EXECUTIVE CHAIRMAN COMMENTARY
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- Reported consolidated revenue of
$100.1 million . The total was driven by the strong contributions fromAimia's sustainable speciality chemicals subsidiaryBozzetto Group ("Bozzetto"), which generated$70.3 million or 70.2% ofAimia's consolidated total. Aimia's Bozzetto and Cortland International ("Cortland") segments generated Adjusted EBITDA of$12.9 million on a combined basis.- Reported consolidated net loss of
$59 million or$0.69 per common share. The loss was principally due to a$54.9 million net change in the fair value of investments atAimia's non-core investments, including TRADEX and Clear Media. - Closed a private placement that generated gross proceeds of
$32.5 million . Under the terms of the financing, the Company issued 10,475,000 common shares ("Common Shares") together with 10,475,000 Common Share purchase warrants ("Warrants"). The issue price of each Common Share and accompanying Warrant was$3.10 with a$3.70 Warrant exercise price. Aimia's Bozzetto subsidiary acquired a 65% interest in StarChem S.A, aHonduras -based manufacturer of chemicals for the textile industry, for$24.1 million . The acquisition, which closed onJanuary 4, 2024 , enables Bozzetto to establish a beachhead in the North American market and take advantage of a number of customer and cost synergies.- Rebranded the Company's cordage and synthetic rope business as
Cortland International following the acquisitions and integration ofTufropes and Cortland Industrial . - Named
Thomas Finke as Chairman ofAimia's Board of Directors and appointedYannis Skoufalos as a Board Director.
SUMMARY OF AIMIA'S KEY 2023 DEVELOPMENTS
- Completed two transformative transactions, acquiring sustainable specialty chemicals company Bozzetto Group for
$257.8 million for a 93.94 per cent equity stake in the company, and acquiring Tufropes, a manufacturer of synthetic ropes, for$238.2 million for 100 percent of the company. The transactions were paid from the Company's cash on hand and a debt facility secured for the Bozzetto acquisition.Aimia subsequently purchased a 0.16 per cent equity interest from a Bozzetto management team member, increasing its total equity stake to 94.1 per cent. - Ended 2023 with a total liquidity of
$136.9 million , comprised of$109.1 million in cash and cash equivalents and$27.8 million in public securities. Aimia has no debt at the Holding Company level. - Reported consolidated revenue for FY2023 of
$291.2 million . On a pro forma basis taking into account the full-year contributions of Bozzetto, Tufropes and Cortland Aimia's revenue would have been$437.2 million . - Reported consolidated net loss was
$188.6 million or$2.37 per share. The total net loss was impacted by a number of significant non-cash items, including a$98.6 million net change in fair value of non-core investments, primarily due to the write down of investments in TRADE X and Clear Media, but offset by a$19.3 million gain related to the PLM earn-out.Aimia anticipates receiving the estimated earn-out of$32 million in the second quarter of 2024.
- Named Tom Finke as Executive Chairman and
Karen Basian as Lead Independent Director following the resignations ofPhil Mittleman as CEO andMichael Lehmann as President. The Company launched the search for a new CEO. - Received notice that that the earn-out conditions from the sale of its 48.9 percent stake in PLM Loyalty to Aeromexico have been met, resulting in an anticipated cash earnout payment of approximately
$32 million in the second quarter of 2024. - Announced that it would not be exercising its right to redeem all or part of its Series 3 Preferred Shares and that holders had the right to convert their shares into cumulative floating rate shares subject to certain restrictions and conditions. The Company subsequently announced that 2,706,112 of its 4,355,263 currently outstanding Cumulative Redeemable Rate Reset First Preferred Shares, Series 3 were tendered for conversion, on a one-for-one basis, into Cumulative Redeemable Floating Rate First Preferred Shares, Series 4 after having taken into account all election notices. As a result, on
April 1, 2024 , the Company will have 1,649,151 Series 3 Shares issued and outstanding and 2,706,112 Series 4 Shares issued and outstanding.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(in millions of Canadian dollars) | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 |
Revenue from contracts with customers | 100.1 | 0.3 | 291.2 | 1.5 |
Gross Profit | 23.8 | 0.3 | 65.9 | 1.5 |
Operating Expenses | (37.8) | (7.4) | (119.8) | (32.1) |
