# DIEBOLD NIXDORF, Inc: Form 10-Q for the period ended Mar 31, 2023

- Company: [DIEBOLD NIXDORF, Inc](/companies/dbd.md) (CIK 28823)
- Form: 10-Q
- Filed: 2023-05-30
- Accepted by EDGAR: May 30, 2023, 07:39 ET
- Period: 2023-03-31
- Accession: 0000028823-23-000117
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/28823/000002882323000117/dbd-20230331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/28823/000002882323000117/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2023-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2023-01-01 to 2023-03-31 | $858.1m | us-gaap:Revenues |
| Cost of revenue | 3 months, 2023-01-01 to 2023-03-31 | $648.8m | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2023-01-01 to 2023-03-31 | $209.3m | us-gaap:GrossProfit |
| Research and development | 3 months, 2023-01-01 to 2023-03-31 | $26.4m | us-gaap:ResearchAndDevelopmentExpense |
| Selling, general and administrative | 3 months, 2023-01-01 to 2023-03-31 | $183.8m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2023-01-01 to 2023-03-31 | −$2.1m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2023-01-01 to 2023-03-31 | $81.9m | us-gaap:InterestExpense |
| Income tax | 3 months, 2023-01-01 to 2023-03-31 | $21.1m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2023-01-01 to 2023-03-31 | −$111.1m | us-gaap:NetIncomeLoss |
| Basic EPS | 3 months, 2023-01-01 to 2023-03-31 | −$1.40 | us-gaap:EarningsPerShareBasic |
| Operating cash flow | 3 months, 2023-01-01 to 2023-03-31 | −$95.9m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Share repurchases | 3 months, 2023-01-01 to 2023-03-31 | $1.8m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Current assets | at 2023-03-31 | $1.81bn | us-gaap:AssetsCurrent |
| Total assets | at 2023-03-31 | $3.09bn | us-gaap:Assets |
| Current liabilities | at 2023-03-31 | $1.74bn | us-gaap:LiabilitiesCurrent |
| Long-term debt | at 2023-03-31 | $2.6k | us-gaap:LongTermDebt |
| Shareholders' equity | at 2023-03-31 | −$1.49bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 57,081 characters.

### Overview

Management’s discussion and analysis of financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and accompanying notes that appear within this Quarterly Report on Form 10-Q.

#### Introduction

The Company automates, digitizes and transforms the way people bank and shop. The Company’s integrated solutions connect digital and physical channels conveniently, securely and efficiently for millions of consumers every day. As an innovation partner for a majority of the world's top 100 financial institutions and top 25 global retailers, the Company delivers unparalleled services and technology that power the daily operations and consumer experience of banks and retailers around the world. The Company has a presence in more than 100 countries with approximately 21,000 employees worldwide.

#### Strategy

The Company is focused on consistently innovating its solutions to support a better transaction experience for consumers at bank and retail locations while simultaneously streamlining cost structures and business processes through the integration of hardware, software and services.

RECENT DEVELOPMENTS

#### Restructuring Support Agreement

On May 30, 2023, the Company Parties entered into the Restructuring Support Agreement with the Consenting Creditors holding: (i) obligations under the Superpriority Credit Agreement; (ii) term loan obligations under the New Term Loan Credit Agreement; (iii) the 2025 Senior Notes; and (iv) the 2L Notes. The Consenting Creditors collectively hold significant majority of the Companies outstanding secured debt obligations.

The Restructuring Support Agreement sets forth the agreed-upon terms among the Company and the Consenting Creditors for the effectuation of a deleveraging transaction through, among other things (i) a pre-packaged chapter 11 plan of reorganization to be filed by the Debtors in connection with the anticipated commencement by the Debtors of the Chapter 11 Cases under the U.S. Bankruptcy Code in the U.S. Bankruptcy Court, (ii) a scheme of arrangement to be filed by the Dutch Issuer in connection with the commencement by the Dutch Issuer of the Dutch Scheme Proceedings under the Dutch Restructuring Law in the the Dutch Court and (iii) recognition of such Dutch scheme pursuant to proceedings to be commenced under chapter 15 of the U.S. Bankruptcy Code by the Dutch Issuer.

Under the Restructuring Support Agreement, the Consenting Creditors have agreed, subject to certain terms and conditions, to support transactions (the Restructuring Transactions) that would result in a financial restructuring of the existing debt of, existing equity interests in the Company Parties pursuant to the Chapter 11 Plan and the WHOA Plan.

The Company cannot predict the ultimate outcome of the Chapter 11 Cases and the Dutch Scheme Proceedings at this time or the satisfaction of any of the Restructuring Support Agreement milestones yet to come. For the duration of any Chapter 11 Cases or Dutch Scheme Proceedings, the Company’s operations and ability to develop and execute its business plan would be subject to the risks and uncertainties associated with the Chapter 11 process and Dutch Restructuring Law process. The amount and composition of the Company’s assets, liabilities, officers and/or directors could be significantly different following the outcome of the Chapter 11 Cases and the Dutch Scheme Proceedings, and our historical financial performance would likely not be indicative of our future financial performance. In particular, the description of the Company’s operations, properties and liquidity and capital resources included in this Quarterly Report on Form 10-Q may not accurately reflect our operations, properties and liquidity and capital resources following the Chapter 11 process and Dutch Restructuring Law process.

For a more detailed discussion of the Restructuring Support Agreement and the Restructuring Transactions, see “Restructuring Support Agreement” in Note 9 to our Condensed Consolidated Financial Statements and Part II, Item 1A “Risk Factors” in this Quarterly Report.

#### Going Concern

### (unaudited)

### (dollars in millions, except per share amounts)

Our condensed consolidated financial statements included herein have been prepared using the going concern basis of accounting, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities in the normal course of business. Pursuant to the requirements of ASC Topic 205-40, *Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern*, management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year from the date the consolidated financial statements are issued. Our ability to continue as a going concern is contingent upon, among other things, our ability to successfully implement the Restructuring Transactions contemplated in the Restructuring Support Agreement, subject to the approval of the U.S. Bankruptcy Court and the Dutch Court. The Restructuring Transactions are intended to provide the Company with additional liquidity and a sustainable capital structure. There can be no certainty that the Restructuring Transactions will be effected or that disruption from the Chapter 11 Cases and Dutch Scheme Proceedings contemplated by the Restructuring Agreement will not interfere with the Company’s business. As of March 31, 2023 substantial doubt exists regarding our ability to continue as a going concern.

For a more detailed discussion of the Going Concern Assessment see “Going Concern Assessment” in Note 1 to our Condensed Consolidated Financial Statements and Part II, Item 1A “Risk Factors” in this Quarterly Report.

SERVICES AND PRODUCT SOLUTIONS

The Company offers a broad portfolio of solutions designed to automate, digitize and transform the way people bank and shop. As a result, the Company’s operating structure is focused on its two customer segments — Banking and Retail. Leveraging a broad portfolio of solutions, the Company offers customers the flexibility to purchase the combination of services and products embedded with software that drive the most value to their businesses.

#### Banking

The Company provides integrated solutions for financial institutions of all sizes designed to help drive operational efficiencies, differentiate the consumer experience, grow revenue and manage risk.

#### Banking Services

Services represents the largest operational component of the Company and includes product-related services, implementation services and managed services. Product-related services incidents are managed through remote service capabilities or an on-site visit. The portfolio includes contracted maintenance, preventive maintenance, “on-demand” maintenance and total implementation services. Implementation services help our customers effectively respond to changing customer demands and includes scalable solutions based on globally standardized processes and tools, a single point of contact and reliable local expertise. Managed services and outsourcing consists of managing the end-to-end business processes and technology integration. Our integrated business solutions include self-service fleet management, branch life-cycle management and ATM as-a-service capabilities.

