AIM.TO - Earnings call transcript Q3 2022

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Operator

Good morning, ladies and gentlemen, and welcome to the Aimia, Inc.

Third Quarter 2022 Results Conference Call. At this time, all lines are in listen-only mode and following the presentation we will conduct a question-and-answer session. [Operator Instructions]. This call is being recorded on Wednesday, November 9, 2022. to conference like Mr. over now would turn call the to I Matousek. Albert Please go ahead.

Albert Matousek

and this website. everyone, presentation you, welcome, Thank Kelsey, to on and is SEDAR morning's on our available Today's call.

time remind Lehmann, today Before underway, me and who Michael Phil. statements the Aimia's strategic to CFO. end. the Albert investments, performance President; statement. and we cover begin cautions Communications. quarter. to Matousek, are on Steve Mittleman, you before let Leonard, for with that, Phil results With the review Factors have CEO; to our to name Steve will highlights, I'd hand to With and pertaining your get our followed Risk speakers My and of questions our the Phil everyone it our like over by Head over forward-looking Michael, the call through will at to handing me take call the is IR the for the of We'll our

Phil Mittleman

with transaction, exciting companies tax our as to long-term the $XXX.X that well track deploy cash whereby of Thanks, we common of webcast quarter, generation, towards gain prospects the today. of which per Albert, the earnings the intends as due phone mainly in PLM Aimia records recognized million. our the recap will for most to proceeds and morning included strategic highlights losses. closing pleased Aimia net tax of the and of investments highlights of To with $X.XX flow results, of growth on to the share, are the everyone utilize good free

repurchase shares to our under also NCIB. We continue

million we our have of stock. So far common shares year, over repurchased X this

a to shares opportunistically as intrinsic We we our value. continue significant buyback discount see our to

by Middle trade our holdings. the cross-border to Latin facilitate confident some We company reducing associated inventory to corridors refocused TRADE transactions global on it to model. onto new future. its about America, across capital the excited as needs and Africa, more did TRADE experience East, as quarter business Asia. macro focus remain Europe, working its automotive Now opens and risk platform The during headwinds it grow X's and transactional a continues X

Kognitiv. to improving Kognitiv's prior its but versus be profitability, attention efficiencies ahead very continues achieve on year, basis, slightly remain profile. the pursues in year-to-date to the down quarter a improve to Revenues reducing customer is on company financing additional high. Moving and costs were as while it to focused liquidity The

the investment The a is similar and situation Chinese advertising Moving in once have in implementing lifted. and outdoor to business cost-saving of are XXXX Media's prospects. company Media. high-quality created China. for challenging reopens operating future slowing its Clear has remain environment stands We and sizable by half from the China a Clear first Clear benefit restrictions that economy our Media to market COVID-related Media that to initiatives. is position excited mobility once very responded shutdowns is recent Clear a facing about

info Mike? to with investment from and benefit see Capital Capital COVID on increased updates floor while that, to value Asia develop its uniquely portfolio. positioned as Asia, Southeast pent-up restrictions. travel to assets. Moving you digital me provide Southeast investment A. emerges enhance some AirAsia our low Mike to travel in for the continues over our of is across the the region sizable A to to airline demand on the This And cost continues the turn let of further capitalize

Michael Lehmann

the corridors in continues in $XXX closed full-year the continues work gross the a mainly partners. which to a to $XXX year, It prices I'm of $X everyone. and vehicle level approximately sales experienced morning most generate was the in a year. quarter, growth. develop company expand operational the million last We increase tracking of approximately and vehicle was review its of of beginning X. accompany sales for as X in Thanks, that a The vehicle a below platform gross of financing of going trade X Phil, but market below good begin of TRADE which pullback vehicle to has the million generated X billion guidance million, Year-to-date, certain to fourth that XXXX. TRADE from as to XXXX, in of million rapid quarter TRADE through reduction the and period last with trade quarter, gross above from $XXX sales due this industry full-year a is significant expect volume generated acquisitions recent TRADE now result third significantly result of full-year the sales and and its summer. headwinds challenges often vehicle $XXX between to gross distribution

