a key priority as we started 2023. I am pleased to say we are able to finish out the year with an initial paydown on our acquisition debt and increase our overall backlog sequentially from Q3. I will turn it over to Phil to talk through the detailed numbers. Thank you, Mike. And good morning, everyone.
We improved gross margin for the business throughout the year, which was a key priority as we started 2023.
I am pleased to say, we were able to finish out the year with an initial paydown on our acquisition debt and increased our overall backlog sequentially from Q3, I will turn it over to Phil to talk through the detailed numbers.
Thank you, Mike and good morning, everyone.
Philip A. Fain: Earlier this morning, we released our fourth-quarter results for the quarter ended December 31st, 2023. We also updated our investor presentation, which you can find in the Investor Relations section of our website, and plan on filing our Form 10-K with the SEC in early March. Consolidated revenues totaled $44.5 million, compared to $36.1 million for the fourth quarter of 2022, an increase of 23.4 percent. Government defense sales increased 28.8 percent, and commercial sales increased 20.2%.
Earlier. This morning, we released our fourth quarter results for the quarter ended December 31 2023.
We also updated our investor presentation, which you can find in the Investor Relations section of our website.
And filing our Form 10-K with the SEC in early March.
Consolidated revenues totaled $44 5 million.
<unk> to $36 1 million for the fourth quarter of 2022 and.
An increase of 23, 4%.
Government defense sales increased 28, 8%.
Commercial sales increased 22%.
Philip A. Fain: Revenues from our battery and energy product segment were $35.7 million, the highest sales quarter in our history for this segment, compared to $32.1 million last year, an increase of 11.1%. This growth was driven by the highest medical sales quarter since we entered this business in 2012, and increased 118% year over year. Medical sales in the fourth quarter represented 33.8 percent of total segment sales compared to 17.3 percent for the year earlier quarter. The increase in medical was partially offset by declines in government defense in oil and gas sales of 11.4% and 11.3%, respectively.
Revenues from our battery and energy products segment were $35 7 million.
The highest sales quarter in our history for this segment.
<unk> to $32 1 million last year, an increase of 11, 1%.
This growth was driven by the highest medical sales quarter. Since we entered this business in 2012.
And increased 118% year over year.
Medical sales in the fourth quarter represented 33, 8% of total segment sales compared to 17, 3% for the year earlier quarter.
The increase in medical was partially offset by declines in government defense and oil and gas sales of 11, 4% and 11, 3% respectively.
Philip A. Fain: The sales split between commercial and government defense for our battery business was $78.22 compared to $71.29 reported for the 2022 quarter, and the domestic to international split was $48.52 compared to $55.45 last year, demonstrating the continued success of our global revenue diversification strategy. Revenues from our communications system segment of $8.8 million more than doubled the $4.0 million we reported last year, primarily attributable to fulfilling long lead time orders of vehicle amplifier adapters to a global defense contractor for the U.S. Army. Inintegrated Systems of Amplifiers and Radio Vehicle Mounts to a major international defense contractor under an ongoing allied country government defense modernization program. On a consolidated basis, the commercial to government defense sales split was 6238 versus 7129 reported for the 2022 full year.
The sales split between commercial and government defense for our battery business was $78 22, compared to $71 29 reported for the 2022 quarter.
And the domestic to international split was $48 52, compared to $55 45 last year demonstrating.
Demonstrating the continued success of our global revenue diversification strategy.
Revenues from our communications systems segment of $8 8 million more than doubled the 4.1 million. We reported last year, primarily attributable to fulfilling long lead time orders of vehicle amplifier adapters to a global defense contractor for the U S Army.
Integrated systems of amplifiers and radio vehicle amounts to a major international defense contractor under an ongoing allied countries government defense modernization program.
On a consolidated basis, the commercial to government defense sales split was 62 38 versus $71 29 reported for the 2022 full year.
Philip A. Fain: Our total backlog exiting the fourth quarter was $103.5 million, representing a 2.4% sequential increase, and remains diverse in nature across our commercial and government defense customer base. The replenishment rate remains high, and the backlog represents a very healthy 65% of TTM sales. Our consolidated gross profit was $11.4 million, up 4.1% over the 2022 period. As a percentage of total revenues, consolidated gross margin was 25.6% versus 22.4% for last year's fourth quarter, a 320 basis point improvement, an increased 80 basis points, sequentially over the third quarter. Gross profit for our battery and energy products business was $9.0 million, compared to $6.9 million last year, an increase of 29.6%.
Our total backlog exiting the fourth quarter was $103 5 million, representing a two 4% sequential increase.
And to remain diverse in nature across our commercial and government defense customer base.
The replenishment rate remains high and our backlog represents a very healthy 65% of TTM sales.
Our consolidated gross profit was $11 4 million.
Up four 1% over the 2022 period.
As a percentage of total revenues consolidated gross margin was 25, 6% versus 22, 4% over last year's fourth quarter or three.
320 basis point improvement.
And increased 80 basis points sequentially over the third quarter.
Gross profit for our battery and energy products business was 9.1 million compared to $6 9 million last year, an increase of 29, 6%.
Philip A. Fain: Gross margin was 25.2%, an increase of 360 basis points over the 21.6% reported for last year's fourth quarter and an increase of 100 basis points over the 24.2% reported for this year's third quarter. The year-over-year and sequential increases were primarily due to improved price realization as well as a concerted effort to level-load production more evenly throughout the quarter, resulting in labor utilization efficiencies and higher cost absorption. For the communications system segment, gross profit was $2.4 million compared to $1.1 million for the year earlier period. Gross margin was 27.2% compared to 28.7% last year, primarily due to inefficiencies caused by delays experienced in the receipt of certain components partially offset by higher factory value. Operating expenses were $7.8 million, an increase of $0.1 million over the year-earlier period.
Gross margin was 25, 2% an increase of 360 basis points over 21, 6% reported for last year's fourth quarter.
