Date: Thursday, March 3, 2022
Expeditors International, a top-five freight management company by revenue, disclosed Wednesday that last month’s cyberattack will have a “material adverse impact” on finances and that it will be late filing its 2021 annual report because of difficulty accessing information on its accounting systems.
In a separate notice to the Securities and Exchange Commission, the logistics provider said it is making progress returning to normal operations but is unable to estimate when it will resume full operations.
“The company’s workforce is now handling shipments and providing services across most products and expanding recovery across its locations. The company is incurring significant expenses to incorporate business continuity systems and to investigate, remediate and recover from this cyberattack,” Expeditors (NASDAQ: EXPD) said in the filing.
Systems that are likely degraded include freight booking, tracking, customs brokerage and order management.
The Seattle-based company was targeted Feb. 20 and forced to shut down most operating systems to prevent further damage. Speculation has focused on the possibility that hackers froze the systems for ransom, but Expeditors has not described the exact nature of the attack.
“While the company has partially resumed operations and expects to bring additional systems online, at this time the company is unable to estimate when it will resume full operations. The company expects that the impact of the prior shutdown and the ongoing impacts of the cyberattack will have a material adverse impact on its business, revenues, expenses, results of operations, cash flows and reputation.
“At this early stage, the company is unable to estimate the ultimate direct and indirect financial impacts of this cyber-attack,” the SEC filing stated.
Cowen investment analyst Jason Seidl, in a research note, said revenue losses are expected to be temporary, but there is a possibility that some business doesn’t come back. Two companies have confided that they have taken some business from Expeditors because of the cyberattack.
In a notice to customers on its website Monday, Expeditors said, “We recognize the challenges this incident has created within supply chains. Expeditors greatly appreciates the patience of our customers and service providers” and is working around the clock to make services available as soon as possible.
Expeditors said it is having difficulty obtaining the information necessary to complete the annual report but will file it within the 15-day grace period allowed under the law.
In the previous two years, Expeditors submitted its annual report about Feb. 20.