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The ODP Corporation Announces First Quarter 2021 Results

First Quarter Revenue of $2.4 Billion with GAAP Diluted EPS of $0.95; Adjusted EPS of $1.21

Low-Cost Model Helped Drive Operating Income of $55 million; Adjusted Operating Income of $91 million

Delivered Significant Cash Flow with $1.7 Billion in Total Available Liquidity at Quarter End

Announced Plans to Separate ODP into Two Independent, Publicly Traded Companies

Board Approves a New $300 Million Stock Repurchase Authorization

Plan for CompuCom Sale Process Continues to Proceed

BOCA RATON, Fla.–(BUSINESS WIRE)–
The ODP Corporation (“ODP,” or the “Company”) (NASDAQ: ODP), a leading provider of business services, products and digital workplace technology solutions through an integrated B2B distribution platform with an online presence and approximately 1,100 stores, today announced results for the first quarter ended March 27, 2021.

First Quarter 2021 Summary⁽¹⁾⁽²⁾

• Total reported sales of $2.4 billion, down 13% versus last year
• GAAP operating income of $55 million and net income of $53 million, or $0.95 per diluted share, versus $80 million and $45 million, or $0.84 per diluted share, respectively in the prior year
• Adjusted operating income of $91 million, down from $108 million in the first quarter of 2020; and adjusted EBITDA of $138 million, down from $157 million in the first quarter of 2020
• Adjusted net income of $68 million, or adjusted earnings per share of $1.21, versus $66 million or $1.21, respectively in the prior year
• Operating cash flow of $86 million and adjusted free cash flow of $79 million, versus $188 million and $173 million, respectively in prior year
• $1.7 billion of total available liquidity including $753 million in cash and cash equivalents

“It’s an exciting day for ODP, as we mark the continued evolution of our B2B pivot and digital transformation, drove solid quarterly results, and took the next step in unlocking shareholder value,” said Gerry Smith, chief executive officer of The ODP Corporation.

“While conditions related to COVID-19 persisted in the quarter and adverse weather temporarily impacted operations in the Southwest, the continued execution of our low-cost model drove solid operating and free cash flow results, as we continued to make meaningful progress on our strategic initiatives. We delivered our value proposition to customers at home, in the office, and through our Retail channel, which experienced strong demand, including a 35% year-over-year increase in our buy online, pick-up in store (BOPIS) offering. While COVID-19 conditions continued to impact our contract channel, we did achieve one of our highest levels of net new customer wins and are encouraged by the increased business activity and traction exiting the quarter,” he added.

“The significant progress on our B2B pivot and digital transformation initiatives have us well positioned for the future. Our digital platform business integrated BuyerQuest, our new procure-to-pay (P2P) platform, and we advanced our collaboration with Microsoft. Additionally, the supplier community continues to gain interest as they realize the broad capabilities and reach of our new digital platform. In all, we are well on our way to pursue future growth in the large and growing business commerce market.”

“Also, as we described in a separate release, we’re taking an important step to unlock shareholder value by planning a tax-free spin-off of our B2B businesses, creating two, independent, publicly-traded companies. As separate companies, we believe all stakeholders will benefit from the increased strategic focus and flexibility, aligned capital structures and growth profiles, which will enhance our prospects for long-term value creation. In support of our strategy, we are happy to announce that our Board has authorized a new $300 million stock repurchase program,” he added.

Consolidated Results

Reported (GAAP) Results

Total reported sales for the first quarter of 2021 were $2.4 billion, a decrease of 13% compared to the first quarter of 2020. The year-over-year decrease in revenue was primarily the result of fewer retail stores in service and lower sales driven by impacts related to the COVID-19 pandemic. Product sales in the first quarter were down 12% relative to the prior year period. Service revenue in the first quarter was down 19% related to lower comparable sales at CompuCom as a result of the COVID-19 outbreak and the previously disclosed malware incident, and lower sales of services in our BSD and Retail Division, both of which were negatively impacted by the COVID-19 outbreak.

The Company reported operating income of $55 million in the first quarter of 2021, compared to $80 million in the prior year period. GAAP operating results in the first quarter included a total of $36 million of charges which include $10 million of SG&A expenses related to CompuCom’s efforts to address the malware incident and restore service delivery to impacted customers, $12 million of non-cash asset impairment charges primarily related to the impairment of operating lease right-of-use (ROU) assets associated with the Company’s retail store locations, and $14 million of merger, restructuring and other operating costs primarily associated with the Maximize B2B Restructuring Plan. Net income was $53 million, or $0.95 per diluted share in the first quarter of 2021, compared to $45 million, or $0.84 per diluted share in the first quarter of 2020.

Adjusted (non-GAAP) Results⁽¹⁾⁽²⁾

Adjusted results for the first quarter of 2021 exclude charges and credits totaling $36 million as defined above, as well as a credit of $7 million for other income related to the release of certain liabilities of its former European Business, and the tax impacts associated with the above items.

