Mr. Tom Finke reports

AIMIA REPORTS STRONG FIRST QUARTER 2024 RESULTS, SETS PRIORITIES TO CREATE VALUE, AND PROVIDES GUIDANCE

Aimia Inc. has released its financial results for the three months ended March 31, 2024, provided clarity on its corporate strategy aimed at accelerating value creation and provided guidance for 2024. All amounts are in Canadian currency unless otherwise noted.

Executive chairman commentary

"Our first quarter results were marked by the strong performances of our core subsidiaries, Bozzetto and Cortland International, who each improved their gross margins and adjusted EBITDA [earnings before interest, taxes, depreciation and amortization] from the prior period," said Tom Finke, Aimia's executive chairman. "Bozzetto, in particular, demonstrated a combination of organic growth driven by increased customer demand as well as accretive growth resulting from the initial contributions from its acquisition of StarChem, which closed in January. We look forward to sustaining this momentum through 2024 and beyond."

Mr. Finke added: "In conjunction with valuable feedback from our shareholders and input from our board, we have realigned our strategy to focus on our core holdings and accelerate shareholder value creation. Our priorities in the near term will centre on three main objectives: First, unlock the growth potential of our core holdings, Bozzetto and Cortland, two global companies operating in specialty markets with significant organic and accretive growth potential. Second, responsibly monetize our non-core assets in an expedited manner. And third, optimize Aimia's capital structure to support the return of capital to shareholders. With respect to the latter, we expect to launch a normal course issuer bid later this year with amounts to be determined pending receipt of our anticipated earnout from the PLM transaction, completion of certain strategic developments and assessing our liquidity requirements."

Mr. Finke concluded: "Given our performance in Q1 and confidence in our near-term outlook, we anticipate generating adjusted EBITDA in 2024 for our core businesses in the range of $80[-million] to $85-million on a combined basis and anticipate corporate operating costs for the year to be approximately $13-million, exclusive of one-time expenses of $13[-million] to $14-million."

Aimia's Q1 2024 highlights

Consolidated results and corporate developments:

• Reported consolidated revenue of $122.1-million. The total was particularly driven by the strong contributions from Aimia's sustainable speciality chemicals subsidiary, Bozzetto, which generated $88.1-million or 72.2 per cent of Aimia'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 nine cents per common share.
• Ended Q1 with a total liquidity of $111.2-million, comprising $98.2-million in cash and cash equivalents and $13-million in public securities.
• Named Mr. Finke as executive chairman and Karen Basian as lead independent director following the resignations of Phil Mittleman as chief executive officer and Michael 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 the earnout conditions from the sale of its 48.9-per-cent stake in PLM Loyalty to Aeromexico have been met, resulting in an anticipated cash earnout 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-per-cent interest in StarChem SA, a Honduras-based manufacturer of chemicals for the textile industry, for a base consideration of $24.1-million with a potential earnout 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.

Aimia's financial results for the three months ended March 31, 2024, reflect the acquisitions of Bozzetto and Cortland completed in 2023, and the acquisition of StarChem completed on Jan. 2, 2024. Comparisons with the company's performance in the comparable period of 2023 may not be meaningful. 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 months ended March 31, 2024, which can be accessed from SEDAR+ and Aimia's website.

Balance sheet and liquidity

As at March 31, 2024, Aimia had a total liquidity of $111.2-million, which comprised $98.2-million in cash and cash equivalents and $13-million in public securities. At Dec. 31, 2023, Aimia had total liquidity of $136.9-million, which comprised $109.1-million in cash and $27.8-million in public securities. The quarter-over-quarter decrease was attributable to a number of developments in Q1, including $15.5-million spent toward the StarChem acquisition, net of cash acquired.

At March 31, 2024, Aimia held cash and cash equivalents of $98.2-million of which $44-million was held in Bozzetto, $9.3-million in Cortland International and $44.9-million in the holdings segment.

Cash flow from operations

Aimia used $5.7-million of cash in operating activities on a consolidated basis in the first quarter of 2024. The amount includes $1.6-million of expenses related to acquisition activities and $7-million of expenses paid mainly related to shareholder activism, including litigation settlement agreements.

