Ultralife Corp (ULBI) 2025 Q3 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Ultralife Corporation third-quarter 2025 results call. (Operator Instructions)

您好，感謝您的耐心等待。歡迎參加 Ultralife 公司 2025 年第三季業績電話會議。（操作說明）

I would now like to hand the conference over to your first speaker today, Jody Burfening. Please go ahead.

現在我謹將會議交給今天的第一位發言人，Jody Burfening。請繼續。

Thank you, Latanya, and good morning, everyone, and thank you for joining us this morning for Ultralife Corporation's earnings conference call for the third quarter of fiscal 2025. With us on today's call are Mike Manna, Ultralife's President and CEO; and Philip Fain, Ultralife's Chief Financial Officer.

謝謝 Latanya，大家早安，謝謝各位今天上午參加 Ultralife 公司 2025 財年第三季財報電話會議。今天參加電話會議的有 Ultralife 總裁兼執行長 Mike Manna 和 Ultralife 財務長 Philip Fain。

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.

盈利報告新聞稿已於今天早上早些時候發布。如果您尚未收到副本，請造訪本公司網站 www.ultralifecorp.com，您可以在「投資者關係」部分的「投資者新聞」下找到該新聞稿。在將電話會議交給管理階層之前，我想提醒大家，本次電話會議中一些發言包含基於當前預期的前瞻性陳述。

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 revenue from key customers, delays or reductions in US and foreign military spending, acceptance of new products on a global basis, disruptions or delays in our supply of raw materials and components due to business conditions, global conflicts, weather or other factors not under the company's control.

由於各種風險和不確定因素，實際結果可能與預測結果有重大差異。可能導致實際結果與預期結果有重大差異的潛在風險和不確定性包括：全球經濟狀況的不確定性、主要客戶收入的減少、美國和外國軍費開支的延遲或減少、新產品在全球範圍內的接受度、由於商業狀況、天氣或其他公司無法控制的因素導致原材料和零部件供應中斷或延遲。

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.

公司提醒投資人不要過度依賴前瞻性陳述，這些陳述僅反映公司截至今日的分析。本公司不承擔公開更新前瞻性聲明以反映後續事件或情況的義務。

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 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. These non-GAAP measures should be considered supplemental to corresponding GAAP figures.

有關這些因素以及其他可能影響 Ultralife 財務業績的因素的更多信息，請參閱該公司向美國證券交易委員會提交的文件，包括最新的 10-K 表格報告。此外，在今天的電話會議上，管理階層將提及一些管理階層認為有用且與公認會計準則不同的非公認會計準則財務指標。這些非GAAP指標應被視為對應GAAP資料的補充。

With that, I would now like to turn the call over to Mike. Good morning, Mike.

接下來，我想把電話交給麥克。早上好，麥克。

Thank you, Jody. Good morning. Welcome to our call on Ultralife's Q3 operating results. Earlier this morning, we reported Q3 sales of $43.4 million with an operating loss of $1 million, including a onetime adjustment of $1.1 million for various costs related to the final services transition of Electrochem and the planned closure of our Calgary location, which resulted in a GAAP net loss of $0.07. In Q3, we saw revenue growth year-over-year, but faced several challenges with gross margin, primarily due to incoming supply chain quality issues, which affected product mix and line efficiencies in our Battery & Energy business.

謝謝你，喬迪。早安.歡迎參加我們對 Ultralife 第三季經營業績的電話會議。今天早些時候，我們公佈了第三季業績，銷售額為4340萬美元，營業虧損100萬美元，其中包括與電化學業務最終過渡和卡加利工廠計劃關閉相關的110萬美元一次性調整，導致GAAP淨虧損0.07美元。第三季度，我們的營收年增，但毛利率面臨諸多挑戰，主要原因是供應鏈品質問題，影響了電池與能源業務的產品組合和生產線效率。

Our Communications business continues to weigh on earnings as new products are launched and sell-through gains momentum. Our overarching strategy of diversification through M&A and new product development remains critical to stabilizing and improving the profitability as many of our existing products service components or accessories within our customer systems, giving us limited control over order timing, volume and mix.