The Company's DN Vynamic software is the first end-to-end software portfolio in the banking marketplace designed to simplify and enhance the consumer experience. This platform is cloud-native, provides new capabilities and supports advanced transactions via open application program interface (API). In addition, the Company’s software suite simplifies operations by eliminating the traditional focus on internal silos and enabling inter-connected partnerships between financial institutions and payment providers. Through its open approach, DN Vynamic brings together legacy systems, enabling new levels of connectivity, integration, and interoperability. The Company’s software suite provides a shared analytic and transaction engine. The DN Vynamic platform can generate new insights to enhance operations; prioritizing consumer preferences rather than technology.

In 2020, the Company launched the AllConnect Data Engine (ACDE), which enables a more data-driven and predictive approach to services. As of March 31, 2023, more than 182,000 devices were connected to ACDE. As the number of connected devices continues to increase, the Company expects to benefit from more efficient and cost-effective operations.

### (unaudited)

### (dollars in millions, except per share amounts)

#### Banking Products

The banking portfolio of products consists of cash recyclers and dispensers, intelligent deposit terminals, teller automation, and kiosk technologies. As financial institutions seek to expand the self-service transaction set and reduce operating costs by shrinking their physical branch footprint, the Company offers the DN Series™ family of self-service solutions.

DN Series is the culmination of several years of investment in consumer research, design and engineering resources. Key benefits and features of DN Series include:

- superior availability and performance;
- next-generation cash recycling technology;
- full integration with the DN Vynamic™ software suite;
- a modular and upgradeable design, which enables customers to respond more quickly to changing customer demands;
- higher note capacity and processing power;
- improved security safeguards to protect customers against emerging physical, data and cyber threats;
- physical footprint as much as 40% less vs. competing ATMs in certain models;
- made of recycled and recyclable materials and is 25% lighter than most traditional ATMs, reducing CO2 emissions both in the manufacturing and transportation of components and terminals;
- uses LED technology and highly efficient electrical systems, resulting in up to 50% power savings versus traditional ATMs; and
- increased branding options for financial institutions.

#### Retail

The Company’s comprehensive portfolio of retail services and products improves the checkout process for retailers while enhancing shopping experiences for consumers.

#### Retail Services

Diebold Nixdorf AllConnect Services® for retailers include maintenance and availability services to continuously optimize the performance and total cost of ownership of retail touchpoints, such as checkout, self-service and mobile devices, as well as critical store infrastructure. The solutions portfolio includes: implementation services to expand, modernize or upgrade store concepts; maintenance services for on-site incident resolution and restoration of multivendor solutions; support services for on-demand service desk support; operations services for remote monitoring of stationary and mobile endpoint hardware; as well as application services for remote monitoring of multivendor software and planned software deployments and data moves. As a single point of contact, service personnel plan and supervise store openings, renewals and transformation projects, with attention to local details and customers’ global IT infrastructure.

The DN Vynamic software suite for retailers provides a comprehensive, modular and open solution ranging from the in-store check-out to solutions across multiple channels that improve end-to-end store processes and facilitate continuous consumer engagements in support of a digital ecosystem. This includes click & collect, reserve & collect, in-store ordering and return-to-store processes across the retailers' physical and digital sales channels. Operational data from a number of sources, such as enterprise resource planning (ERP), POS, store systems and customer relationship management systems (CRM), may be integrated across all customer connection points to create seamless and differentiated consumer experiences.

In 2021, the Company announced it entered the electric vehicle (EV) charging station services business, a market with a customer profile potentially comparable to the existing retail business. Our global services capability, including our technicians, our skills in global spare parts logistics management, and multi-lingual help desks have initially resonated with market participants who own public charging stations.

### (unaudited)

### (dollars in millions, except per share amounts)

#### Retail Products

The retail product portfolio includes self-checkout (SCO) products and ordering kiosks facilitate a seamless and efficient transaction experience. The BEETLE®/iSCAN EASY eXpress™, hybrid products, can alternate from attended operation to SCO with the press of a button. The K-two Kiosk automates routine tasks and in-store transactions, offers order-taking abilities, particularly at quick service restaurants (QSRs) and fast casual restaurants and presents functionality that furthers store automation and digitalization. The retail product portfolio also includes modular and integrated, “all-in-one” point of sale (POS) and self-service terminals that meet changing consumer shopping journeys, as well as retailers’ and store staff’s automation requirements. Supplementing the POS system is a broad range of peripherals, including printers, scales and mobile scanners, as well as the cash management portfolio, which offers a wide range of banknote and coin processing systems. Additionally, our retail software solutions are inclusive of a cloud native software platform which is hardware agnostic and multi-vendor capable.

#### Business Drivers

The business drivers of the Company's future performance include, but are not limited to:

- demand for self-service and automation from Banking and Retail customers driven by the evolution of consumer behavior;
- demand for cost efficiencies and better usage of real estate for bank branches and retail stores as they transform their businesses to meet the needs of their customers while facing macro-economic challenges;
- demand for services on distributed IT assets such as ATMs, POS and SCO, including managed services and professional services;
- timing of product upgrades and/or replacement cycles for ATMs, POS and SCO;
- demand for software products and professional services;
- demand for security products and services for the financial, retail and commercial sectors; and
- demand for innovative technology in connection with the Company's strategy.

#### Refinancing Transactions

On October 20, 2022, the Company, certain of its subsidiaries, including Diebold Nixdorf Dutch Holding B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under Dutch law and a direct wholly owned subsidiary of the Company (the Dutch Subsidiary), and certain initial consenting holders entered into a Transaction Support Agreement (which was subsequently amended on November 28, 2022 and December 20, 2022), to which the other consenting holders became parties (together with all exhibits, annexes and schedules thereto, and as so amended, the Transaction Support Agreement). As contemplated in the Transaction Support Agreement, the following refinancing transactions (the December 2022 Refinancing Transactions) were completed on December 29, 2022:

- The Company and certain of its subsidiaries obtained a new $250.0 asset-based credit facility (the ABL Facility), which will mature in July 2026, subject to a springing maturity to a date that is 91 days prior to the maturity of certain indebtedness of the Company or its subsidiaries above a certain threshold amount. The ABL Facility is provided by, and replaces the commitments of, the Company’s existing revolving credit lenders under the Credit Agreement, dated as of November 23, 2015 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the Existing Credit Agreement), among the Company, as borrower, the Company’s subsidiary borrowers party thereto, the lenders party thereto from time to time and JPMorgan Chase Bank N.A., as administrative agent.
- Diebold Nixdorf Holding Germany GmbH (the German Borrower), a wholly-owned subsidiary of the Company, obtained a new $400.0 superpriority term loan credit facility (the Superpriority Facility), which will mature in July 2025.
- Certain holders of the term loans (the Existing Term Loans) under the Existing Credit Agreement exchanged such Existing Term Loans at par into extended term loans (the New Term Loans and, such exchange, the Term Loan Exchange), which will mature in July 2025.
- The Company amended the Existing Credit Agreement to, among other things, permit the December 2022 Refinancing Transactions, remove substantially all negative covenants and mandatory prepayments, and direct the collateral agent to release the liens on certain collateral securing the Company’s obligations under the Existing Credit Agreement and

### (unaudited)

### (dollars in millions, except per share amounts)

the Company’s existing subsidiary guarantors’ obligations under the related guarantees (in each case, to the extent permitted, including under applicable law).

