Earnings call transcript: Aimia Inc’s Q2 2025 revenue misses forecast

Aimia Inc., a global player in the dispersion solutions market, reported its second-quarter earnings for 2025, revealing a mixed financial performance. The company posted a revenue of $128.7 million, falling short of the $132.1 million forecast. Despite this miss, Aimia saw improvements in gross profit and reduced SG&A expenses. The stock reacted negatively, dropping 1.86% in pre-market trading, reflecting investor concerns over the revenue shortfall.

Key Takeaways

• Aimia’s Q2 revenue of $128.7 million missed the $132.1 million forecast.
• Gross profit increased by 11% to $34.9 million.
• SG&A expenses were reduced by 33%, aiding profitability.
• Adjusted EBITDA rose significantly to $19.7 million from $12.3 million.
• Stock price fell 1.86% in pre-market trading following the earnings release.

Company Performance

Aimia Inc. demonstrated resilience in its core business segments despite missing revenue expectations. The Bizzetto division, focusing on agrochemical and plasterboard markets, and the Cortland division, with a presence in over 70 countries, both reported revenue growth. The company’s strategic cost-cutting measures contributed to an improved adjusted EBITDA, indicating operational efficiency gains.

Financial Highlights

• Revenue: $128.7 million, up 5% year-over-year but below forecast.
• Gross Profit: $34.9 million, up 11%.
• SG&A Expenses: $25.9 million, down 33%.
• Adjusted EBITDA: $19.7 million, up from $12.3 million.
• Cash Position: $70.5 million, down from $94.7 million in Q1.

Earnings vs. Forecast

Aimia’s revenue of $128.7 million fell short of the $132.1 million forecast, representing a miss of approximately 2.6%. This shortfall contrasts with the company’s historical trend, where it has often met or exceeded revenue expectations. This miss may influence investor sentiment, particularly given the broader economic uncertainties.

Market Reaction

Following the earnings announcement, Aimia’s stock declined by 1.86% in pre-market trading, closing at $3.22. This movement reflects investor apprehension regarding the revenue miss and its potential implications for future performance. With a beta of 0.45, the stock historically demonstrates low volatility compared to the market. InvestingPro’s Fair Value analysis suggests the stock is currently undervalued, presenting a potential opportunity for value investors.

Outlook & Guidance

Aimia has set a cautious outlook for the remainder of 2025, projecting adjusted EBITDA between $88 million and $95 million, leaning towards the lower end of the range. The company is also anticipating $33 million in tax refunds, which could bolster its financial position. Management is exploring capital allocation opportunities and aims to keep Holdco costs below 1.5% of equity value.

Executive Commentary

Executive Chairman Reese Somerton emphasized the company’s commitment to strategic deals, stating, "We will only do deals that are fair and beneficial where the relative value will be." Somerton also expressed confidence in the quality of Aimia’s core assets, noting, "Our core assets are better quality businesses with brighter futures than I initially anticipated."

Risks and Challenges

• Economic uncertainties, particularly U.S. tariffs affecting the textile sector.
• Challenges in the Chinese consumer market impacting Clear Media.
• Potential volatility in global markets could influence future performance.
• The ongoing need for strategic acquisitions to drive growth.
• Maintaining cost efficiencies amidst fluctuating market conditions.

Q&A

During the earnings call, analysts focused on Aimia’s potential asset dispositions in 2025 and interest in UK-linked companies with strong balance sheets. Management expressed cautious optimism about market conditions and reiterated their focus on creating shareholder value through strategic initiatives.

Full transcript - Aimia Inc (AIM) Q2 2025:

Conference Operator: Morning, ladies and gentlemen. Welcome to Aimia Inc. Second Quarter twenty twenty five 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.

This call is being recorded on Thursday, 08/14/2025. I would now like to turn the conference over to Joe Rakenley. Please go ahead.

Joe Rakenley, Investor Relations, Aimia Inc.: You, operator, and good morning, everyone. Joining me on today’s call are Aimia’s Executive Chairman, Reese Somerton and our President and CFO, Steven Leonard. Before we begin, I’d like to make note of the following. We issued our financial results for the second quarter earlier this morning. All of our materials, including our news release, MD and A and financial statements are available from our website as well as SEDAR plus We will be using a presentation today.