隨著新產品的推出和銷售勢頭增強，我們的通訊業務繼續對盈利造成壓力。我們透過併購和新產品開發來實現多元化的整體策略對於穩定和提高盈利能力仍然至關重要，因為我們現有的許多產品都是客戶系統中的服務組件或配件，這使得我們對訂單時間、數量和組合的控制有限。

As we've grown through M&A, periodically, we need to review our infrastructure and align it properly to serve our customers in a cost-effective manner. With that said -- with that in mind, we have decided to close our Calgary location which is a smaller facility supporting oil and gas battery packs acquired with the Excel acquisition, with production being relocated to our Houston facility. Additionally, we are progressing through a company-wide rebranding initiative with the first phase targeted for completion in Q4.

隨著我們透過併購不斷發展壯大，我們需要定期審查我們的基礎設施，並對其進行適當調整，以便以經濟高效的方式為客戶提供服務。有鑑於此，我們決定關閉位於卡加利的工廠，該工廠規模較小，主要生產透過收購 Excel 獲得的石油和天然氣電池組，生產將轉移到我們位於休士頓的工廠。此外，我們正在推進公司範圍內的品牌重塑計劃，第一階段的目標是在第四季度完成。

This effort will emphasize the Ultralife brand as our unified market identity, enabling more cohesive marketing efforts, stronger brand equity and reduced redundancy. Ultimately, this alignment will enhance our global position as a leading critical power provider. With that said, because of the investment in new products and our M&A activity, we continue to see large opportunities develop on both sides of our business with favorable discussions with various partners and customers.

這項舉措將強調 Ultralife 品牌作為我們統一的市場標識，從而實現更具凝聚力的營銷活動、更強大的品牌資產和更少的重複工作。最終，這種合作將提升我們作為全球領先的關鍵電力供應商的地位。儘管如此，由於對新產品的投資和我們的併購活動，我們與各合作夥伴和客戶進行了有利的洽談，繼續看到業務雙向出現巨大的機會。

With our leveraged business model and reduced facility count, we can add significant revenue with minimal increase to overall costs. I will now turn it over to Phil to talk through the detailed numbers.

憑藉我們優化的商業模式和減少的設施數量，我們可以在總體成本增加最小的情況下，並顯著增加收入。現在我將把發言權交給菲爾，讓他詳細講解這些數字。

Thank you, Mike, and good morning, everyone. Earlier this morning, we released our third quarter results for the quarter ended September 30, 2025. We filed our Form 10-Q with the SEC yesterday and have updated our investor presentation in the Investor Relations section of our website.

謝謝你，麥克，大家早安。今天早些時候，我們發布了截至 2025 年 9 月 30 日的第三季業績。我們昨天向美國證券交易委員會提交了 10-Q 表格，並在我們網站的投資者關係部分更新了投資者簡報。

As noted in our November 7 press release, we requested an extension to file our Form 10-Q with the SEC to allow for the completion of our accounting close for Electrochem. The service agreement under which Electrochem's former parent maintain their books and records concluded in the third quarter, and we have now transitioned Electrochem to Ultralife's information systems.

正如我們在 11 月 7 日的新聞稿中所述，我們已請求延長向美國證券交易委員會提交 10-Q 表格的時間，以便完成 Electrochem 的會計結算。Electrochem 的前母公司為其維護帳簿和記錄的服務協議已於第三季結束，我們現在已將 Electrochem 過渡到 Ultralife 的資訊系統。

A summary of our third quarter results follows. Consolidated revenues totaled $43.4 million compared to $35.7 million for the third quarter of 2024. Revenues from our Battery & Energy Products segment were $39.9 million compared to $32.5 million last year. Excluding third-party sales for Electrochem, which we acquired on October 31, 2024, sales for the segment increased 1.9% year-over-year. Government Defense sales for the 2025 quarter increased 19%, reflecting strong demand from the US-based global prime.