• First quarter of 2021 adjusted EBITDA was $138 million compared to $157 million in the prior year period. This included adjusted depreciation and amortization⁽⁵⁾ of $44 million and $49 million in the first quarters of 2021 and 2020, respectively.

• First quarter 2021 adjusted operating income was $91 million compared to $108 million in the first quarter of 2020, including the impacts related to the COVID-19 pandemic.

• First quarter 2021 adjusted net income was $68 million, or $1.21 per diluted share, compared to $66 million, or $1.21 per diluted share, in the first quarter of 2020.

First Quarter Division Results

Business Solutions Division (BSD)

• Reported sales were $1.1 billion in the first quarter of 2021, down 16% compared to the same period last year. Sales performance was impacted by conditions caused by the COVID-19 outbreak, which impacted schools and business operations
• Demand in our eCommerce channel increased 3% with growth in certain adjacency product sales, which comprised 44% of total BSD revenues in the quarter
• Operating income was $17 million in the first quarter of 2021 compared to $40 million in the prior year period

Retail Division

• Reported sales were $1.0 billion in the first quarter of 2021, down 10% versus the prior year period, but up sequentially from $951 million in the fourth quarter of 2020. Planned closures of underperforming stores drove the reported decline with 149 fewer retail outlets at the end of the first quarter as compared to the prior year. The Company closed 8 stores in the quarter and had 1,146 stores at quarter end
• Partially offsetting these impacts were increased sales per shopper as well as a 35% increase in our buy online, pick up in store (BOPIS) offering
• Operating income was $100 million in the first quarter of 2021, up 15% over the same period last year. As a percentage of sales, this performance reflects an approximate 210 basis point margin improvement

CompuCom Division

• Reported sales were $196 million in the first quarter of 2021, down 17% compared to the prior year period. The year-over-year decrease was due primarily to lower services volumes related to the COVID-19 outbreak and other factors, as well as lower billed service revenues as a result of the malware incident
• CompuCom reported $1 million operating loss in the first quarter of 2021, compared to $3 million operating income in the prior year period
• The Company continues to make progress on its plan for a value-maximizing sale of its CompuCom Division to maximize CompuCom’s full potential and drive forward its future value and success

B2B Pivot and Digital Transformation Progress

As a primary component of its strategy to drive growth in higher value industry segments, the Company has made significant progress on its B2B pivot and digital transformation initiatives. The Company recently established its new technology business, announced its digital transformation leadership team, acquired one of the leading Procure-to-Pay software companies, and entered into a collaboration with Microsoft corporation.

During the quarter, the Company’s new technology platform business integrated BuyerQuest, its new leading P2P eProcurement software platform, launching new customers and growing its pipeline of new business opportunities. Furthering its collaboration with Microsoft, in April, the Company’s digital technology business successfully completed a live technical demonstration of the platform at an industry technology conference, representing an important step as the Company prepares for a full launch to Microsoft’s Business Central customers scheduled for late 2021. The Company continues to generate strong interest from suppliers as they begin to recognize the expansive reach and innovative capabilities of the new digital platform.

Balance Sheet and Cash Flow

As of March 27, 2021, ODP had total available liquidity of approximately $1.7 billion, consisting of $753 million in cash and cash equivalents and $946 million of available credit under the Third Amended Credit Agreement. Total debt was $367 million.

For the first quarter of 2021, cash provided by operating activities was $86 million, which included less than $1 million in acquisition and integration-related costs and $6 million in restructuring costs, compared to cash provided by operating activities of $188 million in the first quarter of the prior year, which included $4 million and $10 million, respectively, of the same costs. The reduction in operating cash flow was driven primarily by higher working capital usage in the quarter.

Capital expenditures in the quarter were $13 million versus $25 million in the prior year period, reflecting lower investment in retail operations, while continuing growth investments in the Company’s digital transformation, distribution network, and eCommerce capabilities. The cash charges associated with the Company’s Maximize B2B Restructuring Plan and its Business Acceleration Program in the quarter were $5 million and $1 million, respectively. Accordingly, Adjusted Free Cash Flow was $79 million in the first quarter of 2021.

Additionally, as part of its ongoing commitment to drive shareholder value in support of its strategic initiatives, the Company announced today that its Board of Directors authorized a new $300 million stock repurchase program. This new program, available through June 30, 2022, replaces the current share repurchase program that was temporarily suspended during the onset of COVID-19. The authorization permits the Company to repurchase common stock from time-to-time through a combination of open market repurchases, privately negotiated transactions, 10b5-1 trading plans, accelerated stock repurchase transactions and/or other derivative transactions. The stock repurchase program may be modified, extended, suspended or discontinued at any time. The exact number and timing of share repurchases will depend on market conditions and other factors, and will be funded through available cash balances. “Reflecting our team’s confidence in the future, this new authorization will allow us to opportunistically enhance the return of capital to shareholders as we execute our strategic initiatives. As we make progress, our Board of Director’s will continue to evaluate our capital allocation plans in order to maximize long-term value for shareholders,” Smith added.

