Cerence Inc. Announces Strategic Repurchase of $27 Million in Convertible Notes

Cerence Inc. Announces Strategic Note Repurchase

Cerence Inc. (NASDAQ: CRNC), a global leader in AI for transportation, has announced a strategic financial move to repurchase approximately $27 million of its 3% Convertible Senior Notes due 2025. This decision, made in light of the company's strong cash position and positive outlook for future cash generation, demonstrates Cerence's commitment to optimizing its balance sheet and enhancing shareholder value 1

1

2

Details of the Repurchase

The company has entered into privately negotiated transactions with certain noteholders to repurchase the Notes at a cash price equal to 98% of their principal amount, along with accrued and unpaid interest. This repurchase at below par value represents an efficient use of Cerence's cash reserves and is expected to yield several benefits:

1. Reduced interest expense
2. Elimination of potential dilution from refinancing
3. Lower leverage

Cerence plans to pay off the remaining $60.5 million of Notes upon maturity in June 2025 using cash on hand, assuming the completion of this repurchase 1

1

2

Management's Perspective

Brian Krzanich, CEO of Cerence AI, stated, "This repurchase not only highlights our confidence in Cerence AI's future but also demonstrates our commitment to driving shareholder value." He emphasized that this proactive step would optimize the balance sheet and reduce interest expenses, positioning the company for continued success in fiscal year 2025 and beyond 1

1

2

Tony Rodriquez, CFO of Cerence AI, added that the company's ability to execute these actions reflects careful financial planning, strategic execution of cost-reduction initiatives, and disciplined cash management 1

1

2

Additional Financial Moves

In addition to the note repurchase, Cerence intends to terminate its undrawn $50 million senior secured first-lien revolving credit facility, contingent upon the completion of the Note repurchase. This move is expected to save the company ongoing commitment fees 1

1

2

Related Stories

Cerence AI to Present at 27th Annual Needham Growth Conference

Cerence Appoints Former Intel CEO Brian Krzanich as New Chief Executive

Cerence AI Appoints Tony Rodriquez as Permanent CFO, Aims for Growth and Profitability

Cerence AI and JLR Partner to Develop Next-Generation In-Car Experience

Reaffirmation of Fiscal 2025 Guidance

Cerence AI has reaffirmed its first quarter fiscal year 2025 and full fiscal year 2025 guidance, which was previously disclosed on November 21, 2024, in conjunction with its fourth quarter fiscal year 2024 and full year ending September 30, 2024 financial results 1

1

2

About Cerence Inc.

Cerence Inc. is a global industry leader in creating AI-powered experiences for the automotive and transportation sectors. The company leverages its expertise in voice technology, generative AI, and large language models to develop integrated experiences that enhance safety, connectivity, and enjoyment for drivers and passengers. With its technology shipped in over 500 million cars, Cerence partners with leading automakers, transportation OEMs, and technology companies to advance the next generation of user experiences 1

1

2

This strategic financial move by Cerence Inc. underscores the company's strong market position in the AI-driven transportation sector and its commitment to maintaining financial health while driving innovation in the automotive industry.