以下是我們第三季業績的概要。合併收入總計 4,340 萬美元，而 2024 年第三季為 3,570 萬美元。我們的電池和能源產品部門的收入為 3,990 萬美元，而去年為 3,250 萬美元。不包括我們於 2024 年 10 月 31 日收購的 Electrochem 的第三方銷售額，該業務部門的銷售額年增 1.9%。2025 年第一季政府國防銷售額成長 19%，反映出美國全球主要供應商的強勁需求。

This growth was partially offset by a 5.7% decrease in commercial sales resulting from declines of 13.3% in oil and gas sales due to macroeconomic and geopolitical factors and 10.4% in medical battery sales due to the timing of orders. The sales split between commercial and government defense for our battery business was 70%-30%, almost identical to 69%-31% reported for the 2024 quarter, and the domestic to international split was 72%-28% compared to 56%-44% for the 2024 period, reflecting our acquisition of Electrochem and the heightened domestic shipments of our government defense products.

這一增長被商業銷售額下降 5.7% 部分抵消，其中石油和天然氣銷售額因宏觀經濟和地緣政治因素下降 13.3%，醫療電池銷售額因訂單時間安排下降 10.4%。我們電池業務的商業和政府國防銷售額佔比為 70%-30%，與 2024 年季度報告的 69%-31% 幾乎相同；國內和國際銷售額佔比為 72%-28%，而 2024 年同期為 56%-44%，這反映了我們收購了 Electrochem 以及我們國內出貨量的國防產品。

Revenues from our Communications Systems segment of $3.4 million increased to 8.2% from the $3.2 million we reported last year. On a consolidated basis, the commercial to government defense sales split was 65%-35%, almost identical to 63%-37% for the 2024 third quarter. Our total backlog exiting the third quarter was $90.1 million, a 6.5% increase over the $84.5 million exiting the second quarter.

我們的通訊系統部門營收為 340 萬美元，比去年報告的 320 萬美元成長了 8.2%。從綜合來看，商業和政府國防銷售的比例為 65%-35%，與 2024 年第三季的 63%-37% 幾乎相同。第三季末，我們的積壓訂單總額為 9,010 萬美元，比第二季末的 8,450 萬美元增加了 6.5%。

The replenishment rate remains diverse in nature with commercial customers comprising approximately 55% of the backlog and government defense customers comprising the remaining 45%.

補貨率仍呈現多樣化的趨勢，商業客戶約佔積壓訂單的 55%，政府國防客戶約佔剩餘的 45%。

Our consolidated gross profit was $9.6 million, an increase of 10.8% over the $8.7 million for the 2024 period. As a percentage of total revenues, consolidated gross margin was 22.2%, a 210 basis point decline from the 24.3% reported for last year's third quarter. Gross profit for our Battery & Energy Products business was $8.8 million compared to $8 million last year, an increase of 9.6%.

我們的綜合毛利為 960 萬美元，比 2024 年的 870 萬美元成長了 10.8%。綜合毛利率佔總收入的百分比為 22.2%，比去年第三季報告的 24.3% 下降了 210 個基點。我們的電池和能源產品業務毛利為 880 萬美元，而去年為 800 萬美元，成長了 9.6%。

Gross margin was 22.1% compared to 24.7% last year. The year-over-year reduction resulted from manufacturing inefficiencies, primarily due to quality issues associated with key incoming raw materials and components that disrupted our operations and to a lesser extent, sales mix, reflecting the declines in generally higher-margin medical and oil and gas sales.

毛利率為 22.1%，去年同期為 24.7%。同比下降是由於生產效率低下造成的，主要是由於關鍵原材料和零件的品質問題擾亂了我們的運營，其次是銷售組合問題，反映了利潤率普遍較高的醫療和石油天然氣銷售的下降。

For our Communications Systems segment, gross profit was $0.8 million compared to $0.6 million for the year earlier period. Gross margin was 23.3% compared to 20% last year. Operating expenses were $10.6 million, an increase of $2.4 million or 29.4% from the year earlier quarter. The year-over-year increase is comprised of $1.3 million related to the inclusion of Electrochem and $1.1 million of nonrecurring costs. The onetime costs include a $0.5 million provision to close our Calgary facility, costs related to our transition of Electrochem to Ultralife information systems and litigation costs for our cyber insurance claim.

