Please standby. We are about to begin. Good day. And welcome to the Ultralife Corporation Third Quarter 2013 Earnings Call. At this time for opening remarks and introductions, I would like to turn the call over to Ms. Jody Burfening. Please go ahead.

Thank you, Operator. Good morning, everyone. This is Jody Burfening of LHA. Thank you for joining us this morning for Ultralife Corporation earnings conference call for the third 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 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 U.S. 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 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 metrics that differ from net 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, Mike.

Good morning, Jody, and thank you everyone for joining the call this morning. Today, I will start by making some overall comments about our third quarter 2013 operating performance. Then I'll turn the call over to Phil, who will take you through the detailed financial results for the quarter. After Phil is finished, I'll provide a progress report on our top 2013 priorities and give some final thoughts on the full year financial outlook for 2013 before opening it up for questions. We were pleased to generate an operating profit of $0.7 million in third quarter of 2013 with strong P&L execution by the teams and revenue up almost 18% from the loss producing second quarter. Total company gross margin return to our business model target of 30% and with operating expenses down 14% from the second quarter, representing 26.9% of sales, we are able to achieve operating margin rate of 3.2%. Lastly, the business unit reduced inventory by $3.2 million or 10% and the company ended Q3 with the cash balance of $10.8 million. Regarding, Com Systems’ revenue, we were able to convert the opportunities originally expected in Q2 into Q3 sales as referred to you on our last call and reported revenue of $6.9 million. For battery and energy products, revenue was $13.5 million fair consistent to the $13 million to $14 million per quarter revenue that was reported over the last two prior quarters. This revenue stabilization has enabled us to tune our B&E business model to achieve profitability in third quarter. In summary, we are pleased by the continued signs of battery and energy products revenue stabilization and both teams ability to achieve favorable productivity gains and profitability in the face of lower revenue. In a few minutes, I’ll talk more about our third quarter performance and outlook, but first, I’d like ask Ultralife CFO, Phil Fain to take you through additional details of our third quarter of 2013 financial results. Phil?

Thank you, Mike, and good morning, everyone. Earlier this morning we released our third quarter results for the period ended September 29, 2013. For purposes of reviewing our third quarter financial results, I will discuss operating results from continuing operations for 2013, compared to 2012. Consolidated revenues for the third quarter totaled $20.4 million, representing a $5.8 million or 22% decline from the $26.2 million for the third quarter of 2012. Revenues from our battery and energy products segment were $13.5 million, a decline of $3.1 million or 19% from last year. This decrease is primarily attributable to a large order for M1 primary battery products shipped in the third quarter of 2012 to service an allied country’s Department of Defense. The decrease also reflects the continued slowdown in the U.S. government and defense order rate for chargeable and non-chargeable batteries in charger systems. Our battery sale continued to run 60/40 between domestic and international in 2013, with 46% our third quarter sales to commercial customers. These rates are fairly consistent with 2012 Third quarter revenues was also fairly consistent with the revenues reported for the first two quarters and as Mike had mentioned this revenue stabilization has enabled us to fine tune our battery and energy products business model to achieve profitability for the third quarter. Communication systems sales of $6.9 million decreased by $2.7 million, or 28% from the prior year. The decrease is attributable to shipment of SATCOM units in the amount of $3.4 million to a large prime which services the U.S. Department of Defense during the third quarter of 2012. Excluding the impact of SATCOM sales, communication systems revenue was up 11%. Also sales for the period were favorably impacted by approximately $3 million as we fulfilled several of the amplifier orders, which we told…

Thanks, Phil. As a reminder, our top priorities remain, number one, improving profitability and two, executing our growth game plan, each while leveraging our worldwide operations for global growth and competitiveness. Our day-to-day operating cadence is guided by the 30, 5,5,10 equals 10% operating margin business model we established in 2011. In addition to providing a framework for achieving profitability improvement by allocating costs within the (inaudible) gross profit, this model also enables us to efficiently fund new product development and sales force expansion activities. It would be easy during these difficult times to skimp our new product development for the sales force. Yet, world-class new products and sales teams are developed over years not quarters. And we believe that putting either of these activities on hold could have a serious negative impact on future results. Quite simply to achieve sustainable revenue growth, we need a constant pipeline of new products and continuously improving sales force productivity. Therefore, we constantly reengage our 30, 5,5,10 equals 10 business model against actual revenue, so we don't overspend. Yet continuously and prudently fund our growth initiatives. Taking a quick look at how we're doing, regarding the overall company’s 30% gross margin component of our business model, which we have now achieved in four of the last five quarters. We still have room for meaningful margin improvement as we gradually increased throughput in our B&E facilities. For the 5% of sales new product development component, we are currently running about 6.5% of sales and for the 5% selling expense component it's about 9% of sales, reflecting our delivered efforts to return to topline revenue growth as soon as possible despite the current economy. And lastly, our G&A expense to sales is currently around 11% versus our 10% target and this is the area we…

(Operator Instructions) And will take our first question from Gary Siperstein with Eliot Rose Asset Management.

Hey, guys, good morning.

Good morning, Gary.

Good morning, Gary.

Mike, with year-over-year forecast, so I guess through nine months, we’re showing a loss on a continuing basis of $0.07, so roughly $0.04 to $0.07 and profitability is what you are looking for in the fourth quarter to get to that breakeven?

Gary, just I would say that that certainly is within the range.

Okay. And so, thank you for that. And I think you gave unless I missed it, in Q3 you said EBITDA was $1.8 million, do you have the nine-month figure?

Yes. The nine-month figure is $2.5 million four quarters trailing is $5.0 million.

$5.0 four quarters, okay. And is there any color, I know it’s early in the M&A process? Any color you can give us on some of the things you’ve been looking at and have you gotten closed to anything or why have you past on sometimes?

Yeah. Gary, this is Mike. We’ve been very active looking at different opportunities. We have some internal resources was external resourcing versus helping us with that activity. We have a very rigorous process to make sure we get it right in terms of the company, not only we go initially talk to but even ultimately decide we want to try to acquire. So that process is ongoing, nothing as eminent as we speak. But there’s a lot of activity in the second that we have something more definite that we’ll be sure to share with you.

Superb. Okay. And just congratulations on managing the company so well on is reduced levels to maintain profitability and positive cash flow and to grow cash year-over-year in the phase of those declining revenues is really remarkable. Thanks really for your hard work.

Thank you, Gary.

We may have no further questions at this time. I’d like to turn it over to Mike Popielec, for any additional or closing remarks.

All right. Thank you. Well, thank you everybody once again for joining us for the third quarter 2013 earnings call. We’re going to be out in the marketplace gain over the next couple weeks or so, so I look forward to meeting up several you in person and of course, look forward to sharing with you in a future our quarterly performance on each call in the future. Thank you very much for participating today.

This concludes today’s conference. We thank you for your participation.