(All figures in Canadian dollars unless otherwise
noted)
TORONTO, Nov. 9, 2022
/CNW/ - Aimia Inc. (TSX: AIM) reported its financial results
for the three months ended September 30,
2022.
Q3 2022 financial highlights:
HIGHLIGHTS
|
Three Months Ended
September 30,
|
(in millions of
Canadian dollars,
except per share amounts)
|
2022
|
2021
|
YoY %
Change
|
Consolidated
|
|
|
|
Income
|
533.9
|
7.0
|
**
|
Expenses*
|
15.9
|
3.1
|
**
|
Earnings before income
taxes
|
518.7
|
4.7
|
**
|
Net earnings
|
517.5
|
3.5
|
**
|
Basic Earnings per
Common Share
|
5.93
|
-
|
**
|
Distributions received
from PLM
|
-
|
6.3
|
**
|
Cash used in Operating
Activities
|
(4.2)
|
(1.0)
|
**
|
*Q3 2022 Expenses
include a goodwill impairment charge of $11.4 million and a
litigation provision of $4.0 million.
|
|
**Information not
meaningful.
|
|
|
|
Phil Mittleman, Chief Executive
Officer of Aimia, said: "We are pleased with our third quarter
results, the highlights of which included earnings of $5.93 per common share, primarily due to the
close of the PLM transaction, whereby Aimia recognized a gain net
of tax of $530.6 million. We have
repurchased over 8 million shares of our common stock year to date,
and we remain actively focused on investing in companies with long
track records of free cash flow generation, that will also utilize
our $785 million in tax losses.
We currently have a robust pipeline of opportunities, some of which
are in advanced discussions. We look forward to sharing
further information with you in the near future."
Q3 2022 Highlights and Subsequent Events:
- Aimia reported income of $533.9
million mainly related to a $530.6
million gain on the divestiture of PLM. Consolidated
net earnings were $517.5
million.
- Aimia closed the PLM transaction on July
15, 2022 and received $537.3
million in proceeds net of tax and transaction costs during
the quarter. In addition, an earn out will be payable in cash for
approximately $28.2 million on a net
basis should the PLM loyalty program achieve certain targeted
annual gross billings amounts by 2024.
Use of PLM Proceeds:
- Aimia is pursuing investments in cash generating businesses,
which will utilize Aimia's sizeable tax losses.
- Year-to-date November 8, 2022
Aimia has repurchased 8,254,907 million shares for a total of
$36.3 million. As of today's date,
there are 84,233,305 shares outstanding.
This quarterly earnings release should be read in conjunction
with Aimia's condensed interim financial statements and MD&A
for the three and nine months ended September 30, 2022, which can be accessed on
SEDAR as well as on Aimia's website under Investor Relations.
Holdings segment results for Q3
2022
During the third quarter of 2022, income from investments was
$533.6 million, compared to
$6.5 million of income in the same
quarter last year mainly due to:
- Gain on disposal of equity-accounted investments related to the
PLM transaction of $530.6
million;
- Aimia's non-cash equity pick-up of its share of Kognitiv's net
loss of $6.5 million in the third
quarter, compared to a share of net loss of $1.7 million in the same quarter last year, which
also included Aimia's share of equity earnings from PLM in the
comparative period;
- Positive net change in fair value of investments of
$7.8 million in the third quarter
mainly driven by foreign currency strengthening compared to the
Canadian dollar on our TRADE X and Clear Media investments,
compared to positive net change in fair value of investments of
$7.9 million in the same quarter last
year, and
- Income, dividend, and other investment income of $1.7 million in the third quarter, compared to
$0.3 million in the same quarter last
year primarily due to interest income earned on the TRADE X and
Kognitiv convertible notes.