就我們的通訊系統業務而言，毛利為 80 萬美元，而去年同期為 60 萬美元。毛利率為 23.3%，去年同期為 20%。營運支出為 1,060 萬美元，比去年同期增加 240 萬美元，增幅達 29.4%。與去年同期相比，成長包括因納入電化學業務而增加的 130 萬美元，以及 110 萬美元的非經常性成本。一次性成本包括關閉卡加利工廠的 50 萬美元準備金、將 Electrochem 過渡到 Ultralife 資訊系統的相關成本以及網路保險索賠的訴訟費用。

We anticipate annual savings from our closure of Calgary of approximately $0.8 million throughout 2026. As a percentage of revenues, operating expenses were 24.4% compared to 22.9% for last year's third quarter. Excluding the onetime costs, operating expenses were 21.9% of revenues for the third quarter of 2025.

我們預計，關閉卡加利工廠後，到 2026 年每年可節省約 80 萬美元。營業費用佔收入的百分比為 24.4%，而去年第三季為 22.9%。不計一次性成本，2025 年第三季的營運費用佔營收的 21.9%。

Operating loss was $1.0 million compared to operating income of $0.5 million last year, reflecting the decline in Battery & Energy Products gross margin due in large part to quality issues on incoming materials, the onetime nonrecurring costs totaling $1.1 million and Communication Systems delayed sales orders. Other expense reported below operating income was $0.8 million for the quarter compared to $0.2 million for the year earlier period, primarily resulting from the increase in interest expense on the acquisition debt and the impact of foreign currency fluctuations.

營業虧損為 100 萬美元，而去年同期營業收入為 50 萬美元，這反映出電池和能源產品毛利率的下降，這主要是由於進貨材料的品質問題、總計 110 萬美元的一次性非經常性成本以及通訊系統延遲的銷售訂單。本季營業收入下的其他支出為 80 萬美元，而去年同期為 20 萬美元，主要原因是收購債務的利息支出增加以及外匯波動的影響。

Our resulting tax benefit for the third quarter was $0.5 million compared to a provision of $0.1 million for the 2024 quarter computed on a GAAP basis at statutory rates. Net loss was $1.2 million or $0.07 per share on a GAAP fully diluted basis. This compares to net income of $0.3 million or $0.02 per share for the 2024 quarter.

根據 GAAP 和法定稅率計算，我們第三季的稅收優惠為 50 萬美元，而 2024 年第一季的準備金為 10 萬美元。以美國通用會計準則完全稀釋後計算，淨虧損為 120 萬美元，即每股虧損 0.07 美元。相比之下，2024 年第一季淨收入為 30 萬美元，即每股 0.02 美元。

Adjusted EBITDA, defined as EBITDA, including noncash stock-based compensation expense and onetime acquisition and other costs not reflected of our ongoing operations was $2.0 million or 4.7% of sales compared to $1.9 million or 5.4% for the prior year quarter. Adjusted EBITDA on a TTM basis is $15.5 million or 8.3% of sales.

經調整的 EBITDA（定義為 EBITDA，包括非現金股票選擇權費用以及不反映我們持續經營的一次性收購和其他成本）為 200 萬美元，佔銷售額的 4.7%，而上年同期為 190 萬美元，佔銷售額的 5.4%。以過去12個月計算的調整後EBITDA為1,550萬美元，佔銷售額的8.3%。

Turning to our balance sheet. We ended the third quarter with working capital of $66.9 million and a current ratio of 3.0 compared to $67.9 million and 3.3 for 2024 year-end. Our liquidity remains solid. In the first 9 months of 2025, we have reduced our debt principal by $4.1 million, which already exceeds the $2.8 million amortization required for the full year under our debt agreement. While we do not have any draws on the $30 million revolver portion of our debt agreement and no present plans to do so, our balance sheet provides the borrowing base capacity for this amount.

接下來來看看我們的資產負債表。第三季末，我們的營運資金為 6,690 萬美元，流動比率為 3.0，而 2024 年末的營運資金為 6,790 萬美元，流動比率為 3.3。我們的流動性依然穩健。2025 年前 9 個月，我們已減少了 410 萬美元的債務本金，這已經超過了我們債務協議規定的全年 280 萬美元的攤銷額。雖然我們目前沒有動用債務協議中 3000 萬美元的循環信貸部分，也沒有動用該部分的計劃，但我們的資產負債表提供了該金額的借款基礎能力。

In closing, we have initiated several actions, which Mike will cover, which position us to improve our gross margins, reduce redundant facilities, consolidate operations, diversify our supply chain and better promote our Ultralife brand on a global basis. These actions better position us to more fully realize the profitability leverage associated with our increasing sales funnel.

