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Newark’s Ultralife takes financial hit in first quarter due to ransomware attack

  • / Updated:
  • Staff Report 

Ultralife Corp. announced last week that a cybersecurity ransomware attack earlier this year has affected the company’s first quarter financial results. The attack targeted their Newark, Wayne County, and Virginia Beach, Va. facilities and was discovered on January 25, with the company disclosing the attack on March 2.

The ransomware incident disrupted Ultralife’s ability to process orders, ship products, provide customer services, and effectively manage sales and operating planning for several weeks at the Newark location and even longer at the Virginia Beach facility.

Although production and shipping have resumed at both locations, significant time during the first quarter was dedicated to data restoration, system recovery, security enhancement, and regulatory reporting of the attack, according to Ultralife.

Management is currently working on their cybersecurity insurance claim to cover the costs of hiring external cybersecurity experts and addressing the impact on business operations. The company’s $100,000 cyber-insurance deductible is included in the first quarter results, and no ransom was paid.

Ultralife reported first quarter revenue of $31.9 million, a 5.1% increase from the previous year’s $30.4 million. However, the company experienced a net loss of $346,000 or 2 cents per diluted share, compared to a net loss of $168,000 or a penny per diluted share in the first quarter of 2022. Adjusted EBITDA was $1.2 million for the first quarter of 2023, compared to $1.1 million during the same period in the previous year.

Mike Manna, Ultralife’s President and CEO, stated that the company is focused on completing orders that were delayed due to the cybersecurity attack and addressing increased demand from medical and government/defense customers, as well as ongoing demand from other commercial sectors such as oil and gas. Manna emphasized their goal for 2023, which is to “deliver high-quality, profitable growth through execution of operational improvements, and to generate incremental cash flow to pay down our acquisition debt.”