Aimia Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the AMIA Inc. Third Quarter 2020 Results Conference Call. At this time, all participants are in a listen-only mode, and after the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 on your telephone. If you require any further assistance, please press star 0. I'd now like to hand the conference over to your speaker today, Tom Tran, Head of Investor Relations. Please go ahead, sir.

Thank you, James, and welcome, everyone, to this morning's call. Today's presentation is available on CDAR and will be available on our website. Before we get underway, I would like to remind everyone to review our forward-looking statements and the cautions and risk factors pertaining to the statements. With me on the call today are speakers Phil Middleman, AMIA CEO, Michael Lehman, our president, and Steve Leonard, our CFO. Phil will begin with our strategic highlights, followed by Michael, who will cover the performance of our investments, before handing the call over to Steve to take you through the results of the quarter. We will have time for your questions at the end. With that, let me hand it over to Phil.

Thanks, Tom, and good morning, everyone. I'm excited to share the continued progress that we've made at the company, including several new opportunities to drive future growth. Starting with our strategic highlights, AMIA's expenses were down 16% over last year to $9 million. Corporate expenses were $3 million, excluding expenses associated with stock-based compensation, contingent consideration, currency translation, and depreciation and amortization. We remain on track to achieving an annualized corporate expenses of $15 million or $12 million on a cash basis with further savings being evaluated. Despite the COVID-induced crisis impacting our airline-based loyalty investments, PLM continues to demonstrate signs of recovery and generated $9 million of positive operating cash flow in the quarter. Big Life has rebranded its loyalty program and has been focusing on expanding its earn and redemption ecosystem while transforming its loyalty points into a universal digital currency that to make it more accessible for members. Cognitive is making business progress and remains on track to achieving substantial cost synergies and is positioned to achieve its positive EBITDA and cash flow targets during 2021. Mike will cover these in greater detail later in his remarks. ClearMedia continues to make progress towards its privatization. Recently, its board appointed non-executive directors from Ant Group and JCDecaux, both of which are part of the investor consortium. Since we made our investments, China's economy has experienced a rapid recovery. We believe these positive economic trends bode well for outdoor advertising sales in China. AMIA repurchased 1.4 million of its common shares under its NCIB during the quarter, bringing year-to-date repurchases to 3 million shares. We believe AMIA's stock is undervalued, and opportunistic buybacks provide a significant return to stakeholders. The company has repurchased over 40% of its outstanding shares over the past 21 months, with over 1 million shares of insider buyings and support was reconstituted. As announced last quarter, $67 million held in restricted cash and $2 million held in escrow related to the error plan transaction were released to AMIA. In addition, we are in a notice of objection process to recover $33 million related to an error plan tax assessment. Moving on to our new investments. Subsequent to the end of the quarter, we acquired approximately 481,000 shares for $10.5 million in J.C. DeCoe, the global leader in outdoor advertising and a member of the Clear Media Investment Consortium. JCDecaux represents an attractive investment for AMIA's stakeholders. While its business is experiencing a COVID-related slowdown, JCDecaux is a well-capitalized, well-managed global leader in the outdoor advertising space with exciting future growth opportunities. We also committed $6.7 million to a special purpose vehicle created to pursue a leveraged buyout of a Target, currently trading at a significant discount to intrinsic value. The investment agreement provides AMIA an option to acquire a stake of up to 25% in the Target, upon the successful consummation of the planned LBO. At this time, half of this $6.7 million commitment has been funded. Lastly, we acquired 4.2 million shares for $9.2 million in Village Roadshow Limited, the largest owner and operator of theme parks and one of the largest cinema operators across Australia, with a long-term history of profitability and dividends. The company is currently trading at a very attractive valuation and is in the midst of a takeover bid. We believe these new investments have the potential to provide meaningful net asset value growth in the near and long term for AMIA stakeholders. Finally, let me spend a moment to provide you an update on our progress with Aeromexico and PLM. We are encouraged to see the significant progress made by Aeromexico during the Chapter 11 process to implement the restructuring that is expected to provide the airline with the ability to cut costs and raise additional liquidity, including the recently announced court approval of a dip financing facility of up to $1 billion in USD led by Apollo. We believe Aeromexico will emerge from Chapter 11 as a much stronger airline and thus further strengthen the PLM loyalty program. AMIA has been working closely with Aeromexico, PLM, and Apollo throughout the Aeromexico bankruptcy process, and the parties are progressing towards the formal assumption by Aeromexico of its agreements with PLM. The CPSA, as recently amended, is being honored during the bankruptcy process, and we expect AMIA's and PLM's agreement with Aeromexico to remain intact following their formal assumption. This includes a 20-year CPSA extension between PLM and Aeromexico, as well as the option for Aeromexico to acquire AMIA's stake in PLM for $400 million U.S., or 7.5 times EBITDA, whichever is greater, and adjusted for net cash on the balance sheet. Loyalty programs are coveted, valuable assets, as evidenced by the recent financing transactions involving United and Delta. As the airlines continue their recovery, we expect distributions from PLM to AMIA will resume in 2021, and we'll have more information for you when we report our fourth quarter results. We look forward to sharing more of our progress with you as soon as we can. And with that, let me turn the floor over to Mike to provide you some further updates on our investment portfolio. Mike?