FOR IMMEDIATE RELEASE
Dialight PLC
28 January 2025
Dialight plc ("Dialight" or the "Company")
Q3
trading update
&
Sanmina
litigation - settlement discussions
Q3 trading update
Trading performance for the 3-month
period ended 31 December 2024 was slightly ahead of our
expectations. The business traded profitably and generated positive
operating cash flow. Group net debt (excluding
leases) at 31 December 2024 was $14.8m (30 September 2024: $15.4m).
The Board remains confident that further progress will be
made during the rest of the financial year.
The early Transformation Plan
progress reported with the Interim Results in November continued to
gain momentum in the third quarter which has allowed us to
introduce our 5th Transformation Pillar of creating a
platform for future growth. This will provide a strategy and
innovation platform for future products and services that, together
with the other four pillars, will provide a solid sales and
operational base for future, profitable growth. We will also
continue to explore opportunities to accelerate our Transformation
Plan to focus on delivering our medium-term ambitions.
Sanmina litigation - settlement
discussions
On 25 September 2024, Dialight
announced the details of the jury verdict in the trial relating to
the litigation with its former manufacturing partner, Sanmina
Corporation (NASDAQ: SANM) (Sanmina) and confirmed that a
definitive judgment would be handed down once certain post-trial
motions had been filed. Those post-trial motions have now been
filed.
The Company is pleased to announce
that, following constructive discussions with Sanmina, agreement
has now been reached in principle to resolve the dispute. Under the
settlement terms, Dialight will pay Sanmina $12m in full and final
settlement of all claims between the parties. This amount will be
paid in instalments, with the first payment of $4m due by 31 March
2025, followed by 8 instalments (the Deferred Instalments) of $1m paid at
the end of each subsequent calendar quarter through to 31 March
2027.
The amount of any outstanding
Deferred Instalments will be automatically increased from $1m to
$1.5m if Dialight's market capitalisation exceeds £100m for 30
consecutive days, subject to total cumulative instalment payments
not exceeding $8m. A letter has been filed with the New York
Southern District court requesting that judgment is deferred
pending agreement on a final definitive settlement and the parties
will work together to agree a final definitive settlement
agreement.
The Board is
confident that the initial payment of $4m and the Deferred
Instalments totalling $8m will be met from the operational cashflow
of the business and that the Group has sufficient headroom to meet
its ongoing business needs. In the highly remote
event of payment default under the settlement agreement following
the initial payment, Sanmina will be entitled to enforce the full
judgment (less payments already made) in the ordinary course
following a 90-day cure period (1).
Steve Blair, Dialight CEO,
commented: "I am pleased that we have
been able to reach a settlement that allows us to put this long
running issue behind us. I would particularly like to thank Jure
Sola and Jon Faust of Sanmina for their openness and willingness to
agree the settlement. Our focus remains on our Transformation Plan
for Dialight, for the benefit of all our
stakeholders."
Note 1: The full judgment, equating to the total claims by
Sanmina (as previously disclosed), would amount to $22.9m
comprising the jury award of $8.6m, interest of $6.3m and legal
costs of $7m.
Contacts:
Dialight plc
Tel: +44 (0)203 058 3542
Steve Blair, CEO
Mark Fryer, CFO
Investec Bank plc (Financial Adviser
and Corporate Broker)
Tel: +44 (0)207 597 5970
Christopher Baird / James
Rudd
Dialight plc
About Dialight:
Dialight (LSE: DIA.L) is a global
leader in sustainable LED lighting for industrial applications.
Dialight's LED products are providing the next generation of
lighting solutions that deliver reduced energy consumption and
create a safer working environment. Our products are specifically
designed to provide superior operational performance, reliability
and durability, reducing energy consumption and ongoing maintenance
and achieving a rapid return on investment. The company is
headquartered in the UK with operations in Australia, Dubai,
Germany, Malaysia, Mexico, Singapore, the UK and the USA.
www.dialight.com.
