Aimia: Aimia Inc (AIMFF) Q4 2024 Earnings Call Highlights: Strong Revenue Growth Amid Challenges

In This Article: Consolidated Revenue: Increased by 27% to $127.2 million in Q4 2024. Gross Profit: Rose by 31% to $31.1 million. Adjusted EBITDA: Improved to $17.3 million from a loss of $1.1 million. Net Loss: Improved by $17.8 million to $42.1 million, impacted by $55 million in noncash write-downs. Bozzetto Revenue: Grew by 22% to $85.8 million in Q4 2024. Bozzetto Adjusted EBITDA: $13.4 million with a margin of 15.6%. Cortland Revenue: Increased by 39% to $41.4 million. Cortland Adjusted EBITDA: Grew by 168% to $6.7 million with a margin of 16.2%. Consolidated Cash: Ended Q4 2024 with $95.4 million, a decrease of $25.2 million from Q3 2024. Debt Paydowns: $30 million in Q4 at Bozzetto. Cash from Operating Activities: $20.2 million in Q4. Interest Payments: $7.2 million in Q4. Capital Expenditures: $5.4 million in Q4. NCIB Share Purchases: Over 3 million shares purchased, representing an outlay of approximately $7 million. Annual Cash Savings from SIB: Approximately $5 million. Warning! GuruFocus has detected 2 Warning Signs with AIMFF. Release Date: March 28, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript . Positive Points Aimia Inc ( AIMFF ) achieved its financial guidance for 2024, with strong performance from its core holdings, Bozzetto and Cortland. Consolidated revenue grew by 27% to $127.2 million, and gross profit increased by 31% to $31.1 million year-over-year. The company successfully reduced holding company costs, contributing to improved financial metrics. A substantial issuer bid was completed, resulting in approximately $5 million in annual cash savings and a $54 million gain on the transaction. Aimia Inc ( AIMFF ) ended 2024 with a healthy balance sheet and $95.4 million in consolidated cash, positioning it well for future growth. Negative Points Aimia Inc ( AIMFF ) reported a net loss of $42.1 million for Q4, impacted by $55 million in non-cash write-downs. The company faces ongoing geopolitical and macroeconomic headwinds, which could affect future performance. There is potential pressure on the textile segment of Bozzetto, which may impact growth in 2025. The company has a significant gap between its market value and the value of its underlying assets, which it aims to address. Aimia Inc ( AIMFF ) is still working on resolving a $30 million tax receivable issue with the Canada Revenue Agency. Q & A Highlights Q : Can you explain the sequential decline in Bozzetto's performance during the year? Is it due to seasonality? Also, what are the key growth drivers for Bozzetto in 2025? A : Steven Leonard, CFO: The sequential decline in Q4 relative to Q3 is due to seasonal impacts in Italy and Spain, where maintenance occurs during the holiday season, reducing production. For 2025, while textiles may face pressure, growth is expected from diversifying into dispersion and water solutions, with a focus on higher-margin powder products. Q : Can you break down the guidance for 2025, specifically the $88 million to $95 million range for Bozzetto and Cortland? A : Steven Leonard, CFO: We haven't provided precise guidance for each business to maintain flexibility. However, we expect growth in both businesses, with potentially more growth from Cortland compared to Bozzetto. Q : Is there any tariff exposure for Cortland selling into the US, and why was there a write-down despite achieving financial targets? A : Steven Leonard, CFO: Currently, the tariff exposure is not significant. The write-down was due to initially overpaying for Tufropes, but we are seeing the business recover. The impairment charge represents about 10% of the acquisition cost. Q : What is the status of the $30 million tax receivable? A : Steven Leonard, CFO: We have been in discussions with the CRA since November 2023, and we hope to have an outcome to announce to investors by Q2. Q : With the SIB complete, what shareholder-enhancing initiatives are planned? Could there be a monetization event of significant holdings this year? A : Rhys Summerton, Executive Chairman: Our priorities are to cut costs at the Holdco level and close the discount between market value and asset value. We will continue strategic review efforts and communicate any significant developments to shareholders. Q : Could an accelerated NCIB be a way to close the discount? A : Rhys Summerton, Executive Chairman: While share buybacks are an attractive option if shares remain undervalued, we will communicate any decisions to shareholders when appropriate. Q : Does your appointment as Executive Chairman mean Mithaq has taken control of Aimia? A : Rhys Summerton, Executive Chairman: Mithaq has not taken control. My investment in Aimia is personal, and Mithaq is a co-investor with high ethical standards. Our focus is on cutting costs, closing the discount, and capital allocation. For the complete transcript of the earnings call, please refer to the full earnings call transcript . This article first appeared on GuruFocus .