最後，我們已經啟動了幾項行動（Mike 將對此進行介紹），這些行動將幫助我們提高毛利率、減少冗餘設施、整合營運、實現供應鏈多元化，並在全球範圍內更好地推廣我們的 Ultralife 品牌。這些措施能讓我們更能利用不斷擴大的銷售管道所帶來的獲利槓桿效應。

I will now turn it back to Mike.

現在我把麥克風交還給麥克。

Thank you, Phil, for the detailed review of the Q3 2025 results. As mentioned in our last call, our priorities remain clear for 2025. First, completion of the Electrochem transition, which over the last few quarters has been completed in full.

菲爾，感謝你對 2025 年第三季業績的詳細分析。正如我們在上次電話會議中提到的，我們2025年的工作重點仍然明確。首先是電化學轉型完成，在過去的幾個季度裡，這項轉型已經全面完成。

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 market in areas such as pipeline inspection, seismic telemetry and sonobuoys. We are qualifying cells with several oil and gas customers to enable transition of their battery packs to utilize Electrochem cells and expect to see benefit of these efforts in 2026.

我們透過收購 Electrochem 繼續拓展垂直整合機會，使我們能夠將 Electrochem 電池整合到現有的電池組組件中，並擴大我們在管道檢測、地震遙測和聲納浮標等領域的潛在市場。我們正在與幾家石油和天然氣客戶合作，對電池進行認證，以使他們的電池組能夠過渡到使用電化學電池，並預計在 2026 年看到這些努力的成效。

Secondly, we remain focused on strengthening our sales opportunity pipeline to drive growth through 2026 and beyond, while continuing to strategically diversify our business and customer base. Our efforts are aimed not only at expanding the overall size of the funnel, but also prioritizing opportunities that can generate consistent, repeatable annual revenue.

其次，我們將繼續專注於加強銷售機會管道，以推動 2026 年及以後的成長，同時繼續策略性地實現業務和客戶群的多元化。我們的努力目標不僅是擴大銷售管道的整體規模，還要優先考慮能夠產生持續、可重複的年度收入的機會。

We have been reviewing our multiple brands and market initiatives and have started a company-wide branding alignment. We currently have a complex and confusing number of brands and trade names for a company of our size. This effort will reduce the redundant cost of supporting and justifying multiple brands and trade names, short messaging both internally and externally to customers that we are a global critical power provider of energy and RF products.

我們一直在審查旗下多個品牌和市場舉措，並已啟動全公司範圍的品牌協調工作。對於我們這樣規模的公司來說，我們目前擁有數量眾多且複雜混亂的品牌和商標名稱。這項措施將減少支援和證明多個品牌和商標名稱的冗餘成本，向內部和外部客戶傳達我們是全球關鍵能源和無線射頻產品供應商的訊息。

Third, we are intensifying our efforts at improving and stabilizing gross margin through pricing, material cost deflation and lean productivity projects in both the Battery and Energy and Communications businesses. As we enter Q4, we have an external expertise to drive targeted lean exercises and process improvements at our Newark location to increase gross margin.

第三，我們正在加大力度，透過電池和能源通訊業務的定價、材料成本通貨緊縮和精益生產項目來提高和穩定毛利率。進入第四季度，我們聘請了外部專家，在我們位於紐瓦克的工廠開展有針對性的精益實踐和流程改進，以提高毛利率。

We are closing our Calgary location which is focused on providing production -- are focused on providing production centers of excellence with all the necessary systems to support our customers and prepare for expected growth. Switching to development projects. We continue to invest in products on both sides of the business to drive revenue and opportunities for organic growth.

我們將關閉位於卡加利的生產基地，該基地專注於提供生產服務——我們致力於提供卓越的生產中心，配備所有必要的系統來支援我們的客戶並為預期成長做好準備。轉而開展開發項目。我們將繼續投資於業務各環節的產品，以推動營收成長和有機成長機會。

The Communication System business is expanding the ruggedized server case portfolio to service new programs and server variants, which will provide greater opportunity to expand the market share in the ruggedized computing environment. We completed an initial design for the latest next-gen communication and control solution, utilizing our ruggedized server expertise and HPE's line of exceptional servers for AI and edge computing.