And an increase of 100 basis points over the 24, 2% reported for this year's third quarter.
The year over year and sequential increases were primarily due to improved price realization as well as a concerted effort to level load production more evenly throughout the quarter.
<unk> and labor utilization efficiencies and higher cost absorption.
For our communication systems segment gross profit was $2 4 million compared to $1 1 million for the year earlier period.
Gross margin was 27, 2% compared to 28, 7% last year.
Primarily due to inefficiencies caused by delays experienced in the receipt of certain components, partially offset by higher factory volume.
Operating expenses were $7 8 million, an increase of <unk> 1 million over the year earlier period.
Philip A. Fain: As a percentage of revenues, operating expenses were 17.4% compared to 21.8% for last year's fourth quarter, a 440 basis point improvement, reflecting the sales leverage of our business model. The combined leverage of our 320 basis point gross margin improvement and our 440 basis point operating expense to sales ratio resulted in an 8.2% operating margin. On an absolute dollar basis, operating profit improved $3.4 million over the 2022 fourth quarter to $3.6 million. However, the business interruption insurance claim pertaining to our Q1 cyber attack still remains in review and is not included in our 2023 results. Our tax provision for the fourth quarter was $0.3 million versus a $0.2 million benefit reported for the 2022 quarter computed on a gap basis, including the impact of interest expense to help finance the Excel acquisition and Foreign Currency Gains and Losses. Net income was $2.8 million, or $0.17 per share, on a GAAP fully diluted basis.
Percentage of revenues operating expenses were 17, 4% compared to 21, 8% for last year's fourth quarter.
440 basis point improvement.
Reflecting the sales leverage of our business model.
The combined leverage of our 320 basis point gross margin improvement and our 440 basis points of operating expense to sales ratio resulted in an eight 2% operating margin.
On an absolute dollar basis operating profit improved $3 4 million over the 2022 fourth quarter to $3 6 million.
The business interruption insurance claim pertaining to our Q1 cyber attack still remains in review.
It is not included in our 2023 results.
Our tax provision for the third quarter for the fourth quarter was <unk> 3 million versus <unk> 2 million benefit reported for the 2022 quarter computed on a GAAP basis.
Including the impact of interest expense to help finance the <unk> acquisition.
And foreign currency gains and losses.
Net income was $2 8 million or 17.
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GAAP fully diluted basis.
Philip A. Fain: This compares to a loss of 0.2 million, or a loss of one cent per share, for the 2022 quarter. Excluding the provision for non-cash U.S. taxes expected to be fully offset by our net operating loss carry-forwards and other tax credits, adjusted fully diluted EPS was 18 cents per share for the fourth quarter of 2023, compared to a loss of $0.03 for the 2022 period. Adjusted EBITDA, defined as EBITDA including non-cash, stock-based compensation expenses, was $4.7 million, or 10.7% of sales, compared to $2.0 million, or 5.6% for the prior year quarter.
This compares to a loss of <unk> 2 million or a loss of <unk> <unk> per share for the 2022 quarter.
Excluding the provision for noncash U S taxes expected to be fully offset by our net operating loss carry forwards.
Other tax credits.
Justin fully diluted EPS was <unk> 18 per share for the fourth quarter of 2023.
Compared to a loss of <unk> <unk> for the 2022 period.
Adjusted EBITDA defined as EBITDA, including noncash stock based compensation expense.
It was $4 7 million or 10, 7% of sales compared to 2.1 million or five 6% for the prior year quarter for the full year adjusted EBITDA is $15 7 million or nine 9% of sales compared to $6 6 million.
Philip A. Fain: For the full year, adjusted EBITDA is $15.7 million or 9.9% of sales compared to $6.6 million or 5% of sales for the 2022 year. This represents the highest TTM level that we have achieved in the last 15 years. Turning to our balance sheet, we ended 2023 with working capital of $66.5 million in a current ratio of 3.8, compared to 50.1 million and 2.7 at 2022 year end. The major components of the $15.4 million increase in working capital include a $4.6 million increase in cash, a $4 million increase in accounts receivable, a $1 million increase in inventory, and a $5.2 million decrease in payables and accruals.
Or 5% of sales for the 2022 year.
This represents the highest T T M level that we have achieved in the last 15 years.
Turning to our balance sheet, we ended 2023 with working capital of $66 5 million.
And a current ratio of three eight <unk>.
Compared to $50 1 million and $2 seven for 2022 year and.
The major components of the $15 4 million increase in working capital include a $4 6 million increase in cash of $4 million increase in accounts receivable of $1 million increase in inventory.
$5 2 million decrease in payables and accruals.
Philip A. Fain: With the strengthening of our balance sheet, we are positioned to continue the pay-down of our debt, thereby reducing the costly interest expense, which represents almost $0.12 per share on a TTM-based basis. Going forward, our backlog of diverse end markets, growth initiatives, and ongoing actions to improve our gross margins, further strengthen our balance sheet, and position us well to optimize the leverage potential of our business model. I will now turn it back to Mike.
With the strengthening of our balance sheet, we are positioned to continue to paydown of our debt, thereby reducing the costly interest expense, which represents almost 12 per share on a TTM basis.
Going forward, our backlog diversified end markets growth initiatives and ongoing actions to improve our gross margins and further strengthen our balance sheet position us well to optimize the leverage potential of our business model I will now turn it back to Mike.
Mike Manna: Thank you, Phil, for the detailed review of the Q4 and full year 2023 results. To review where we were when we entered the year, in my initial assessment of the 2023 priorities, number one, price realization. We have completed the pricing corrections we had scheduled with some long-term IDIQ contracts still active and price challenged. We're working material and leading projects to improve gross margin on those specific products, and we'll reprice future opportunities to extend the time horizon of the S&OP planning process and part procurement. We have a framework established. We'll continue to refine this process throughout 2024 and have upgraded supply chain resources that we expect to have an impact this year, and three, improve the process of launching our new projects. We've identified a few challenges in our processes and some system-imposed waste.
