(All figures in millions of Canadian dollars unless otherwise noted)
TORONTO, May 14, 2021 /CNW/ - Aimia Inc. (TSX: AIM) reported its financial results for the three months ended March 31, 2021.
Q1 2021 Highlights (with comparisons to Q1 2020 except as otherwise noted):
- Aimia reported Income of $1.7 million, an increase of $5.7 million, and net loss from continuing operations of $(8.4) million, a 37.8% improvement over last year's net loss from continuing operations of $(13.5) million.
- PLM distributions resumed in the first quarter of 2021; Aimia received $9.8 million. PLM generated net earnings of $5.2 million and adjusted EBITDA of $14.5 million.
- Aimia entered into a binding Memorandum of Understanding with AirAsia Group Berhad ("AirAsia") (AAGB.MK) to sell its 20% equity stake in AirAsia's loyalty company, BIGLIFE, for $31.5 million (US$25.0 million) in exchange for 85.9 million new publicly traded ordinary shares of AirAsia.
- Kognitiv entered into a sales transaction and partnership agreement with industry leader IRI, in which IRI acquired the Intelligent Shopper Solutions (ISS) business from Kognitiv.
- Clear Media projects 2021 revenues to be materially higher than 2020.
Q1 2021 financial highlights – continuing operations, unless otherwise noted:
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HIGHLIGHTS | Three Months Ended March 31, |
(in millions of Canadian dollars,
except per share amounts) | 2021 | 2020 | YoY %
Change |
Continuing operations(1) |
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Income | 1.7 | (4.0) | ** |
Expenses | 8.8 | 8.2 | 7.3% |
Loss before income taxes | (7.1) | (12.2) | -41.8% |
Net Loss | (8.4) | (13.5) | -37.8% |
Loss per Common Share | (0.13) | (0.18) | -27.8% |
Distributions received from PLM | 9.8 | 9.5 | 3.2% |
Cash from (used in) Operating Activities | 3.1 | (19.4) | ** |
Consolidated |
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Net Loss | (8.4) | (9.6) | -12.5% |
Loss per Common Share | (0.13) | (0.14) | -7.1% |
Cash from (used) in Operating Activities | 4.6 | (25.8) | ** |
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** Information not meaningful |
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1. Continuing operations refers to consolidated results excluding discontinued operations. |
This quarterly earnings release should be read in conjunction with Aimia's consolidated financial statements and MD&A which can be accessed on SEDAR as well as the company's website.
Phil Mittleman, Chief Executive Officer, commented: "We had a strong start to the year, highlighted by the significant progress made in executing our new strategy as a holding company and the positive developments in our various investments. 2021 is shaping up to be very promising, and we remain focused on continuing to grow our existing holdings, while seeking new investment opportunities."
Segment Highlights for Q1 2021
The Holdings segment includes Aimia's equity-accounted investments in PLM, Kognitiv, BIGLIFE and fair-value investments in Clear Media Limited, a special purpose vehicle, and a portfolio of various public securities. Also included are holding company operating costs related to public company disclosure and Board costs, executive leadership, finance and administration.
The Investment Management segment consists of the discretionary portfolio management services provided to institutional investors and high net worth individuals, currently operated under Mittleman Investment Management, LLC (MIM).
Holdings segment results
During the first quarter of 2021, total income was $1.2 million, up from $(4.0) million in the same quarter last year, mostly due to a $5.4 million net fair value gain on investments in equity instruments.
Expenses were $7.9 million, down from $8.2 million in the same quarter last year, driven mostly by reduced technology spend and other office expenses, and lower professional, advisory, and service fees offset by higher share-based compensation and other compensation awards due to a 25.2% increase in Aimia's common share price during the quarter, and the current quarter amortization of deferred share units granted to executives in Q2 2020 to maintain continuous alignment with stakeholders. Excluding share-based compensation and other compensation awards, expenses were $4.4 million, a decline of $4.2 million from $8.6 million last year.