- The Company consummated a private exchange offer (the Private 2024 Exchange Offer) and consent solicitation with respect to the outstanding 2024 Senior Notes, which included (i) a private offer to certain eligible holders to exchange any and all 2024 Senior Notes for units (the Units) consisting of (a) new 8.50%/12.50% Senior Secured PIK Toggle Notes due 2026 issued by the Company (the 2L Notes) and (b) a number of warrants (the Warrants) to purchase common shares of the Company and (ii) a related consent solicitation to adopt certain proposed amendments to the indenture governing the 2024 Senior Notes (the 2024 Senior Notes Indenture) to eliminate certain of the covenants, restrictive provisions and events of default intended to protect holders, among other things, from such indenture (collectively, the 2024 Exchange Offer and Consent Solicitation).
- (i) Certain holders of the Company’s 9.375% Senior Secured Notes due 2025 (the 2025 USD Senior Notes), issued pursuant to the Indenture, dated as of July 20, 2020 (as amended, the 2025 USD Senior Notes Indenture) exchanged such 2025 USD Senior Notes for new 9.375% Senior Secured Notes due 2025 (the New 2025 USD Senior Notes), being issued under the 2025 USD Senior Notes Indenture and with identical terms to the 2025 USD Senior Notes (after giving effect to the proposed amendments as described below), and (ii) certain holders of the Dutch Subsidiary’s 9.000% Senior Secured Notes due 2025 (the 2025 EUR Senior Notes and, together with the 2025 USD Senior Notes, the 2025 Senior Notes), issued pursuant to that certain Indenture, dated as of July 20, 2020 (the 2025 EUR Senior Notes Indenture) exchanged such 2025 EUR Senior Notes for new 9.00% Senior Secured Notes due 2025 (the New 2025 EUR Senior Notes and, together with the New 2025 USD Senior Notes, the New 2025 Notes). The Company also consummated the related consent solicitations and effected certain proposed amendments to the 2025 USD Senior Notes Indenture and the 2025 EUR Senior Notes Indenture.

#### Public 2024 Exchange Offer

On February 10, 2023, the Company filed with the SEC a registration statement on Form S-4, registering an exchange offer (the Public 2024 Exchange Offer) with respect to the 2024 Senior Notes, on substantially the same terms as the Private 2024 Exchange Offer, to exchange the remaining 2024 Senior Notes outstanding following the Private 2024 Exchange Offer for Units. The Public 2024 Exchange Offer is currently scheduled to expire on June 5, 2023. The Company is required to raise equity capital prior to the maturity date of the 2024 Senior Notes in an amount necessary to repurchase, redeem, prepay or pay in full the principal amount of any 2024 Senior Notes that are not exchanged in the Public 2024 Exchange Offer in excess of $20 aggregate principal amount of 2024 Senior Notes (such 2024 Senior Notes in excess of $20.0, the Excess Stub Notes). In light of ongoing conversations with the Company's lending partners to address short- and long-term liquidity needs, the Company's capital structure and deleveraging its balance sheet, the Company currently believes that the Public 2024 Exchange Offer will not be consummated.

#### FILO Facility

On March 21,2023, the Company entered into the FILO Amendment (as defined below), which established the FILO Facility (as defined below). Commitments under the FILO Facility were $55.0 and were borrowed in full and terminated on March 21, 2023. The liquidity provided by the FILO Facility is only expected to sustain the Company through part of the second quarter of 2023.

### (unaudited)

### (dollars in millions, except per share amounts)

### Results of Operations

The following discussion of the Company’s financial condition and results of operations provides information that will assist in understanding the financial statements and the changes in certain key items in those financial statements. The following discussion should be read in conjunction with the condensed consolidated financial statements and the accompanying notes that appear elsewhere in this Quarterly Report on Form 10-Q.

#### Net Sales

The following tables represent information regarding the Company's net sales:

| Segments Banking | Three months ended March 31, 2023 | 2022 | % Change | % Change in CC (1) | Percent of Total Net Sales for the Three months ended March 31, 2023 | 2022 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Services | $381.1 | $383.7 | (0.7) | 1.5 | 44.4 | 46.2 |
| Products | 211.8 | 179.0 | 18.3 | 21.7 | 24.7 | 21.6 |
| Total Banking | 592.9 | 562.7 | 5.4 | 7.9 | 69.1 | 67.8 |
| Retail |  |  |  |  |  |  |
| Services | 135.3 | 142.5 | (5.1) | 0.8 | 15.8 | 17.2 |
| Products | 129.9 | 124.6 | 4.3 | 8.9 | 15.1 | 15.0 |
| Total Retail | 265.2 | 267.1 | (0.7) | 4.6 | 30.9 | 32.2 |
| Total Net Sales | $858.1 | $829.8 | 3.4 | 6.8 | 100.0 | 100.0 |

(1) The Company calculates constant currency by translating the prior-year period results at the current year exchange rate.

Net sales increased $28.3, or 3.4 percent, including a net unfavorable currency impact of $26.7 primarily related to the euro. After excluding the unfavorable currency impact and $12.7 of net sales generated during the three months ended March 31, 2022 from divested businesses, net sales increased by $67.7.

### Segments

- Banking net sales increased $30.2, including a net unfavorable currency impact of $13.1, related primarily to the euro. After excluding the unfavorable currency impact and $5.9 of net sales generated by divested businesses, net sales increased $49.2, which was driven by higher ATM unit sales volume.
- Retail net sales decreased $1.9, including a net unfavorable currency impact of $13.6 primarily related to the euro. After excluding the unfavorable currency impact and $6.8 of sales generated by divested businesses, net sales increased $18.5 primarily due to increased volume from the business.

### (unaudited)

### (dollars in millions, except per share amounts)

#### Gross Profit

The following table represents information regarding the Company's gross profit:

|  | Three months ended March 31, 2023 | 2022 | % Change |
| --- | ---: | ---: | ---: |
| Gross profit - services | $153.4 | $152.0 | 0.9 |
| Gross profit - products | 55.9 | 33.3 | 67.9 |
| Total gross profit | $209.3 | $185.3 | 13.0 |
| Gross margin - services | 29.7% | 28.9% |  |
| Gross margin - products | 16.4% | 11.0% |  |
| Total gross margin | 24.4% | 22.3% |  |

Product gross profit increased due to the product sales increase. Product gross margin increased 540 basis points in the three months ended March 31, 2023 primarily due to lower logistical costs and decreases in certain raw material costs, most notably semiconductor chips. Further increase period over period was due to a favorable mix in sales geography.

#### Operating Expenses

The following table represents information regarding the Company's operating expenses:

|  | Three months ended March 31, 2023 | 2022 | % Change |
| --- | ---: | ---: | ---: |
| Selling and administrative expense | $183.8 | $181.0 | 1.5 |
| Research, development and engineering expense | 26.4 | 32.3 | (18.3) |
| Loss on sale of assets, net | 0.3 | 0.2 | 50.0 |
| Impairment of assets | 0.9 | 55.2 | (98.4) |
| Total operating expenses | $211.4 | $268.7 | (21.3) |
| Percent of net sales | 24.6% | 32.4% |  |

Selling and administrative expense increased $2.8 in the three months ended March 31, 2023 compared to the corresponding period in 2022. This increase is the result of refinancing related charges incurred in 2023 related to efforts to obtain additional liquidity and optimize capital structure, which is partially offset by the cost savings initiatives, the most significant of which were headcount reductions that were implemented beginning in the second quarter of 2022.

Research and development costs decreased $5.9 as a result of ongoing costs savings initiatives which include the movement of certain research and development activities to lower cost jurisdictions and project prioritization and rationalization.

During the first quarter of 2023, the Company recognized impairment for certain facilities leases in the U.K. as a result of an initiative to streamline administrative office space usage. The Company recognized impairment of its North American ERP system of $38.4 as well as assets in Russia and Ukraine of $16.8 in the same period in the prior year.

### (unaudited)

### (dollars in millions, except per share amounts)

#### Operating Loss

The following table represents information regarding the Company's operating loss:

|  | Three months ended March 31, 2023 | 2022 | % Change |
| --- | ---: | ---: | ---: |
| Operating loss | $(2.1) | $(83.4) | 97.5 |
| Operating margin | (0.2)% | (10.1)% |  |

Operating profit increased by $81.3 in the three months ended March 31, 2023, compared to the prior-year period. The improvement in operating profit is predominantly the result of higher product gross profits and the non-recurrence of the large impairment charges recognized in the first quarter of 2022, as noted above.

#### Other Income (Expense)

The following table represents information regarding the Company's other income (expense), net:

|  | Three months ended March 31, 2023 | 2022 | % Change |
| --- | ---: | ---: | ---: |
| Interest income | $1.7 | $1.3 | 30.8 |
| Interest expense | (81.9) | (48.1) | 70.3 |
| Foreign exchange loss, net | (10.6) | (4.7) | 125.5 |
| Miscellaneous, net | 2.6 | 2.6 | — |
| Other income (expense), net | $(88.2) | $(48.9) | 80.4 |

Interest income remained materially consistent for the three month periods ended March 31, 2023 and 2022.

