Good day, and thank you for standing by. Welcome to the Ultralife Corporation Fourth Quarter 2025 Results Call. [Operator Instructions] Please be advised that today's conference is being recorded. I'd now like to hand the conference over to Jody Burfening. Please go ahead.

Thank you, Liz, 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 2025. 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. Actual 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 include uncertain global economic conditions, reductions in revenues from key customers, delays or reductions in U.S. and foreign military spending, acceptance of new products on a global basis and disruptions or delays in our supply of raw materials and components due to business conditions, global conflicts, weather or other factors not under our control. 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. 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. 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. These non-GAAP measures should be considered supplemental to corresponding GAAP figures. With that, I would now like to turn the call over to Mike. Good morning, Mike.

Good morning. Welcome to Ultralife's Q4 and full year 2025 results call. Earlier today, we announced Q4 revenue of $48.5 million, an increase of 10.6% year-over-year, with an operating profit loss of $10.6 million after a onetime noncash impairment, which results in a loss of $0.45 EPS. We finished the year 2025 with revenue of $191.2 million, with over $30 million from new products less than 5 years old, which is a growth of 16.2% year-over-year, which after the noncash write-down resulted in a full year operating profit loss of $5.9 million, which equates to a full year loss of $0.35 EPS. During 2025, we completed the Electrochem transition and various operational initiatives to reduce ongoing costs. I am excited to see our backlog grow to $110 million exiting the year, diversified across several markets and applications with over $6 million of it driven from new products released in 2025. In 2026, I expect the Communication Systems business to rebound as new product sales begin and long-delayed programs start selling through, with the Battery & Energy business improving gross margin and revenue from new product launches. Our improved brand promotion and collaboration of worldwide resources will drive organic growth and new customer opportunities. I will turn it over to Phil to talk through the detailed numbers.

Thank you, Mike, and good morning, everyone. Earlier this morning, we released our fourth quarter results for the quarter ended December 31, 2025. We have also updated our investor presentation in the Investor Relations section of our website and plan to file our Form 10-K with the SEC in the near future. Turning to our financial results for the fourth quarter. Consolidated revenues totaled $48.5 million compared to $43.9 million for the fourth quarter of 2024, driven by strong performance for our Battery & Energy Products segment. Revenues for this segment were $45.9 million compared to $39.9 million last year, a 15.1% increase. Excluding third-party sales for Electrochem acquired on October 31, 2024, from both periods, sales for this segment increased 9.5% year-over-year. This organic growth was driven by a 39.6% increase in medical, a 20.4% increase in industrial and other commercial and a 1.2% increase in government defense, partially offset by a 3.6% decrease in oil and gas market sales. The sales split between commercial and government defense for our battery business was 73-27 compared to 70-30 reported for the 2024 quarter, and the domestic to international split was 71-29 compared to 62-38 for the 2024 period, primarily reflecting our acquisition of Electrochem. Revenues from our Communications Systems segment of $2.6 million declined 35.2% from the $4 million we reported last year, primarily attributable to timing of expected orders, which were delayed by the U.S. government shutdown. On a consolidated basis, the commercial to government defense sales split was 66-34 compared to 62-38 for the 2025 and 2024 full years, respectively. Our total backlog exiting the fourth quarter was $110.2 million, an increase of $20 million or 22.1% from the $90.3 million exiting the third quarter and remains diverse in nature across our commercial and government defense customer base.…