Investment Management segment results
During the first quarter of 2021, revenue from investment management fees were $0.5 million and loss before income taxes was $(0.4) million, or $(0.1) million excluding depreciation and amortization of intangible assets.
Assets under management were $244.8 million (US$194.1) million as of March 31, 2021, a 6.3% improvement over the prior quarter of $230.3 million (US$180.2) million, as a result of a rebound in its concentrated and value-oriented investment strategy.
Equity-accounted Investment Performance Summary
PLM
Our 48.9% equity stake in PLM, owner and operator of Club Premier, the coalition loyalty program in Mexico that operates the Aeromexico frequent flyer program, delivered the following financial results for the three months ended March 31, 2021. A detailed analysis of its financial performance is available in the MD&A:
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PLM operating metric (millions) | Q1 2021 | Q1 2020 |
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Enrolled members | 7.1 | 6.8 |
PLM financial metric (millions of Canadian dollars) | Q1 2021 | Q1 2020 |
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Revenue | 36.4 | 73.5 |
Net earnings (loss) | 5.2 | (8.8) |
Gross Billings | 44.9 | 86.2 |
Adjusted EBITDA(1) | 14.5 | 30.2 |
Cash from (used in) operating activities(2) | 24.4 | (22.4) |
Free Cash Flow(1)(2) | 24.2 | (21.6) |
Cash and cash equivalents(2) | 90.4 | 77.2 |
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1. | A non-GAAP measurement. Non-GAAP financial measures are defined and reconciled to the most comparable IFRS measures in our MD&A. See caution regarding Non-GAAP financial measures at the end of this earnings release. |
2. | Q1 2020 includes the impact of $20.1 million (US$15.0 million) pre-payment of award tickets. |
KOGNITIV
Aimia owns a 48.7% stake in Kognitiv, a B2B technology growth company that enables collaborative commerce for global clients across the financial services, media, telecom, hospitality and retail sectors. Clients including banks, major retailers, and loyalty program providers can collaborate in safe, peer-to-peer networks with hotels, airlines and other industries with perishable inventory, to increase their yield on assets, significantly reduce distribution costs, and leverage zero-party data to create hyper-personalized offers that drive customer lifetime value.
The table below summarizes the performance of Kognitiv for the three months ended March 31, 2021. A detailed analysis of its performance is available in the MD&A:
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Kognitiv (millions of Canadian dollars) | Q1 2021 | Q1 2020(2) |
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Revenue(1) | 14.4 | - |
Net loss | (10.2) | - |
Adjusted EBITDA(1)(3) | (11.4) | - |
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1. | Kognitiv's Q1 2021 revenue and Adjusted EBITDA are presented on a continuing operations basis, excluding ISS discontinued operations. |
2. | Aimia closed the Kognitiv transaction on June 18, 2020. |
3. | A non-GAAP measurement. Non-GAAP financial measures are defined and reconciled to the most comparable IFRS measures in our MD&A. See caution regarding Non-GAAP financial measures at the end of this earnings release. |
Transaction with IRI: As announced on March 18, 2021, Kognitiv entered into a sales transaction and partnership agreement with IRI, a global leader in innovative solutions and services for consumer, retail and media companies. IRI acquired Intelligent Shopper Solutions (ISS), a leading retail consumer insight provider that enables collaboration between retailers and suppliers, from Kognitiv for undisclosed terms.
Through the partnership agreement, IRI and ISS will explore opportunities for IRI's retailer clients to leverage Kognitiv's unique Platform-as-a-Service to scale their partnerships, connect peer-to-peer and deliver new value to consumers through hyper-personalized experiences within their ecosystem.
Leadership Team Update: Kognitiv announced the additions of a new President, Shawn Pearson, and CFO, Julia Wehmeyer, both of whom possess expertise in building commercial scale and high-performing teams, as well as capital market experience, positioning Kognitiv for a successful future.