Expenses (excluding a goodwill impairment charge of $11.4 million) were $4.1
million, up $1.4 million from
last year's quarter, mainly due to:
- An increase of $1.6 million in
compensation expenses, driven mainly by a $4.0 million litigation provision, offset in part
by a decrease of $2.3 million of
share-based compensation and other performance awards mainly due to
a larger reduction in price per common share this quarter compared
to the same quarter last year, as well as lower vesting expense of
the DSUs; and
- A decrease in professional, advisory and service fees as well
as insurance, technology, and office related expenses of
$0.2 million.
Equity-accounted Investment
Performance Summary
KOGNITIV
Aimia owns a 48.8% equity stake in Kognitiv as of September 30, 2022.
Kognitiv's revenues are derived from platform subscriptions and
commerce activity to global clients across the financial services,
media, telecom, travel and hospitality and retail industries.
Customer retention at Kognitiv continues to be very high as it
has renewed contracts with major brands such as HSBC, National
Australia Bank and Avis earlier this year.
Kognitiv is undertaking a series of initiatives to reduce costs
and drive efficiency as it rolls out its commercial offering, which
is expected to drive the company towards positive EBITDA and to
secure additional sources of financing as necessary.
The table below summarizes the performance of Kognitiv for the
three and nine months ended September 30,
2022 and 2021. A detailed analysis of its performance is
available in the MD&A:
Kognitiv (millions
of Canadian dollars)
|
Q3
2022
|
Q3
2021
|
9M
2022
|
9M
2021
|
|
|
|
|
|
Revenue(1)
|
13.5
|
14.0
|
42.0
|
41.5
|
Net loss
|
(10.8)
|
(9.6)
|
(40.1)
|
(36.6)
|
Adjusted
EBITDA(1)(2)
|
(7.9)
|
(8.5)
|
(28.9)
|
(31.9)
|
1. Kognitiv's financial
results are presented on a continuing operations basis, excluding
ISS discontinued operations.
|
|
|
|
|
|
|
|
|
|
|
|
|
2. A non-GAAP measure.
Non-GAAP financial measures are defined and reconciled to the most
directly comparable GAAP measures in the section "Non-GAAP
Financial Measures and Reconciliation to Comparable GAAP Measures"
of this earnings release. See caution regarding Non-GAAP financial
measures at the end of this earnings release.
|
Other Investments
TRADE X
Aimia owns a 10.8% fully diluted equity stake in TRADE X as of
September 30, 2022.
TRADE X is a global B2B cross-border automotive trading platform
that connects buyers and sellers through an online marketplace
powered by the TRADE X 'Brain' platform, a machine-learning,
AI-driven technology which aids sellers in finding the world's
highest bidders and gives buyers access to the best source
markets.
On July 27, 2021, Aimia invested
$44.0 million (US$35.0 million) as the lead investor of the
convertible preferred shares funding round for TRADE X, at a
US$250 million pre-money
valuation.
On December 17, 2021, Aimia
invested an additional $31.6 million
(US$25.0 million) in a convertible
note of TRADE X, the proceeds of which were used by TRADE X to
continue executing its growth strategy. The convertible note has
the option to convert to equity at a discount to the pre-money
valuation of TRADE X's next qualified financing.
As of September 30, 2022, the fair
value of the preferred shares has been estimated at $47.9 million (US$35.0
million), and the fair value of the convertible note has
been estimated at $37.4 million
(US$27.3 million).
TRADE X generated gross vehicle sales (GVS) of approximately
$176.0 million in the third quarter
of 2022, a significant increase from the same period last year,
mainly the result of acquisitions closed at the end of the third
and into the fourth quarter, but tracking below the full year
guidance of approximately $1.0
billion that Aimia provided in its Q4 2021 earnings release
as a result of a pullback in the volume and price of vehicles sold,
primarily due to the company refocusing its business by reducing
inventory risk and associated working capital needs, and focusing
more on a transactional model. Aimia now expects TRADE X to
generate gross vehicle sales of between $800 to $900
million for the full year in 2022.
CLEAR MEDIA
Aimia owns an indirect 10.85% shareholding in the privatized
Clear Media as of September 30,
2022.