Operating Income (loss) | (51.0) | (18.5) | (137.4) | 444.4 |
Adjusted EBITDA | (4.0) | (3.7) | 4.9 | (19.4) |
Net earnings (loss) | (59.0) | (23.3) | (188.6) | 440.1 |
Earnings (loss) per share diluted | (0.69) | (0.32) | (2.37) | 4.83 |
Balance Sheet and Liquidity
As at
Cash Flow from Operations
On a full-year basis,
At
Available Tax Losses
At
Dividends
SEGMENT RESULTS
Bozzetto
Bozzetto | ||||
(in millions of Canadian dollars) | Q4 2023 | Q4 2022 | FY | FY 2022 |
Revenue from contracts with customers | 70.3 | - | 192.1 | - |
Gross Profit | 19.1 | - | 48.0 | - |
Operating Expenses2 | (14.7) | - | (50.1) | - |
Operating Income (loss) | 5.3 | - | (0.5) | - |
Earnings (loss) before income taxes | 0.5 | - | (29.9) | - |
Adjusted EBITDA3 | 10.4 | - | 30.6 | - |
- Bozzetto generated revenue of
$70.3 million for the fourth quarter, down 7.4% from Q3 2023. The quarter-over-quarter decline was largely attributable to softer demand due to shipping disruptions in theRed Sea , which is a key transportation route used to reach Bozzetto's customers, and the impact of lower input costs that were partially passed on to customers. - Adjusted EBITDA for Q4 2023 was
$10.4 million , representing a margin of 14.8%. Totals for Q4 2023 were down from$11.7 million and 15.4%, respectively, from Q3 2023 results. - Adjusted EBITDA for FY2023 was
$30.6 million , representing a margin of 15.9%. - Bozzetto's revenue and Adjusted EBITDA results for FY 2023 were in line with Bozzetto's expectations for the year.
(in millions of Canadian dollars) | Q4 2023 | Q4 2022 | FY | FY 2022 |
Revenue from contracts with customers | 29.7 | - | 98.7 | - |
Gross Profit | 4.6 | - | 17.5 | - |
Operating Expenses5 | (5.9) | - | (31.4) | - |
Operating Income (loss) | (0.9) | - | (12.9) | - |
Earnings (loss) before taxes | (6.5) | - | (34.4) | - |
Adjusted EBITDA6 | 2.5 | - | 11.3 | - |
- Cortland generated revenue of
$29.7 million for Q4 2023, down 22.6% from$38.4 million generated in Q3 2023. The quarter-over-quarter decline was attributable to a number of factors, including softer customer demand caused by economic uncertainty and delays to customer deliveries due to shipping disruptions in theRed Sea , a key transportation route used to reach Cortland's customers. - Adjusted EBITDA for Q4 2023 was
$2.5 million , representing a margin of 8.4%. Totals for Q4 2023 were down from$5.7 million and 14.8%, respectively, from Q3 2023 results. The decline was mainly driven by lower sales volume in the fourth quarter. - Adjusted EBITDA for FY2023 was
$11.3 million , representing a margin of 11.4%.
Holdings Segment Results for Q4 2023
The Holdings segment includes
Holdings Segment | ||||
(in millions of Canadian dollars) | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 |
Revenue from contracts with customers | 0.1 | 0.3 | 0.4 | 1.5 |
Gross Profit | 0.1 | 0.3 | 0.4 | 1.5 |
Operating Expenses | (17.2) | (7.4) | (38.3) | (20.7) |
Earnings (loss) before taxes | (54.0) | (22.0) | (116.3) | 455.3 |
Adjusted EBITDA7 | (16.9) | (3.7) | (37.0) | (19.4) |
- Operating expenses for the Holdings segment in Q4 2023 included
$9.4 million of expenses related to shareholder activism including settlement agreements, and the termination of the employment of a former executive of one of the Corporation's subsidiaries. - In FY2023, Aimia incurred a net change in the unrealized value of its investment in TRADE X, the business-to-business cross-border trading platform, totaling
$82.3 million . The write-down was due to a combination of factors, including TRADE X being placed in receivership onDecember 22, 2203 , and the financing challenges it previously experienced. - In FY2023, Aimia recognized an unrealized fair value loss of
$27 million related to Clear Media, the outdoor advertising firm inChina , due to the slower than expected recovery ofChina's economy following the end of the country's COVID-19 lock-down measures.
______________________________ |
1 Includes results of Bozzetto since its acquisition on |
2 Operating expenses include one-time transaction costs related to business acquisitions totaling |
3 Adjusted EBITDA is a non-GAAP measure. |
4 Includes results of |
5 Operating expenses include one-time transaction and transition costs related to the acquisition of Tufropes and Cortland amounting to |
6 Adjusted EBITDA is a non-GAAP measure. |
7 Adjusted EBITDA is a non-GAAP measure. |
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For more information about
Non-GAAP Financial Measures and Reconciliation to Comparable GAAP Measures
"GAAP" means Canadian Generally Accepted Accounting Principles (which are in accordance with the International Financial Reporting Standards).
