(All figures in Canadian dollars unless otherwise
noted)
TORONTO, Aug. 12,
2022 /CNW/ - Aimia Inc. (TSX: AIM) reported its
financial results for the three months ended June 30, 2022.
Phil Mittleman, Chief Executive
Officer of Aimia, said: "Facing a difficult and turbulent
macro-economic environment, we nonetheless closed the PLM
transaction soon after the end of the second quarter. The net
cash proceeds received of $537
million ($5.84 per common
share) were $45 million more than
when we announced the transaction in February. With
$580 million in cash and liquid
investments, no debt, and approximately $750
million in capital and operating losses, Aimia is now
well positioned to capitalize on investment opportunities.
Additionally, we renewed the NCIB program in June, and year to date
we have repurchased 1,984,259 common shares at an average price of
$4.69 per share under the current and
predecessor programs. The negative performance of our investment
portfolio for the quarter was predominantly related to the result
of a worldwide decline in equity values and the Covid-related
lockdowns in China."
Q2 2022 financial highlights:
HIGHLIGHTS
|
Three Months Ended
June 30,
|
(in millions of
Canadian dollars,
except per share amounts)
|
2022
|
2021
|
YoY %
Change
|
Consolidated
|
|
|
|
Income
|
(32.0)
|
9.7
|
**
|
Expenses
|
3.5
|
5.9
|
-40.7 %
|
Net Earnings (loss)
before income taxes
|
(33.8)
|
4.1
|
**
|
Net Earnings
(loss)
|
(35.2)
|
3.1
|
**
|
Earnings (loss) per
Common Share
|
(0.42)
|
-
|
**
|
Distributions received
from PLM
|
-
|
5.3
|
**
|
Cash used in Operating
Activities
|
(5.7)
|
(3.4)
|
67.6 %
|
|
|
|
|
** Information not
meaningful
|
|
|
|
Q2 2022 Highlights and Subsequent
Events:
- Aimia reported a loss of $32.0
million mainly related to a $24.0
million unrealized loss on its investment portfolio as
equity values softened, and an $8.8
million non-cash equity pick-up of its share of Kognitiv's
net loss. Consolidated net loss was $35.2
million.
- On June 17, 2022, Aimia announced
the renewal of its Normal Course Issuer Bid ("NCIB") with an intent
to repurchase up to approximately 7.8 million shares.
- Aimia closed the PLM transaction on July
15, 2022 receiving $537
million ($5.84 per common
share) in net cash proceeds, subject to post closing adjustments.
In addition, an earn out will be payable in cash for approximately
$27.0 million on a net basis should
the PLM loyalty program achieve certain targeted annual gross
billings amounts by 2024. The terms of the transaction are in US
dollars. The Canadian dollar amounts have been translated at a
USD/CAD exchange rate of 1.309 as of July
15, 2022. Approximate consideration per common share is
calculated on the basis of 91,944,936 common shares outstanding as
of July 15, 2022.
- TRADE X generated gross vehicle sales of approximately
$222 million in Q2 2022, tracking
towards the full year estimate of approximately $1 billion, including gross vehicle sales from
acquisitions which closed in the fourth quarter of
2021.
Use of PLM Proceeds:
- Aimia intends to utilize most of the proceeds from the PLM
transaction to pursue the acquisition of majority or significant
minority stakes, in one or more cash generating businesses
operating in either the U.S. or Canada, which will ideally utilize Aimia's
sizeable net operating tax losses.
- On March 30, 2022, Aimia
announced its intent to allocate up to $75
million of the net proceeds towards a combination of
opportunistic share buybacks and/or a tax-efficient special
dividend to common shareholders.
- Since that announcement, Aimia has repurchased 1,984,259 common
shares for $9.3 million. Aimia
currently has 6.3 million shares available for repurchase under the
current NCIB plan expiring no later than on June 20, 2023.
- The final amount of the net proceeds that could ultimately be
allocated to share buybacks and/or tax-efficient special dividend
to common shareholders will be subject to the then applicable
market conditions, investment opportunities and other relevant
factors.