Clear Media is the largest operator of bus shelter advertising
panels in China, with leading
market shares of more than 70% in top-tier cities, including
Shanghai, Guangzhou and Beijing, and broad presence in fast growing
cities across the country. Clear Media provides one-stop solutions
for nationwide advertising campaigns to their customers, through a
network of more than 72,000 panels covering twenty-four cities, and
536 digital panels as of December 31,
2021.
In the nine months ended September 30,
2022, facing the resurgence of COVID-19 cases, China continued to apply zero-COVID policy,
which has triggered full and partial lockdowns in many Chinese
cities, including Shanghai,
Beijing, and Guangzhou. These lockdowns are significantly
affecting the demand for outdoor advertising and therefore, Clear
Media's revenue are lower than in the same period in 2020 when
Covid lockdowns began to unwind. Clear Media is in the process of
mitigating these impacts via various cost-saving plans and delays
in capital expenditures compared to normal course.
As of September 30, 2022, the fair
value of the indirect investment in Clear Media Limited has been
estimated at $62.3 million. Aimia
recognized an unrealized fair value gain of $3.5 million and an unrealized fair value loss of
$6.0 million during the three and
nine months ended September 30, 2022,
respectively, with the year-to-date unrealized fair value loss
mainly due to the impacts of COVID-19 related lockdowns in
China on demand for outdoor
advertising, which have caused delays in the execution of Clear
Media's business plan, offset in part by the strengthening of the
Hong-Kong dollar versus the
Canadian dollar.
Balance sheet and Liquidity
As of September 30, 2022, Aimia
had cash and cash equivalents of $521.0
million.
Aimia's liquid portfolio of publicly listed equities had a
market value of $36.6 million at the
end of the third quarter of 2022 (excluding marketable securities
held through Precog, presently valued at $15.9 million).
Aimia is seeking to acquire companies with long track records of
free cash flow generation that will also utilize Aimia's sizeable
tax assets.
Available Tax Losses
Tax losses approximated $785
million as of September 30,
2022, comprised of $390
million in capital losses and $395
million in net operating losses.
Returns to Shareholders
Normal Course Issuer Bid (NCIB)
On June 17, 2022, Aimia announced
it had received approval from the Toronto Stock Exchange for the
establishment of a new NCIB to repurchase for cancellation up to
7.8 million common shares during the period from June 21, 2022 to no later than June 20, 2023. On July 29, 2022 in connection with this program, it
entered into an automatic share purchase plan.
During the third quarter, Aimia repurchased 7,327,331 common
shares at an average price per share of $4.40 for a total consideration of $32.3 million.
Subsequent to September 30, 2022,
Aimia repurchased 384,300 common shares under its new NCIB at an
average price per share of $3.55 for
a total consideration of $1.4
million.
Dividends
Dividends of $3.1 million were
paid on September 30, 2022 on the two
series of outstanding preferred shares.
On November 8, 2022, the Board of
Directors declared quarterly dividends of $0.300125 per Series 1 preferred share and
$0.375688 per Series 3 preferred
share. Dividends on the Series 1 and Series 3 preferred shares will
be payable on December 30, 2022, to
shareholders of record at the close of business on December 16, 2022.
Quarterly Conference Call and Audio
Webcast Information
Aimia will host a conference call to discuss its third quarter
2022 financial results at 8:30 a.m.
EDT on November 9, 2022. The
call will be webcast at the following URL link:
https://app.webinar.net/Pn1xlERQd4g
A slide presentation intended for simultaneous viewing with the
conference call and an archived audio webcast will be available for
90 days following the original broadcast available at:
https://www.aimia.com/investor-relations/events-presentations/
Aimia's third quarter 2022 Financial Statements, Management
Discussion & Analysis, and Financial Highlights Presentation
will be filed on SEDAR.com around 7:00 a.m.
EDT on November 9, 2022, as
well as on Aimia's website under Investor Relations.
This earnings release was reviewed by Aimia's Audit Committee
and was approved by Aimia's Board of Directors, on the Audit
Committee's recommendation, prior to its release.