In client engagements. a the by same year, the offset impacted third scope lower to $XXX,XXX a to focus revenue base member margin period Kognitiv. lower maximizing the quarter, revenues were growth X.X% or clients lower revenue. by was by last over due with mainly well technology EBITDA loss client growth, the to over existing to and due year, current latter last by continuing client service its the through headcount revenues. of an same Moving as $X.X period offset million $XXX,XXX operations subscription from on in mainly on of as Kognitiv decrease of new $XX.X from roll-offs operations expanding current of their continuing million, Adjusted reductions expenses, compensation from part continues widening improvement

expense on management aligns improve structure commercial it team the its In to addition, delivery its focused cost as model. reduction initiatives remains

that Media. most the being business. Clear growth. to XXXX, continues strong growth, mobility markets, Street Once time, and XX, be until throughout similar sequential recovery revenue its lifted were RMBXXX Clear But Media's a Clear is often we by restrictions for experience the China. to ended in high-single-digit on organic Media's was September anticipate rebound furniture nine million to delayed. continues shutdowns Total markets to advertising months out-of-home Moving COVID-related globally, affected In

period for is there's and volume while of Next third up positioned the XX% the to operating Southeast low the In carried in XXXX's the enhance Capital is airline the recover capitalize of with to be results Asia, so quarterly uniquely load to still almost This cost demand Capital across pent-up A sizable only X.X A. develop pandemic. continues value of on the quarter the travel same positive levels, used XXXX. approximately figure Management finally, a a recorded of Management income million continues trend And Investment growth And to to factor its set carried Revenue highest quarter This passenger quarter-over-quarter fees airline the represents for XXx XX%. XX%, and the earnings room AirAsia passengers of onset since before was $XXX,XXX. of the $XXX,XXX. our were digital business. the loss taxes assets. from returning Investment the

new in to markets from turn in due at let concentrated with of part sequentially, which Steve? under the broad-based down weakness that, largely And through by clients. take performance financial were by the equity end existing MIMs million quarter, Assets management results. inflows the global the value-oriented you over portfolio, the third XX.X% to Steve offset negative $XXX.X me to it was impacted the

Steve Leonard

Thanks, Mike.

we $XX.X was exclude of the close income performance $XXX.X Starting Let's you recognized period $X related net litigation positive million. stock-based move $X tax begin third by in $XXX.X the our compared when were year. million quarter. gain goodwill around million million to with results. was compensation with of the and the cash of whereby year $X from PLM the million the to transaction, consolidated in quarter the provision consolidated Aimia of before million. and of the of and last quarter, current movements of a the charge results line investments segment The performance mainly Expenses impairment In prior covering income to

segment, technology, were fees, well holding the expenses, For include $X.X million professional quarter. which the expenses, and compensation, and in insurance other corporate as as advisory office

$X provision same million Holdco $X.X $XXX,XXX the last and a million decrease litigation credit stock-based expenses the of million the versus compensation, period associated $X.X with quarter, for were year. Excluding

in net million, the cover $XXX.X cash repurchase proceeds shares million. quarter. from quarter. under of in PLM comprised movements increased $X.X to of used distribution and $XXX of to $XX.X Available end to NCIB, quarter million. $X.X million tax currency cash quarter has marketable and the of of total quarter which due The for returns. million losses on translation million cash Precog, cash of in U.S. million operating the Moving VX and with transaction million the the this approximated filing million, third $XX.X Part Canada. end were major were losses of mostly post $XXX $X.X held Holdco securities ended $XX.X of in marketable We the preferred and the not movements of the in at adding the dividends currency is net million $XXX expenses operating losses, third of $XXX.X The million capital partly $XXX main adjustment, at cash the a tax and related securities of

concluding and As it mentioned from our Phil? to up to few now utilize earnings remarks. me these over operating let we capital that, earlier, wrap tax And taxable Phil, intend mitigate generated a losses investments. to with with to turn