Thank you, Phil, for the detailed review of the Q4 and full year 2025 results. As mentioned in the last call, we closed out a year with a lot of momentum and focus on preparation for future growth expectations. During 2025, we transitioned our largest acquisition to date, Electrochem, out of their parent systems and in Ultralife systems for ERP, MRP, networking, mail and office. We closed 2 of our smaller manufacturing facilities in North America, which decreased our North American locations from 7 to 5. We began systems consolidation at our Houston facilities, brought in external lean and operational support for our Newark facility and launched global rebranding efforts to eliminate customer confusion and better align sales and marketing resources worldwide. As we transition into 2026, we have 4 distinct priorities underway. We need our Communication Systems business to be profitable and growing. We have several new products in the commercial capture phase with initial orders received and multiple new products slated for release in 2026. We are actively working with multiple partners on large programs of record and long-term projects that we will bring -- that we believe will bring recurring baseline revenue back into the business. The second priority, which is in the Battery & Energy side of the business is improved gross margin with the initial target being our Newark operation. We have several recurring yield issues and inefficiencies that we continue to address with the help of external consultants in conjunction with the new leadership team that recently joined. We have revised pricing in several product areas and have cost-down projects ongoing with multiple customers. We continue to expand vertical integration opportunities enabled by the acquisition of Electrochem, allowing us to incorporate Electrochem cells into existing pack assemblies and broaden our addressable pack assembly market…

[Operator Instructions] We have a question from Gregory Weaver with Invicta Capital Management.

It sounds like there's a lot of good growth as well as margin expansion opportunities. Would you care to help us frame that a little bit and kind of what your goals are in terms of organic growth rate or kind of where you want to get that 9% EBITDA margin?

Yes. I mean, overall, we started really a road map a few years ago really to get our new product pipeline on both sides of our business really humming and delivering organic growth. And as much as we'd like to have it just happen immediately, there's time. It's not -- we're often part of someone else's solution. We're very seldom selling an end solution to the marketplace. So it's not only us developing our stuff, it's our customers getting their things through all their quals and certifications into market. But overall, we're targeting to be 2x GDP as a minimum in our organic growth side. We'd love to be greater than 10% EBITDA to start short term. Long term, we'd love it to be higher. And long term, we continue to look for other ways we can grow the business. As we pay down the debt on this last acquisition, we'll be looking for what's next.

All right. I appreciate that. So on the Comm Systems business, I mean, when I was involved in the company years, probably 20 years ago, you had a huge order in that business, and you were right in that and now it's extremely low levels here, I guess, but you said you want to get it back to a baseline revenue. I guess kind of what's your definition of baseline revenue for that business.

Baseline is $25 million. That's where we need to be with the potential for breakaway large orders, maybe not to the extent of what we experienced years ago with SATCOM, but there are some very, very large opportunities out there, starting with Joint Fires that's received a lot of publicity. It's through the R&D stage and into the solicitation stage. And I think we're aligned with the right parties to be in a position to execute on what we see going forward for the business.

Okay. I appreciate that, Phil. And I guess just last one. You mentioned offhand, Mike, about -- I've listened to some old calls here about this medical order. As I remember, that was kind of a -- if it's the same one, it was kind of a topic for quite a while and then I guess the customer kept dragging their feet. So I guess what's the ramp look like there? And is that a sizable opportunity?

Well, the new medical order, we don't often talk about a lot of the medical projects just because the history has been that they drag on for an extended period of time. And no one wants to hear about something that's 5 years out typically. We still have some of that in the thin cell area where we have some medical projects with thin cell that we expected to see revenue by now, and we're still kind of waiting for these POs. On the order that we have, it's an OEM that we've been working with for a number of years, obviously. We already have a pretty good relationship with the customer, and we have a good revenue stream already. This will be a 6-figure plus opportunity per year, and it's just beginning to be a product launch. So we expect this to be a good little pop to the business.

Okay. Maybe it was the thin film one that I was thinking of beforehand that you've been waiting for, right?

Yes. We're still waiting for.

Yes. Okay.

[Operator Instructions] I'm showing no further questions at this time. I'd like to turn the call back to Mike Manna for closing remarks.

All right. Thanks, everyone. We look forward to talking to you at the next call for the Q1 2026 earnings. Have a great day. Bye now.

This concludes today's conference call. Thank you for participating. You may now disconnect.