NEW YORK--()--Engine Capital LP (together with its affiliates, "Engine" or "we"), which owns approximately 7.1% of the issued and outstanding common shares of Dye & Durham Limited (TSX: DND) ("Dye & Durham" or the "Company"), today announced that Glass, Lewis & Co. (“Glass Lewis”) has recommended that Dye & Durham shareholders support meaningful boardroom change by voting for four of its six directors at the Company’s 2024 Annual Meeting of Shareholders to be held on December 17, 2024. Glass Lewis recommends that shareholders vote the BLUE proxy card to elect Arnaud Ajdler, Hans T. Gieskes, Anthony Kinnear and Sid Singh to the Board of Directors (the “Board”).

Glass Lewis also recommends that shareholders WITHHOLD votes for CEO Matt Proud, Board Chair Colleen Moorehead, Chair of the Compensation Committee Edward Prittie and director Luke McCormick.

Mr. Ajdler, Founder and Managing Partner of Engine, commented:

“We appreciate the endorsement for meaningful boardroom change at Dye & Durham from both leading independent proxy advisory firms. In their reports, Glass Lewis and ISS rebuke the Board – led by Chair Colleen Moorehead and CEO Matt Proud – for its failure to generate value since the Company’s 2020 IPO and for its use of several entrenchment tactics to prevent shareholders from having their say. Notably, both Glass Lewis and ISS agree with our concerns regarding the potential for Mr. Proud to disrupt progress at the Company, including its search for a new CEO, if he were reelected to the Board.”

In its full report, Glass Lewis highlighted its rationale in recommending shareholders vote for meaningful boardroom change:1

  • “[…] we do not consider DND has, by its own benchmark, convincingly established any particularly durable legacy of consistent, competitive value creation since listing.”
  • “[…] DND seems to take material analytical and/or narrative liberties, including by failing to address key concerns which otherwise serve to underscore doubts surrounding the efficacy of the current board […] we believe adequate cause exists to suggest investors would be well served endorsing substantive change to the DND board at this time.”
  • “DND's reported severance payment of C$10 million to Mr. Proud — to which he was not entitled and about which DND has provided investors no substantive commentary or transparency — is decidedly disconcerting […]”
  • “We do not find any of these steps to be indicative of a board interested in the timely exercise of the shareholder franchise, and instead consider these patterns to be much more consistent with a board determined to employ a fairly wide range of stall tactics and entrenchment mechanisms.”
  • “The reasons to oppose Mr. Proud's candidacy are, in our view, expansive. We are also concerned Mr. Proud appears to be at the center of DND's overworked executive turnstile, a circumstance which amplifies already significant uncertainty regarding his prospective willingness to leverage the existing investor rights agreement to appoint himself board chair concurrent with the board's effort to identify and retain his successor.”
  • “[…] we believe [Ms. Moorehead’s] service as board chair during DND's expansive efforts to blunt the shareholder franchise hardly serves as a particularly auspicious indication of her willingness or ability to effectively and reliably represent unaffiliated investor interests.”
  • “The issue of customer value add is also fraught for the board, as Engine reasonably highlights consistently and pointedly negative responses to material price increases (including at least one lawsuit) and a failure to stick to messaged price freezes, which developments the Dissident believes have damaged DND's credibility and driven significant customer losses.”
  • “We believe the foregoing Engine candidates represent a favorable cross-section of independence, executive service, relevant industry expertise and prior public company board experience, giving us a reasonable degree of confidence they will be well situated to swiftly contribute to necessary deliberations relating to myriad issues at DND.”

In its report recommending shareholders vote FOR three of Engine’s director candidates, Institutional Shareholder Services Inc. (“ISS”) noted the following:2

  • “Various configurations of the board have been ineffective at performing oversight over the company's founder, CEO, and strategic architect, Matthew Proud.”
  • “[…] there is unease regarding oversight and accountability, and the ability of the incumbent board (with Proud involved) to attract and retain a new high-caliber CEO.”
  • “Shareholders would be right to wonder […] if Proud and the management nominees endorsing his continued involvement in the succession process should be trusted.”
  • “At times, the board has engaged in questionable tactics to stifle the dissident campaign under [Ms. Moorehead’s] tenure, most notably by lobbying for the Competition Bureau investigation to serve as rationale to preserve the incumbent board and management.”