Interest expense increased $33.8 due to the terms of the agreement completed on December 29, 2022 and increasing variable interest rates. Additionally, amortization of deferred financing fees from refinanced debt contributed $13.6 of interest expense in the current year quarter compared to only $4.3 in the prior year quarter.

Foreign exchange gain (loss), net, includes realized gains and losses, primarily related to euro and brazilian real currency exposure, which was unfavorable during all periods presented.

Miscellaneous, net remained consistent for the three month periods ended March 31, 2023 and 2022 and is primarily driven by recognition of non-service pension items, the most significant of which are in Germany.

#### Net Loss

The following table represents information regarding the Company's net loss:

|  | Three months ended March 31, 2023 | 2022 | % Change |
| --- | ---: | ---: | ---: |
| Net loss | $(111.5) | $(183.9) | 39.4 |
| Percent of net sales | (13.0)% | (22.2)% |  |
| Effective tax rate | (23.4)% | (38.3)% |  |

Changes in net loss are a result of the fluctuations outlined in the previous sections. The change in net loss is also impacted by a decrease in income tax expense for the three months ended March 31, 2023, Refer to Note 3 of the Condensed Consolidated Financial Statements for additional information of tax expense in the current quarter.

### (unaudited)

### (dollars in millions, except per share amounts)

### Segment Operating Profit Summary

The following tables represent information regarding the segment operating profit metrics, which exclude the impact of restructuring, non-routine charges, and held for sale non-core European retail business. Refer to Note 17 of the Condensed Consolidated Financial Statements for further details regarding the determination of reportable segments and the reconciliation between segment operating profit and consolidated operating profit.

| Banking: | Three months ended March 31, 2023 | 2022 | % Change |
| --- | ---: | ---: | ---: |
| Net sales | $592.9 | $562.7 | 5.4 |
| Segment operating profit | $79.9 | $46.1 | 73.3 |
| Segment operating profit margin | 13.5% | 8.2% |  |

Banking segment operating profit increased $33.8 in the three months ended March 31, 2023, as compared to the prior-year period due to increased sales volume of ATM units and normalization of supply chain logistics and input costs.

| Retail: | Three months ended March 31, 2023 | 2022 | % Change |
| --- | ---: | ---: | ---: |
| Net sales | $260.4 | $261.7 | (0.5) |
| Segment operating profit | $39.1 | $24.2 | 61.6 |
| Segment operating profit margin | 15.0% | 9.2% |  |

Retail segment operating profit increased $14.9 in the three months ended March 31, 2023, as compared to the prior-year period due to normalization of supply chain logistics and input costs.

| Corporate: | Three months ended March 31, 2023 | 2022 | % Change |
| --- | ---: | ---: | ---: |
| Charges not allocated to segments | $69.0 | $71.2 | (3.1) |

Corporate does not represent a reportable segment, but the table above includes charges not allocated to segments as they are not directly attributable and are managed independently by the CODM. These include include headquarter-based costs associated primarily with human resources, finance, IT and legal. The decreases in cost from the prior year period are a result of continued restructuring efforts to reduce redundancy and indirect spend.

### Liquidity and Capital Resources

On December 29, 2022, and as discussed above, the Company completed the December 2022 Refinancing Transactions, which were a series of transactions with certain key financial stakeholders to refinance certain debt with near-term maturities and provide the Company with new capital. As planned, at the closing of the December 2022 Refinancing Transactions, the Company drew down the ABL Facility and utilized the proceeds for working capital, including payments to suppliers and vendors. As of March 31, 2023, therefore, the Company had zero availability under the ABL Facility and $263.0 of cash, cash equivalents, restricted cash and short-term investments. Initially, the Company believed that the December 2022 Refinancing Transactions, along with cash from operations, would be sufficient to meet the Company’s near-term and long-term liquidity needs for at least the next 12 months. Over the course of the first quarter of 2023, based on the Company’s revenue cycle and the composition of the borrowing base under the ABL Facility, the availability under the ABL Facility as of March 2023 has been substantially limited. In addition, slower-than-expected conversion of inventory into revenue has further suppressed liquidity. Accordingly, on March 21, 2023, and as discussed above, the Company entered into the FILO Amendment, which

### (unaudited)

### (dollars in millions, except per share amounts)

established the FILO Facility. The initial commitments under the FILO Facility were $55.0 and were borrowed in full and terminated on March 21, 2023.

The liquidity provided by the FILO Facility is only expected to sustain the Company through part of the second quarter. As previously disclosed, the Company is currently working to improve its operating performance and its cash, liquidity and financial position. In addition, the Company has been in discussions with its lenders with respect to a long-term solution for the Company’s capital structure, leverage and liquidity needs. As a result of those discussions, on May 30, 2023, the Company Parties entered into a Restructuring Support Agreement with the Consenting Creditors. The Consenting Creditors collectively hold significant majority of the Companies outstanding secured debt obligations.

The Restructuring Support Agreement sets forth the agreed-upon terms among the Company and the Consenting Creditors fora the effectuation of a deleveraging transaction through, among other things, (i) a pre-packaged chapter 11 plan of reorganization to be filed by the Debtors in connection with the anticipated commencement by the Debtors of the Chapter 11 Cases under chapter 11 of title 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court, (ii) a scheme of arrangement to be filed by the Dutch Issuer relating to the Dutch Scheme Companies in connection with the commencement by the Dutch Issuer of the Dutch Scheme Proceedings under the Dutch Restructuring Law in the Dutch Court and (iii) recognition of such Dutch scheme pursuant to proceedings to be commenced under chapter 15 of the U.S. Bankruptcy Code by the Dutch Issuer.

The Company cannot predict the ultimate outcome of the Chapter 11 Cases and the Dutch Scheme Proceedings at this time or the satisfaction of any of the Restructuring Support Agreement milestones yet to come. For the duration of any Chapter 11 Cases or Dutch Scheme Proceedings, the Company’s operations and ability to develop and execute its business plan would be subject to the risks and uncertainties associated with the Chapter 11 process and Dutch Restructuring Law process. The amount and composition of the Company’s assets, liabilities, officers and/or directors could be significantly different following the outcome of the Chapter 11 Cases and the Dutch Scheme Proceedings, and our historical financial performance would likely not be indicative of our future financial performance. In particular, the description of the Company's operations, properties and liquidity and capital resources included in this Quarterly Report on Form 10-Q may not accurately reflect our operations, properties and liquidity and capital resources following the Chapter 11 process and Dutch Restructuring Law process.

Our condensed consolidated financial statements included herein have been prepared using the going concern basis of accounting, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities in the normal course of business. Pursuant to the requirements of ASC Topic 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year from the date the consolidated financial statements are issued. Our ability to continue as a going concern is contingent upon, among other things, our ability to successfully implement the Restructuring Transactions contemplated in the Restructuring Support Agreement, subject to the approval of the Bankruptcy Court and the Dutch Court. The Restructuring Transactions are intended to provide the Company with additional liquidity and a sustainable capital structure. There can be no certainty that the Restructuring Transactions will be effected or that, disruption from the Chapter 11 Cases and Dutch Scheme Proceedings contemplated by the Restructuring Support Agreement will not interfere with the Company’s business. As of March 31, 2023 , substantial doubt exists regarding our ability to continue as a going concern.

For a more detailed discussion of the Restructuring Support Agreement and the Restructuring Transactions, see “Restructuring Support Agreement” in Note 9 and “Going Concern Assessment” in Note 1 to our Condensed Consolidated Financial Statements and Part II, Item 1A “Risk Factors” in this Quarterly Report.