This quarterly earnings release should be read in conjunction
with Aimia's condensed interim financial statements and MD&A
for the three and six months ended June 30,
2022, which can be accessed on SEDAR as well as on Aimia's
website under Investor Relations.
Holdings segment results for Q2
2022
During the second quarter of 2022, Income (loss) from
investments was $(32.4) million,
compared to $8.8 million of income in
the same quarter last year mainly due to:
- Aimia's non-cash equity pick-up of its share of Kognitiv's net
loss of $8.8 million in the second
quarter, compared to $2.4 million of
income in the same quarter last year, which also included Aimia's
share of equity earnings from PLM and BIGLIFE in the comparative
period;
- Negative net change in fair value of investments of
$25.0 million in the second quarter
mainly driven by a decrease in the share price of its marketable
securities of $16.1 million and a
reduction in fair value of Clear Media of $8.2 million, compared to positive net change in
fair value of investments of $4.1
million in the same quarter last year, and
- Income, dividend, and other investment income of $1.4 million in the second quarter, compared to
$0.2 million in the same quarter last
year.
Expenses were $2.7 million, down
from $5.0 million in the same quarter
last year, mainly due to:
- A decrease in compensation expenses, driven by a decrease of
$1.5 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; and
- A decrease in professional, advisory and service fees as well
as technology, insurance and office related expenses of
$0.6 million.
Equity-accounted Investment
Performance Summary
KOGNITIV
Aimia owns a 48.8% equity stake in Kognitiv as of June 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. The
table below summarizes the performance of Kognitiv for the three
and six months ended June 30, 2022
and 2021. A detailed analysis of its performance is available in
the MD&A:
Kognitiv (millions of Canadian
dollars)
|
Q2 2022
|
Q2 2021
|
1H 2022
|
1H 2021
|
|
|
|
|
|
Revenue(1)
|
14.4
|
13.1
|
28.5
|
27.5
|
Net loss
|
(15.8)
|
(16.8)
|
(29.3)
|
(27.0)
|
Adjusted
EBITDA(1)(2)
|
(10.3)
|
(12.0)
|
(21.0)
|
(23.4)
|
1. Kognitiv's financial results are
presented on a continuing operations basis, excludingISS
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 (<20% equity
stakes)
TRADE X
Aimia owns a 10.8% fully diluted equity stake in TRADE X as of
June 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 June 30, 2022, the fair
value of the preferred shares has been estimated at $45.2 million (US$35.0
million), and the fair value of the convertible note has
been estimated at $34.7 million
(US$26.9 million).
TRADE X generated gross vehicle sales of $222.3 million in Q2 2022, and $470.6 million for the six months ended
June 30, 2022, which is tracking
towards the full year estimate of approximately $1 billion, including gross vehicle sales from
acquisitions which closed in the fourth quarter of 2021.
CLEAR MEDIA
Aimia owns an indirect 10.85% shareholding in the privatized
Clear Media as of June 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 six months ended June 30,
2022, China continued to
apply its zero-COVID policy to contain the resurgence of COVID-19
cases, which has triggered full and partial lockdowns in many
Chinese cities, including Shenzhen, Guangzhou, and Shanghai. These lockdowns are significantly
affecting the demand for outdoor advertising, and Clear Media is
facing reduction in revenues similar to the first half of 2020.
Clear Media is in the process of mitigating these impacts via
various cost-saving plans and a pause in capital expenditures.
As of June 30, 2022, the fair
value of the indirect investment in Clear Media Limited has been
estimated at $58.8 million, which is
a reduction in value of $8.2 million
in the second quarter given the recent downturn in the macro
environment and its impact on Clear Media business. We see
this as a temporary adjustment to the fair value until Covid
restrictions are lifted in China.
Balance sheet and Liquidity
As of June 30, 2022, Aimia had
cash and cash equivalents of $10.2
million. This does not include the $537 million of cash proceeds received on
July 15, 2022 from the PLM
transaction.
Aimia's liquid portfolio of publicly listed equities had a
market value of $36.3 million at the
end of the second quarter of 2022 (excluding marketable securities
held through Precog).