Appendix
The highlights for the nine months ended
September 30, 2022 and 2021, are as
follows:
HIGHLIGHTS
|
Nine Months Ended
September 30,
|
(in millions of
Canadian dollars,
except per share amounts)
|
2022
|
2021
|
YoY %
Change
|
Consolidated
|
|
|
|
Income
|
487.6
|
18.4
|
**
|
Expenses*
|
23.5
|
17.8
|
32.0 %
|
Earnings before income
taxes
|
467.3
|
1.7
|
**
|
Net earnings
(loss)
|
463.4
|
(1.8)
|
**
|
Basic Earnings (loss)
per Common Share
|
5.08
|
(0.12)
|
**
|
Distributions received
from PLM
|
2.9
|
21.4
|
-86.4 %
|
Cash from (used in)
Operating Activities
|
(11.7)
|
0.2
|
**
|
* Expenses for the nine
months ended September 30,2022, include a goodwill impairment
charge of $11.4 million and a litigation provision of $4.0
million.
|
**Information not
meaningful.
|
About Aimia
Aimia Inc. (TSX: AIM) is a holding company with a focus on
making long-term investments in public and private companies, on a
global basis, through controlling or minority stakes.
The company owns a portfolio of investments which include: a
10.85% stake in Clear Media Limited, one of the largest outdoor
advertising firms in China, a
48.8% equity stake in Kognitiv, a B2B company enabling global
brands to redefine loyalty with solutions for multi-enterprise
collaboration, a 10.8% equity stake in TRADE X, a global B2B
cross-border automotive trading platform as well as a wholly owned
investment advisory business, Mittleman Investment Management,
LLC.
For more information about Aimia, visit www.aimia.com.
Non-GAAP Financial Measures and
Reconciliation to Comparable GAAP Measures
Aimia does not present Non-GAAP financial measures for its
consolidated results. However, in order to complement the analysis
of the financial performance of its investments, certain Non-GAAP
measures are presented. A reconciliation to these investments' most
comparable GAAP measure is provided in this earnings release in
this section "Non-GAAP Financial Measures and Reconciliation to
Comparable GAAP Measures".
Kognitiv Adjusted EBITDA
Adjusted EBITDA for Kognitiv ("Kognitiv Adjusted EBITDA") is
earnings before net financial income (expense) and net income tax
expense adjusted to exclude depreciation, amortization,
shared-based compensation, restructuring expenses, business
acquisition/disposal related expenses and impairment charges
related to non-financial assets. Kognitiv Adjusted EBITDA is not a
measure based on GAAP, is not considered an alternative to net
earnings in measuring profitability, does not have a standardized
meaning and is not comparable to similar measures used by other
issuers. Kognitiv Adjusted EBITDA is used by Aimia and Kognitiv's
management to evaluate performance. Aimia and Kognitiv's management
believe Adjusted EBITDA assists investors in comparing Kognitiv's
performance on a consistent basis excluding depreciation,
amortization, impairment charges related to non-financial assets,
share-based compensation, which are non-cash in nature and can vary
significantly depending on accounting methods as well as
non-operating factors such as historical cost. Aimia and Kognitiv's
management believe that the exclusion of restructuring and business
acquisition/disposal related expenses assists investors by
excluding expenses that are not representative of the run-rate cost
structure of Kognitiv.