The Company's total cash and cash availability as of March 31, 2023 and December 31, 2022 was as follows:

|  | March 31, 2023 | December 31, 2022 |
| --- | ---: | ---: |
| Cash, cash equivalents and restricted cash | $246.4 | $319.1 |
| Additional cash availability from: |  |  |
| Short-term investments | 16.6 | 24.6 |
| Total cash and cash availability | $263.0 | $343.7 |

As of March 31, 2023, the ABL Credit Agreement provides for (x) the ABL Facility with commitments of up to $250.0 that matures on July 20, 2026 and (y) the FILO Facility of $55.0 that matures on June 4, 2023. The weighted average interest rates on outstanding revolver borrowings under the ABL Facility as of March 31, 2023 and December 31, 2022 were 7.60 percent and 7.66 percent, respectively which is based on the Secured Overnight Financing Rate (SOFR). The interest rate for the

### (unaudited)

### (dollars in millions, except per share amounts)

outstanding borrowings on the FILO facility as of March 31, 2023 was 12.88 percent. There was $263.0 in cash, cash equivalents, restricted cash and short-term investments and zero borrowing availability under the ABL Facility as of March 31, 2023, after excluding $29.0 in outstanding letters of credit.

The following table summarizes the results of the Company's condensed consolidated statement of cash flows for the three months ended March 31, 2023 and 2022:

| Summary of cash flows: | Three months ended March 31, 2023 | March 31, 2022 |
| --- | ---: | ---: |
| Net cash used by operating activities | $(95.9) | $(226.2) |
| Net cash used by investing activities | (1.7) | (5.8) |
| Net cash provided by financing activities | 21.1 | 65.6 |
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 1.9 | 1.5 |
| Change in cash, cash equivalents and restricted cash | $(74.6) | $(164.9) |

### Operating Activities

Cash flows from operating activities can fluctuate significantly from period to period as working capital needs and the timing of payments impact reported cash flows. Net cash used by operating activities was $95.9 for the three months ended March 31, 2023, a change of $130.3 from cash use of $226.2 for the three months ended March 31, 2022.

- Cash flows from operating activities during the three months ended March 31, 2023 compared to the three months ended March 31, 2022 were favorably impacted by a $72.4 decrease in net loss. Refer to "Results of Operations" discussed above for further discussion of the Company's net loss.
- The net aggregate of inventories and accounts payable was a decrease in operating cash flow of $24.2 during the three months ended March 31, 2023, compared to a decrease in operating cash flow of $160.7 during the three months ended March 31, 2022. The $136.5 decrease in cash usage is primarily a result of disbursement timing.
- The net aggregate of trade receivables and deferred revenue was an increase in operating cash flow of $21.1 during the three months ended March 31, 2023, compared to an increase in operating cash flow of $89.4 in the three months ended March 31, 2022. The $68.3 net change is primarily the result of timing within the order to cash cycle as well as lower collections of customer prepayments.

### Investing Activities

Cash flows from investing activities during the three months ended March 31, 2023 includes $5.7 and $5.4 for capital expenditures and software development, respectively, compared to $4.0 and $7.6, respectively, for the same periods in 2022. .

During the three months ended March 31, 2023, the Company received no cash proceeds from divestitures compared to $5.8 of proceeds from the divestiture of its German reverse vending business in the three months ended March 31, 2022.

During the three months ended March 31, 2023, net maturities from investing activity was $9.4, compared to $0.0 for the three months ended March 31, 2022.

### Financing Activities

Net cash provided by financing activities was $21.1 for the three months ended March 31, 2023 compared to a $65.6 source of cash for the same period in 2022. The change was primarily a result of net borrowings under the ABL Facility, including the FILO facility, of $22.7 during the three months ended March 31, 2023, compared to net borrowings under the Company's prior revolving credit facility of $75.0 during the three months ended March 31, 2022.

The Company paid cash for interest related to its debt of $25.5 and $58.6 for the three months ended March 31, 2023 and March 31, 2022, respectively.

### (unaudited)

### (dollars in millions, except per share amounts)

Refer to Note 9 of the condensed consolidated financial statements for additional information regarding the Company's debt obligations.

**Contractual and Other Obligations** The Company enters into certain purchase commitments due within one year for materials through contract manufacturing agreements for a total negotiated price. At March 31, 2023, the Company had minimal purchase commitments due within one year for materials through contract manufacturing agreements at negotiated prices.

Except for the items noted above, inclusive of near-term debt maturities, all contractual and other cash obligations with initial and remaining terms in excess of one year and contingent liabilities remained generally unchanged at March 31, 2023 compared to December 31, 2022.

### (unaudited)

### (dollars in millions, except per share amounts)

**Off-Balance Sheet Arrangements** The Company enters into various arrangements not recognized in the consolidated balance sheets that have or could have an effect on its financial condition, results of operations, liquidity, capital expenditures or capital resources. The principal off-balance sheet arrangements that the Company enters into are guarantees and sales of finance receivables. The Company provides its global operations guarantees and standby letters of credit through various financial institutions to suppliers, customers, regulatory agencies and insurance providers. If the Company is not able to comply with its contractual obligations, the suppliers, regulatory agencies and insurance providers may draw on the pertinent bank. The Company has sold finance receivables to financial institutions while continuing to service the receivables. The Company records these sales by removing finance receivables from the consolidated balance sheets and recording gains and losses in the consolidated statement of operations (refer to Note 5 of the condensed consolidated financial statements).

Diebold Nixdorf, Incorporated initially issued the 8.5% Senior Notes due 2024 (the 2024 Senior Notes) in an offering exempt from the registration requirements of the Securities Act, which were later exchanged in an exchange offer registered under the Securities Act, and any 2L Notes issued pursuant to the Public 2024 Exchange Offer (the Public 2L Notes) will be issued in a transaction registered under the Securities Act. The 2024 Senior Notes are and will be, and the Public 2L Notes will be, guaranteed by certain of Diebold Nixdorf, Incorporated's existing and future subsidiaries which are listed on Exhibit 22.1 to this Quarterly Report on Form 10-Q. The following presents the summarized financial information separately for Diebold Nixdorf, Incorporated (the Parent Company), the issuer of the guaranteed obligations, and the guarantor subsidiaries, as specified in the indenture governing the Company's obligations under the 2024 Senior Notes and the indenture that will govern the Company’s obligations under the Public 2L Notes, on a combined basis.

Each guarantor subsidiary is 100 percent owned by the Parent Company at the date of each balance sheet presented. The 2024 Senior Notes are, and the Public 2L Notes will be, fully and unconditionally guaranteed on a joint and several basis by each guarantor subsidiary. The guarantees of the guarantor subsidiaries are subject to release in limited circumstances only upon the occurrence of certain conditions. Each entity in the consolidating financial information follows the same accounting policies as described in the condensed consolidated financial statements, except for the use by the Parent Company and the guarantor subsidiaries of the equity method of accounting to reflect ownership interests in subsidiaries which are eliminated upon consolidation.

The following tables present summarized financial information for the Parent Company and the guarantor subsidiaries on a combined basis after elimination of (i) intercompany transactions and balances among the Parent Company and the guarantor subsidiaries and (ii) equity in earnings from and investments in any non-guarantor subsidiary.

|  | Summarized Balance Sheets March 31, 2023 | December 31, 2022 |
| --- | ---: | ---: |
| Total current assets | $2,004.2 | $1,818.9 |
| Total non-current assets | $1,388.5 | $1,401.2 |
| Total current liabilities | $2,925.0 | $2,662.6 |
| Total non-current liabilities | $2,751.1 | $2,748.7 |

### (unaudited)

### (dollars in millions, except per share amounts)

|  | Summarized Statements of Operations Three months ended March 31, 2023 | Year ended December 31, 2022 |
| --- | ---: | ---: |
| Net sales | $643.8 | $2,521.2 |
| Cost of sales | 478.2 | 1,857.8 |
| Selling and administrative expense | 182.3 | 690.0 |
| Research, development and engineering expense | 22.1 | 83.4 |
| Impairment of assets | 0.9 | 52.0 |
| Gain (loss) on sale of assets, net | 0.3 | (4.6) |
| Interest income | 0.9 | 1.6 |
| Interest expense | (73.9) | (298.3) |
| Foreign exchange gain (loss), net | 2.4 | 36.5 |
| Miscellaneous, net | (4.7) | (13.2) |
| Loss from continuing operations before taxes | $(115.3) | $(430.8) |
| Net loss | $(127.0) | $(494.7) |

