Cybersecurity attack impacts Ultralife’s Q1 results

Andrea Deckert//April 27, 2023//

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A cybersecurity ransomware attack on Ultralife Corp. earlier this year impacted the Newark, Wayne County firm’s first quarter financial results, company leaders said in a release this morning.

The company discovered a cybersecurity ransomware attack at its Newark and Virginia Beach, Va. locations on Jan. 25 and disclosed the attack on March 2.

It impacted Ultralife’s ability to process orders, ship products, provide services to customers and effectively manage its sales and operating planning process over a several week period at the Newark facility and an even longer period at its Virginia Beach location.

While production and shipping have been resumed in both locations, considerable time during the first quarter was devoted to data restoration, systems recovery, systems security augmentation and regulatory reporting of the attack, Ultralife reported.

Management said it continues to work on its cybersecurity insurance claim covering the cost of engaging external cybersecurity experts and the business interruption impact.

The company’s deductible for its cyber-insurance policy of $100,000 is included in the first quarter results. No ransom was paid.

Ultralife’s first quarter revenue was $31.9 million, an increase of $1.5 million, or 5.1 percent, compared to $30.4 million for the first quarter of 2022.

The company reported a net loss of $346,000, or 2 cents a diluted share, compared to a net loss of $168,000 or a penny a diluted share for the first quarter of 2022.

Adjusted EBITDA was $1.2 million for the first quarter of 2023, compared to $1.1 million for the year earlier period.

Mike Manna, Ultralife’s president and CEO, said the company is focused on fulfilling orders that were held back in the first quarter due to the cybersecurity attack and meeting surging demand from the company’s medical and government/defense customers while satisfying ongoing demand from other commercial end markets, particularly oil and gas.

“Our goal for 2023 remains to deliver high-quality, profitable growth through execution of operational improvements, and to generate incremental cash flow to pay down our acquisition debt,” Manna said, in a statement.

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