Available tax losses

At March 31, 2024, Aimia had $727.8-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 comprises $441.2-million of operating tax losses and $286.6-million of capital tax losses.

Dividends

Aimia paid $3.2-million in dividends for the first quarter ended March 31, 2024, on its two series of outstanding preferred shares.

Aimia's board of directors declared quarterly dividends of 30.0125 cents per Series 1 preferred share, 48.5813 cents per Series 3 preferred share and 57.0677 cents per Series 4 preferred share, in each case payable on June 28, 2024, to shareholders of record on June 14, 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 quarterly dividend payments will increase by approximately $700,000 beginning in Q2 2024.

Segment results

Aimia comprises three segments: Bozzetto, Cortland International and holdings. Financial highlights for each segment for the three-month period ended March 31, 2024, follow.

Bozzetto

Aimia owns a 94.1-per-cent equity stake in Bozzetto, one of the world's leading providers of sustainable specialty chemicals with applications mainly in the textile, home and personal care, geothermal, construction, and agrochemical markets. Bozzetto's management team owns the remaining 5.9 per cent. The Bozzetto segment includes results since Bozzetto's acquisition on May 9, 2023, and the results since the acquisition of StarChem on Jan. 2, 2024. Comparisons with Bozzetto's results for comparable three-month period ended March 31, 2023, are, as a result, not presented.

• Bozzetto generated revenue of $88.1-million in the first quarter of 2024, up 25.3 per cent from $70.3-million generated in Q4 2023. The quarter-over-quarter increase was driven by the acquisition of StarChem, which closed on Jan. 2, 2024, and contributed $7.3-million in new revenue. Excluding the contributions from StarChem, Bozzetto's revenue grew by 14.9 per cent, largely due to stronger customer demand.
• Adjusted EBITDA for Q1 2024 was $15.5-million, which represents a margin of 17.6 per cent. These compare with $10.4-million and 14.8 per cent, respectively, for Q4 2023. The quarter-over-quarter improvement was largely driven by higher sales volumes to existing customers and by the StarChem 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.

Cortland International

Aimia owns a 100-per-cent equity stake in Cortland International, the rebranded combination of Tufropes and Cortland Industrial, a global leader in the manufacturing of high-performance synthetic fibre ropes and netting solutions for maritime and other industrial customers.

The Cortland International segment includes the results of Tufropes and Cortland Industrial since their acquisition on March 17, 2023, and July 11, 2023, respectively.

• Cortland generated revenue of $34-million for Q1 2024, up 14.5 per cent from $29.7-million generated in Q4 2023. The quarter-over-quarter increase was attributable to several factors, including stronger customer demand, particularly from Europe and improved product mix.
• Adjusted EBITDA for Q1 2024 was $4-million, up 60 per cent from $2.5-million generated in Q4 2023.
• Adjusted EBITDA margin for Q1 2024 was 11.8 per cent, up from 8.4 per cent for Q4 2023.
• Despite Cortland's improved performance in Q1, its results were impacted by continuing 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 road map for products, services, applications and sustainability. Mr. Volpenhein brings more than 15 years of rope industry experience.

Holdings segment

The holdings segment includes Aimia's investments in Clear Media Ltd., Kognitiv, Capital A, as well as minority investments in public company securities and limited partnerships. Holdings also includes corporate operating costs, including costs related to public company disclosure and board costs, executive leadership, legal, finance, and administration.

• 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 totalling $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 continuing sales of Aimia's stock holdings.

Quarterly conference call and audio webcast information

Aimia will host a conference call to discuss its first quarter 2024 financial results at 8:30 a.m. ET on May 15. The call will be webcast on-line. 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 on Aimia's website.

About Aimia Inc.

Aimia is a diversified company focused on unlocking the growth potential of its two global businesses, Bozzetto, a sustainable specialty chemicals company, and Cortland International, a rope and netting solutions company. Headquartered in Toronto, Aimia's priorities include monetizing its non-core investments, returning capital to its shareholders, and efficiently utilizing its loss carryforwards to create shareholder value.

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