As of March 31, 2023 and December 31, 2022, the Parent Company and the guarantor subsidiaries on a combined basis had the following balances with non-guarantor subsidiaries:

|  | Summarized Balance Sheets March 31, 2023 | December 31, 2022 |
| --- | ---: | ---: |
| Total current assets | $940.8 | $820.5 |
| Total non-current assets | $— | $— |

### (unaudited)

### (dollars in millions, except per share amounts)

The following tables present summarized financial information for the subsidiaries of the Company whose securities are pledged as the Collateral (together, the “Collateral Group”) on a combined basis with intercompany balances and transactions between entities in the Consolidated Group eliminated. No trading market for the subsidiaries in the Collateral Group exists.

|  | Summarized Balance Sheets March 31, 2023 | December 31, 2022 |
| --- | ---: | ---: |
| Total current assets | $2,472.2 | $2,362.4 |
| Total non-current assets | $1,241.4 | $1,248.3 |
| Total current liabilities | $1,104.0 | $1,035.7 |
| Total non-current liabilities | $1,457.4 | $1,443.0 |

|  | Summarized Statements of Operations Three months ended March 31, 2023 | Year ended December 31, 2022 |
| --- | ---: | ---: |
| Net sales | $590.7 | $2,370.9 |
| Cost of sales | 374.3 | 1,541.5 |
| Selling and administrative expense | 103.4 | 420.9 |
| Research, development and engineering expense | 20.0 | 84.8 |
| Impairment of assets | 0.8 | 25.8 |
| Gain (loss) on sale of assets, net | 0.1 | (1.3) |
| Interest income | 0.6 | 3.5 |
| Interest expense | (21.9) | (44.7) |
| Foreign exchange gain, net | 7.8 | 28.5 |
| Miscellaneous, net | (6.6) | (53.6) |
| Income from continuing operations before taxes | $72.0 | $232.9 |
| Net income | $63.2 | $239.3 |

As of March 31, 2023 and December 31, 2022, the Collateral Group on a combined basis had the following balances with non-guarantor subsidiaries:

|  | Summarized Balance Sheets March 31, 2023 | December 31, 2022 |
| --- | ---: | ---: |
| Total current assets | $1,417.0 | $1,332.0 |
| Total non-current assets | $— | $— |

### (unaudited)

### (dollars in millions, except per share amounts)

### Critical Accounting Policies and Estimates

Management’s discussion and analysis of the Company’s financial condition and results of operations are based upon the Company’s condensed consolidated financial statements. The consolidated financial statements of the Company are prepared in conformity with generally accepted accounting principles in the United States (U.S. GAAP). The preparation of the accompanying consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities and reported amounts of revenues and expenses. Such estimates include revenue recognition, the valuation of trade and financing receivables, inventories, goodwill, intangible assets, other long-lived assets, legal contingencies, guarantee obligations, and assumptions used in the calculation of income taxes, pension and post-retirement benefits and customer incentives, among others. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors. Management monitors the economic conditions and other factors and will adjust such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates.

There have been no material changes to the critical accounting policies and estimates described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

### Forward-Looking Statement Disclosure

This Quarterly Report on Form 10-Q and the exhibits hereto may contain statements that are not historical information and are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give current expectations or forecasts of future events and are not guarantees of future performance. These forward-looking statements include, but are not limited to, projections, statements regarding the Company's expected future performance (including expected results of operations and financial guidance), future financial condition, potential impact of the ongoing coronavirus (COVID-19) pandemic, anticipated operating results, strategy plans, future liquidity and financial position.

Statements can generally be identified as forward looking because they include words such as “believes,” “anticipates,” “expects,” “intends,” “plans,” “will,” “estimates,” “potential,” “target,” “predict,” “project,” “seek,” and variations thereof or “could,” “should” or words of similar meaning. Statements that describe the Company's future plans, objectives or goals are also forward-looking statements, which reflect the current views of the Company with respect to future events and are subject to assumptions, risks and uncertainties that could cause actual results to differ materially. Although the Company believes that these forward-looking statements are based upon reasonable assumptions regarding, among other things, the economy, its knowledge of its business, and key performance indicators that impact the Company, these forward-looking statements involve risks, uncertainties and other factors that may cause actual results to differ materially from those expressed in or implied by the forward-looking statements.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

The factors that may affect the Company's results include, among others:

- the Company's ability to negotiate and execute definitive documentation with respect to the Restructuring Transactions and to satisfy the conditions of the Restructuring Support Agreement;
- the timing and ultimate outcome of the Chapter 11 Cases and the Dutch Scheme Proceedings;
- the Company's ability to have its New Common Stock approved for listing on the New York Stock Exchange;
- the overall impact of the global supply chain complexities on the Company and its business, including delays in sourcing key components as well as longer transport times, especially for container ships and U.S. trucking, given the Company’s reliance on suppliers, subcontractors and availability of raw materials and other components;
- the Company's ability to improve its operating performance and its cash, liquidity and financial position;
- the Company's ability to generate sufficient cash or have sufficient access to capital resources to service its debt, which, if unsuccessful or insufficient, could force the Company to reduce or delay investments and capital expenditures or to dispose of material assets or operations, seek additional debt or equity capital or restructure or refinance its indebtedness;
- the Company's ability to comply with the covenants contained in the agreements governing its debt and to successfully refinance its debt in the future;

### (unaudited)

### (dollars in millions, except per share amounts)

- the Company’s ability to successfully convert its backlog into sales, including our ability to overcome supply chain and liquidity challenges;
- the ultimate impact of the ongoing COVID-19 pandemic and other public health emergencies, including further adverse effects to the Company’s supply chain, maintenance of increased order backlog, and the effects of any COVID-19 related cancellations;
- the Company's ability to successfully meet its cost-reduction goals and continue to achieve benefits from its cost-reduction initiatives and other strategic initiatives, such as the current $150 million-plus cost savings plan;
- the success of the Company’s new products, including its DN Series line and EASY family of retail checkout solutions, and electronic vehicle charging service business;
- the impact of a cybersecurity breach or operational failure on the Company's business;
- the Company’s ability to attract, retain and motivate key employees;
- the Company’s reliance on suppliers, subcontractors and availability of raw materials and other components;
- changes in the Company's intention to further repatriate cash and cash equivalents and short-term investments residing in international tax jurisdictions, which could negatively impact foreign and domestic taxes;
- the Company's success in divesting, reorganizing or exiting non-core and/or non-accretive businesses and its ability to successfully manage acquisitions, divestitures, and alliances;
- the ultimate outcome of the appraisal proceedings initiated in connection with the implementation of the Domination and Profit Loss Transfer Agreement with the former Diebold Nixdorf AG (which was dismissed in the Company’s favor at the lower court level in May 2022) and the merger/squeeze-out;
- the impact of market and economic conditions, including the bankruptcies, restructuring or consolidations of financial institutions, which could reduce the Company’s customer base and/or adversely affect its customers' ability to make capital expenditures, as well as adversely impact the availability and cost of credit;
- the impact of competitive pressures, including pricing pressures and technological developments;
- changes in political, economic or other factors such as currency exchange rates, inflation rates (including the impact of possible currency devaluations in countries experiencing high inflation rates), recessionary or expansive trends, hostilities or conflicts (including the war between Russia and Ukraine and the tension between the U.S. and China), disruption in energy supply, taxes and regulations and laws affecting the worldwide business in each of the Company's operations;
- the Company's ability to maintain effective internal controls;
- unanticipated litigation, claims or assessments, as well as the outcome/impact of any current/pending litigation, claims or assessments;
- the effect of changes in law and regulations or the manner of enforcement in the U.S. and internationally and the Company’s ability to comply with applicable laws and regulations; and
- and other factors included in the Company’s filings with the SEC, including its Annual Report on Form 10-K for the year ended December 31, 2022.

Except to the extent required by applicable law or regulation, the Company undertakes no obligation to update these forward-looking statements to reflect future events or circumstances or to reflect the occurrence of unanticipated events.

