REG - Dialight PLC - Trading Statement

DialightAnnouncement

28/01/2025 07:00

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RNS Number : 8663U  Dialight PLC  28 January 2025

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 5(th) 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.

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