通訊系統業務正在擴展加固型伺服器機箱產品組合，以服務新的程式和伺服器變體，這將為擴大在加固型運算環境中的市場份額提供更大的機會。我們利用自身在加固型伺服器方面的專業知識以及 HPE 面向人工智慧和邊緣運算的卓越伺服器產品線，完成了最新一代通訊和控制解決方案的初步設計。

Several military programs are using this solution now for possible fielding as components to the broader readiness initiatives. We showcased our new amplifier and Crescent server products at the Defense Security Equipment International Show in September, which is one of the UK and EU largest defense trade shows, where we met with multiple OEM and governmental representatives. We have sample amplifiers out with specific partners for trials currently with expected orders inbound and production shipments starting in 2026.

目前已有多個軍事項目正在採用此解決方案，以便將其作為更廣泛的戰備計劃的組成部分進行部署。9 月份，我們在國際防務安全設備展上展示了我們的新擴大機和 Crescent 伺服器產品。該展會是英國和歐盟最大的國防貿易展之一，我們在展會上與多家 OEM 廠商和政府代表進行了會面。我們目前已向特定合作夥伴提供樣品放大器進行試驗，預計將有訂單到貨，並於 2026 年開始量產發貨。

Crescent server continues to evolve, and we have received critical feedback and direction to fully develop this tip of the spear compute capability for forward field applications with initial production expected in 2026. Meanwhile, we are finalizing the design of our next high-performance amplifier, targeting advanced radio platforms with the latest high-speed waveforms utilized by the US and Armed Forces.

Crescent 伺服器不斷發展，我們已收到重要的回饋和指導，以充分開發此尖端運算能力，用於前沿現場應用，預計將於 2026 年實現初步生產。同時，我們正在最終確定下一代高性能放大器的設計，目標是採用美國和武裝部隊使用的最新高速波形的高級無線電平台。

We have preproduction parts in-house for bench testing and final validation and expect to have preproduction units for evaluation in Q1 2026. Lastly, on the communications side of the business, we received an initial PO from an international customer for prototype electronic warfare amplifiers.

我們公司內部有預生產零件用於台架測試和最終驗證，預計 2026 年第一季提供預生產單元進行評估。最後，在通訊業務方面，我們收到了一位國際客戶的首份採購訂單，用於生產電子戰放大器原型。

This is our first project, leveraging our amplification expertise to counter electronics in the battlefield. On the Battery and Energy side of the business, we have a great deal of activity across several products with new business being the key focus.

這是我們的第一個項目，利用我們的放大技術專長來對抗戰場上的電子設備。在電池和能源業務方面，我們在多個產品領域開展了大量活動，其中新業務是重點。

But first, I will mention we received the BA-53 battery award in Q3 for $5.2 million, which will be delivered throughout 2026, our first sizable award for this product in over 4 years. On the new business side, I will start with the conformal wearable battery, where we have now begun shipping production quantities. We've quoted multiple large volume opportunities, mainly for international customers with expected awards for 2026 deliveries.

但首先，我要提一下，我們在第三季度獲得了價值 520 萬美元的 BA-53 電池合同，該電池將於 2026 年交付，這是我們 4 年多來首​​次獲得該產品的大額合同。在新業務方面，我將從穿戴式電池開始，我們現在已經開始大量出貨。我們已經為多個大批量訂單機會提供了報價，主要客戶是國際客戶，預計將於 2026 年交付。

We've passed 2 critical quality audits in our China location, the most important one being for our high-capacity thionyl chloride D cell with an opportunity in the metering space. Testing continues to go well, and we expect UL testing and validation testing to complete in Q4 with initial production volume commitments to come soon after. On the 123A side of our business, we have received a follow-on PEO from a major illumination company, which will begin deliveries in Q4 and throughout the first half of 2026.

