AIMIA REPORTS STRONG THIRD QUARTER 2024 RESULTS AND REITERATES 2024 GUIDANCE
TORONTO, Nov. 8, 2024 /CNW/ - Aimia Inc, (TSX:AIM) ("Aimia" or the "Company"), today reported its financial results for the three and nine months ended September 30, 2024. All amounts are in Canadian currency unless otherwise noted.
SENIOR LEADERSHIP COMMENTARY
"Since the start of the year, we have executed a strategy focused on strengthening the operational performance of our core holdings, unlocking value for shareholders, and improving engagement with our investors," said Tom Finke, Aimia's Executive Chairman. "Our strong financial results for Q3, which were marked by gains across a number of key financial metrics, the continued roll out of our normal course issuer bid, the roadmap being developed by our Strategic Review Committee to return capital to shareholders, and the recent signing of a cooperation agreement with our largest investor, are indicative of the significant progress we have made to date. With the settlement of all activist investor matters now behind us, we plan to build on our recent performance and focus on unlocking shareholder value in the coming months."
"Aimia's core holdings showed resilience against a backdrop of unfavorable geopolitical and macro-economic developments, generating strong financial and operational results in Q3," said Steven Leonard, Aimia's President and Chief Financial Officer. "Our strong performance in the quarter was reflected by improvements across several key financial metrics, including consolidated revenue growth of 13%, increased adjusted EBITDA by 55%, and decreased HoldCo expenses by more than $2 million. Our results in Q3 put us well on track to reach our guidance for the year. We anticipate generating adjusted EBITDA for our core businesses in the range of $80 to $85 million on a combined basis, albeit at the lower end of the scale. We also anticipate corporate operating costs for the year to be approximately $13 million, exclusive of one-time expenses."
AIMIA'S Q3 2024 HIGHLIGHTS
Reported consolidated revenue of $129.1 million, up 13% from $114.3 million generated in Q3 2023. Results for Q3 2024 sustained the momentum established at the Company's core holdings since the start of 2024 in spite of the continued global shipping disruptions and the negative impact of high inflation on customer demand.
Reported consolidated Adjusted EBITDA of $15.0 million, up 55% from $9.7 million generated in Q3 2023. The improvement was driven by a number of developments, including the reduction in selling, general and administrative (SG&A) expenses at the Holdings segment by $2.1 million in Q3 2024.
Generated cash flow from operating activities of $1.3 million, a total that included $6.4 million of costs related to shareholder activism, payments related to the departures of former executives, and business acquisition costs incurred in the quarter.
Reported consolidated net loss of $1.9 million or $0.07 per common share, amounts that include a $2 million expense related to the settlement with Mithaq Capital SPC ("Mithaq") and $2.4 million tax expense.
Ended Q3 with a total liquidity of $121.4 million, comprised of $120.6 million in cash and cash equivalents and $0.8 million of marketable securities.
Announced leadership appointments aimed at fast-tracking the rollout of the Company's strategy endorsed by shareholders at Aimia's annual general meeting, naming James Scarlett as Chair of the recently formed Strategic Review Committee and Steven Leonard as President and Chief Financial Officer. Aimia's strategy and near-term priorities are focused on unlocking value and returning capital to investors in a responsible and expeditious manner.
Entered into an agreement with Milkwood Capital (UK) Ltd. to purchase for cancellation 1.3 million common shares owned by Milkwood. The common shares were purchased at a price of $2.53 per common share, representing an approximate aggregate price of $3.3 million.
In Q3 2024, Aimia re-purchased 1.9 million common shares for cancellation under the auspices of a Normal Course Issuer Bid launched on June 6, 2024. The total consideration for shares re-purchased, including the 1.3 million re-purchased for cancellation from Milkwood, was $5million.
HIGHLIGHTS SUBSEQUENT TO QUARTER END
Signed a cooperation agreement with Mithaq that will result in the dismissal of all outstanding litigation between the parties, the appointment of two Mithaq nominees, Muhammad Asif Seemab and Rhys Summerton, to Aimia's Board of Directors, the grant of customary preemptive and registration rights to Mithaq, the adoption of customary standstill provisions through March 31, 2026, and an undertaking from Mithaq to vote all of its common shares of the Company in favour of each of Aimia's management nominees for election to the Company's board of directors at Aimia's next annual general meeting of shareholders to be held in 2025.
CONSOLIDATED FINANCIAL HIGHLIGHTS
Aimia
(in millions of dollars except for margin and per share data)
Q3 2024
Q3 2023
Change
Revenue
129.1
114.3
13 %
Gross Profit
35.4
22.9
55 %
Gross Margin
27.4 %
20.0 %
7.4 pp
Operating Expenses
(29.4)
(30.4)
(3 %)
Operating Income (loss)
6.0
(7.5)
NM
Adjusted EBITDA1
15.0
9.7
55 %
Net earnings (loss)
(1.9)
(34.4)
94 %
Earnings (loss) per share diluted
(0.07)
(0.45)
84 %
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1 Adjusted EBITDA is a non-GAAP measure.
Aimia's financial results for the three months ended September 30, 2024 reflect the acquisition of StarChem completed on January 2, 2024. This quarterly earnings release should be read in conjunction with Aimia's consolidated financial statements and management discussions and analysis (MD&A) for the three and nine months ended September 30, 2024, which can be accessed from SEDAR+ and www.aimia.com.
Balance Sheet and LiquidityAs at September 30, 2024, Aimia had a total liquidity of $121.4 million, comprised of $120.6 million in cash and cash equivalents and $0.8 million of marketable securities. As at June 30, 2024, Aimia had total liquidity of $114.6 million, which was comprised of $112.8 million in cash and cash equivalents and $1.8 million in marketable securities.
The quarter over quarter increase in Aimia's liquidity was attributable to a number of developments in Q3, including cash flow from operating activities of $1.3 million, and net proceeds of $22.6 million from a new senior financing agreement entered into by Bozzetto. The increase in liquidity was partially offset by a $3.3 million investment in property, plant and equipment, $3.9 million dividend payment for preferred shareholders, a $4.9 million repayment of other borrowings, payments of $5 million for the repurchase of common shares through a normal course issuer bid. Cash flow from operating activities in Q3 2024 includes $1.2 million of shareholder activism costs, $0.9 million of transaction and transition costs, and $4.3 million in payments to former executives of the Company related to vested deferred share units.
Of Aimia's cash and cash equivalents held at September 30, 2024, $59.5 million was held in Bozzetto, $7.7 million in Cortland International, and $53.4 million in the Holdings segment.
Available Tax LossesAs at September 30, 2024, Aimia had $772.1 million of tax losses available for carry forward that may be used to reduce taxable income in future years. The total available for carry forward is comprised of $480.2 million of operating tax losses and $291.9 million of capital tax losses.
DividendsAimia paid $3.9 million in dividends for the third quarter ended September 30, 2024, on its three series of outstanding preferred shares.
Aimia's Board of Directors declared quarterly dividends of $0.300125 per Series 1 preferred share, $0.485813 per Series 3 preferred share, and $0.528183 per Series 4 preferred share, in each case payable on December 31, 2024, to shareholders of record on December 17, 2024.
With the reset of the annual dividend rate for Series 3 Preferred shares and the introduction of Cumulative Floating Rate Series 4 Preferred Shares, Aimia's quarterly ...
