It's not like when you are constructing a house and a tornado happens to knock out months of your hard work. Programming is less like laboriously laying thousands of bricks, but more like very carefully laying a small handful of bricks in just the right places after a lot of thought.

I have a feeling that as they start re-developing what they have lost, they will find that the work goes 1-2 orders of magnitude faster than it went when they originally did it and in just a few weeks they will be caught up.

I think the way that they are handling it (treating it as pretty much a project ending blow) is pretty questionable.