Thank you Phil for the detailed review of the Q4 and full year 2023 results to review, where we were when we entered the year and my initial research <unk> assessment of the 2023 priorities number one price realization. We have completed the pricing corrections, we had scheduled with some long term idea IQ contracts still active in.
Price challenged we are working material and looking product projects to improve gross margin on those specific products and we will reprice future opportunities.
To extend the time horizon of the ethanol <unk> planning process in part procurement.
We have a framework established we will continue to refine this process throughout 2024 and have upgraded supply chain resources that we expect to have impact this year in.
And three improve the process of launching our new projects. We've identified a few challenges in our processes and some system imposed waste, we're working on refining processes to improve that flow currently.
Mike Manna: We are currently working on refined processes to improve that flow. I state an increase in gross margin was a key focus across the business, and we achieved a positive trend throughout 2023. Remember, a great deal of our valuable resources were allocated to the recovery from the cyber event for much of the first half of the 2023 year, putting us two full cores behind my expected time today. As we enter 2024, the operational priorities are continued gross margin improvement through material cost deflation and lean productivity projects in both the battery and energy and communications business. Our sales priorities are to increase our engagement resources and grow the opportunity funnel of our major projects, including phenyl chloride cells, EL8000 cases, 123A cells and packs, and thin-cell related designs.
I stayed an increase in gross margin was a key focus across the business and we accomplished it positive gross positive trend throughout 2023.
Remember a great deal of our valuable resources were allocated to the recovery from the cyber event for much of the first half of 2023 year, putting us two full quarters behind my expected timetable.
Sure.
As we enter 2020 for the operational priorities. Our continued gross margin improvement through material cost deflation and lean productivity projects in both the battery and energy and communications businesses.
Our sales priorities are to increase our engagement resources and grow the opportunity funnel of our major projects, including final chloride cells.
For all 8000 cases, 123 cells impacts and thin cell related designs.
Mike Manna: On the materials side, the supply chain is improving, but we are still far from pre-COVID lead times for components, so extending order visibility and forecasting is key in our S&OP process to mitigate part shortages and maintain revenue levels. Switching over, I will provide a brief update on the Organic Growth Projects for the business community. On the communications system side, we have shipped our first substantial orders of EL8000 server cases to several customers. We continue to get small orders from various partners. We have developed a new DC power supply that will allow the server to be used in vehicular applications, both military and commercial in nature.
On the materials side supply chain is improving but we are still far from pre COVID-19 lead times for components, so extending order visibility and forecasting is key and our ethanol process to mitigate parts shortages and maintain revenue levels.
Switching over I will provide a brief update on the organic growth projects for the businesses on the communication system side, we have shipped our first substantial orders of 8000 server cases to several customers. We continue to get small orders from various partners. We have developed a new DC power supply that will allow the server to be used.
And vehicular applications, both military and commercial in nature, we have systems and test with the Dod customer currently and expect that option to be available for mid year production orders to reiterate this system developed with our strategic partner allows high end computing power to be used in difficult environments.
Mike Manna: We have systems in test with a DoD customer currently and expect that option to be available for mid-year production orders. To reiterate, this system, developed with our strategic partner, allows high-end computing power to be used in difficult environments, on the edge, in industrial 5G and AI applications, truly bringing server-level computational power to the point of use. We expect this product line to grow as new customers adopt it for their system use. Secondly... On the battery and energy side of the business, several projects continue to advance. We have production equipment in place for our thin cell to support customers in the medical wearable space and several applications in item tracking. Our partner in the medical wearable space is currently in FDA testing, which is a gating factor for production ramp-up.
We urge and industrial five G&A applications truly bringing server level computational power to the point of views. We expect this product line to grow as new customers adopt it for their system use.
Secondly.
On the bedroom and energy side of the business. Several projects continue to advance we have production equipment in place for our thin cell to support customers in the medical wearable space and several applications in item tracking our partner in the medical wearable space is currently in FDA testing, which is a gating factor for production ramp we will be attending the him.
Mike Manna: We will be attending the HIMS show in Orlando next month where we will continue to showcase our X5 power system for powered medical carts and launch the new X5 light variant for USB-C powered devices. The 1-2-3-A product line supporting IOT and illumination market opportunities is growing, with our XR-1-2-3-A cell offering over 30% more energy in the same footprint now available for sampling and production. Several night vision customers are reporting significant increases in usable runtime over competitor CR-1-2-3-As using this new cell.
Show in Orlando next month, where we will continue to showcase our X five power system for powered medical cards and launched the new X five light variance for USB C power devices.
The 123 product lines, supporting Iot and illumination market opportunity sales funnel is growing with our XR 123 cell offering over 30% more energy in the same footprint now available for sampling and production. Several night vision customers are reporting significant increases unusable runtime.
Over competitors here 123, as using this new cell.
Mike Manna: Our improved final chloride product line targeting monitoring and telemetry applications is in qualification and field testing with several customers. These qualification cycles are extremely lengthy, but we anticipate some initial production orders later this year. Our development work on the conformal wearable battery continues, and we have successfully completed UN DOT shipment testing, a major milestone that allows us now to ship batteries to customers for initial testing and functional feedback. We are working on completing the rest of the validation testing to enter U.S. government first article testing, which is currently scheduled to start later this year. We have been informed by the U.S. government that they expect significantly lower production volumes of this product due to delays in the Integrated Visual Augmentation System, known as IVAS, currently under development by Microsoft. Nevertheless, we are in a strong position to bring this product to market for the U.S. government and other customers. We continue to work on advanced projects and business cases for items that accelerate the growth of both businesses. We have a development partner working with us in Newark on advanced rechargeable cell designs with promising early results.
Our improved final chloride product line targeting monitoring and telemetry applications is in qualification and field testing with several customers. These qualification cycles are extremely lengthy but we anticipate some initial production orders later this year.