Adjusted EBITDA
Adjusted EBITDA is not a measurement based on GAAP, is not considered an alternative to net earnings in measuring profitability, does not have a standardized meaning and is not directly comparable to similar measures used by other issuers. Adjusted EBITDA should not be used as an exclusive measure of cash flow because it does not account for the impact of working capital growth, capital expenditures, debt repayments and other sources and uses of cash, which are disclosed in the statements of cash flows. A reconciliation to earnings (losses) before income taxes is provided.
Adjusted EBITDA is used by management to evaluate the performance of its Bozzetto,
Adjusted EBITDA is earnings (losses) before income taxes adjusted to exclude depreciation, amortization, impairment charges related to non-financial assets, cost of sales expense related to inventory fair value step up resulting from purchase price allocation, other investment income, financial expense, increase/decrease in limited partners' capital liability, income/expenses related to call option and carried interest, fair value gain/loss on contingent consideration and
For a reconciliation of Adjusted EBITDA to earnings (before) income taxes, please refer to the tables below.
Bozzetto | Cortland | Holdings | Total | |
(in millions of Canadian dollars) | FY 2023 (a) | FY 2023 (a) | FY 2023 | FY 2023 |
Reconciliation of Adjusted EBITDA (b) | ||||
Earning (loss) before income taxes(e) | (29.9) | (34.4) | (116.3) | (180.6) |
Depreciation and amortization (d) | 13.1 | 8.7 | 1.1 | 22.9 |
Cost of sales expense related to | 6.3 | 1.3 | - | 7.6 |
Share-based compensation expense | - | - | (0.2) | (0.2) |
Intercompany interest income | - | 8.1 | (8.1) | - |
Financial expense, net | 12.5 | 3.2 | 1.8 | 17.5 |
Transaction related costs (c) | 13.3 | 15.2 | - | 28.5 |
(Income) expenses related to carried | 16.9 | 10.2 | (1.9) | 25.2 |
Increase in limited partners' capital liability | - | - | 0.5 | 0.5 |
Other income from investments | (1.6) | (1.0) | 86.1 | 83.5 |
Adjusted EBITDA (b) | 30.6 | 11.3 | (37.0) | 4.9 |
Adjusted EBITDA margin | 15.9 % | 11.4 % | - |
(a) | Includes results of Bozzetto since its acquisition date on |
(b) | A Non-GAAP measure. |
(c) | Bozzetto operating expenses include one-time transaction costs related to business acquisitions amounting to |
(d) | Holdings selling, general and administrative expense for the year ended |
(e) | Holdings selling, general and administrative expense for the twelve months ended |
Bozzetto | Cortland | Holdings | Total | |
(in millions of Canadian dollars) | Q4 2023 | Q4 2023 | Q4 2023 | Q4 2023 |
Reconciliation of Adjusted EBITDA (a) | ||||
Earning (loss) before income taxes(c) | 0.5 | (6.5) | (54.0) | (60.0) |
Depreciation and amortization | 5.1 | 3.0 | - | 8.1 |
Cost of sales expense related to inventory | - | 0.3 | - | 0.3 |
Share-based compensation expense | - | - | 0.2 | 0.2 |
Intercompany interest income (expense) | - | 3.0 | (3.0) | - |
Financial expense, net | 5.1 | 2.7 | 1.9 | 9.7 |
Transaction related costs (b) | 0.9 | 0.5 | - | 1.4 |
(Income) expenses related to carried | (0.3) | (0.1) | (0.3) | (0.7) |
Other income from investments | (0.9) | (0.4) | 38.3 | 37.0 |
Adjusted EBITDA (a) | 10.4 | 2.5 | (16.9) | (4.0) |
Adjusted EBITDA margin | 14.8 % | 8.4 % | - |
(a) | A Non-GAAP measure. |
(b) | Bozzetto operating expenses include one-time transaction costs related to business acquisitions amounting to |
(c) | Holdings selling, general and administrative expense for the three months ended |
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
Forward-looking statements in this press release include, but are not limited to, Aimia`s future growth and value creation, Bozzetto and Cortland growth opportunities, the monetization of Aimia`s other investments, costs reduction at the holding level, the value of PLM cash earnout, and future upside resulting from the Company executing on its strategy.
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 the Company can be found in
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