(All figures in Canadian dollars unless otherwise
TORONTO, May 6, 2022 /CNW/ - Aimia Inc. (TSX:
AIM) reported its financial results for the three months ended
March 31, 2022.
Phil Mittleman, Chief Executive
Officer of Aimia, said: "We are pleased with our first quarter 2022
business results, the highlights of which included the signing of a
binding letter of intent with Aeromexico to divest our 48.9% stake
in PLM, Kognitiv's closing on $48.5
million in new financing, as well as TRADE X's continued
business growth. TRADE X generated gross vehicle sales of
$248.3 million in Q1 2022, up 714%
Mr. Mittleman added, "We continue to make progress towards
closing the PLM transaction, as the application for Mexican
anti-trust approval has been filed and we are moving closer towards
completion of the definitive agreement. Upon closing of the PLM
transaction, Aimia expects to receive approximately $484 million (USD $386
million) in net proceeds (adjusted for currency). We also
recently began share repurchases under the current NCIB after the
quarter end, buying back more than 340,000 shares at an average
price of $5.19 per common share."
Q1 2022 financial highlights:
Three Months Ended
(in millions of
Canadian dollars, except per share amounts)
Loss before income
Loss per Common
Cash from (used) in
** Information not
Q1 2022 Highlights:
- Aimia reported a loss of $14.3
million mainly related to $7.5
million non-cash equity pick-up of its share of Kognitiv's
net loss, as well as $12.1 million
negative net fair value change of investments, driven by unrealized
fair value losses related to marketable securities held through
Precog Capital Partners and Capital A (formerly AirAsia). This was
offset in part by investment income and management fees.
Consolidated net loss was $18.9
- Aimia entered into a binding letter of intent ("Binding LOI")
with Aeromexico and its Debtors to divest Aimia's 48.9% equity
stake in PLM. Aimia received a $2.9
million distribution from PLM.
- TRADE X generated gross vehicle sales of $248.3 million in Q1 2022, up 714%
year-over-year, including acquisitions which closed in the fourth
quarter of 2021.
- Kognitiv raised $48.5 million in
new financing transactions which consisted of a $17.5 million senior debt facility from Silicon
Valley Bank and $31.0 million of
convertible notes, of which Aimia invested $10.0 million.
PLM Transaction & Use of
PLM Transaction Update:
- On February 8, 2022, Aimia
announced it had entered into a Binding LOI with Aeromexico and its
Debtors to divest Aimia's 48.9% equity stake in PLM.
- Upon closing of the PLM transaction, Aimia Holdings UK Limited
and Aimia Holdings UK II Limited will receive approximately
$483.6 million (US$386.0 million) in net cash proceeds (adjusted
for currency), subject to certain adjustments to be made at closing
pursuant to the Binding LOI and Definitive Agreement. In
addition, an earn-out in an amount of approximately $24.2 million (US$19.3
million) on a net basis, is payable to Aimia Holdings UK
Limited and Aimia Holdings UK II Limited in cash should the PLM
loyalty program achieve certain targeted annual gross billings
amounts by 2024.
- As a result of the upcoming PLM transaction, the investment in
PLM was classified as an asset held for sale in the three months
ended March 31, 2022. The terms of
the transaction are in US dollars. The Canadian dollar amounts have
been translated at a USD/CAD exchange rate of 1.2529 as of
March 31, 2022.
- The parties are progressing towards the completion of the
definitive agreement (the "Definitive Agreement") for the
transaction reflecting the terms and conditions of the Binding LOI
and have filed the application for Mexican antitrust approval. The
proposed transaction is expected to close within the next three
- On March 17, 2022, Aeromexico
announced it had successfully completed its financial restructuring
process and emerged from the Chapter 11, which included the formal
assumption of the PLM contracts. Aeromexico is continuing to
implement all required steps and actions for the Plan of
Reorganization to be substantially consummated, including the PLM
Stock Participation Transaction, pursuant to which PLM shall become
a wholly-owned subsidiary of Grupo Aeroméxico.
Use of Proceeds:
- Aimia intends to utilize the majority 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 the
company's sizeable net operating tax losses.
- Aimia intends 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.
- The company's intent is to utilize a combination of its current
NCIB, plus its subsequent anticipated renewal (subject to the
Toronto Stock Exchange acceptance), to enable total buybacks of up
to 14 million common shares.
- The final amount of the net proceeds from the PLM transaction
that could ultimately be allocated to share buybacks and/or
tax-efficient special dividend to common shareholders will be
subject, upon receipt of such proceeds, to the then applicable
market conditions, investment opportunities and other relevant
This quarterly earnings release should be read in conjunction
with Aimia's condensed interim financial statements and MD&A
which can be accessed on SEDAR as well as the company's website
under Investor Relations.