Our development work on the confirm a wearable battery continues and we have successfully completed U N D. O T shipment testing a major milestone, which allows us now to ship batteries to customers for initial testing and functional feedback.
We're working on completing the rest of the validation testing to enter U S. Government first article testing, which is currently scheduled to start later this year.
We have been informed by the U S government, they expect significantly lower production volumes of this product due to delays in the integrated visual augmentation system known as <unk> currently under development by Microsoft.
Nevertheless, we are in a strong position to bring this product to market for the U S government and other customers.
We continue to work on advanced projects and business cases for items that accelerate the growth of both businesses. We have a development partner working with us in Newark on advanced rechargeable cell designs with promising early results as we progressed to a more tangible items in the future our prior updates in future earnings calls.
Mike Manna: As we progress to have more tangible items in the future, I will provide updates in future earnings calls. With a great ending to 2023 and a strong Q4 finish, strong backlog position, and a positive trend of gross margin improvements, we are focused on continuing these efforts throughout 2024. With continued strong focus on lean and material deflation initiatives, we are targeting further sustainable gross margin improvements for both businesses, which will further improve the generation of cash and allow us to continue to pay down acquisition debt. Sales funnel and commercial opportunity pipeline growth is key for 2024 and beyond to keep our strong organic growth trajectory going as we have yet to fully utilize and realize the return from all our new product investments. Thanks, everyone, for your attention.
With a great ending to 2023 and a strong Q4 finish strong backlog position and a positive trend of gross margin improvements. We are focused on continuing these efforts throughout 2024 with continued strong focus on lean and material deflation initiatives. We are targeting further sustainable gross margin improvements for both businesses.
Which will further improve generation of cash and allow us to continue to pay down our acquisition debt.
Sales funnel and commercial opportunity pipeline growth is key for 2024 and beyond to keep our strong organic growth trajectory going as we have yet to fully utilize and realize the return from all our new product investments.
Operator: That concludes the prepared remarks for today. We'll go back to the operator for questions. Thank you. Again, ladies and gentlemen, if you'd like to ask a question, please press star 1-1 on your telephone. Again, to ask a question, please press star 1-1.
Thanks, everyone for the attention that concludes the prepared remarks for today, we will go back to the operator for questions.
Thank you again, ladies and gentlemen, if you like to ask a question. Please press star one on your telephone again to ask a question. Please press star 111 moment for our first question.
Operator: One moment for our first question. Our first question comes from the line of Josh Sullivan of the Benchmark Company. Your line is open. Hey, good morning, Mike.
Okay.
Our first question comes from the line of Josh Sullivan of the Benchmark Company. Your line is open.
Josh Sullivan: Phil, congratulations on the quarter here. Thank you. You know, with the momentum here coming out of 23, and you're pointing to double-digit revenue growth and operating margins for 24 and onward in the presentation, you know, how should we think of that walk or cadence, you know, particularly on the margin profile side here, looking ahead? What are the major hurdles to maybe getting to that, or, I mean, you're obviously already on a good trajectory here, but do we need to see Well, we're always in an organic growth funnel that's, you know, we're somewhat host to our customers. I mean, there are very few products that we're bringing to the market directly. So we're somewhat tied to their development cycle and launch cycle. So there's always some risk involved there.
Hey, good morning, Mike Phil Congratulations on the quarter here alright. Thank you.
With the momentum here coming out of 'twenty three.
And you are pointing to double digit revenue growth and operating margins for 'twenty four and onward in the presentation. How should we think of that walk or cadence, particularly on the margin profile side. Here. Looking ahead, what are the major hurdles to getting to that or I mean, you obviously already on a good trajectory here, but do we need to see any of these specific development projects workout or is this just kind of.
That's really going to work out.
Well Theres always had an organic growth funnel.
Someone asked you to our customers I mean, there's very few products that were bringing to market directly.
So we're somewhat tied to their development cycle and long cycle. So there's always some risk there, but we have pretty good visibility to a lot of things going on we have a good strong backlog currently and feel pretty good about the position we're in.
And then maybe just on the price realization you are seeing here. The you mentioned the comments can you just.
Mike Manna: But you know, we have pretty good visibility into a lot of things going on. We have a good, strong backlog currently, and feel pretty good about the position we're in. And then maybe just on the price realization, you know, you're seeing here, you mentioned the comments. Can you just expand on the contract negotiations and what we might expect to see this year? Well, as I stated, there are still some IDIQs for both businesses that were negotiated, you know, two, three years ago that are still active and in out years of the IDIQs, but price challenges because of when they were negotiated. In some cases, we've been able to just cancel. In other cases, the government has taken a harder stance and not really allowed much to happen.
Band on the contract negotiations and what we might expect to see this year.
Well as I stated there is still some some IDI cues for both businesses that were negotiated you know two or three years ago that are still active and in in out years of the IDI cues, but price challenge because when they were negotiated.
In some cases, we've been able to just cancel.
In other cases, the government has taken a harder stance and not really allowed much to happen there.
So we're doing our best to make sure that we're profitable on all of those cases and continue to move forward and provide the products that are more fighter needs to <unk>.
Survive.
Got it.
Mike Manna: So we're doing our best to, you know, make sure that we're profitable on all those cases and continue to move forward and provide the products that our warfighter needs to survive and have. And then maybe on the supply chain improvements you're seeing, where were the biggest improvements in the quarter? You know, maybe where are some of the bottlenecks as we head into 24?
And then maybe on the on the supply chain improvements Youre seeing.
We're the biggest improvement in the quarter, maybe where some of the bottlenecks as we head into 2004, I know you talked about lead times there.
And then I think you also talked about maybe a certain component that was delayed in the quarter.
Yeah.
The biggest the biggest real improvement was really when we started our ethanol P process. After the cyber event, we kind of got.
Mike Manna: I know you talked about lead times there, and then I think you also talked about maybe a certain component that was delayed in the quarter. Yeah, the biggest real improvement was really when we started our S&OP process. You know, after the cyber event, we kind of got hit in the mouth, and we were kind of flat-footed going into the year.
