EXECUTIVE CHAIRMAN COMMENTARY
"Our first quarter results were marked by the strong performances of our core subsidiaries,
Consolidated Results and Corporate Developments
- Reported consolidated revenue of
$122.1 million . The total was particularly driven by the strong contributions fromAimia's sustainable speciality chemicals subsidiary, Bozzetto, which generated$88.1 million or 72.2% ofAimia's consolidated total. - Reported consolidated Adjusted EBITDA of
$6.7 million , which marked a positive turnaround of$10.7 million from the Adjusted EBITDA loss of$4 million in Q4 2023. - Reported a consolidated net loss of
$4.2 million or$0.09 per common share. - Ended Q1 with a total liquidity of
$111.2 million , comprised of$98.2 million in cash and cash equivalents and$13 million in public securities. - Named
Tom Finke as Executive Chairman andKaren Basian as Lead Independent Director following the resignations ofPhil Mittleman as CEO andMichael Lehmann as President. The Company continues to make progress on the search for a new CEO. - Appointed
Robert Feingold , a finance and asset management professional with more than 30 years of industry and academic experience, to the Company's Board of Directors. - 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 earn-out payment of approximately
$33 million in the second quarter of 2024.
Subsidiaries and Investments
Aimia's Bozzetto and Cortland segments generated Adjusted EBITDA of$19.5 million on a combined basis.Aimia's Bozzetto subsidiary closed its acquisition of a 65% interest in StarChem S.A, aHonduras -based manufacturer of chemicals for the textile industry, for a base consideration of$24.1 million with a potential earn-out of up to$12.3 million based on EBITDA targets to be met over the next two years. The acquisition enables Bozzetto to establish a beachhead in the North American market and take advantage of several customer and cost synergies. In Q1,StarChem contributed revenue of$7.3 million .
CONSOLIDATED FINANCIAL HIGHLIGHTS
(in millions of dollars except for margin and per share data) | Q1 2024 | Q4 2023 | Q1 2023 | ||
Revenue from contracts with customers | 122.1 | 100.1 | 2.0 | ||
Gross Profit | 34.6 | 23.8 | 0.1 | ||
Gross Margin | 28.3 % | 23.8 % | 5.0 % | ||
Operating Expenses | (35.0) | (37.8) | (19.8) | ||
Operating Income (loss) | (3.6) | (51.0) | (7.6) | ||
Adjusted EBITDA1 | 6.7 | (4.0) | (6.3) | ||
Net earnings (loss) | (4.2) | (59.0) | (20.7) | ||
Earnings (loss) per share diluted | (0.09) | (0.69) | (0.29) |
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1 Adjusted EBITDA is a non-GAAP measure. |
Balance Sheet and Liquidity
As at
At
Cash Flow from Operations
Available Tax Losses
At
Dividends
With the reset of the annual dividend rate for Series 3 Preferred shares and the introduction of Cumulative Floating Rate Series 4 Preferred Shares,
SEGMENT RESULTS
Bozzetto
Bozzetto2 | |||
(in millions of dollars expect for margin data) | Q1 2024 | Q4 2023 | Q1 2023 |
Revenue from contracts with customers | 88.1 | 70.3 | - |
Gross Profit | 26.8 | 19.1 | - |
Gross Margin | 30.4 % | 27.2 % | |
Operating Expenses3 | (17.1) | (14.7) | - |
Operating Income | 10.1 | 5.3 | - |
Earnings before income taxes | 5.9 | 0.5 | - |
Adjusted EBITDA4 | 15.5 | 10.4 | - |
- Bozzetto generated revenue of
$88.1 million in the first quarter of 2024, up 25.3% from$70.3 million generated in Q4 2023. The quarter-over-quarter increase was driven by the acquisition ofStarChem , which closed onJanuary 2, 2024 , and contributed$7.3 million in new revenue. Excluding the contributions fromStarChem , Bozzetto's revenue grew by 14.9%, largely due to stronger customer demand. - Adjusted EBITDA for Q1 2024 was
$15.5 million , which represents a margin of 17.6%. These compare to$10.4 million and 14.8%, respectively, for Q4 2023. The quarter-over-quarter improvement was largely driven by higher sales volumes to existing customers and by theStarChem acquisition. - Bozzetto's efforts to mitigate the impact of shipping disruptions experienced in the fourth quarter of 2023 were reflected by increased local production in select markets.
(in millions of dollars except for margin data) | Q1 2024 | Q4 2023 | Q1 2023 | |
Revenue from contracts with customers | 34.0 | 29.7 | 1.7 | |
Gross Profit | 7.8 | 4.6 | (0.2) | |
Gross Margin | 22.9 % | 15.5 % | nm | |
Operating Expenses5 | (7.0) | (5.9) | (13.3) | |
Operating Income (loss) | 1.1 | (0.9) | (13.2) | |
Earnings (loss) before taxes | (1.5) | (6.5) | (25.3) | |
Adjusted EBITDA6 | 4.0 | 2.5 | (1.5) |
- Cortland generated revenue of
$34 million for Q1 2024, up 14.5% from$29.7 million generated in Q4 2023. The quarter-over-quarter increase was attributable to several factors, including stronger customer demand, particularly fromEurope , and improved product mix. - Adjusted EBITDA for Q1 2024 was
$4 million , up 60% from$2.5 million generated in Q4 2023. - Adjusted EBITDA margin for Q1 2024 was 11.8%, up from 8.4% for Q4 2023.