About The ODP Corporation

The ODP Corporation (NASDAQ:ODP) is a leading provider of business services and supplies, products and digital workplace technology solutions to small, medium and enterprise businesses, through an integrated business-to-business (B2B) distribution platform, which includes world-class supply chain and distribution operations, dedicated sales professionals and technicians, online presence, and approximately 1,100 stores. Through its banner brands Office Depot®, OfficeMax®, CompuCom® and Grand&Toy®, as well as others, the Company offers its customers the tools and resources they need to focus on their passion of starting, growing and running their business. For more information, visit news.theodpcorp.com and investor.theodpcorp.com.

The ODP Corporation and Office Depot are trademarks of The Office Club, Inc. OfficeMax is a trademark of OMX, Inc. CompuCom is a trademark of CompuCom Systems, Inc. Grand&Toy is a trademark of Grand & Toy, LLC in Canada. ©2021 Office Depot, LLC. All rights reserved. Any other product or company names mentioned herein are the trademarks of their respective owners.

FORWARD LOOKING STATEMENTS

This communication may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements or disclosures may discuss goals, intentions and expectations as to future trends, plans, events, results of operations, cash flow or financial condition, the potential impacts on our business due to the unknown severity and duration of the COVID-19 outbreak, or state other information relating to, among other things, the Company, based on current beliefs and assumptions made by, and information currently available to, management. Forward-looking statements generally will be accompanied by words such as “anticipate,” “believe,” “plan,” “could,” “estimate,” “expect,” “forecast,” “guidance,” “outlook,” “intend,” “may,” “possible,” “potential,” “predict,” “project,” “propose” or other similar words, phrases or expressions, or other variations of such words. These forward-looking statements are subject to various risks and uncertainties, many of which are outside of the Company’s control. There can be no assurances that the Company will realize these expectations or that these beliefs will prove correct, and therefore investors and stakeholders should not place undue reliance on such statements.

Factors that could cause actual results to differ materially from those in the forward-looking statements include, among other things, highly competitive office products market and failure to differentiate the Company from other office supply resellers or respond to decline in general office supplies sales or to shifting consumer demands; competitive pressures on the Company’s sales and pricing; the adverse effects of an unsolicited tender offer on our business, operating results or financial condition; the risk that the Company is unable to transform the business into a service-driven, B2B platform that such a strategy will not result in the benefits anticipated; the risk that the Company will not be able to achieve its strategic plans, including the announced separation of the B2B Operations and the sale of CompuCom, and the high costs in connection with these transactions which may not be recouped if these transactions are not consummated, the risk that the Company may not be able to realize the anticipated benefits of acquisitions due to unforeseen liabilities, future capital expenditures, expenses, indebtedness and the unanticipated loss of key customers or the inability to achieve expected revenues, synergies, cost savings or financial performance; the risk that the Company is unable to successfully maintain a relevant omni-channel experience for its customers; the risk that the Company is unable to execute the Maximize B2B Restructuring Plan successfully or that such plan will not result in the benefits anticipated; the risk that the Company will not be successful in maximizing the full potential of its CompuCom Division; failure to effectively manage the Company’s real estate portfolio; loss of business with government entities, purchasing consortiums, and sole- or limited- source distribution arrangements; failure to attract and retain qualified personnel, including employees in stores, service centers, distribution centers, field and corporate offices and executive management, and the inability to keep supply of skills and resources in balance with customer demand; failure to execute effective advertising efforts and maintain the Company’s reputation and brand at a high level; disruptions in computer systems, including delivery of technology services; breach of information technology systems affecting reputation, business partner and customer relationships and operations and resulting in high costs and lost revenue; unanticipated downturns in business relationships with customers or terms with the suppliers, third-party vendors and business partners; disruption of global sourcing activities, evolving foreign trade policy (including tariffs imposed on certain foreign made goods); exclusive Office Depot branded products are subject to additional product, supply chain and legal risks; product safety and quality concerns of manufacturers’ branded products and services and Office Depot private branded products; covenants in the credit facility; general disruption in the credit markets; incurrence of significant impairment charges; retained responsibility for liabilities of acquired companies; fluctuation in quarterly operating results due to seasonality of the Company’s business; changes in tax laws in jurisdictions where the Company operates; increases in wage and benefit costs and changes in labor regulations; changes in the regulatory environment, legal compliance risks and violations of the U.S. Foreign Corrupt Practices Act and other worldwide anti-bribery laws; volatility in the Company’s common stock price; changes in or the elimination of the payment of cash dividends on Company common stock; macroeconomic conditions such as future declines in business or consumer spending; increases in fuel and other commodity prices and the cost of material, energy and other production costs, or unexpected costs that cannot be recouped in product pricing; unexpected claims, charges, litigation, dispute resolutions or settlement expenses; catastrophic events, including the impact of weather events on the Company’s business; the discouragement of lawsuits by shareholders against the Company and its directors and officers as a result of the exclusive forum selection of the Court of Chancery, the federal district court for the District of Delaware or other Delaware state courts by the Company as the sole and exclusive forum for such lawsuits; and the impact of the COVID-19 pandemic on the Company’s business, including on the demand for its and our customers’ products and services, on trade and transport restrictions and generally on our ability to effectively manage the impacts of the COVID-19 pandemic on our business operations. The foregoing list of factors is not exhaustive. Investors and shareholders should carefully consider the foregoing factors and the other risks and uncertainties described in the Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K filed with the U.S. Securities and Exchange Commission. The Company does not assume any obligation to update or revise any forward-looking statements.