Hitting them often mirrors kind of.
Footing going into the year, but RSVP process really started to flourish and mid year. So as you get into Q4, you've now had a good strong six months of strong forecasting and forecasting not only from our customers all the way through to our supply chain. It just really eases the burden of visibility.
Mike Manna: But our S&OP process really started to flourish in mid-year, so as you get into Q4, you've now had a good, strong six months of strong forecasting, and forecasting not only from our customers but all the way through to our supply chain. It just really eases the burden of, you know, visibility.
<unk> you can get ahead of some of the orders and Youre not expediting parts, because you were ordering them within the normal lead time in the parks.
Got it.
And then maybe just.
Right.
The specific example, I called out and I'll just give you a.
It.
This happens, but maybe infrequently, but it still happens during the course of a quarter, where you're waiting at a long time.
Mike Manna: You can get ahead of some of the orders, and you're not, you know, expediting parts because you were ordering them within the normal lead time of the parts. The specific sample I called out, and I'll just give you this happens, but maybe infrequently, but it still happens during the course of a quarter, where you're waiting on a long time, a long, long lead time for a lead item that's months and months and months that used to be weeks. You finally get the part, and it doesn't pass incoming inspection. And you just want to rip your hair out when that happens.
A long long time lead item thats months and months and months they used to be.
Weeks, you finally get the power and it doesn't pass incoming inspection.
And you just want to you just want to rip your hair out when that happens and that that does happen. It happened several times during the quarter and those are if theyre not theyre not day to day.
Issues that were fighting, but they happen.
A couple of weeks so that is it forces our SLP process to go deeper into the supply chain and to be much more interactive with much more face to face contact with our vendors.
Mike Manna: And that does happen. It happens several times during the quarter. And those are not day-to-day issues that we're fighting, but they happen every couple weeks. So that forces our SNOP process to go deeper into the supply chain and to be much more interactive, much more face-to-face contact with our vendors. And then maybe just switching over to some of the products, you know, on the Yale server cases, you know, how are those small orders developing, and then do you think they will lead into larger orders or those different customers, and maybe what the timeline is? Oof. The answer's yes. I mean, there's kind of a groundswell.
Got it.
And then maybe just switching over to some of the products.
<unk> server cases.
Those small orders developing and then do you think they lead into larger orders are those different customers and maybe what the timeline is.
Well.
The answer is yes, I mean, there's kind of a ground swell, we just got through some of the some of the qualification early last year. It takes a little bit of time for customers to get it through or strategic partner actually it was a pretty lengthy server backlog right now so I.
I think right now if you were to order a server it is going to be about four to six months before you actually get the blade from them. So theres a little bit of inherent lead time built into it.
Mike Manna: You know, we just got through some of the qualification early last year. It takes a little bit of time for customers to get them through. Our strategic partner actually has a pretty lengthy server backlog right now. So I think right now, if you were to order a server, it's going to be about four to six months before you actually get the blade from them.
The case need because of the server.
Timing.
But we expect it to continue to grow and be a significant piece of our business going forward.
Right, Okay, and then the option that coming available mid year. So how do you think that will drive sales or what is the.
Mike Manna: So there's a little bit of an inherent lead time built into the case need because of the server timing, but we expect it to continue to grow and be a significant piece of our business going forward. Right. And then the option that's coming available, you know, mid year or so, you know, how do you think that'll drive sales? Or what is the, you know, the key incremental there? I think that's probably initially going to be more on the military side of the business. There's just a lot of need for, you know, computational power on the battlefield forward field, especially now that there's a lot of electronic jamming and communications giveaway positions and etc, etc. They want to do a lot more, you know, local to the events and operations that are going on. And really, the DC power supply enables them to put it in, you know, a normal Humvee or tracked vehicle and operate in the forward field.
The key incremental there.
I think thats, probably initially going to be more on the military side of the business. There's just a lot of need for computational power on the battlefield for field, especially.
Especially now that you know, there's a lot of electronic jamming and communications give away position and et cetera et cetera. They they want to do a lot more local to the events in operations that are going on and really the DC power supply enables them to put it in a normal humvee your tracked vehicle.
And operate Ford field.
And then just one last one just on the thin cell.
The medical wearable partner, that's working through the FDA testing, what you think the timeline on that it looks like.
Well, we're hoping we're going to be in production last year.
Mike Manna: And then I'll just do one last one on the thin cell, you know, the medical wearable partner that's working through FDA testing. What do you think the timeline on that is? It looks like it's going to be pretty short.
So obviously, we're not showing a huge revenue spike in thin solar or really announcing anything so.
Yeah.
Mike Manna: Well, we were hoping we were going to be in production last year, so obviously, we're not showing a huge revenue spike in thin cell or really announcing anything. So, you know, AFDA is a fickle process. We've been through it with a lot of our customers. You know, sometimes you get through it in six months; sometimes it takes four years.
You have to as a fickle process, we've been through it with a lot of our customers, sometimes you get through it in six months, sometimes it takes four years.
Unfortunately, it's another one of those process as I stated earlier, we're kind of hostage to our customers' timeline and their successes in that regard, but we're poised and ready to go.
Mike Manna: Unfortunately, it's another one of those processes I stated earlier. We're kind of hostage to our customers' timelines and their successes in that regard, but we're poised and ready to go. Yeah, the automated equipment is in place, and we're ready when the orders come in. Well, thank you. Thank you for the time. Sure, no.
Yes.
Automated equipment is in place.
And we're ready.
When the orders come in.
Got it.
Well. Thank you. Thank you for the time.
Sure.
Thank you one moment please.
Mike Manna: Thank you. One moment, please. Our next question comes from the line of Brett Davidson of InvestRudder. Your line is open. Good morning.
Our next question comes from the line of Brett Davidson I mean, that's why don't you line is open.
Okay.
Good morning, I got just a couple of quick questions. One of them is where are you guys in regards to production capacity right now.
