Haynes International, a leading developer of high-performance alloys, has provided an update on a recent cybersecurity incident, revealing the estimated quarterly financial impact. The company experienced a network outage indicative of a cybersecurity incident on June 10, 2023, prompting swift engagement of third-party specialists to investigate and restore functionality. Despite announcing the resumption of manufacturing operations within two weeks, the disruption significantly affected various aspects of production, leading to an estimated $18-$20 million loss in net revenues for the third quarter. This impact, coupled with costs related to the investigation and restoration efforts, is estimated to be approximately $0.40 – $0.45 on diluted earnings per share.
The lower production levels also impacted efficiency, absorption of fixed costs, and compressed the gross margin percentage for the quarter, further influencing earnings. Additionally, the estimated headwind from raw material fluctuations, primarily Cobalt, lowered diluted earnings per share by an additional $0.09. Consequently, the company anticipates an estimated diluted earnings per share of $0.65 – $0.70 for the third quarter of fiscal year 2023. Despite the challenges, Mike Shor, President, and CEO expresses satisfaction with the team’s quick and robust response to the cybersecurity incident, activating effective cyber-security preparedness measures. Shor expects to make up for the third-quarter cyber-related shortfall over the next few quarters, emphasizing the team’s renewed focus on continued performance improvement.
Haynes International, Inc., primarily serving aerospace, industrial gas turbine, and chemical processing industries, remains resilient in the face of the cybersecurity incident, highlighting the effectiveness of their Enterprise Risk Management planning efforts related to cybersecurity preparedness.