Holdings segment results for Q1
During the first quarter of 2022, Income (loss) from investments
was $(14.8) million, compared to
$1.2 million of income last year
mainly due to:
- Aimia's non-cash equity pick-up of its share of Kognitiv's net
loss of $7.5 million in the first
quarter, compared to $5.7 million in
the same quarter last year;
- Negative net change in fair value of investments of
$12.1 million in the first quarter
mainly driven by a decrease in the share price of both the
marketable securities held through Precog Capital Partners, and
Capital A, compared to positive net change in fair value of
investments of $5.4 million in the
same quarter last year; and
- Income, dividend and other investment income of $4.2 million in the first quarter, which included
distributions received from PLM of $2.9
million after the investment was reclassified to asset held
for sale, compared to $0.2 million in
the same quarter last year.
Expenses were $3.6 million, down
from $7.9 million in the same quarter
last year, mainly due to:
- A decrease of $4.4 million of
share-based compensation and other performance awards mainly due
- A significant increase in the Corporation share price in the
three months ended March 31, 2021;
- The derecognition of the accrued liability of $1.9 million related to unvested DSUs previously
granted to an executive of the Corporation in connection with a
change in role effective on March 29,
Investment Management segment results
for Q1 2022
During the first quarter of 2022, revenue from investment
management fees were $0.6 million,
and earnings before income taxes were break-even.
Assets under management were $181.6
million (US$145.0 million) as
of March 31, 2022. This represents a
10.4% decrease (in US dollars) from the assets under management as
of December 31, 2021, mainly due to
negative performance of its concentrated and value-oriented
On February 8, 2022, Aimia
announced that it had entered into a Binding LOI with PLM and Grupo
Aeromexico, S.A.B. de C.V. and Aerovías de México, S.A. de C.V.
(collectively, "Aeromexico") to divest the company's 48.9% equity
stake in PLM, upon which PLM will become a wholly-owned subsidiary
of Aeromexico. As a result, Aimia's investment in PLM was
reclassified from an equity-accounted investment to an asset held
for sale as of March 31, 2022.
In the first quarter of 2022, Aimia received a $2.9 million distribution from PLM.
Aimia owns a 48.9% equity stake in Kognitiv as of March 31, 2022.
Kognitiv is a B2B technology company redefining loyalty and
empowering businesses to grow and transform with Collaborative
Commerce. Kognitiv's platform and services enable businesses to
build marketplaces and experiences through multi-enterprise
collaboration with partners, suppliers, and distributors, while
creating new value for consumers, enhancing access to data –
including zero party data – and providing greater control of the
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
months ended March 31, 2022 and 2021.
A detailed analysis of its performance is available in the
of Canadian dollars)
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.
In the first quarter of 2022, Kognitiv secured additional
financing, via a series of transactions totalling $48.5 million. The financings consisted of a
$17.5 million senior debt facility
from Silicon Valley Bank, and $31.0
million of secured subordinated convertible notes. Investors
in the secured subordinated convertible notes included $15.0 million from a new U.S. institutional
investor, $10.0 million from Aimia,
and $1.25 million from company
insiders, including members of the board of directors and senior
management, among other investors.
The secured subordinated convertible notes have the option to
convert to equity at a discount to the price at which equity is
offered in Kognitiv's next qualified financing round.
Other Investments (<20% equity
Aimia owns a 12.2% fully diluted equity stake in TRADE X as of
March 31, 2022.
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
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.
In the event a qualified financing occurs, the note will
automatically convert into the same equity instruments than such
qualified financing at the lesser of (i) 25% discount over the
qualified financing price per share; and (ii) price per share based
on a certain pre-money valuation cap.
The convertible note has an 8% interest rate and, unless
converted in a qualified financing, will mature 12 months after the
closing date. At maturity, Aimia will have the option to convert
the note and accrued and unpaid interest into TRADE X preferred
shares using the original issue price of the note, which is based
on the most recent financing round, or have the note and accrued
interests paid in full.
As of March 31, 2022, the fair
value of the preferred shares has been estimated at $43.9 million (US$35.0
million), and the fair value of the convertible note has
been estimated at $32.1 million
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.
TRADE X charges a fee of between 4.5% to 6.0% per transaction to
facilitate cross-border trading of pre-owned vehicles by authorized
buyers and sellers of its platform, with all the complexities of
international trade all managed by TRADE X.
TRADE X also operates a wholesale distribution division, TRADE
XPRESS, which brings vehicles that are ready for immediate delivery
to new markets to help establish trust and brand presence.
TRADE X generated gross vehicle sales of $248.3 million in Q1 2022, up 714%
Aimia owns an indirect 10.85% shareholding in the privatized
Clear Media as of March 31, 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,
In May 2020, Aimia invested
$76.2 million (HK$419.6 million) to acquire 58,774,450 common
shares of Clear Media Limited. The acquisition of Clear Media
shares was made in anticipation of a change of control transaction
in which, former controlling shareholder, Clear Channel Outdoor
(NYSE: CCO), would sell its stake in Clear Media to Ever Harmonic
Global Limited ("Ever Harmonic").