Brett Davidson: I got just a couple of quick questions. One of them is, where are you guys in regards to production capacity right now? Well, production capacity is, we're still pretty low. I mean, as far as our overall ability to serve, we're pretty much a first shift operation worldwide.
Well production capacity, where we are still pretty low I mean as far as our overall.
Ability to serve or pretty much a first shift operation worldwide.
Mike Manna: And we have a lot of, you know, open capacity as far as footprint and building space are concerned. So, you know, if I had to guess, we could easily add another 30% capacity just on the first shift, maybe even more than that, and then we still have the option of going to, you know, alternate shifts, additional shifts to, you know, triple our capacity if we need to. And, you know, I know you guys have gone through some growing pains introducing some of those new products, you know, regarding operating efficiency. Where are you guys in that process right now? If you could put like kind of a percentage number on it, if you were at 50% before, are you guys at like 85% now, or what does that look like?
And we have a lot of open capacity as far as footprint and building space.
If I had to guess we could easily add another 30% capacity just on first shift.
Maybe even more than that and then we still have the option of going to you know alternate shifts additional shifts.
Sure.
Probably triple our capacity if we needed to.
And I know you guys have gone through some growing pains of introducing some of those new products regarding operating efficiency.
Yes.
Where are you guys in that process right now.
Uh huh.
If you could put like kind of a percentage number on it.
If you were at 50% before are you guys at like 85% now or what does that look like.
Oh.
Mike Manna: It's a little hard to nail down because there are so many different products and projects going on, but, you know, if I had to guess, we're probably in the 80% range probably, but some projects are probably closer to 95 and some are probably still closer to 20 at this point. So a lot of things are going on, and we're trying to prioritize, obviously, the highest revenue potential, more land, or more resource-intensive projects first so we can see the maximum benefit.
It's a little hard to nail down because theres, so many different products and projects going on but.
If I had to gas where we're in that 80%.
Range, probably but some projects are probably closer to 95 in summary, probably still closer to 'twenty.
At this point, so a lot of things going on and we're trying to prioritize obviously the highest revenue.
More land are more resource intensive projects first so we can see the maximum benefit.
Okay.
Mike Manna: And, you know, on some of those, like maybe some of the things more like the 20 percent level, I mean, do you guys still have some low-hanging fruit that you can easily address to ramp up efficiency? Oh, absolutely. I mean, you know, the real challenge is, you know, now that we've become a lot more medical involved with some of our other customers, the medical process to just change either process or product is just a lot more lengthy than some of just the industrial other projects that you deal with. There's just a really long quality and supplier approval process to really go through any type of change.
On some of those like maybe some of the things more like the 20% level. I mean do you guys still have some low hanging fruit that you can.
You addressed a ramp up the efficiencies.
Oh, absolutely I mean.
The real challenge is now that we've become a lot more medical involved.
In some of our other customers I mean, the medical process to just change either process or product. There's just a lot more lengthy than than Soma, just the industrial and other projects that you deal with there is just a really long qual and supplier approval process to really go through any type of change so even though we have the best intentions.
Mike Manna: So even though we have the best intentions, sometimes, you know, what you think is a simple change that should take a quarter might take three, just because you have to get resources from the customer to actually approve it and actually give you the green light to implement. All right. Thank you. I appreciate the time.
Times, what you think's, a simple change that should take a quarter might take three just because you have to get resources from the customer to actually prove it in and actually give you the green light to implement it.
Alright. Thank you I appreciate the time.
Sure. Thank you.
Thank you.
Ladies and gentlemen, if you like to ask a question. Please press star one on your telephone again to ask a question. Please star 111 moment. Please.
Brett Davidson: Sure, thank you. Thank you. Again, ladies and gentlemen, if you'd like to ask a question, please press star 1-1 on your telephone. Again, to ask a question, press star 1-1.
Okay.
Our next question comes from the line of John Dresser Clinical your line is open.
Hi, good morning, Thanks for taking my question.
It looks like a solid quarter.
I just wanted to wrap up the year.
A couple of quick questions one what what is driving the medical sales, obviously that helped you a lot.
Operator: One moment, please. Our next question comes from the line of John Drescher of Pinnacle. Your line is open. Hi, good morning.
And the last quarter and I'm, just curious were there any specific items that.
John Drescher: Thanks for taking my question. Looks like a solid quarter and a nice way to wrap up the year. A couple of quick questions. One, what is driving medical sales? Obviously, that helped you a lot in the last quarter.
Really helped boost the sales in that segment.
Well, we have some recurring products that under FDA and other things are under our battery replacement cycle.
Mike Manna: And I'm just curious, were there any specific items that really helped boost the sales of that? Well, we have some recurring products that, you know, under FDA regulations, and other things are under a battery replacement cycle. You know, obviously, we had a lot of sales in medical during COVID. So you have some of that coming due where you get a little bit of a bump because there's a replacement being used. But in a lot of cases, our main customers have had their competitors have foot faults and, in some cases, recalls and other things that have really driven their businesses to, you know, grow a lot faster than I think even they thought, which we are a beneficiary of. Okay, what's the cycle time for the ones that you put into place during COVID?
Obviously, we had a lot of sales in medical during Covid. So you have some of that coming due where you can get a little bit of a bump because there's a replacement.
Being used but in a lot of cases, our main customers have had there.
Are there competitors have foot faults and in some cases recalls and other things that have really driven.
Their business is to grow a lot faster than I think even they thought which we are a beneficiary of.
Okay.
The cycle time for the ones that are.
You put.
Put into place during Covid is it four years or so or how does that work.
Typically the ventilation devices or on a three three year cycle typically.
Mike Manna: Is it four years or so? Or how does that work? Typically, ventilation devices are on a three year cycle.
Okay and that's that's the key product line is the ventilation products.