BSD year-over-year sales performance was impacted by conditions caused by the COVID-19 outbreak, negatively impacting sales primarily in the Company’s contract channel as the operations of many businesses were interrupted and the majority of school systems remained closed to in-class learning. The Company utilized diverse channels and a broader product portfolio to meet customer needs. Demand through its eCommerce channel grew by 3%. Adjacency categories include cleaning and breakroom, personal protective equipment (PPE), technology, furniture, and copy and print, and comprised 44% of total BSD revenues in the quarter. BSD operating income was impacted by lower sales volume related to the effects of the COVID-19 pandemic and product mix, partially offset by cost efficiency measures. The Company’s contract channel experienced stronger demand late in the quarter as more businesses resumed normal operations and a great number of school systems returned to in-class learning.

The Retail Division reported sales were down 10% versus the prior year period related to planned closures of underperforming stores with 149 fewer retail outlets at the end of the first quarter as compared to the prior year. Partially offsetting these impacts were increased sales per shopper, increased demand for certain adjacency product categories, and stronger adoption of our BOPIS offering. Retail Division operating income was up 15% over the same period last year and reflects a 210 basis point margin improvement. The increase in operating income versus the prior year was largely related to lower SG&A from cost savings initiatives, improvements in distribution and inventory management costs, and lower operating lease costs.

The CompuCom Division reported sales decrease was due primarily to lower services volumes related to the impact of the COVID-19 pandemic and other factors, as well as lower billed service revenue as a result of the malware incident. Service disruptions related to the malware incident have largely been addressed and service has been restored to all customers. The CompuCom Division reported an operating loss of $1 million in the first quarter of 2021, compared to $3 million operating income in the first quarter of 2020.

THE ODP CORPORATION

GAAP to Non-GAAP Reconciliations

(Unaudited)

We report our results in accordance with accounting principles generally accepted in the United States (“GAAP”). We also review certain financial measures excluding impacts of transactions that are not related to our core operations (“non-GAAP”). Management believes that the presentation of these non-GAAP financial measures enhances the ability of its investors to analyze trends in its business and provides a means to compare periods that may be affected by various items that might obscure trends or developments in its business. Management uses both GAAP and non-GAAP measures to assist in making business decisions and assessing overall performance. Non-GAAP measures help to evaluate programs and activities that are intended to attract and satisfy customers, separate from expenses and credits directly associated with Merger, restructuring, and certain similar items. Certain non-GAAP measures are also used for short and long-term incentive programs.

Our measurement of these non-GAAP financial measures may be different from similarly titled financial measures used by others and therefore may not be comparable. These non-GAAP financial measures should not be considered superior to the GAAP measures, but only to clarify some information and assist the reader. We have included reconciliations of this information to the most comparable GAAP measures in the tables included within this material.

Free cash flow is a non-GAAP measure, which we define as cash flows from operating activities less capital expenditures. We believe that free cash flow is an important indicator that provides additional perspective on our ability to generate cash to fund our strategy and expand our distribution network. Adjusted free cash flow is also a non-GAAP measure, which we define as free cash flow excluding cash charges associated with the Company’s Maximize B2B Restructuring Plan and its Business Acceleration Program.

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Tim Perrott

Investor Relations

561-438-4629

[email protected]

Danny Jovic

Media Relations

561-438-1594

[email protected]

KEYWORDS: United States North America Florida

INDUSTRY KEYWORDS: Retail Specialty Office Products

MEDIA:

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Company On Track for Record Fiscal Year Revenues and Bookings

Investor Relations Contacts
Jim Fanucchi and Satya Chillara
Darrow Associates, Inc.
[email protected]

Trane Technologies Ties ESG Metrics to Executive and Employee Compensation as it Accelerates Bold 2030 Sustainability Commitments

SWORDS, Ireland–(BUSINESS WIRE)–
Trane Technologies (NYSE: TT), a global climate innovator, announced today that it has revised its executive and senior leader incentive plan to link directly to Environmental, Social and Governance (ESG) metrics that align with the company’s bold 2030 Sustainability Commitments.