BIGLIFE
On March 22, 2021, Aimia announced that it has entered into a binding Memorandum of Understanding with AirAsia to sell its 20% equity stake in AirAsia's loyalty company, BIGLIFE, for a consideration of $31.5 million (US$25.0 million) to be satisfied by 85.9 million new publicly traded ordinary shares of AirAsia (AAGB.MK), representing an approximate equity stake of 2.2% of AirAsia's existing issued shares. Subsequent to the quarter end, Aimia signed a formal share purchase agreement with AirAsia. The transaction is subject to AirAsia's shareholders' approval which is expected to occur before end of June 2021.
During the three months ended March 31, 2021, Aimia also participated in the second tranche of a private placement of new ordinary shares in AirAsia, subscribing for 35.6 million new ordinary shares for $9.4 million (US$7.5 million).
In total, Aimia will hold 121.5 million new ordinary shares for an approximate 3.1% equity stake in AirAsia upon completion of the BIGLIFE transaction.
Balance sheet
As of March 31, 2021, the company had cash and cash equivalents of $134.8 million and a liquid public securities portfolio totaling $42.6 million, which included unrealized gains up until the end of the quarter of $9.8 million.
Aligned with the new corporate strategy, the company's investment committee 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.
The company will also invest in public equities that have been identified as significantly undervalued businesses with discernable catalysts to surface shareholder value.
Returns to Shareholders
Normal Course Issuer Bid (NCIB)
On June 8, 2020, Aimia announced the establishment of a NCIB to repurchase for cancellation up to 6.98 million common shares during the period from June 10, 2020 to no later than June 9, 2021.
In 2020, shares repurchased totalled 4.4 million common shares at an average cost per share after fees of $3.31, for a total cost of $14.6 million.
During the first quarter of 2021, Aimia did not make any purchases under its NCIB.
Dividends
Dividends of $3.2 million were paid on March 31, 2021 on the two series of outstanding preferred shares in respect of the first quarter of 2021.
At the end of the first quarter of 2021, there were a total of 9.4 million preferred shares outstanding comprised of 5.1 million Series 1 preferred shares with a dividend rate of 4.802%, and 4.3 million Series 3 preferred shares with a dividend rate of 6.01%.
On May 13, 2021, the Board of Directors declared a quarterly dividend in respect of its two series of preferred shares for the second quarter of 2021. Dividends on the Series 1 and Series 3 preferred shares will be payable on June 30, 2021, to shareholders of record at the close of business on May 21, 2021.
Quarterly Conference Call and Audio Webcast Information
Aimia will host a conference call to discuss its first quarter 2021 financial results at 8:30 a.m. EST on May 14, 2021. The call will be webcast at: https://produceredition.webcasts.com/starthere.jsp?ei=1451927&tp_key=75bff98ece
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 first quarter 2021 Financial Statements, Management Discussion & Analysis, and Financial Highlights Presentation will be filed on SEDAR around 7:00 a.m. EST on May 14, 2021 available here, as well as on the company's Investor Relations website accessible here.
This earnings release was reviewed by Aimia's Audit Committee and was approved by the company's Board of Directors, on the Audit Committee's recommendation, prior to its release.
About Aimia
Aimia Inc. (TSX: AIM) is a holding company with a focus on long-term investments in public and private companies, on a global basis, through controlling or minority stakes.
The company operates an investment advisory business through its wholly-owned subsidiary Mittleman Investment Management, LLC, and owns a diversified portfolio of valuable investments including a 48.9% equity stake in PLM Premier, S.A.P.I. de C.V. (PLM), owner and operator of Club Premier, the coalition loyalty program in Mexico that operates the Aeromexico Frequent Flyer program, a 48.7% equity stake in Kognitiv, a B2B technology growth company enabling collaborative commerce, a 20.0% equity stake in BIGLIFE, the operator of BIG Rewards, one of the largest loyalty programs across Asia, a 10.85% stake in Clear Media Limited (100.HK), one of the largest outdoor advertising firms in China, as well as minority stakes in a portfolio of public company securities.
For more information about Aimia, visit www.aimia.com.
Non-GAAP Financial Measures
Following the Corporation strategic update, 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 our MD&A section – "Non-GAAP Financial Measures for Investments".