我們在中國工廠通過了 2 次關鍵品質審核，其中最重要的是我們的大容量氯化亞砜 D 型電池，這在計量領域是一個機會。測試進展順利，我們預計 UL 測試和驗證測試將於第四季度完成，隨後很快就會做出初步的生產量承諾。在我們的 123A 業務方面，我們已收到一家大型照明公司的後續 PEO 訂單，該公司將於 2026 年第四季度開始交付，並持續到 2026 年上半年。

We're working on several new products for battery packs utilizing our XR123A cells, which offer a 30% increase in energy density over the standard 123A cell. As mentioned earlier, we established initial production capabilities for our thin cell technology to support customers in the medical wearable sector in various item tracking applications.

我們正在研發幾款採用 XR123A 電芯的新型電池組產品，與標準 123A 電芯相比，其能量密度提高了 30%。如前所述，我們已建立了薄細胞技術的初步生產能力，以支援醫療穿戴式裝置領域的客戶在各種物品追蹤應用中的需求。

The sales pipeline continues to strengthen with several projects now in the qualification phase. We are investing additional development effort in this product line with the unique cell designs that further reduce the thickness of the product while reducing manufacturing complexity with an eye on large-scale automation as we expect thin wearable sensors will continue to proliferate.

銷售管道持續增強，目前已有多個項目進入資格審查階段。我們正在對該產品線投入更多研發精力，採用獨特的單元設計，進一步降低產品厚度，同時降低製造複雜性，並著眼於大規模自動化，因為我們預計輕薄穿戴式感測器將繼續普及。

We have expanded our family of X5 medical car products with the release of our latest product, a portable power bank that provides power to pole-mounted equipment or any other item that requires extended run time utilizing USB-C, mostly targeting tablet and portable computers. Production validation and certification are finishing up, and we have samples out to key partners in support of product quotations. Investing in new product development is essential to diversifying and strengthening our product portfolio, driving future growth and building our legacy of delivering critical power solutions.

我們推出了最新產品——一款便攜式行動電源，進一步擴展了我們的 X5 醫療車產品系列。此行動電源可為桿式安裝設備或任何其他需要長時間運行的設備供電，它採用 USB-C 接口，主要面向平板電腦和便攜式電腦。生產驗證和認證工作即將完成，我們已向主要合作夥伴提供樣品，以支援產品報價。投資新產品開發對於豐富和加強我們的產品組合、推動未來成長以及鞏固我們提供關鍵電力解決方案的傳統至關重要。

Our priorities remain converting long-term development product, development efforts into revenue, advancing vertical integration where possible and maintaining a strong focus on the operational efficiency initiatives. I continue to focus on the long-term projects and future of the business. And although we've had a challenging 2025, I'm confident we are making the right moves to stabilize and grow the business over the long term.

我們的首要任務仍是將長期開發的產品和開發工作轉化為收入，盡可能推動垂直整合，並持續高度重視營運效率提升措施。我將繼續專注於公司的長期專案和未來發展。儘管 2025 年充滿挑戰，但我相信我們正在採取正確的措施，以實現業務的長期穩定和發展。

As we go through the end of the year, we will enter 2026 with the Electrochem transition completed, the largest number of new products for sale ever in our Communication Systems business, multiple large opportunities for both sides of the business, a reduced North American facility count, unified back-office systems across most of North America and a strong brand architecture evolution underway. I believe we are well positioned for future growth with overall reduced operational costs.

隨著年底的臨近，我們將進入 2026 年，屆時 Electrochem 的轉型已經完成，通訊系統業務將推出有史以來最多的新產品，業務的兩方面都將迎來多個重大機遇，北美工廠數量將減少，北美大部分地區將採用統一的後台系統，強大的品牌架構演進也將正在進行中。我相信，隨著營運成本的全面降低，我們已經為未來的成長做好了充分準備。

We'll go back to the operator for questions.

我們會再向操作員諮詢問題。

(Operator Instructions) And I am showing no questions at this time. I would now like to hand the call to Mike for closing remarks.

（操作說明）目前我沒有顯示任何問題。現在我把電話交給麥克，請他作總結發言。

All right. Well, thanks, everyone, for listening to today's call. We look forward to talking to you again next time during the Q4 2025 earnings call. Bye now.

好的。謝謝大家收聽今天的電話會議。我們期待在 2025 年第四季財報電話會議上再次與您交流。再見了。

And this concludes today's program. Thank you for participating. You may now disconnect.

今天的節目到此結束。感謝您的參與。您現在可以斷開連線了。