Aimia Inc.

Good morning, ladies and gentlemen, and welcome to the AMIA Inc. First Quarter 2022 Results Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Friday, May 6, 2022. I would now like to turn the conference call over to Mr. Tom Tran, Head of Investor Relations. Please go ahead.

Thank you, Pam, and welcome everyone to this morning's call. Today's presentation is available on CDAR and the company's website. Before we get underway, I'd like to remind everyone to review our forward-looking statements and the cautions and risk factors pertaining to the statement. 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 to everyone on the phone and webcast today. We are pleased with our first quarter results as we continue to advance our strategy of maximizing the value of our existing holdings while seeking to deploy capital towards new investment opportunities to deliver strong returns for our stakeholders. To recap the strategic highlights for the first quarter, beginning with PLM. In February, AMIA announced that it entered into a binding LOI with Aeromexico to divest its 48.9% stake in PLM, which will, on closing, result in PLM becoming a wholly owned subsidiary of Aeromexico. We continue to make progress towards closing the PLM transaction, as the application for Mexican antitrust approval has been filed, and we advance towards completion of the definitive agreement. Aeromexico has also completed its financial restructuring and emerged from Chapter 11, and the PLM contracts have been formally assumed. We expect this transaction will close within the next three months. Upon closing of the transaction, AMIA expects to receive approximately $484 million Canadian in after-tax proceeds by applying the Canadian dollar exchange rate at the end of March, which will be subject to change based on the currency exchange rate at closing. AMIA intends to deploy the majority of the proceeds towards the acquisition of majority or significant minority stakes in one or more cash-generating businesses operating in either the U.S. or Canada that will, ideally, utilize our sizable legacy net operating tax losses. Against the backdrop of ongoing dislocations in world markets, these proceeds will allow AMIA to capitalize on investment opportunities. Moving to Tradex. Tradex continues to grow at a remarkable rate with gross vehicle sales up 714% year-over-year in the first quarter, benefiting from acquisitions it closed in Q4 2021 and as it opens new global trade corridors to facilitate cross-border automotive transactions across Europe, Latin America, Africa, the Middle East, and Asia. Also, Tradex is actively pursuing a robust pipeline of accretive acquisitions, targeting companies in current and complementary business lines that can help Tradex scale quickly in key growth markets and expand its market reach. Moving to Cognitive. We are pleased with the commercial progress made by Cognitive. Under a new management team led by President and CEO Sean Pearson, Cognitive is executing its business plan to drive engagement in its collaborative commerce platform. In the first quarter, Cognitive was successful in securing contract renewals and extensions with major global brands, including HSBC, Avis, and National Australian Bank, amongst many others. Cognitive is seen as continued strengthening of its pipeline with several new global brands across different verticals that are prime candidates to benefit from its approach to empowering businesses to grow, adapt, and transform through collaborative commerce. Having successfully completed a financing of $48.5 million led by Silicon Valley Bank, which includes our $10 million convertible note investment, Cognitive is well-positioned to accelerate its commercial efforts to achieve its growth plans. Moving to our investment in Clear Media. The slowing Chinese economy and recent COVID-related shutdowns have created a challenging operating environment for advertising in China, and Clear Media is facing a situation that is similar to the first half of 2020 and has responded to the situation by implementing cost-saving initiatives. We continue to believe that Clear Media is a high-quality business It stands to benefit from its sizable market position and enhanced digital offering. We are monitoring developments closely as they navigate their business through this headwind. Moving to our investment in Capital A, formerly AirAsia. We are very pleased to see the airline resume its domestic travel and the reopening of Malaysia's borders as the region moves away from its zero COVID strategy. As recently reported in Capital A's first quarter preliminary results, strong domestic travel demand and promotional campaigns during the quarter led to a significant increase of 464% year-over-year for the number of passengers carried by AirAsia Malaysia. We expect Capital One will emerge from the pandemic as a stronger airline and holding company, uniquely positioned to capitalize on the sizable pent-up demand for low-cost air travel across Southeast Asia, while enhancing the value of its digital assets. Finally, we recently began share repurchases under the current NCIB, buying back more than 340,000 shares year-to-date and an average price of 519 per common share. We have a heightened interest to continue executing accretive buybacks as we believe our shares are undervalued. As announced previously, we intend to allocate up to $75 million of incoming PLM proceeds towards these buybacks. And with that, let me turn the floor over to Mike to provide you some further updates on our investment portfolio. Mike?