Phil Mittleman

exciting markets successful and very repurchased is the X% now common This two with of our events holdings are achieving waves are approximately liquid for armed Aeromexico so this outstanding successfully great and bankruptcy, no having The losses. recent Steve. we time well-positioned. and Thanks, debt, $XXX capital legacy creating million opportunities investments, Having Aimia. approximately a of navigated dislocations for liquidity shares in in far COVID, now tax over in the million year cash and Aimia extremely $XXX

some with the to We we opportunities to be information you with are share and in future. able near advanced in stages investment hope exciting further

Albert Matousek

ahead for today's prepared us and Please Kelsey that remarks. you. thank Well, go prompt questions. concludes

Operator

Please And Thank we session. question Thind Surinder ahead. will begin question-and-answer Instructions]. [Operator the you. comes from first your go now Jefferies. gentlemen, Ladies from and

Surinder Thind

the maybe a $XX is to of just capital of the want Can of mix provide what that between relative share color somewhat I million and or your at target a you. any of Thank of on allocation. you're return? this kind start to repurchases point you question thinking with target dividends that flexible about

Phil Mittleman

kind Yes, -- going we'll -- need transact, what amount Surinder. obviously we're consider the acquire that sub to a type level. of Hi, that the And to on until we of balancing the are Yes. point. take because and/or some revisit clear money in debt dividends we'll uncertainty it's repurchases we, the we using of looking at for markets cash of at on to the of we'll act targets debt we're

Surinder Thind

or like Thank of holdings are just of expanding terms then, provide maybe kind following that there a just the you more decisions that in you on that were the sounds X little bit of they terms just have, much in made kinds maybe some we can And color this there? talk things is decisions TRADE some them quickly of startup macro you. than hit on It being them business risk little kind of too how How of a quicker about of of of at kind when and that reducing those how you anticipated. the are of about, and should are issues, business much point? those kind of think inventory

Phil Mittleman

transactional raise I of at ability hits middle money only And liquidate and the financing think terms and took in and obviously cars. think they the kind significantly off to bigots the back market some of model of a meantime tax And the they the in and a terms I time, world, it kind working hot limitless they've say themselves really actually to things, they turned got higher don't model, when both. little were re-pivot demand turn capital. focus was kind valuation those their little limitless step much vehicles. at they on inventory, had inventory got a when raised a of of when bought of the anticipating presold too they some the meaning access ahead a, a valuation. of in And on in of taken of

to see too inventory they're themselves oriented good And So doing going in of it's you're think getting growing ahead and of much but reliance working a less more little job I transaction fast of with much going model forward kind capital. just adjusting.

Surinder Thind

Got it.

Michael Lehmann

I reiterate, the Carvana If right? it's so. second. jump Lehmann. is Surinder, model, BXB could and X model, The like a of TRADE a Mike a BXC in to Not kind like X TRADE a for just

businesses are, but So degree --with And half the is impacted, that model. more BXC they're not certainly to model, other to heavy X regard the brokerage BXB is. the of the TRADE of

to they the with transact they and that the the had in those sitting adding satisfy that into if they the demand those trade the inventory So was into -- middle, the middle. corridors, startup platform the startup were within assets to they the as just they in both buyer own in And the in seller. in part and that And order costs get they to each inventory corridors. participate get that trade demand different find The markets. and party, of

a model. business was effect one-time than part their So that more of that long-term of

Surinder Thind

Understood.

it should form be more -- So business, theoretically like sounds technology that Much of oriented a asset-light an this right?

Michael Lehmann

That's right.

