Good day and welcome to this Ultralife Corporation second quarter 2013 earnings release conference call. At this time for opening remarks and introductions I would like to turn the call over to Jody Burfening. Please go ahead.

Thank you Jessica and good morning everyone. Thank you for joining us this morning for Ultralife Corporation conference call for the second quarter of fiscal 2013. With us on today’s call are Mike Popielec, Ultralife’s President and CEO; and Phil Fain, Ultralife’s Chief Financial Officer. The earnings press release was issued earlier this morning. If anyone has not yet received a copy, I invite you to visit the company’s website at www.ultralifecorp.com, where you will 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 will contain forward-looking statements based on current expectations. Actual results could differ materially from those projected as a result of various risks and uncertainties. These include potential reductions in US military spending, uncertain global economic conditions and acceptance of the company’s new products on a global basis. 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 Ultralife’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 metrics that 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.

Thank you, Jody and thank you everyone for joining the call this morning. Today, I will start by making some high level observations about our second quarter, 2013 operating performance. Then I'll turn the call over to Phil who will take you through the detailed financial results. After Phil is finished, I'll take the call back to provide an update on our top 2013 priorities and share with you our thoughts on the full-year financial outlook for 2013 before opening up for questions. In the second quarter of 2013, the delay of some expected Communication Systems Contract and shipments drove their revenue down 18% year-over-year, resulting in our total cost being upside down to revenue and an overall company operating loss of $1.9 million, whereas the sales teams had done their jobs in terms of winning the competitions, the subsequent DoD contract awarding process has been quite slow, especially given the refinancement of DoD work and several anticipated shipments were delayed into the second half of the year. As a real time update, incoming July orders in backlog for Com Systems’ Q3 shipments already exceed their reported Q2 revenue. As we discussed before, our communications systems business is a project and program driven and therefore lumpier in terms of revenue make up than our battery business. This has impacted us favorably over the last three consecutive quarters where we reported strong Com Systems’ year-over-year revenue increases of 50% in Q3 of 2012, 85% in Q4 of 2012 and 7% in Q1 of 2013. However in the second quarter of 2013, the impact was clearly unfavorable. We continue to achieve strong variable and base cost productivity gains in both of our business unit and have already implemented some additional spending rate adjustments for the remainder of the year, such that we…

Thank you, Mike and good morning everyone. Earlier this morning, we released our second quarter results for the period ended June 30, 2013. For purposes of reviewing our second quarter financial results, I will discuss operating results from continuing operations for 2013 compared to 2012. Consolidated revenues for the second quarter totaled $17.3 million, representing a $1.4 million or 8% decline from the $18.7 million for the second quarter of 2012. Revenues from our battery and energy products segment were $14.7 million, a sequential increase of 12% over the first quarter, but a decline of $0.9 million or 6% from last year. This decrease is primarily attributable to lower shipments of rechargeable batteries in certain commercial and international defense orders have been shifted into the second half of 2013. This would partially offset by a 12% increase in 9-volt battery shipments over the prior year. The sales mix of our battery sales were split 60-40 between domestic and international in 2013 versus a 53-47 split for the year earlier period and 50% of our second quarter sales were to commercial customers. Communication System sales of $2.6 million decreased by $0.6 million or 18% from the prior year, and was $5.4 million lower than Q1. This decrease was attributable to delays in the final sign-off in purchase order issuance of several large high margin funded projects which we expect to ship in the second half of 2013. In fact, since the second quarter closed we have received the signed purchase orders for almost $3 million of these funded projects with the remainder expected in the second half of the year. Our consolidated gross profit was $4.5 million consistent with the second quarter of 2012 despite the $1.4 million sales decline. As a percentage of total revenues, consolidated gross margin was $26.2…

Thanks, Phil. The top priorities that we are pursuing to drive efficient operational execution and to reposition the company for growth remain, number one, improvement in profitability and the number two executing our growth gain plan, while at the same time also leveraging our China operations for global growth competitiveness. We continue to set as our goal to improve profitability every quarter and to do so continue to be guided by 30, 5,5,10 equals 10% operating margin business model in our day-to-day actions. The targeted 30% gross margins allowed a 5% cost headwind needed for each to the new product development and the selling initiatives essential to increasing competitive advantage and driving growth. When achieving these parameters and capping G&A expenses at 10%, we will achieve our interim operating margin goal of 10%. We still hold the view that our new product development and sales force effectiveness is paramount to our long-term growth potential and with improving gross margins and strong cash position, the investments are still important to make. That said, we also want to make sure, we are impacting profitability, because of a high spending rate that due to external factors isn't going to make any real difference in the speed in which revenue is realized. Looking more specifically at our revenue growth game plan execution. The focus remains on three main elements, expanding our market and sales reach, new product development and pursuing acquisitions. For the Communication Systems’ business, the team is actively engage with multiple global OEMs as well as a widening group of global special operations forces supporting SOCOM's vision of a global soft network within [NETO] and its allies. Our ties are strong in the EU and growing in other regions of the world. Domestically, Com Systems is penetrating more US Special Forces groups…

(Operator Instructions) We will go first to Matthew Paul with Sidoti & Company. Matthew Paul - Sidoti & Company: In regards to the increase in gross margin you saw for the Communication Systems business, could you comment a little further on how you've increased productivity and furthermore if you could sustain levels around that range?

Sure Matt. A couple of things, a couple of different fronts. First and foremost is our lean process. And our lean process is focused on every single step that goes into making other products along the line as it exists today in taking those steps and reconfiguring the line, so in some cases including our 20 watt amplifier line, we are able to reconfigure the line, cut out certain steps, reduce the labor required on a per unit basis, cut back on some material usage and (inaudible) we wind up with a couple of points increase in gross margin. That exercise is going on for all of our products. It is time consuming but well worth it across all three of our operations. So that is step one. Step two is certainly focused on pricing, understanding the competitive environment and what the market we will bear, in step three Matt as you know I do want to point out that there was a rework reserve that was recorded last year that unfavorably impacted the Com Systems margin and the total margin that we want to make sure that you are aware off. So the long way of answering our question that, we're certainly focused on that 30%, the key point is dealing with the increasing volume for the absorption for the Newark facility. Matthew Paul - Sidoti & Company: And moving on in regards to the delays in the contract orders you've seen in this quarter, you noted that you received (inaudible) for $3 million since the end of the second quarter. Can you maybe go into detail, how large is the total piece of delayed contracts?

Matthew, as everything came in, we would not have been reporting a $5.4 million decrease in revenue from the first quarter of 2013. So it's certainly in that range. Matthew Paul - Sidoti & Company: Last question with the cash balance increase yet again, has anything changed in your outlook on potential acquisitions in the aggression Ultralife should show or will show?

No, Matthew. I mean, we're very interested in pursuing acquisitions. We continue the process as soon as if something becomes relevant then we can talk about, we will let people know about it. But our stance on acquisition does not change at all.

(Operator Instructions) There are no further questions at this time.

Thank you once again for joining us to the second quarter 2013 earnings call. We look forward to meeting with you over the next couple of weeks as we've done in the past and sharing with you our quarterly progress on each quarter's conference call in the future. Thank you very much.

This does conclude today's conference. Thank you for your participation.