The company’s revised annual incentive plan, which starts this year, holds top executives and approximately 2,300 company leaders accountable for meeting the company’s ambitious social and environmental sustainability goals. In addition to tying leaders’ annual cash incentives to ESG metrics, all salaried employee performance plans now must include at least one goal tied to the company’s 2030 sustainability commitments.

“We are leading with a bold purpose to challenge what’s possible for a sustainable world, and have embedded leading environmental, social and governance practices into our strategy and operations,” said Mike Lamach, Trane Technologies chairman and CEO. “Solving major global challenges like climate change and creating a more diverse and inclusive workplace requires courage, innovation, and accountability. Having everyone pull in the same direction toward our sustainability goals reinforces the right behaviors and decision-making to build a sustainable future for our customers, communities and the planet.”

The annual incentive plan for leaders, historically based on financial performance metrics, now also includes an ESG factor based on several sustainability metrics, which could decrease or increase leader incentive payments by up to 20 percent, for a total impact range of 40 percent.

Employees’ performance rating and annual merit increase above base compensation are affected by their performance on sustainability objectives, as well as other business goals. “Everyone plays an important role in our shared purpose as a climate innovation leader,” said Lamach.

The ESG factor in the annual incentive plan for leaders connects to the following three categories:

The Gigaton Challenge (Scope 3 Emissions)

Trane Technologies’ Gigaton Challenge is aimed at reducing customer carbon emissions by a billion metric tons. This will require reducing emissions from products and services by nearly 50 percent by 2030, an ambitious target that has been validated by the Science Based Targets initiative (SBTi). The incentive plan includes an annual greenhouse gas reduction target toward the gigaton goal.

The company has made significant progress against its Gigaton Challenge, as reported in its annual ESG report, “Bold Action for a Sustainable Future,” released last week. In 2020, the company reduced customer greenhouse gases on track with its gigaton goal through sustainable innovation for heating and cooling buildings and transportation of food, medicines and vaccines.

Trane Technologies also has joined the United Nations Framework Convention on Climate Change (UNFCCC) Race to Zero international campaign for a healthy, resilient, zero-carbon recovery.

Leading by Example (Carbon Neutral Operations)

The incentive plan also includes an annual target in support of the company’s “Leading by Example” commitment to achieve net-carbon neutral emissions across its global footprint by 2030.

In 2020, the company made progress toward this goal, including meeting 39 percent of its electricity demand with renewable energy and achieving significant carbon savings from operational efficiencies and returnable packaging projects.

Opportunity for All (Gender, Racial and Ethnic Diversity)

In addition, the incentive plan includes an annual target for increasing women in management roles globally, and a target for increasing racial and ethnic diversity in the U.S. salaried workforce. These goals support the company’s “Opportunity for All” 2030 commitments to achieve gender parity in leadership, workforce diversity reflective of our communities, and community initiatives that support equitable education and pathways to green and STEM careers. The company has made strides toward its diversity goals, with leadership positions held by women at more than 2x the average for S&P 1500 companies.

To accelerate progress in this area, the company was the first in its industry to join Paradigm4Parity, a business coalition to close the gender gap in corporate leadership. Trane Technologies is also a founding member of OneTen, a corporate coalition that aims to upskill, hire, and advance careers for Black Americans.

In addition to measuring results on the specific annual targets, the Compensation Committee of the Trane Technologies Board of Directors will assess the company’s overall accomplishments on Environmental, Social and Governance leadership and the degree to which the company has met, exceeded or fallen short of expectations.

To read Bold Action for a Sustainable Future, or learn more about Trane Technologies’ 2030 Sustainability Commitments, please visit our 2030 Sustainability Commitments website page.

About Trane Technologies

Trane Technologies is a global climate innovator. Through our strategic brands Trane and Thermo King, and our environmentally responsible portfolio of products and services, we bring efficient and sustainable climate solutions to buildings, homes, and transportation. Learn more at tranetechologies.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210505005075/en/

Media:

Jennifer Regina, Trane Technologies

+1-630- 390-8011, [email protected]

Investors:

Zachary Nagle, Trane Technologies

+1-704-990-3913, [email protected]

KEYWORDS: Ireland Europe

INDUSTRY KEYWORDS: Professional Services Utilities Environment Human Resources Energy Construction & Property Building Systems

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SQZ Biotech to Present at BofA Securities 2021 Virtual Health Care Conference

WATERTOWN, Mass.–(BUSINESS WIRE)–
SQZ Biotechnologies (NYSE:SQZ), a cell therapy company developing novel treatments for multiple therapeutic areas, today announced that management will be participating in the BofA (Bank of America) Securities 2021 Virtual Health Care Conference taking place May 11-13, 2021. Armon Sharei, PhD, chief executive officer, will present a corporate overview on May 12 at 8:00am EDT with a virtual webcast and the company will be hosting one on one meetings.

