Jake Patterson's questions to ULTRALIFE (ULBI) leadership • Q2 2025
Question
Jake Patterson of TALANTA Investment Group LLC asked for an update on the Battery and Energy commercial segment, specifically order trends in the oil & gas and medical markets, and requested a breakdown of the factors causing the gross margin decline.
Answer
CFO & Treasurer Philip Fain explained that oil & gas customer orders are tied to the WTI index, while the medical sales comparison was difficult as Q2 2024 was a historically strong quarter. President, CEO & Director Michael Manna added that customers are being cautious with cash. Fain then broke down the margin decline, attributing approximately 100 basis points to tariffs, nearly 200 basis points to unfavorable product mix, and the remainder to material write-offs and labor inefficiencies. He also highlighted that a rebound in the higher-margin Communications Systems segment would benefit the consolidated margin.