A reconciliation of Adjusted EBITDA to Loss before net financial
income and income tax expense (GAAP) is presented below:
|
Three Months
Ended
September 30,
|
Nine Months
Ended
September 30,
|
(in millions of
Canadian dollars)
|
2022
|
2021
|
2022
|
2021
|
Loss before net
financial income and income tax expense (b)
|
(9.8)
|
(9.4)
|
(34.1)
|
(35.2)
|
Depreciation and
amortization
|
0.1
|
0.2
|
0.3
|
0.8
|
Share-based
compensation
|
1.3
|
0.5
|
3.3
|
2.0
|
Restructuring
expenses
|
0.5
|
0.2
|
1.6
|
0.5
|
Kognitiv's Adjusted
EBITDA (a)(b)
|
(7.9)
|
(8.5)
|
(28.9)
|
(31.9)
|
(a) A non-GAAP
measure.
|
|
|
|
|
|
(b) Loss before net
financial income and income tax expense as well as Kognitiv's
Adjusted EBITDA for 2021 are presented on a continuing operations
basis, excluding ISS discontinued operations.
|
Key Performance Indicator
TRADE X Gross Vehicle Sales
Gross Vehicle Sales represents sales income generated from
wholesale transactions and transaction fees from the platform.
TRADE X Gross Vehicle Sales is not a measure based on GAAP and does
not have a standardized meaning and is not comparable to similar
measures used by other issuers. TRADE X Gross Vehicle Sales is used
by Aimia and TRADE X's management to evaluate performance. Aimia
and TRADE X's management believe Gross Vehicle Sales assists
investors in comparing TRADE X growth performance to other
comparable businesses.
Presentation of Financial
Information
The financial information of Aimia and Kognitiv referred to in
this press release is reported in Canadian dollars (unless
otherwise indicated) and have been prepared in accordance with
GAAP. The financial information of TRADE X referred to in this
press release is unaudited and reported in Canadian dollars (unless
otherwise indicated) and has been provided by TRADE X's management
team. Certain of the financial information of TRADE X
referred in this press release is preliminary and subject to TRADE
X closing procedures and based on a number of assumptions and are
not necessarily indicative of results to be expected for any future
period as a result of various factors. During the course of
the TRADE X's financial closing procedures, adjustments to the
preliminary estimates may be identified, and such adjustments maybe
material.
Forward-Looking Statements
This press release contains statements that constitute
"forward-looking information" within the meaning of Canadian
securities laws ("forward-looking statements"), which are based
upon our current expectations, estimates, projections, assumptions
and beliefs. All information that is not clearly historical in
nature may constitute forward-looking statements. Forward-looking
statements are typically identified by the use of terms or phrases
such as "anticipate", "believe", "could", "estimate", "expect",
"intend", "may", "plan", "predict", "project", "will", "would" and
"should", and similar terms and phrases, including references to
assumptions.
Forward-looking statements in this press release include, but
are not limited to, statements with respect to Aimia's current and
future strategic initiatives and investment opportunities; Aimia's
ability to source and execute on acquisitions on terms acceptable
to it; the earn-out in connection with the PLM transaction; the use
of proceeds from the PLM transaction and any returns to
shareholders; the ability of Kognitiv to secure additional sources
of financing; the expected gross vehicle sales of TRADE X;
purchases under the current NCIB; payment of dividends; the use of
Aimia's tax losses; and the impacts of COVID-19 on Clear Media and
their mitigation by Clear Media.
Forward-looking statements, by their nature, are based on
assumptions and are subject to known and unknown risks and
uncertainties, both general and specific, that contribute to the
possibility that the forward-looking statement will not occur. The
forward-looking statements in this press release speak only as of
the date hereof and reflect several material factors, expectations
and assumptions. While Aimia considers these factors, expectations
and assumptions to be reasonable, actual events or results could
differ materially from the results, predictions, forecasts,
conclusions or projections expressed or implied in the
forward-looking statements. Undue reliance should not be placed on
any predictions or forward-looking statements as these may be
affected by, among other things, changing external events and
general uncertainties of the business. A discussion of the material
risks applicable to us can be found in our Management Discussion
and Analysis for the financial years ended December 31, 2021 and 2020, which can be found on
SEDAR and accessed at www.sedar.com. Aimia cautions that the list
of risk factors included in such Management Discussion and Analysis
is not exhaustive. Except as required by applicable securities
laws, forward-looking statements speak only as of the date on which
they are made and we disclaim any intention and assume no
obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or
otherwise.
SOURCE Aimia Inc.