And for those listening to the call by phone, a copy is available from the IR section of our website. Some of the statements made on today’s call may constitute forward looking information, and our future results may differ materially from what we discuss. Please refer to the risks and uncertainties that may affect our future performance referenced in our presentation and discussion today in our MD and A, as well as in the annual information form filed on SEDAR plus In addition, we will be making note of GAAP and non GAAP financial measures. Reconciliation of these numbers is provided in the appendix of our presentation and as well was also included in our press release. Following today’s presentation, please reach out if you do have any outstanding questions or require clarification on any of the matters discussed today.

Rhys, please go ahead.

Reese Somerton, Executive Chairman, Aimia Inc.: Thanks, Joe. Well, good morning, good afternoon, good evening to our shareholders and those who are taking interest in Aimia. Thank you for joining us today. The second quarter results, I think we would describe as solid. There was progress across the board and particularly in areas that are under our control.

So if you have gone through the numbers, you would have seen that our key financial metrics experienced growth, which was good. And then when it comes to our three step strategy, I think what we were really happy with was the reduction in the HoldCo cost guidance down to $9,000,000 for the year. We achieved a number of important milestones regarding the share buyback program, which was renewed. And there was also the settlement with the CRA, which will lead to a total refund of $33,000,000. So that all was good progress.

I think we will talk a little bit more about the strategy and some of our priorities in the near term and the medium term. But I think what I’d like now to do is to hand over to Steve who will take you through the key financial results and the operating highlights for the second quarter.

Steven Leonard, President and CFO, Aimia Inc.: Thank you, Rice. Good morning, everyone. I’d like to begin my remarks with the review of our consolidated results. As you’ll note from slide seven, Q2 was marked by improvements to a number of key financial metrics despite growing economic uncertainty triggered by the onset of the new U. S.

Tariffs. Worth noting, consolidated revenue grew 5% to 128,700,000.0 Gross profit was up 11% to $34,900,000 SG and A expenses declined by 33% to $25,900,000 and adjusted EBITDA increased to $19,700,000 from $12,300,000 Our improvements on a year over year basis were largely due to stronger performance by Cortland, reduced HoldCo costs, including the absence of shareholder activism costs incurred last year, and the positive impact of foreign currency fluctuations relative to the Canadian dollar. Our results through June 30 and our outlook for the balance of the year are the reasons behind our decision to reiterate guidance for adjusted EBITDA for our core holdings and lower our holdco cost target. I will expand on our guidance later in my remarks. Turning to our core holdings, starting with Bizzetto on slide eight.

The results of our Specialty Chemicals business in Q2 were consistent with its performance in recent quarters as management was able to adapt to the changing market dynamics and still generate increased profitability. In Q2 twenty twenty five, Bezetto generated revenue of $90,900,000 up from $87,400,000 for the same period last year. On a constant currency basis, Bezetto’s revenue was down 2% or $2,100,000 The decline was due to lower volumes sold by the textile solutions sector as a result of market uncertainty associated with the pending implementation of U. S. Tariffs on Asian imports, particularly in Bangladesh where Bezzetto sells into.

The revenue decline was partially offset by improved pricing and product mix, as Bezzetto’s dispersion solutions sector, which primarily serves plasterboard, agrochemical and concrete markets outside of The U. S. In Q2 twenty twenty five, Bezzetto generated adjusted EBITDA of $16,900,000 which represents a margin of 18.6%. In the same period last year, Bezzetto generated adjusted EBITDA of $15,100,000 and a margin of 17.3%. The improvements were driven by the favorable foreign currency and reduced SG and A costs.

Cortland’s results for the second quarter are presented on Slide nine. Cortland grew revenue in Q2 twenty twenty five by 8% on a year over year basis to 37,800,000.0 On a constant currency basis, Cortland increased its revenue by $2,400,000 or 6.9%. The growth was driven by increased market demand and improved product mix, including the higher volumes of higher performance rope sales. Cortland sales grew despite some economic uncertainties created by the latest round of pending U. S.

Tariffs. Cortland adjusted EBITDA grew by 36% to $4,900,000 while adjusted EBITDA margin improved to 13% in Q2 twenty twenty five. The improvements were largely driven by higher gross profit offset by higher SG and A costs associated with an expanded sales force, excluding the non recurring $1,200,000 of professional advisory fees that were incurred in the same period last year. We ended the second quarter with $70,500,000 of cash, down from $94,700,000 at the end of Q1. Slide 10 shows a waterfall of the cash movements in Q2.

