Last updated: October 27, 2025
Q: How is Dye & Durham’s underlying business performing? Is the Company advancing its strategic initiatives?
A: Management is advancing several strategic initiatives focused on putting the customer first, improving and integrating the product suite, and operating more efficiently. These initiatives are designed to enhance the customer experience and support organic growth, while taking steps to reduce or reallocate unnecessary operating expenses to align with management’s strategic objectives.
Q: What is the Company’s financial position?
A: The Company continues to generate positive operating cash flow and maintains sufficient liquidity to meet its financial obligations to service its debt obligations, for day-to-day working capital needs and to fund its strategic initiatives.
Q: What are the key debt financial maintenance covenants that must be satisfied on a regular ongoing basis under its senior secured debt documents?
A: Under the Credit Agreement, there is a two-pronged test:
- The revolving credit facility must be drawn above 35% on the last day of any quarter before the financial maintenance covenant test is triggered; and
- If that threshold is met, the Consolidated First Lien Net Leverage Ratio as defined in the Credit Agreement must remain below 5.8x.
Both conditions must be met simultaneously for a financial maintenance covenant breach to occur. The revolver can be used freely throughout the quarter for working-capital purposes without impacting financial maintenance covenant compliance. These provisions provide substantial operational flexibility for managing liquidity and day-to-day working capital needs.
Q: Why doesn’t the Company use its restricted cash balance to retire the 2026 convertible debentures early?
A: The Company has C$185 million of cash held in two escrow accounts which are required to be used for settlement of the convertible senior unsecured debentures maturing March 1, 2026, as per the terms of the Credit Agreement. The cash is to be held to the earlier of (a) the repurchase by the Company of all of the outstanding Original Debentures, or (b) the maturity date.
The Company has earned a positive return on this restricted cash relative to the interest expense on the debentures. Management is currently prioritizing its strategic business objectives, including customer first initiatives and investing in new products to meet our customers’ needs, and will consider any early action on the 2026 convertible debentures in taking into account these factors and objectives.
Q: When will the sale of Credas close, and how will the proceeds be used?
A: The Credas sale is expected to close by January 2026 and is anticipated to generate approximately C$146 million in gross proceeds. The net proceeds from the sale will be used to repay debt; up to C$30 million is expected to be used to repay drawings under the revolver, with the remainder expected to be applied toward repaying first lien indebtednessin accordance with the Company’s debt agreements. The transaction is expected to reduce the Consolidated First Lien Net Leverage Ratio by approximately 0.5x.
Q: Are there any material conditions that need to be met for the Credas closing to occur?
A: The closing of the transaction is subject only to customary closing conditions, includingcompliance with the notification and approval process of the United Kingdom (UK)Secretary of State under the UK's national security legislation which regulates foreign investment into the UK. This is a typical approval process given the nature of the Credas business and approval is anticipated to be received by December 2025, with closing to follow promptly thereafter. There are no other material closing conditions.
Q: How will the quiet period impact engagement with investors and public commentary?
A: During the current period in which the Company has yet to file its audited consolidated financial statements for the fiscal year ended June 30, 2025, and its consolidated financial statements for the quarter ended September 30, 2025, the Company intends to restrict its regular investor engagement and public commentary, including debtholder and investor meetings and calls. The Company will provide any further information regarding its financial position and related matters by way of public announcement as and when required by law or the Company otherwise determines that disclosure is warranted.
Q: When will management resume more in-depth investor meetings?
A: Once the Company’s filings are current, Dye & Durham expects to resume regularinvestor engagement and public commentary, including meetings with investors.
Q: Where can I find updates about Dye & Durham’s business?
A: The best source for accurate, up-to-date information is Dye & Durham’s investor site and direct communications from the Company. The Company will keep this FAQ up to date with relevant information as needed.
Forward-Looking Information
This FAQ may contain forward-looking information within the meaning of applicable securities laws, which reflects Dye & Durham’s current expectations regarding future events. In some cases, but not necessarily in all cases, forward-looking statements can be identified by the use of forward looking terminology such as “plans”, “targets”, “expects” or “does not expect”, “is expected”, “an opportunity exists”, “is positioned”, “estimates”, “intends”, “assumes”, “appears”,“anticipates” or “does not anticipate” or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might”, “will” or “will be taken”, “occur” or “be achieved”. In particular, statements regarding compliance with the Company’s debt covenants, the release of current financial statements, the gross proceeds generated from the sale of Credas, the expected reduction in the Company’s Consolidated First Lien Net Leverage Ratio as a result of the consummation of the Credas transaction, the use of proceeds from the sale of Credas and the timing of the transaction, and the timing for repayment of the Company’s 2026 convertible debentures are forward-looking statements.
Forward-looking statements are not historical facts, nor guarantees or assurances of future performance but instead represent management’s current beliefs, expectations, estimates and projections regarding future events and operating performance. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond Dye & Durham’s control, which could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to the ability to successfully divest non-core assets, the ability to achieve operational improvements and optimize core products, the Company’s ability to execute on its cash management activities, the Company’s ability to reduce its Consolidated First Lien Net Leverage Ratio, the risk associated with the Company’s and SmartSearch’s ability to obtain the approvals that are required to consummate the Credas transaction and thetiming of the closing of the Credas transaction, the risk that the conditions to the Credas transaction are not satisfied on a timely basis or at all, or the failure of the Credas transaction to close for any other reason, the risk that a consent or authorization that may be required for the Credas transaction is not obtained or is obtained subject to conditions that are not anticipated, unanticipated difficulties or expenditures relating to the Credas transaction, the response of business partners and lenders, and retention risks arising as a result of the announcement and pendency of the Credas transaction, and the diversion of management time on Credas transaction-related issues, as well as the factors discussed under “Risk Factors” in Dye & Durham’s most recent annual information form. Dye & Durham does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events, or otherwise, except as expressly required by applicable law.