On July 5, 2021, Ever Harmonic and
Clear Media Limited jointly announced a voluntary conditional offer
to acquire all of the shares of Clear Media Limited that are not
already owned or agreed to be acquired by the consortium or parties
acting in concert with it. On September 27,
2021, the planned privatization of Clear Media Limited was
completed following the acquisition of all of the outstanding
shares of Clear Media Limited by the consortium of investors
through their special purpose vehicle.
The consortium owns an 89.15% indirect shareholding in the
privatized Clear Media which is comprised of Mr. Han Zi Jing, former Chief Executive Officer of
Clear Media ("Forward Elite") at 40%, Ant Fin (Hong Kong) Holding Limited ("Antfin") at 30%,
JCDecaux Innovate (a wholly owned subsidiary of JCDecaux SA) at 23%
and China Wealth Growth Fund III L.P. ("CWG Fund") at 7%.
In the three months ended March 31,
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 March 31, 2022, the fair
value of the indirect investment in Clear Media Limited has been
estimated at $67.0 million, and the
unrealized fair value loss recognized since acquisition is due to
the strengthening of the Canadian dollar versus the Hong Kong dollar.
SPECIAL PURPOSE VEHICLES
In October 2020, Aimia announced
an initial commitment of $6.4 million
(US$5.0 million), which has now been
fully funded, to a special purpose vehicle created to pursue a
leveraged buyout of a target. This special purpose vehicle has
accumulated shares of a publicly listed target company, and has
engaged the target company's management to explore strategic
options that would create value for its shareholders. If a
leveraged buyout is consummated, Aimia also has the option to
purchase up to a total of 25% of the equity of the potential
In November 2021, Aimia invested
an additional $12.4 million
(US$10.0 million) in a second special
purpose vehicle created to pursue a similar leveraged buyout
As of March 31, 2022, the combined
fair value of the special purpose vehicles was $19.6 million, representing an unrealized fair
value loss of $1.7 million during the
Balance sheet and Liquidity
As of March 31, 2022, the company
had cash and cash equivalents of $19.9
Aimia's liquid portfolio of publicly listed equities had a
market value of $45.9 million at the
end of the first quarter of 2022 (excluding marketable securities
held through Precog).
Aligned with the corporate strategy, the company 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 totaled $742 million as
of March 31, 2022, comprised of
$389 million in capital losses and
$353 million in net operating
Returns to Shareholders
Normal Course Issuer Bid
On June 17, 2021, Aimia announced
it had received approval from the Toronto Stock Exchange for the
establishment of a new NCIB to repurchase for cancellation up to
7.3 million common shares during the period from June 21, 2021 to no later than June 20, 2022.
Aimia did not make any purchases under its NCIB in the three
months ended March 31, 2022.
Subsequent to the end of the first quarter of 2022, Aimia
repurchased 340,911 common shares under its current NCIB at an
average price per share of $5.19 for
a total consideration of $1.8
Dividends of $3.2 million were
paid on March 31, 2022 on the two
series of outstanding preferred shares.
On May 5, 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 June 30, 2022, to
shareholders of record at the close of business on June 16, 2022.
Quarterly Conference Call and Audio
Aimia will host a conference call to discuss its first quarter
2022 financial results at 8:30 a.m.
EDT on May 6, 2022. The call
will be webcast at the following URL link:
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:
Aimia's first quarter 2022 Financial Statements, Management
Discussion & Analysis, and Financial Highlights Presentation
will be filed on SEDAR.com around 7:00
a.m. EDT on May 6, 2022, as
well as on the company's website under Investor Relations.
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.
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
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 10.85% stake in Clear Media
Limited, one of the largest outdoor advertising firms in
China, a 48.9% equity stake in
Kognitiv, a B2B technology company enabling collaborative commerce,
a 12.2% 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".
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:
(in millions of
Loss before net
financial income and income tax expense (b)
(a) A non-GAAP
(b) Loss before net
financial income and income tax expense as well as Kognitiv's
Adjusted EBITDA are presented on a continuing operations basis,
excluding ISS discontinued operations.
Key Performance Indicator
TRADE X Gross Vehicle
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
Presentation of Financial
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 reported in Canadian dollars (unless otherwise
indicated) and has been provided by TRADE X's management team.
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 net proceeds to be received from the PLM transaction; the
earn-out in connection with the PLM transaction; the entering into
of the Definitive Agreement; the successful completion of the PLM
transaction within the anticipated timeframe; the satisfaction or
waiver of customary closing conditions in connection with the PLM
transaction, including Mexican antitrust authorities' approval; the
use of proceeds from the PLM transaction, including the allocated
amount and any returns to shareholders; purchases under the current
NCIB; renewal of the 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 assumes 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
failure to complete the PLM transaction, 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,
failure to make any share buybacks (whether through purchases under
the NCIB or otherwise) and/or to pay any tax-efficient special
dividend, and failure to obtain the requisite approval to renew the
NCIB. 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.