You should consider these factors carefully in evaluating forward-looking statements and are cautioned not to place undue reliance on such statements.

### (in millions, except share and per share amounts)

## Market risk

As filed, 639 characters.

Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 for a discussion of market risk exposures. As discussed elsewhere in this Quarterly Report on Form 10-Q, the COVID-19 pandemic and related impacts on the global supply chain have negatively impacted our business and results of operations. As the Company cannot predict the full duration or extent of the pandemic, the future impact on the results of operations, financial position and cash flows, among others, cannot be reasonably estimated, but could be material. There have been no other material changes in this information since December 31, 2022.

## Controls and procedures

As filed, 2,088 characters.

This Quarterly Report on Form 10-Q includes the certifications of the Company's Chief Executive Officer (CEO) and Chief Financial Officer (CFO) required by Rule 13a-14 of the Securities Exchange Act of 1934 (the Exchange Act). See Exhibits 31.1 and 31.2. This Item 4 includes information concerning the controls and control evaluations referred to in those certifications.

Based on the performance of procedures by management, designed to ensure the reliability of financial reporting, management believes that the unaudited condensed consolidated financial statements fairly present, in all material respects, the Company's financial position, results of operations and cash flows as of the dates, and for the periods presented.

### Disclosure Controls and Procedures

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act) are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's (SEC) rules and forms and that such information is accumulated and communicated to management, including the CEO and CFO as appropriate, to allow timely decisions regarding required disclosures.

In connection with the preparation of this Quarterly Report on Form 10-Q, the Company's management, under the supervision and with the participation of the CEO and CFO, conducted an evaluation of disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation, the CEO and CFO have concluded that such disclosure controls and procedures were effective as of March 31, 2023.

### Change in Internal Controls

During the quarter ended March 31, 2023, there have been no changes in the Company's internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

### (in millions, except share and per share amounts)

## Risk factors

As filed, 18,157 characters.

Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. There has been no material change to this information since December 31, 2022, except as provided below.

*The Company may not be able to generate sufficient cash from operations or have access to other sources of liquidity to sustain its operating needs or to meet its obligations as they become due over the next twelve-month period, raising substantial doubt as to the Company’s ability to continue as a going concern.* The Company has substantial indebtedness and requires sufficient cash flows and capital resources to fund its debt service obligations and other liquidity needs. Although the December 2022 Refinancing Transactions were intended to provide the Company with the necessary liquidity to meet, along with cash from operations, its near-term and long-term liquidity needs, over the course of the first quarter of 2023, based on the Company’s revenue cycle and the composition of the borrowing base under the ABL Facility, the availability under the ABL Facility as of March 2023 has been substantially limited. In addition, slower-than-expected conversion of inventory into revenue has further suppressed liquidity. Accordingly, on March 21, 2023, the Company obtained the FILO Facility, which was borrowed in full. However, without modifications to the ABL Facility and access to additional capital, the Company currently projects that it will have insufficient liquidity to satisfy its obligations as they become due over the next twelve-month period.

On May 30, 2023, the Company Parties entered into the Restructuring Support Agreement with the Consenting Creditors.

The Restructuring Support Agreement sets forth the agreed-upon terms among the Company and the Consenting Creditors for Issuer relating to the Dutch Scheme Companies (i) a pre-packaged chapter 11 plan of reorganization to be filed by the Debtors in connection with the anticipated commencement by the Debtors of the Chapter 11 Cases under chapter 11 of title 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court, (ii) a scheme of arrangement to be filed by the Dutch Issuer in connection with the commencement by the Dutch Issuer of the Dutch Scheme Proceedings under the Dutch Restructuring Law in the Dutch Court and (iii) recognition of such Dutch scheme pursuant to proceedings to be commenced under chapter 15 of the U.S. Bankruptcy Code by the Dutch Issuer.

Under the Restructuring Support Agreement, the Consenting Creditors have agreed, subject to certain terms and conditions, to support the Restructuring Transactions that would result in a financial restructuring of the existing debt of, existing equity interests in the Company Parties pursuant to the Chapter 11 Plan and the WHOA Plan.

Although the Company intends to pursue the Restructuring Transactions in accordance with the terms set forth in the Restructuring Support Agreement, there can be no assurance that the Company will be successful in completing a restructuring or any other similar transaction on the terms set forth in the Restructuring Support Agreement, on different terms or at all.

The Company cannot predict the ultimate outcome of the Chapter 11 Cases and the Dutch Scheme Proceedings at this time or the satisfaction of any of the Restructuring Support Agreement milestones yet to come. For the duration of any Chapter 11 Cases or Dutch Scheme Proceedings, the Company’s operations and ability to develop and execute its business plan would be subject to the risks and uncertainties associated with the Chapter 11 process and Dutch Restructuring Law process. The amount and composition of the Company’s assets, liabilities, officers and/or directors could be significantly different following the outcome of the Chapter 11 Cases and the Dutch Scheme Proceedings, and our historical financial performance would likely not be indicative of our future financial performance. In particular, the description of the Company’s operations, properties and

### (in millions, except share and per share amounts)

liquidity and capital resources included in this Quarterly Report on Form 10-Q may not accurately reflect our operations, properties and liquidity and capital resources following the Chapter 11 process and Dutch Restructuring Law process.

*The Restructuring Support Agreement may be terminated upon the occurrence of certain events, and there can be no assurance that the Company will be successful in completing a restructuring or any other similar transaction on the terms set forth in the Restructuring Support Agreement.* The Restructuring Support Agreement may be terminated upon the occurrence of certain events, including the failure to meet the milestones (unless extended or waived) described in “Going Concern Assessment” in Note 9 to our Condensed Consolidated Financial Statements.

Each of the Consenting Creditors may terminate the Restructuring Support Agreement (and thereby their obligations to support the Plans) under certain circumstances, including the Company’s failure to meet the milestones set forth in the Restructuring Support Agreement. A Company Party may terminate the Restructuring Support Agreement under certain circumstances, including the U.S. Bankruptcy Court’s failure to confirm the Chapter 11 Plan or dismissal of the Chapter 11 Cases or the Dutch Court’s failure to sanction the WHOA Plan. The Restructuring Support Agreement will be automatically terminated in certain circumstances, including if the Company’s board of directors determines, after consulting with counsel, that proceeding with any of the restructuring transactions contemplated by the Restructuring Support Agreement would be inconsistent with its fiduciary duties or applicable law. Some of these conditions are not under our control. There can be no assurance that any or all of the conditions precedent will be satisfied or waived or that these transactions will be completed as currently contemplated or at all.

Although the Company intends to pursue the Restructuring Transactions in accordance with the terms set forth in the Restructuring Support Agreement, there can be no assurance that the Company will be successful in completing a restructuring or any other similar transaction on the terms set forth in the Restructuring Support Agreement, on different terms or at all.

If the Restructuring Support Agreement is terminated or if we are otherwise unable to consummate the Restructuring Transactions, it is unclear whether we would be able to reorganize our business and what, if anything, holders of claims against us would ultimately receive with respect to their claims. In addition, any Chapter 11 Cases may become protracted, which could significantly and detrimentally impact our relationships with our partners, suppliers, service providers, customers, employees, and other third parties. Even if the Restructuring Transactions are completed, they may not be completed on the anticipated schedule or terms, and we may incur significant additional costs and expenses.

*Under the terms of the Restructuring Support Agreement, we are required to seek the protection of the U.S. Bankruptcy Court and the Dutch Court, which subjects us to the risks and uncertainties associated with bankruptcy and may harm our business.* If we seek the protection of the U.S. Bankruptcy Court and the Dutch Court, our operations and ability to develop and execute our business plan, and our ability to continue as a going concern, are subject to the risks and uncertainties associated with bankruptcy. As such, seeking bankruptcy protection could have a material adverse effect on our business, financial condition, results of operations and liquidity. Our senior management has been required to spend a significant amount of time and effort attending to the Restructuring Transactions instead of focusing exclusively on our business operations. Bankruptcy court protection also might make it more difficult to retain management and other employees necessary to the success and growth of our business.