Mike Manna: And that's the key product line is the ventilation product. It's one of our more prevalent lines, yeah, I would say. But we do a lot with infusion pumps and other medical devices, so it's spread across a bunch of different devices. Great. What percentage of the backlog would you say is medical right now? Brought to you by the U.S. Department of Labor. I would say probably 30 percent, off the top of my head, but I don't actually have the number for an immediate, You mentioned business interruption claim is under review.
It's one of our more prevalent lines, yeah, I would say, but we do a lot with infusion pumps and other medical.
Power, so it's spread across a bunch of different devices. Okay.
Great.
What percentage of the backlog would you say is medical right now.
Roughly.
I would say probably 30%.
Off top of my head, but I don't actually have the number right in front of me, but.
Yes.
That's helpful.
You mentioned business interruption claim is under review.
Mike Manna: What's the approximate amount of that claim right now? Well, we haven't we haven't disclosed that, but you can you can look at our quarterly results, and you can use intuition to determine what that is because if you look at the last three quarters. You know, well, we'll start with Q1. In Q1, we had $32 million in sales. The last three quarters, we averaged, call it $43 million. And in Q1, whereas we were break-even on the bottom, we averaged $3 million, on an average, per quarter over the last three quarters.
What's the approximate amount of that claim right now.
Well, we havent, we havent disclosed that but you can you can look at our quarterly results and you can use intuition and determining what that is because if you look at the last three quarters.
Well I'll start with Q1 Q1, we had $32 million in sales the last three quarters, we averaged call it $43 million and over in Q1, whereas we were breakeven on the bottom we averaged $3 million on an average per quarter over the last three quarters, so without giving you an absolute number of what our <unk>.
Philip A. Fain: So without giving you an absolute number of what our insurance coverage is and all that, it's in that range. Okay, I gotcha. When do you expect to have that resolved? That is a great question. I would say, hopefully, soon.
Insurance coverages and all of that it sits it's in that range.
Okay I got you.
When do you expect to have that resolved.
That is a great question six months ago.
Yeah, I would say hope hopefully soon.
Philip A. Fain: You know, it's been information intensive, providing as much detail as we possibly can, which we look at as a top priority because it's certainly cash that we would love to see along with our ERC claim that would go directly towards the pay down of our debt. ERC claim? What is that? The ERC claim is a claim that we filed in June with the IRS, and we disclosed the amount.
It's it's been information intensive providing as much details as we possibly can which we look at it as a top priority because it's it certainly cash that we would love to see kill along with our ERC claim that would go directly.
Towards the pay down of our debt.
Okay fine.
<unk> claim which claim is that.
The ERC claim is a claim that we filed in June.
With the IRS.
Philip A. Fain: The amount was approximately 1.5 million dollars that we recognized in Q2, and similar to the business interruption claim, you know, along with everybody else, we're waiting for the refund check to come from the IRS. And finally, you've done a good job of paying down the debt from the acquisition. I'm just curious, how much availability do you have on the credit facility now as of your end? Well, we actually have quite a bit, and let me explain that we have an accordion feature that we can call into play if we need $15 million, which we don't because we're generating some very good EBITDA. We could certainly work with the bank to use the accordion feature that's in our revolver credit loan.
And we disclosed the amount the amount was approximately $1 $5 million that we that we recognized in Q2 and similar to the business interruption claim.
Along with everybody else, we're waiting for.
The refund check to come from the IRS I gotcha that makes sense and finally.
We've done a good job of paying down the debt from the acquisition I'm just curious how much availability do you have on the credit facility now as of year end.
Well we have.
Actually quite a bit and let me let me let me define that we have an accordion feature that we can call into play if we need it $15 million, which which we don't because we are generating.
So some very good EBITDA, we could certainly work with the bank to use the accordion feature.
That's in our revolver.
Revolver, our credit credit loan.
Philip A. Fain: So you have the $15 million accordion, but nothing beyond that? We have an accordion that could get us to that level, provided that there was a really great reason, an underlying strong business reason, that we could do that. But then again, we would compare that to other financing alternatives, you know, as we go through our normal due diligence, whether it's CapEx, whether it's acquisitions, whatever it may be.
So you have the $15 million accordion, but not only.
An accordion that could get us that could get us to that level.
Provided that there was a really great reason, an underlying strong business reason that we could that we could.
You know that we see but then again, we would compare that to other financing alternatives.
As we go through our normal due diligence.
Whether it's capex, whether it's a.
Acquisitions, whatever it may be one of the and I'll just have to mention this because they preach. This all the time the cheapest financing that we have is working down our inventory, which which we very successfully did in Q3 and Q4 versus Q3 working down inventory by approximately.
Philip A. Fain: You know, one of the, and I'll just have to mention this because I preach this all the time, the cheapest financing that we have is working down our inventory, which we very successfully did in Q3, in Q4 versus Q3, working down inventory by approximately $4.7 million from Q3. Okay, so ignoring the accordion, which sounds like a special circumstance, facility. Is it fair to say that there's no availability under the current term loan? No, we certainly have availability. We're not, by any means, capped out.
$4 $7 million from Q3.
Okay.
We're gonna be accordion, which it sounds like a special circumstance.
Facility.
Is it fair to say that there is no availability under the current term loan now.
We certainly we certainly have availability, we're not we're not by any means capped out.
Philip A. Fain: What is that availability, both on the term loan and the revolver? Yeah, the availability before we would use the accordion feature, if we decided to, is over $5 million. $5 million availability, and that's primarily on the revolver?
Okay, what is that availability both on the term loan and the revolver.
The availability before we would use.
Accordion feature if we decided to is over $5 billion.
5 million availability, that's primarily on the revolver, yes, okay. So you've got $5 million on the revolver availability, yes, right now okay. Great. Thank you very much okay. Thank you Sir.
Philip A. Fain: Yes. We've got 5 million on the revolver availability. Great. Thank you very much. Okay. Thank you. Thank you. One moment, please. Our next question comes from the line of Albert Rocco of Self. Your line is open. Hi, good morning. This is Al Rocco.