Aligned with the corporate strategy, Aimia will seek the best
investment opportunities, on a global basis, to deploy its cash,
and potentially utilize its tax losses, on acquisitions of free
cash flow generating businesses with taxable income that can
upstream distributions to the holding company.
Available Tax Losses
Tax losses approximated $750
million as of June 30, 2022,
comprised of $390 million in capital
losses and $360 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 second quarter, Aimia repurchased 543,276 common
shares under its predecessor NCIB program at an average price per
share of $4.86 for a total
consideration of $2.6 million.
Subsequent to June 30, 2022, Aimia
repurchased 1,440,983 common shares under its new NCIB at an
average price per share of $4.62 for
a total consideration of $6.7
million.
Dividends
Dividends of $3.2 million were
paid on June 30, 2022 on the two
series of outstanding preferred shares.
On August 11, 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 September 30, 2022, to
shareholders of record at the close of business on September 16, 2022.
Quarterly Conference Call and Audio
Webcast Information
Aimia will host a conference call to discuss its second quarter
2022 financial results at 8:30 a.m.
EDT on August 12, 2022. The
call will be webcast at the following URL link:
https://app.webinar.net/rGOd5G9EbJp
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 second quarter 2022 Financial Statements, Management
Discussion & Analysis, and Financial Highlights Presentation
will be filed on SEDAR.com around 7:00 a.m.
EDT on August 12, 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 six months ended June 30,
2022 and 2021, are as follows:
HIGHLIGHTS
|
Six Months Ended
June 30,
|
(in millions of
Canadian dollars,
except per share amounts)
|
2022
|
2021
|
YoY %
Change
|
Consolidated
|
|
|
|
Income
|
(46.3)
|
11.4
|
**
|
Expenses
|
7.6
|
14.7
|
-48.3 %
|
Loss before income
taxes
|
(51.4)
|
(3.0)
|
**
|
Net loss
|
(54.1)
|
(5.3)
|
**
|
Loss per Common
Share
|
(0.67)
|
(0.13)
|
**
|
Distributions received
from PLM
|
2.9
|
15.1
|
-80.8 %
|
Cash from (used) in
Operating Activities
|
(7.5)
|
1.2
|
**
|
|
|
|
|
** 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 technology company enabling
collaborative commerce, 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
June 30,
|
Six Months Ended
June 30,
|
(in millions of
Canadian dollars)
|
2022
|
2021
|
2022
|
2021
|
Loss before net
financial income and income tax expense (b)
|
(12.6)
|
(13.3)
|
(24.3)
|
(25.8)
|
Depreciation and
amortization
|
0.1
|
0.3
|
0.2
|
0.6
|
Share-based
compensation
|
1.1
|
0.7
|
2.0
|
1.5
|
Restructuring
expenses
|
1.1
|
0.3
|
1.1
|
0.3
|
Kognitiv's Adjusted EBITDA (a)(b)
|
(10.3)
|
(12.0)
|
(21.0)
|
(23.4)
|
(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 maybe 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 such
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 the earn-out in
connection with the PLM transaction; the use of proceeds from the
PLM transaction, including the allocated amount and any returns to
shareholders; purchases under the current NCIB; payment of
dividends; the use of Aimia's tax losses; the impacts of COVID-19
on Clear Media and their mitigation by Clear Media; the current and
futures strategic initiatives and investment opportunities.
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. 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 current Management Discussion
and Analysis and Annual Information Form, each of which have been
or will be filed on SEDAR and can be accessed at www.sedar.com.
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.
There are also risks inherent to the anticipated use of proceeds
from the PLM transaction described in this press release, including
reduction to the final amount of net proceeds from the PLM
transaction that could ultimately be allocated to share buybacks
and/or tax-efficient special dividend to common shareholders due to
the then market conditions, investment opportunities and other
relevant factors and failure to make any share buybacks (whether
through purchases under the NCIB or otherwise) and/or to pay any
tax-efficient special dividend. Accordingly, there can be no
assurance that the anticipated use of proceeds will be completed,
or that it will be completed in the manner, or at the time,
contemplated in this press release. The anticipated use of proceeds
as described in this press release could be modified or not occur
at all.
SOURCE Aimia Inc.