More information about and access to the webcast for the presentation are available on the Investors & Media section of the company website. The webcast will be available for 90 days following the presentation.

About SQZ Biotechnologies

SQZ Biotechnologies is a clinical-stage biotechnology company developing transformative cell therapies for patients with cancer, infectious diseases, and other serious conditions. Using its proprietary technology, SQZ Biotechnologies offers the unique ability to deliver multiple materials into many patient cell types to engineer what we believe can be an unprecedented range of potential therapeutics for a variety of diseases. SQZ Biotechnologies has the potential to create well-tolerated cell therapies that can provide therapeutic benefit for patients and to improve the patient experience over existing cell therapy approaches. With accelerated production timelines under 24 hours and the opportunity to eliminate preconditioning and lengthy hospital stays, our goal is to use the SQZ approach to establish a new paradigm for cell therapies. Our first therapeutic applications aim to leverage the potential to generate target-specific immune responses, both in activation for the treatment of solid tumors and immune tolerance for the treatment of unwanted immune reactions and autoimmune diseases. For more information, please visit www.sqzbiotech.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210505005005/en/

SQZ Biotechnologies IR Contact:

Rebecca Cohen

Corporate and Investor Relations

[email protected]

617-758-8672 ext. 728

SQZ Biotechnologies Media Contact:

John Lacey

Corporate Communications

[email protected]

781-392-5514

KEYWORDS: United States North America Massachusetts

INDUSTRY KEYWORDS: Biotechnology Infectious Diseases Health Pharmaceutical Oncology

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The ODP Corporation Announces Plans to Separate into Two Independent, Publicly Traded Companies

Plans Tax-Free Spin-Off of Its Business-to-Business (B2B) Solutions Provider (“NewCo”)

Separation Creates Strategic Flexibility and Enhances Prospects for Shareholder Value Creation

Expects to Complete Separation During First Half of 2022

BOCA RATON, Fla.–(BUSINESS WIRE)–
The ODP Corporation (NASDAQ: ODP), a leading provider of business services, products and digital workplace technology solutions through an integrated B2B distribution platform with an online presence and approximately 1,100 stores (the “Company”), announced today that its Board of Directors has unanimously approved a plan to pursue a separation of the Company into two independent, publicly traded companies, each with a unique and highly focused strategy and investment profile:

• ODP – a leading provider of retail consumer and small business products and services distributed via approximately 1,100 Office Depot and OfficeMax retail locations and an award-winning eCommerce presence, officedepot.com; and

• “NewCo” – a leading B2B solutions provider (ODP’s Business Solutions Division contract business, Grand & Toy and ODP’s independent regional office supply distribution businesses) serving small, medium and enterprise level companies. NewCo will also own the Company’s newly formed B2B digital platform technology business, including BuyerQuest, as well as the Company’s global sourcing office and its other sourcing, supply chain and logistics assets.

The separation is expected to occur through a distribution of shares of NewCo as a tax-free dividend to ODP’s shareholders as of a record date to be determined by the directors of ODP, after which ODP shareholders will own 100% of the equity in both of the publicly traded companies.

“We believe creating two focused, pure-play companies will unlock significant opportunities by improving our ability to meet the needs of our customers, while better matching assets and investment profiles of both companies to generate greater value for our shareholders,” said Gerry Smith, Chief Executive Officer of The ODP Corporation. “Maximizing the strategic focus and financial flexibility of each entity and aligning their go-to-market strategies and capital investments will enable us to meet customer demand. In addition, positioning their respective growth trajectories and shareholder specific return profiles will achieve appropriate market valuations. The separation will also provide exciting opportunities for our employees, whose dedication and talent will enable both companies to realize their full potential.”

Compelling Benefits of the Separation

The ODP Board believes the separation will allow ODP and NewCo to pursue market opportunities, accelerate growth and unlock significant value for shareholders and all stakeholders. ODP expects key benefits of the separation to include:

• Allowing ODP and NewCo to pursue specific strategies with more targeted investment opportunities and growth objectives;

• Focusing on customers’ needs through aligned go-to-market strategies and innovation;

• Attracting talent and leveraging employees’ expertise, supporting their development, and providing greater career development opportunities; and

• Matching assets and investments to maximize valuation and better align with shareholder return profiles.

Smith continued, “We are fortunate to be undertaking this process from a position of financial, operational, and organizational readiness, with significant liquidity, providing us flexibility in determining how to allocate capital between the separated entities. We are in a position of strength, having recently streamlined our retail operations for cost efficiencies, while adding net new customers for future growth in our BSD contract division and developing a new digital platform business, including the acquisition of BuyerQuest. With the flexibility created by our holding company reorganization last year, and after careful deliberation, we are now ready to take this exciting next step in our evolution.”