Thank you one moment please.
Okay.
Our next question comes from the line of Albert Rocco <unk>. Your line is open.
Hi, Good morning. This is al Rocco I'm, just wondering if you've ever looked at providing battery cells to the auto industry.
Albert Rocco: I'm just wondering if you've ever looked at providing battery cells to the auto industry? Well, we provide a lot of battery packs to that industry currently. We are partnered with cell providers that we actually use in that marketplace. You know, we've thought about it; it's a very long cycle. Typically, you know, you're at least three or four years of cell development and another two or three years of downhole testing before you really get what I would call approved. And you really have to have a partner that's willing to put the product downhole to do all the testing and qualifications.
Yeah.
Well, we provide a lot of battery packs into that industry. Currently we are partnered with cell providers that actually we use in that marketplace.
We thought about it it's a very long cycle.
Typically you know.
Or at least three or four years of cell development and another two or three years of of downhole testing before you really get what I would call approved and you really have to have a partner that's willing to put the product downhole to do all the testing and qualification so.
Mike Manna: So. It's always been thought about. I'll say that. Okay, I wish you luck in finding a partner who needs a domestic provider.
It's always being thought about their I'll say that.
Okay I wish you luck in.
Finding a partner who need the domestic provider.
Albert Rocco: I would assume you're well positioned there. Sure. Thank you. Great quarter. Oh, thanks. Thanks so much.
I assume you're well positioned there.
Sure.
Thank you.
Great quarter. Thanks.
Thanks, so much.
Albert Rocco: Thank you. Again, ladies and gentlemen, if you'd like to ask a question, please press star one one on your telephone. Again, to ask a question, please press star one one.
Thank you again, ladies and gentlemen, I'd like to ask a question. Please press star one wondering your telephone again to ask a question. Please press star one one.
Operator: One moment, please. Our next question comes from the line of Stewart Citron of the Citron Company. Your line is open.
One moment please.
Our next question comes from the line of Stuart Sichuan Other Sichuan Company. Your line is open.
Stewart Citron: Good morning, gentlemen. A nice presentation on a good quarter. My question has to do with your conformable wearable battery.
Good morning, gentlemen, nice presentation this quarter.
My question has to do with your conformable wearable battery how significant percentage contribution to your bottom line is the conformable wearable battery and secondly, how significant is the Microsoft delayed.
Stewart Citron: How significant is the percentage contribution to your bottom line from the conformable, wearable battery? And secondly, how significant is the Microsoft delay? Well, right now, it's making a zero contribution to our bottom line. But we saw potential. Well, potential. I mean, we had a very large award that, you know, it's an IDIQ. So there's, there's a potential very large number out there. But ultimately, with any IDIQ, and we've lived with them, uh... in and out of this building for years, and all the businesses it supports, it's basically a hunting license to actually get business. It doesn't actually guarantee you're ever going to get one order, let alone revenues. So, I mean, we've kind of always put it off as if it's going to be a good opportunity. We have other commercial and other government opportunities. Customers that would love us to be in a production capability mode with that product, and we believe we're gonna, you know, bring it to market successfully, and it will be a contributor to our bottom line. Are there still, I believe, four companies competing for this? There were four awards.
Well right now it's zero contribution to our bottom line we.
We saw I'm talking I'm sorry.
Potential.
Well potential I mean, we had a very large award that it's an idea IQ. So there is a potential very large number out there.
Right.
Ultimately with any idea IQ and we've lived them.
In and out of this building for <unk> and all the businesses it's.
It's basically a hub.
Hunting license to actually gift business it doesn't actually guarantee.
Unit, one order let alone.
Revenue. So I mean, we've kind of always put it off is to its going to be a good opportunity we have other commercial and other government.
Customers that would love us to be in a production capability mode with that product.
And we believe we're going to bring it to market successfully and it will be a contributor to our bottom line.
Are there still I believe for companies competing for this.
There were four awards were not really Privy to where the others actually are the only thing we've been told there's no one else is.
Mike Manna: We're not really privy to where the others actually are. The only thing we've been told is that ThruFab. No one else is actually qualified at this point.
Through fat.
So no one else is actually qualified at this point, that's the only thing I can weigh in.
Mike Manna: That's the only L I have. There is obviously no timetable on expectations. No, I mean, there's been some rhetoric around when the IVAS system is going to be, you know, out in field trials and other things, and, you know, I'll leave that for you to look up on your own. There are also another couple of government projects, NetWarrior and some other advanced weapons and night vision systems that are scheduled to use the conformal product, just not in the volumes at IVAS, obviously. www.ultralife
All I have.
No timetable on expectations obviously.
No I mean, there's been some rhetoric around when the I've asked system is going to be out in field trials and other things and you know I'll I'll leave that to.
For you to look up on your own.
There is also another couple of government projects net warrior and some other advanced weapons and night vision systems that are scheduled to use.
The formal product.
Not in the volumes that Ipass, obviously would be using.
Thanks, a bunch have a great day, thank you Sir.
Stewart Citron: Have a great day. Thank you, sir. Thank you. I'm showing no further questions at this time, and I'd like to turn the call back over to Mike Mann, our CEO, for any closing remarks. All right, thanks everyone for listening to today's call. We look forward to talking to you next time during the Q1 2024 earnings call.
Thank you.
I'm showing no further questions at this time I'd like to turn the call back over to Mike, Matt as CEO for any closing remarks.
Alright, thanks to everyone for listening to today's call. We look forward to talking to you next time during the Q1 2024 earnings call everyone have a great day and be safe.
Mike Manna: Everyone have a great day and be safe. Bye now. Thank you. Ladies and gentlemen, this does conclude today's conference. Thank you all for participating. You may now disconnect. Have a great day, www.ultralifecorp.com, Thanks for watching!
Sure.
Thank you ladies and gentlemen, this does conclude today's conference. Thank you all participating you may now disconnect have a great day.
Okay.
Okay.
[music].
Okay.