Surinder Thind

and And it's or more entering forth inventory startup there's just kind that so type geographies about costs? these of

Michael Lehmann

exactly right. That's

what to that So the it sell, the have gauge they in what able middle and to sitting the autos way have the as have platform want that think both are to demand customers what they well they ones buy. is about this to the is pull-through customers they're as sell, to

this buy XXX put that of X request. TRADE that model this model and And of kind put sides. buys TRADE will the into sit of and then this middle, clip and model, the -- out trim just the when -- customers in both package, instant flow sell to match they they an sell this and on that side, the can cars clip on So comes year, they cash they want I and called can it's are folks mileage, those their side says, X the all in somebody on to

creating the and their to is So capital off -- people buyers a for to it's sitting are the right. markets, and you're the middle demand attractive asset-light and value it's program and to level platform the and of -- the their or to sellers another very demand that's here. recognize equity for where they're It's there inventory the buy, akin sell in people ability markets that one and want what where Bloomberg is a want

Surinder Thind

about globally of this and towards seems just in can where how maybe Got America consideration kind So bit maybe slowing? part it. you That's the then, at about North next really And you more as should picture point? in is thinking of the talk current the should environment more How the helpful. about actually that environment investments, think local especially little macro look about attractiveness the think this Or to versus tradeoffs about of making big set we of be the an at that? point? we a

Phil Mittleman

Whatever bigger losses that search dislocations appreciate North look We of outside Yes. advantage will do, however, we NOLs obviously our globally, we or we are in happening some of take America. available North the of capital and America.

in would something U.S. we in or footprint global if transact of ultimately it that have a those. could more So would Canada to tap that outside the be were a U.S., the business

are So the generation teams, what and are we rates. economic management which have cycles, globally look we're all at free the do great strong looking records cash companies long but are attributes, same of growth track that looking through

mind as have we're in that So we the and well. are -- world obviously we do combining

Surinder Thind

to kind about And you this a of about maybe think additional some talk be are investing in think there. a bit just appetite there and more point? seems in. like the the invest should there's this about How difficult geopolitical investment maybe dramatically seems it considerations can market China you given little may globally, as at investment Okay. then less It terms bit point just at of for investor there like considerations region in we

Phil Mittleman

that the ever China understood mean the through is see. that Clear partners Yes. you But we the there, risk. Obviously, Media, those the went I on investment. have were geopolitical investment there made could best since we heightened we we into risks took really in partners and

the We in the world. leader business in have that JCDecaux,

fund through investment an Chinese government. effectively We have eFinancial and

couldn't navigate you group a for there. what's better going to on ask So

ideal, we that But navigate I is think great firm the place now. obviously, to of outdoor luck mean, COVID bad investments company zero advertising world an in only having further I seek very this resilient. that there a policy is business. being with out into being of wouldn't type the having in not you're through, geopolitical climate It's and the when unlikely a but

I quickly provide of competitors. in having situations always And also thrive they'll these M&A this can this. like There's of think type partners There's survive weakened thereafter. possibility through also think opportunity. it period I and a

so and like with group the with go they with And to happy happy we're But type rebound a snapback. happy had fun saw quickly We're is shareholders to first we the this things when through to really We're having for through it -- thing partnership. to wind we and where times with it, fast going period scale can of going during if I you think not business business want and as you're costs after up. they back that cut endure. endure a wave; the not it's this this this up COVID can to

us future level that optimistic it, we're that large for going to of forward, So about investments the be see with risk, getting not situations you controlling. of won't going especially geopolitical into

Surinder Thind

maybe the current this to sense to Does right think a it I And that's finally, the this broader be not rebound, think still starting When make it. rebound then, years, at makes or A, at were willingness more holdings few the point travel question terms to Capital about levels. your the on in sense in in it kind to about A way Or patient point. it. of a just about terms of, What's think the maybe Capital below this point? but portfolio? is wait relative to opportunity well Got guess, of at something to this just pandemic cost where we if

Phil Mittleman

investment, decide opportunity to cost. mean our to have between facing let we play would lot we a were required cash, of in and A if have had we little to situation But Capital cash and the a more. that have ability the that be patient current and obviously out it we I we opportunity weigh an

through has there's I strong for kind had if there low. drop balance depressing a is, -- a they to recognizing delisting their that's show it what sheet to a and deal been think think would artificially stay the that that's process been caused wasn't we're of been think I their fact A fear think I stock -- business. Once their there. with the go adjust reason depressed they the be regulator the in have to and there resolved, And otherwise rebound I Capital of that and