Transaction Details

The separation is intended to be completed during the first half of 2022, subject to customary conditions, including final approval by the Company’s Board of Directors, opinions from tax counsel and the favorable ruling by the IRS on the tax-free nature of the transaction to the Company and its shareholders, the filing and effectiveness of a registration statement with the U.S. Securities and Exchange Commission, the approved listing of NewCo’s common stock on a national securities exchange, and the completion of any necessary financings. The separation will not require a vote of ODP shareholders. There can be no assurances regarding the ultimate timing of the separation or that the transaction will be completed at all.

While ODP and NewCo will be separate, independent public companies, they will share commercial agreements that will allow them to continue to leverage scale benefits in such areas as product sourcing and supply chain.

Additional details of the separation are expected to be announced in the coming months, including Board and management leadership of both companies. It is anticipated that both companies will be capitalized to provide the financial flexibility to take advantage of future strategic opportunities.

Simpson Thacher & Bartlett LLP and Goldman Sachs & Co. LLC are acting as legal and financial advisor to the Company, respectively.

Finally, the sale process for CompuCom, ODP’s managed workplace services provider subsidiary, is moving forward as planned, unrelated to and unaffected by today’s announcement.

About The ODP Corporation

The ODP Corporation (NASDAQ:ODP) is a leading provider of business services and supplies, products and digital workplace technology solutions to small, medium and enterprise businesses, through an integrated business-to-business (B2B) distribution platform, which includes world-class supply chain and distribution operations, dedicated sales professionals and technicians, online presence, and approximately 1,100 stores. Through its banner brands Office Depot®, OfficeMax®, CompuCom® and Grand&Toy®, as well as others, the Company offers its customers the tools and resources they need to focus on their passion of starting, growing and running their business. For more information, visit news.theodpcorp.com and investor.theodpcorp.com.

The ODP Corporation and Office Depot are trademarks of The Office Club, Inc. OfficeMax is a trademark of OMX, Inc. CompuCom is a trademark of CompuCom Systems, Inc. Grand&Toy is a trademark of Grand & Toy, LLC in Canada. ©2021 Office Depot, LLC. All rights reserved. Any other product or company names mentioned herein are the trademarks of their respective owners.

This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements or disclosures may discuss goals, intentions and expectations as to future trends, plans, events, results of operations, cash flow or financial condition, the potential impacts on our business due to the unknown severity and duration of the COVID-19 outbreak, or state other information relating to, among other things, the Company, based on current beliefs and assumptions made by, and information currently available to, management. Forward-looking statements generally will be accompanied by words such as “anticipate,” “believe,” “plan,” “could,” “will,” “estimate,” “expect,” “forecast,” “guidance,” “outlook,” “intend,” “may,” “possible,” “potential,” “predict,” “project,” “propose” or other similar words, phrases or expressions, or other variations of such words. These forward-looking statements are subject to various risks and uncertainties, many of which are outside of the Company’s control. There can be no assurances that the Company will realize these expectations or that these beliefs will prove correct, and therefore investors and stakeholders should not place undue reliance on such statements.

Factors that could cause actual results to differ materially from those in the forward-looking statements include, among other things, delays or challenges in completing the separation during the expected timeline; risks related to the fulfillment of the conditions to complete the separation; difficulties in ensuring that the spin-off remains tax-free; the expected costs and benefits of the separation; the inability to adequately capitalize the separated companies; changes in demand for the Company’s existing and future products and services; changes to the products and services sold and provided before and after the separation; unanticipated downturns in business relationships with customers; obstacles preventing the separated companies from maximizing profit opportunities, cost savings, and potential synergies; the failure to retain key employees or attract talent for each of the separated companies; the inability of the separated businesses to align their strategies and capital investments to meet customer demands or match their assets and investment profiles; disruption in key business activities or any impact on the Company’s relationships with third parties as a result of the separation; competitive pressures on the Company’s sales and pricing; increases in the cost of material, energy and other production costs, or unexpected costs that cannot be recouped in product pricing; the introduction of competing technology products and services; unexpected technical or marketing difficulties; unexpected claims, charges, litigation, dispute resolutions or settlement expenses; new laws and governmental regulations; the impact of, and government response to, the COVID-19 pandemic; domestic and international economic conditions. The foregoing list of factors is not exhaustive. Investors and shareholders should carefully consider the foregoing factors and the other risks and uncertainties described in the Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K filed with the U.S. Securities and Exchange Commission. The Company does not assume any obligation to update or revise any forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210505005302/en/

Danny Jovic

Media Relations

561-438-1594

[email protected]

Tim Perrott

Investor Relations

561-438-4629

[email protected]

KEYWORDS: United States North America Florida

INDUSTRY KEYWORDS: Supply Chain Management Online Retail Consumer Electronics Retail Technology Office Products Hardware

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Clarios Announces Confidential Submission of Draft Registration Statement for Proposed Initial Public Offering

