[BreachExchange] SmileDirectClub Cyberattack Could Cost The Company $15 Million

[Destry Winant]

https://www.forbes.com/sites/leemathews/2021/05/04/smiledirectclub-cyberattack-could-cost-the-company-15-million/?sh=552a62e3e220

Nashville-based SmileDirectClub (SDC) rebounded from a tough,
pandemic-driven 2020 and posted a strong first quarter this year. Yesterday
the company warned its second quarter results may take a substantial hit
due to a recent cyberattack.

CVS SmileDirect Expansion

According to a breach notification filed with the Securities and Exchange
Commission, SDC “experienced a systems outage that was caused by a
cybersecurity incident on April 14, 2021.”

The filing offers little insight into the actual breach. It does mention
that internal engineers responded quickly and impacted systems were powered
off or isolated from the reset of the company’s network. SmileDirectClub’s
manufacturing systems were among those affected.

“Leading forensic information technology firms” have been brought in to
help the SDC investigate the incident and assess the damage. The filing
also states that SDC did not pay a ransom and that its systems are “back
online and performing normally.”

Curiously, SDC claims to have been able to “block the attack.” Based on the
rest of the information offered in the filing it appears that it may
actually have been interrupted before progressing to a more dangerous phase.

The initial investigation has not revealed any concerns about the integrity
of SDC’s data so far. The interruption to its operations and remediation
efforts in the wake of the breach may have a substantial cost, however.

Prior to the incident SmileDirectClub was anticipating revenues $205 to
$215 million range. Those have been knocked down by $10 to $15 million as a
result of the cyberattack. It’s a tough pill to swallow after finally
recovering from a tough stretch last year.

SDC share have taken a hit as well. On Monday afternoon shares were trading
at $10.63. At the time of writing the price has fallen to $8.57.
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