I the sharp will accurately stock that's more think going a some So I think underlying very which there, once business of their reflect corrected, and what's of assets. is on the rebound

were So we're was patient. stake not I we story we stock -- to your that to sold we since AirAsia, I'm to from business acquired flow that sure memory, cash any know new the XX% the loyalty determined in a refresh bulk future. we It's your of you're in see not because -- and the going not had the owned the that

to which have had. thought the think liquid obviously, we that previous lot I the convert So think it shares than upside liquidity we holding airline, made sense into more a and of

it -- not to higher stock and especially than in, is significantly like looking ourselves isn't businesses, we now. case, we are this for But not definitely found investments patient we're until models we typically. think in So this is is where a wait the it, fair seek what which situation for in like value we're get enough was -- unique. The airlines. The we airlines don't out cyclical

Surinder Thind

it. Got

it questions. Thank Okay. from me you very much. That's the

Phil Mittleman

Great. Thank you.

Michael Lehmann

Thanks, Surinder.

Operator

from from your And Morrison you. next Thank ahead. Securities. Please go Brian question TD comes

Brian Morrison

capital follow-up guys. I Thank Phil, -- Good morning, just you. the on can

Phil Mittleman

Brian. Hi,

Brian Morrison

$XX NCIB PLM dividend not question. Can morning. Are to potential you that still through million clearly. an it I capital special I follow-up committed the in Good allocation transaction? got on the the post just I'm sure

Phil Mittleman

there an we When it optimistic $XX an was initial than because knew NCIB we could first million, and announced utilize to going that the did. we was -- there's close coming underway was hopefully sooner were we PLM

that missed window. we So

renewed meantime, NCIB the larger And the which in in investments. NCIB, second we obviously first some missed, advanced we stages advantage reviewing fully we the take we're and So of.

want And don't going of deals some those approximately that these We're fact to is the We the So clear be lot on much keep a to we to back what for you stock. We've have buying at for how cash once going of size back at. on buyback is to because micro a that know, we're the buying acquired -- and/or have -- But prices. we what required equity this $XX through then exactly size. we that, know we're going make we million obviously we love these looking spent NCIB. figure stock, as revisit stock, and we'll And buying we're our of to considering. especially we handle check dividend deals we do deals. out need once

Brian Morrison

Steve, the maybe, Okay. did And guess previously. increase $XXX then losses I I of value quarter? million they were this question your for thought tax quarter

Steve Leonard

additional little a of Yes. it NOLs, the currency. returns. as are Well, always a mainly, in we some the accreting, a more half was NOLs, USD of There's driver. Brian, There's was bit but actually that two-thirds currency few and other are almost losses file things

Brian Morrison

you. Got a operational I on maybe want to it. Mike Thank X. follow-up couple TRADE questions. just

there to Or of time? transactional? any de-risk that say, like is So in able of it inventory the -- sales transactions And at is the I the you any Is risk immaterial you there model Are obsolescence? as point understand of share what the this model. percentage is versus, were de-risking here?

Michael Lehmann

Thanks that, Brian. Yes. for

XX%, So pre-sold I closer over XX% to get specific but tell can't we can into you the very cars. details, are

be into So , of there's and needs as great there a if little those they in inventory. get X to to a markets you as proof that they a the provide those new are -- would, they're and just X And need TRADE -- demand for is partner can of cars with model. cars, on they perfect they new TRADE inventory need you bit signing they're the that are sitting a cars. middle, why markets That's right? imagine, But

that market. them acquired they've is done have they cars into and what move So

pump, would. can kind occur It's but very the you right that transactions term, directionally the to be really of is. not there prime it So if quick

cars Republic, so for market And there's cars the they either the as example a there. have and move They cars to or on of being Dominican for middle kind into water demand can transported. massive

they some that transaction there's a feel get and that when a in market, just of immediately into share hit velocity, So can demand, market, sudden of all some a it lot get I difficult But I would was summer It they say. the it did dealers think demand is was it some a period did from the dramatically, which during -- increase acquire because inventory. a it's if And great of thing to cars the with as mid MMR price of long-term. it a can pricing consecutively, past months kind the traded inventory look right? of down. at low-XXs. moved to the of But you they high-XXs you four has to sudden, has held down, been the softened mid average -- just for average all see, the So and cars sold,

the just that's overall So market down. moving

business, going I This an the business. going in to -- it's middle. to fact, be asset-heavy an not that asset-light think being the likelihood So in this is of sitting be don't