Shareholders are encouraged to vote FOR all six of Engine’s nominees using only the BLUE proxy card. In order for your votes to be counted, you must submit your BLUE proxy or voting instruction form before 10:30 a.m. Eastern Time TODAY

Contact your broker to obtain the 16-digit control number associated with your BLUE voting instruction form. Once you have your control number, visit www.LetsFixDND.com/how-to-vote to cast your vote. If you have already voted using the GOLD Dye & Durham proxy, you can submit a new vote using the BLUE proxy. Only the later dated proxy will be counted at the Annual Meeting. If you have questions or require assistance with voting your shares, please contact the proxy solicitation agent, Sodali & Co, at Toll Free: 1-888-777-2094, Outside North America (collect calls accepted): 1-289-695-3075 or Email: assistance@sodali.com.

For more information on how to vote for the entire Engine slate on the BLUE Proxy Card, to download a copy of the full presentation and to share feedback on Dye & Durham, visit www.LetsFixDND.com. Visit SEDAR+ (www.sedarplus.ca) to review a copy of Engine’s Information Proxy Circular, dated November 29, 2024.

Disclaimer for Forward-Looking Information

Statements contained herein that are not historical facts constitute “forward-looking statements” and “forward-looking information” (together, “forward-looking statements”) within the meaning of applicable securities laws that reflect Engine’s current expectations, assumptions, and estimates of future events, performance and economic conditions. Such forward-looking statements rely on the safe harbor provisions of applicable securities laws. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements and there can be no assurance that the Company’s securities will trade at the prices that may be implied herein, and there can be no assurance that any opinion or assumption herein is, or will be proven, correct. Words and phrases such as “anticipate,” “believe,” “create,” “drive,” “expect,” “forecast,” “future,” “growth,” “intend,” “hope,” “opportunity,” “plan,” “confident,” “restore,” “reduce,” “potential,” “proposal,” “unlock,” “upside,” “will,” “would,” and similar words and phrases are intended to identify forward-looking statements. These forward-looking statements may include, but are not limited to, statements concerning: the anticipated financial and operating performance of Dye & Durham; anticipated changes to Dye & Durham’s debt levels and financial ratios; the outcome of the Annual Meeting; the release of a transition plan and go-forward strategy; anticipated EBITDA; and achieving organic growth, free cash flow generation and leverage reduction. Such forward-looking statements are not guarantees of future performance or actual results, and readers should not place undue reliance on any forward-looking statement as actual results may differ materially and adversely from forward-looking statements. All forward-looking statements contained herein are made only as of the date hereof, and Engine disclaims any intention or obligation to update or revise any such forward-looking statements to reflect events or circumstances that subsequently occur, or of which Engine hereafter becomes aware, except as required by applicable law.

Non-IFRS Measures

This press release makes reference to certain non-IFRS financial measures. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS financial measures by providing further understanding of the Company’s results of operations from the Company’s perspective as disclosed by the Company in its public disclosure, including in the Company’s Management Circular. The Company’s definitions of non-IFRS measures may not be the same as the definitions for such measures used by other companies or investors in their reporting. Non-IFRS measures have limitations as analytical tools and should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under IFRS. The Company discloses that it uses non-IFRS financial measures, including “EBITDA” and “Leveraged Free Cash Flow”, to provide investors with supplemental measures of the Company’s operating performance and to eliminate items that have less bearing on operating performance or operating conditions and thus highlight trends in the Company’s core business that may not otherwise be apparent when relying solely on IFRS financial measures. Engine believes that securities analysts, investors and other interested parties frequently use non-IFRS financial measures in the evaluation of issuers such as the Company. The Company also discloses that it uses non-IFRS financial measures in order to facilitate operating performance comparisons from period to period. Please see “Cautionary Note Regarding Non-IFRS Measures” and “Select Information and Reconciliation of Non-IFRS Measures” in the Company’s most recent Management’s Discussion and Analysis, which is available on the Company’s profile on SEDAR+ at www.sedarplus.ca, for further details on these non-IFRS measures, including (i) definitions of each non-IFRS measure and an explanation of the composition of each non-IFRS financial measure, and (ii) relevant reconciliations of each non-IFRS measure to its most directly comparable IFRS measure, which information is incorporated by reference herein. Engine believes that its disclosure of non-IFRS measures in this press release is consistent with the use of such measures by the Company.

About Engine Capital

Engine Capital LP is a value-oriented special situations fund that invests both actively and passively in companies undergoing change.

1 Permission to use quotations from Glass Lewis was neither sought nor obtained.

2 Permission to use quotations from ISS was neither sought nor obtained.