MILWAUKEE–(BUSINESS WIRE)–
Clarios today announced that it has confidentially submitted a draft registration statement on Form S-1 with the Securities and Exchange Commission (the “SEC”) relating to the proposed initial public offering of its common stock. The number of shares to be offered and the price range for the proposed offering have not yet been determined. The initial public offering is expected to commence after the SEC completes its review process, subject to market and other conditions. Clarios is a portfolio company of its sponsors, Brookfield Business Partners LP, (NYSE: BBU) (TSX: BBU.UN), a publicly listed business services and industrials company of Brookfield Asset Management Inc., and Caisse de dépôt et placement du Québec.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities. Any offers, solicitations or offers to buy, or any sales of securities will be made in accordance with the registration requirements of the Securities Act of 1933, as amended (“Securities Act”). This announcement is being issued in accordance with Rule 135 under the Securities Act.

About Clarios

Clarios is a world leader in advanced energy storage solutions. We partner with our aftermarket and original equipment customers to meet increasing market demand for smarter applications, on a global scale. Our 16,000 employees develop, manufacture and distribute a portfolio of evolving battery technologies for virtually every type of vehicle. Our technologies deliver uniquely sustainable, next-generation performance, and bring reliability, safety and comfort to everyday lives. We add value at every link in the supply chain, ensuring that up to 99% of the materials in our batteries are recovered, recycled and reused, contributing to the progress of the communities we serve and the planet we all share. Clarios is a subsidiary of Brookfield Business Partners.

Forward-Looking Statements

This news release may contain forward-looking statements, which involve risks and uncertainties. Readers are cautioned not to place undue reliance on any of these forward-looking statements. These forward-looking statements speak only as of the date hereof. Clarios undertakes no obligation to update any of these forward-looking statements to reflect events or circumstances after the date of this news release or to reflect actual outcomes, unless required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210505005252/en/

Investors:

[email protected]

Media:

[email protected]

1-414-214-6522

KEYWORDS: United States North America Wisconsin

INDUSTRY KEYWORDS: Environment Technology Other Energy Utilities Other Technology Energy Hardware Retail Supply Chain Management

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NOW Inc. Reports First Quarter 2021 Results

HOUSTON–(BUSINESS WIRE)–
NOW Inc. (NYSE: DNOW) announced results for the first quarter ended March 31, 2021.

First Quarter 2021 Financial Highlights

• Revenue was $361 million for the first quarter of 2021
• Net loss was $10 million and non-GAAP net loss excluding other costs was $5 million for the first quarter of 2021
• Diluted loss per share was $0.09 and non-GAAP diluted loss per share excluding other costs was $0.04 for the first quarter of 2021
• Non-GAAP EBITDA excluding other costs for the first quarter of 2021 was $1 million
• Cash and cash equivalents was $374 million and long-term debt was zero at March 31, 2021

David Cherechinsky, President and CEO of NOW Inc., added, “We are very pleased with the positive results we achieved this quarter, driven by strong 13% sequential revenue growth. We closed our second acquisition this year in April and remain debt free. Without the heavy cost of debt burden, we have plenty of strategic and balance sheet flexibility with ample liquidity to fund organic growth and to pursue additional acquisition opportunities.

Last year, we committed to achieve break-even EBITDA in the first half of 2021 and achieved our goal a quarter early. I am proud of every one of our employees as their contributions drove such strong results.

We will continue to innovate, focus on both legacy and emerging end-markets, invest in our DigitalNOW® technologies and advance a customer order fulfillment migration to improve our competitiveness as we build a compelling suite of solutions we believe will be unmatched in our industry.”

Prior to the earnings conference call a presentation titled “NOW Inc. First Quarter 2021 Key Takeaways” will be available on the Company’s Investor Relations website.

About NOW Inc.

NOW Inc. is one of the largest distributors to energy and industrial markets on a worldwide basis, with a legacy of over 150 years. NOW Inc. operates primarily under the DistributionNOW and DNOW brands. Through its network of approximately 195 locations and 2,450 employees worldwide, NOW Inc. offers a comprehensive line of products and solutions for the upstream, midstream and downstream energy and industrial sectors. Our locations provide products and solutions to exploration and production companies, energy transportation companies, refineries, chemical companies, utilities, manufacturers and engineering and construction companies.

Statements made in this press release that are forward-looking in nature are intended to be “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934 and may involve risks and uncertainties. These statements may differ materially from actual future events or results. Readers are referred to documents filed by NOW Inc. with the U.S. Securities and Exchange Commission, which identify significant risk factors which could cause actual results to differ from those contained in the forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210505005247/en/

Mark Johnson

Senior Vice President and Chief Financial Officer

(281) 823-4754

KEYWORDS: Texas United States North America

INDUSTRY KEYWORDS: Supply Chain Management Packaging Retail Transport Logistics/Supply Chain Management Manufacturing

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