So it inventory where or situation up. per was get caught point-in-time just kind with little did $XXX they bit and of $XXX unit a adds of a

So pre-sold cars. reason. to going it's that to going forward, much closer the be that's really XX% But

Brian Morrison

And equity? went so, down common this they're vanilla there you the are available additional quarter on that for if sources again. Does just capital? of holdings lowering can It if I little share there is for the carrying Kognitiv. the need -- additional of Maybe the into creative valuation Thank take value any bit your looks consideration Okay. potential a that. once follow-up like

Phil Mittleman

you're decline our from there, just quarterly non-cash take the -- is The seeing there Brian, loss.

So -- it's not saying we're like

Michael Lehmann

accounting it. The equity of

Phil Mittleman

accounting -- equity The Yes.

Brian Morrison

Okay.

Phil Mittleman

have such are a could as options. non-core So other we're doing natural they're some They -- they a actually sell. that have saying reduction. not assets They write-down,

pursuing all they're So different options.

I hit. this think last tech crash when tsunami

face that. lot business think everybody And it financing look; Kognitiv Kognitiv's there may these think going ultimately initiatives where get of And available. accelerated think we companies, it's in I the do to live not make be in on forced for say, I to to just line just sources and work. structure I including their got models right forward. cost got efforts world a focus to to We've reality and were a

there them than yes, raise, that to have they're So more just it's a options all typical and are -- available yes. the they exploring

Brian Morrison

Okay.

Phil Okay. maybe your provide sectors and resources, cash fortuitous But progress with obviously, diligence of question the you're down very on to that of able any significant you're last narrow position. are a on in front? focused terms due in you that

Phil Mittleman

lot can't of that the economic and mean, we recession-proof can't that the see generating you we are that entry or cash of said They burn are give except that significant really have face Obviously, these recession have are either growing management -- be sectors sure I that in after I cash companies the moat great detail throughout go sector; companies to recessions resistant. a during you will track downturns. say records a -- all would would sectors cycles. don't we they'll to share attributes of to There'll -- can teams. have long they type of as we the or cash make want severe

advanced wouldn't were even see maybe that companies boom times. that we the companies during are with, we think I are

the and a require contingency real can have because no think with I dropped do market lot all estate mortgage XX% we going transaction that buyers like do. into buyer paying what of other people mortgages. cash, they can't a we are I whereas say down would a

sublevel these modest deals, so we do on leverage they amounts leverage markets the upfront. And don't on way while at put of to are, intend debt to the we have the

that list reasonable. their move of And solid seeing because because time, So at forward we the more the are same and that. realization can prices of aggressively and be front the obviously, you're of at that, buyer

to companies XXx more difference into -- a we're seeing see EBITDA, Xx. companies you're entry give across from expect are Xx drop us -- going info what big great when the the just transact to you're companies Xx those type you you you're future. while things, Xx, to down is A to a company can to that great near and excited and going XXx allowing So see at It's should never see Board to in we really of plus to in

Brian Morrison

see very much, Well, you to right. look I All guys. uncover. forward what Thanks

Phil Mittleman

you. Thank

Michael Lehmann

Thanks, Brian.

Operator

further And questions at this time. no there are

You may please proceed.

Albert Matousek

Thank you, the great everyone, much. day. rest all for you a you webcast. joining today's I and call wish very Thank of

Operator

Ladies today. your conference ask Have participating you We call you great and and your very for this that concludes for a disconnect day. gentlemen, much please thank lines.

Aimia (AIMFF) 9 Nov 222022 Q3 Earnings call transcript