- Despite Cortland's improved performance in Q1, its results were impacted by ongoing shipping disruptions in the
Red Sea first experienced in Q4 2023, although to a lesser extent. - Cortland appointed
Kris Volpenhein as Chief Technical Officer, responsible for research and development, engineering, and developing the technology roadmap for products, services, applications, and sustainability.Mr. Volpenhein brings more than 15 years of rope industry experience.
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2 Bozzetto's results for Q1 2024 include contributions from its acquisition of |
3 Operating expenses for the three months ended |
4 Adjusted EBITDA is a non-GAAP measure. |
5 Operating expenses include transaction and transition costs related to the acquisition of Tufropes and Cortland amounting to |
6 Adjusted EBITDA is a non-GAAP measure. |
Holdings Segment
The Holdings segment includes
Holdings Segment | ||||
(in millions of Canadian dollars) | Q1 2024 | Q4 2023 | Q1 2023 | |
Revenue from contracts with customers | - | 0.1 | 0.3 | |
Gross Profit | - | 0.1 | 0.3 | |
Other Income from investments | (3.9) | (38.3) | 11.8 | |
Operating Expenses | (10.9) | (17.2) | (6.5) | |
Earnings (loss) before taxes | (5.8) | (54.0) | 5.9 | |
Adjusted EBITDA7 | (12.8) | (16.9) | (4.8) |
- Operating expenses for the Holdings segment in Q1 2024 included
$6.9 million of expenses mainly related to shareholder activism including settlement agreements and$1.6 million of separation related expenses for the departure of executives. - In Q1 2024,
Aimia recorded a negative net change in the realized and unrealized value of its investments totaling$3 million . The net change was due to adjustments across its holdings and driven by a decrease in the fair value of the Capital A holdings of$3.3 million from ongoing sales ofAimia's stock holdings.
(in millions of Canadian dollars) 2024 | ||||
Adjusted EBITDA at Bozzetto and Cortland on a Combined Basis | ||||
Holding Company Costs | ||||
One-time Costs Related to Shareholder Activism, Employee Severance, and |
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7 Adjusted EBITDA is a non-GAAP measure. |
Quarterly Conference Call and Audio Webcast Information
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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 (loss) before income taxes, please refer to the tables below.
BOZZETTO | |||||
(in millions of Canadian dollars) | Q1 2024 | Q4 2023 | Q1 2023 | ||
Reconciliation of Adjusted EBITDA | |||||
Earnings (loss) before income taxes | 5.9 | 0.5 | — | ||
Depreciation and amortization | 5.1 | 5.1 | — | ||
Financial expense, net | 4.3 | 5.1 | — | ||
Transaction related costs | 0.7 | 0.9 | — | ||
(Income) expenses related to carried interest, call option and fair value (gain) loss on | (0.1) | (0.3) | — | ||
Other income from investments | (0.4) | (0.9) | — | ||
Adjusted EBITDA | 15.5 | 10.4 | — | ||
Adjusted EBITDA margin | 17.6 % | 14.8 % |
CORTLAND INTERNATIONAL | |||||
(in millions of Canadian dollars) | Q1 2024 | Q4 2023 | Q1 2023 | ||
Reconciliation of Adjusted EBITDA | |||||
Earnings (loss) before income taxes | (1.5) | (6.5) | (25.3) | ||
Depreciation and amortization | 3.0 | 3.0 | 0.4 | ||
Intercompany interest (income) expense | 2.2 | 3.0 | 0.5 | ||
Cost of sales expense related to inventory fair value step result from purchase price | — | - | 0.3 | — | |
Transaction and transition related costs | 0.2 | 0.5 | 11.6 | ||
(Income) expenses related to carried interest and call option | 0.2 | (0.1) | 10.8 | ||
Financial (income) expense, net | 0.2 | 2.7 | 0.8 | ||
Other income from investments | (0.3) | (0.4) | (0.3) | ||
Adjusted EBITDA | 4.0 | 2.5 | (1.5) | ||
Adjusted EBITDA margin | 11.8 % | 8.4 % | nm. |
HOLDINGS | ||||||
(in millions of Canadian dollars) | Q1 2024 | Q4 2023 | Q1 2023 | |||
Reconciliation of Adjusted EBITDA | ||||||
Earnings (loss) before income taxes | (5.8) | (54.0) | 5.9 | |||
Depreciation and amortization | — | — | 1.1 | |||
Share-based compensation expense (reversal) | (1.9) | 0.2 | 0.3 | |||
Intercompany interest (income) expense | (2.2) | (3.0) | (0.5)) | |||
(Income) expenses related to carried interest, call option and fair value (gain) loss | (3.8) | (0.3) | — | |||
Financial (income) expense, net | (3.0) | 1.9 | 0.1 | |||
(Decrease) increase in limited partners' capital liability | — | — | 0.1 | |||
Other income from investments | 3.9 | 38.3 | (11.8)) | |||
Adjusted EBITDA | (12.8) | (16.9) | (4.8) | |||
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,
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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