Other significant risks include the following:

- our ability to consummate the Chapter 11 Plan and the WHOA Plan;
- the high costs of bankruptcy and related fees;
- the imposition of restrictions or obligations on the Company by regulators related to the bankruptcy and emergence from bankruptcy;
- our ability to obtain sufficient financing to allow us to emerge from bankruptcy and execute our business plan post-emergence;
- our ability to maintain our relationships with our suppliers, service providers, customers, employees, and other third parties;
- our ability to maintain contracts that are critical to our operations; and
- the actions and decisions of our debtholders and other third parties who have interests in our Chapter 11 Cases that may be inconsistent with our plans.

*If we seek the protection of the U.S. Bankruptcy Court and the Dutch Court, we may not be able to obtain confirmation of the Chapter 11 Plan and the WHOA Plan.* To emerge successfully from bankruptcy protection as a viable entity, we must meet certain statutory requirements with respect to adequacy of disclosure with respect to the Chapter 11 Plan and the WHOA Plan, solicit and obtain the requisite acceptances of such reorganization plans and fulfill other statutory conditions for confirmation of such a plan. There is no assurance that Chapter 11 Cases and the Dutch Scheme Proceedings will be confirmed by the U.S. Bankruptcy Court or the Dutch Court, or that the WHOA Plan proceedings will be recognized by the U.S. Bankruptcy Court.

### (in millions, except share and per share amounts)

Additionally, certain parties in interest may file objections to the Chapter 11 Plan and the WHOA Plan. The precise requirements and evidentiary showing for confirming a plan, notwithstanding its rejection by one or more impaired classes of claims or equity interests, depends upon a number of factors including, without limitation, the status and seniority of the claims or equity interests in the rejecting class.

If the Chapter 11 Plan and the WHOA Plan are not confirmed by the U.S. Bankruptcy Court or the Dutch Court, or the WHOA Plan proceedings are not recognized by the U.S. Bankruptcy Court, it is unclear whether we would be able to reorganize our business and what, if anything, holders of claims against us would ultimately receive with respect to their claims. Delays could increase the risks of our being unable to reorganize our business and emerge from bankruptcy and increase our costs associated with the bankruptcy process.

*We expect to be subject to claims that will not be discharged in the Chapter 11 Cases and the Dutch Scheme Proceedings.* The U.S. Bankruptcy Code provides that the effectiveness of a plan of reorganization discharges a debtor from substantially all debts arising prior to petition date, other than as provided in the Chapter 11 Plan or the confirmation order. For example, pursuant to the Restructuring Support Agreement, the Chapter 11 Plan is expected to provide that holders of allowed general unsecured claims would be reinstated and paid in the ordinary course of business in accordance with the terms and conditions of the particular transaction or agreement giving rise to such allowed general unsecured claim, or otherwise provided such treatment to render it unimpaired.

To the extent such claims could have been asserted prior to bankruptcy or arose during the bankruptcy, such claims can be asserted after we emerge from bankruptcy. The outcome and timing of potential matters is uncertain, and it is possible material costs, penalties, fines, sanctions, or injunctive relief could result from such a matter. As a result, an adverse ruling with respect to potential matters could have a material impact on our financial condition, results of operations, liquidity, and cash flows.

*The negotiations of the Restructuring Transactions have consumed and will continue to consume a substantial portion of the time and attention of our management, which may have an adverse effect on our business and results of operations, and we may face increased levels of employee attrition.* Our management has spent, and continues to be required to spend, a significant amount of time and effort focusing on the Restructuring Transactions. This diversion of attention may have a material adverse effect on the conduct of our business, and, as a result, on our financial condition and results of operations, particularly if the Restructuring Transactions, the Chapter 11 Cases or the Dutch Scheme Proceedings are protracted. During the pendency of the Restructuring Transactions, our employees will face considerable distraction and uncertainty and we may experience increased levels of employee attrition. A loss of key personnel or material erosion of employee morale could have a materially adverse effect on our ability to meet customer expectations, thereby adversely affecting our business and results of operations. The failure to retain or attract members of our management team and other key personnel could impair our ability to execute our strategy and implement operational initiatives, thereby having a material adverse effect on our financial condition and results of operations. Likewise, we could experience losses of customers or business partners who may be concerned about our ongoing long-term viability.

*In certain instances, the Chapter 11 Cases may be converted to a case under Chapter 7 of the U.S. Bankruptcy Code.* Following commencement of the Chapter 11 Cases, upon a showing of cause, the U.S. Bankruptcy Court may convert such Chapter 11 Cases to cases under chapter 7 of the U.S. Bankruptcy Code (Chapter 7). In such event, a Chapter 7 trustee would be appointed or elected to liquidate our assets for distribution in accordance with the priorities established by the U.S. Bankruptcy Code. We believe that liquidation under Chapter 7 would result in significantly smaller distributions being made to our creditors than those provided for in a prepackaged plan because of (i) the likelihood that the assets would have to be sold or otherwise disposed of in a distressed fashion over a short period of time rather than a controlled manner and as a going concern, (ii) additional administrative expenses involved in the appointment of a Chapter 7 trustee, and (iii) additional expenses and claims, some of which would be entitled to priority, that would be generated during the liquidation and from the rejection of leases and other executory contracts in connection with a cessation of operations.

*As a result of the Chapter 11 Cases and the Dutch Scheme Proceedings, our historical financial information may not be indicative of our future financial performance and our board of directors and management team may change significantly.* During the Chapter 11 Cases and the Dutch Scheme Proceedings, we expect our financial results to be volatile as restructuring activities and expenses, contract terminations and rejections, and claims assessments significantly impact our consolidated financial statements. As a result, the amount and composition of the Company’s assets, liabilities, officers and/or directors could be significantly different following the outcome of the Chapter 11 Cases and the Dutch Scheme Proceedings, and our historical financial performance is likely not indicative of our future financial performance. In particular, the description of the Company’s operations, properties and liquidity and capital resources included in this Quarterly Report on Form 10-Q may not accurately reflect our operations, properties and liquidity and capital resources following the Chapter 11 process and Dutch Restructuring Law process.

### (in millions, except share and per share amounts)

In addition, the composition of our management team may change significantly. Qualified individuals are in high demand and we may incur significant costs to attract them. In addition, the loss of any of our senior management or other key employees or changes in the composition of our management team could materially and adversely affect our ability to execute their strategy and implement operational initiatives and have a material and adverse effect on our financial condition, liquidity and results of operations.

*Our existing common shares will be cancelled without any recovery if the Restructuring Transactions are consummated.* If the Restructuring Transactions contemplated by the Restructuring Support Agreement are consummated, all existing equity interests of the Company, including common shares, will be extinguished without any recovery. Additionally, if the Restructuring Support Agreement is terminated or if we are otherwise unable to consummate the Restructuring Transactions, it is unclear whether we would be able to reorganize our business and what, if anything, holders of claims against us would ultimately receive with respect to their claims.

*If the New York Stock Exchange (NYSE) were to suspend trading in the Company’s common shares, liquidity in our common shares would be materially diminished.* As a result of the announcement of the Restructuring Transactions or the initiation of the Chapter 11 Cases or the Dutch Scheme Proceedings, the NYSE may commence proceedings to delist the Company’s common shares and suspend trading in the Company’s common shares. Although the Company’s common shares are likely to begin trading in the over-the-counter markets in such circumstances, the over-the-counter markets are significantly more limited than the NYSE, and quotation on the over-the-counter markets may result in a less liquid market available for existing and potential shareholders to trade the common shares and could further depress the trading price of the common shares. We can provide no assurance that the common shares will trade on the over-the-counter markets, whether broker-dealers will continue to provide public quotes of the common shares or whether the trading volume of the common shares will be sufficient to provide for an efficient trading market.

Filed May 30, 2023.
Source: SEC EDGAR, the filing index for accession 0000028823-23-000117. Last ingested by Listed: Oct 28, 2026, 07:18 ET. No prices; not investment advice.