PLM Adjusted EBITDA
Adjusted EBITDA for PLM ("PLM Adjusted EBITDA") is earnings before net financial income (expense) and net income tax expense adjusted to exclude depreciation, amortization and impairment charges related to non-financial assets, as well as adjusted for certain factors particular to PLM, such as changes in deferred revenue and Future Redemption Costs. Change in deferred revenue is calculated as the difference between Gross Billings and revenue recognized, including recognition of Breakage. Future Redemption Costs represent management's estimated future cost of rewards in respect of Loyalty Units sold which remain outstanding and unbroken at the end of any given period. Future Redemption Costs are revalued at the end of any given period by taking into account the most recently determined average unit cost per Loyalty Unit redeemed for that period (cost of rewards / Loyalty Units redeemed) and applying it to the total Unbroken Loyalty Units outstanding at the end of that period. As a result, Future Redemption Costs and the change in Future Redemption Costs must be calculated at the end of any given period and for that period. The simple addition of sequential inter-period changes to arrive at a cumulative change for a particular period may result in inaccurate results depending on the fluctuation in the Average Cost of Rewards per Loyalty Unit redeemed for the period in question. PLM Adjusted EBITDA is not a measurement based on GAAP, is not considered an alternative to net earnings in measuring profitability, and is not comparable to similar measures used by other issuers. Aimia and PLM's management do not believe that PLM Adjusted EBITDA has an appropriate directly comparable GAAP measure. However, a reconciliation to earnings before net financial income (expense) and net income tax expense is provided in our MD&A section "Non-GAAP Financial Measures for Investments". PLM Adjusted EBITDA is used by Aimia and PLM's management to evaluate performance. Aimia and PLM's management believe PLM Adjusted EBITDA assists investors in comparing PLM's performance on a consistent basis without regard to depreciation and amortization and impairment charges related to non-financial assets, which are non-cash in nature and can vary significantly depending on accounting methods, and non-operating factors such as historical cost.
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. Adjusted EBITDA also includes distributions and dividends received or receivable from equity accounted investments. Kognitiv 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 comparable to similar measures used by other issuers. A reconciliation to earnings before net financial income (expense) and net income tax expense is provided in our MD&A section – "Non-GAAP Financial Measures for Investments". 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 inclusion of distributions and dividends received or receivable from equity-accounted investments in Adjusted EBITDA assists investors by adding a performance indicator representative of earnings from equity-accounted investments accessible to Kognitiv. 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.
Forward-Looking Statements
Forward-looking statements are included in this press release. These forward-looking statements are identified by the use of terms and 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. Such statements may involve but are not limited to comments with respect to strategies, expectations, planned operations or future actions. Forward-looking statements, by their nature, are based on assumptions and are subject to important risks and uncertainties. Any forecasts, predictions or forward-looking statements cannot be relied upon due to, among other things, changing external events and general uncertainties of the business and its corporate structure. Results indicated in forward-looking statements may differ materially from actual results for a number of reasons, including without limitation, business and industry disruptions related to natural disasters, security issues and global health crises particularly as they might affect the airline, travel and hospitality sectors, risks and uncertainties related to Aimia's investment in PLM arising from Aeromexico's Chapter 11 filings, the execution of the strategic plan, investment risks, including in connection with how and when to deploy and invest Aimia's considerable cash and other liquid assets, holding company liquidity risk, investment partnerships risks, airline industry changes and increased airline costs, reliance on key personnel, market price and trading volume of the common shares and preferred shares, uncertainty of dividend declarations and/or payments on either common shares or preferred shares, passive foreign investment company risk, limitations on utilization of tax losses, technological disruptions and inability to use third-party software and outsourcing, regulatory matters related to privacy, foreign operations, interest rate and currency fluctuations, legal proceedings, audit by tax authorities, as well as the other factors identified throughout Aimia's public disclosure records on file with the Canadian securities regulatory authorities. The forward-looking statements contained herein represent Aimia's expectations as of May 13, 2021 and are subject to change after such date. However, Aimia disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required under applicable securities regulations.
SOURCE Aimia Inc.
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