In the quarter, we generated $9,400,000 in operating cash flow and received $2,700,000 from a loan repayment from Cognitive. Cash outflows in Q2 included $9,400,000 of senior Bizzetto debt payments, of which 6,300,000.0 were voluntary, 8,200,000.0 related to the buyback of common shares, 6,400,000.0 of interest payments related to the 2,030 notes and $5,200,000 of interest payments on Buzzetto’s credit facilities and $3,700,000 of capital expenditures. Looking at our liquidity more closely, Slide 11 shows a breakdown of our cash position by segment at the June. Over the next twelve months, our cash requirements will include less than $9,000,000 of Holdco costs, dollars 13,900,000.0 of interest payments for our 2,030 senior notes, 10,500,000.0 of senior debt principal repayments on Bizzetto’s debt, 9,600,000.0 of Bizzetto’s interest payments. I should point out that our June 30 liquidity totals exclude the anticipated $33,000,000 tax refund we’re expecting from government agencies, and our cash requirements do not reflect the expected operating cash flow over the next twelve months from the businesses.

Through the six month period, Mazetto and Cortland generated $44,200,000 of adjusted EBITDA on a combined basis, putting us on track to reach our guidance for 2025. Despite the emergence of economic uncertainties related to trade barriers, we remain cautiously optimistic about our outlook. It’s why, as mentioned earlier, we are reiterating our guidance for the year. As illustrated on Slide 12, we continue to forecast adjusted EBITDA in 2025 to be in the range of 88,000,000 to $95,000,000 for our core holdings on a combined basis, albeit at the lower end of the scale. We will, of course, monitor these macroeconomic developments and adjust our outlook if necessary.

Given our progress at lowering Holdco costs through June and our belief that we will sustain this momentum through the end of the year, we are lowering our target from $11,000,000 to $9,000,000 Some of these cost savings we have made so far include reduced audit and professional fees, relocating our Montreal office to a lower rent facility, and reduced compensation expense stemming from the optimization of our Board earlier this year. That concludes the summary of the financial results. I’d like to turn this back the call back over to Rice for closing remarks. Rice?

Reese Somerton, Executive Chairman, Aimia Inc.: Thanks, Steve. So following my appointment as executive chairman at the end of the first quarter, we rolled out a three point strategy. And just a reminder about that, the three points were reduced HoldCo costs, reduced the discount Aimia shares paid relative to intrinsic value, and three, allocate capital effectively with the goal of eventually utilizing the tax loss carry forwards. And I think over the past four months, have made fairly good progress on the first two priorities. Firstly, we achieved the $1,400,000 of cost cutting initiatives in Q2.

We’ve kept our Holco costs from continuing to grow, and we’ve actually reduced the anticipated spend down from $11,000,000 down to $9,000,000 as Steve remarked upon. And we’ve renewed the share buyback, which will run through to the June 2026 at the latest. So this progress, I think, has allowed us to initiate efforts on our third step, which is really the exciting part. It’s about deploying capital, looking at new investments, and we might get there sooner than probably initially anticipated us getting to this point. More specifically, we’ve, made good progress on determining the market value of our core holdings and also understanding how we can get the best value for them.

While we don’t have any specifics to share with you today, and I kind of sympathize how irritating that might be, as soon as we do have something to share, we will obviously update, our shareholders and the market. If you go to slide 15, there, I think it demonstrates, and and we keep this updated on a monthly basis, the number of shares outstanding. And I think what you would see there, we’re down to about 91,000,000 shares. And largely, we’ve been able to, reverse some of the poor issuance that happened in the past. And we will continue to execute on the share buyback program while it makes sense.

And I think you would have noted that we’ve continued with our renewal of the share buyback on the NCIB, which as I said, will run through until June 2026. Then on slide 16, this is the updated valuation metrics slide. And we’ve added one line item to this, and and that is, we’ve, now been able to, take the tax deposit, which you would see there’s now 33,000,000. So that’s going to come through shortly. And we’ve added also this focus on book value or net book value attributable to common shareholders.

And we’ve done that because we expect our performance in future will be able to be better measured based on the growth in that number. So just to reiterate, this book value or balance sheet book value number is not the same as intrinsic value or net asset value. But if you take the great capital allocation machines in the world, they kind of use this book value number and we thought we would highlight it, from this quarter so that it can be monitored going forward. If you look at the net book value per common share over time on slide 17, you can see that there hasn’t been all that much progress in the past. It’s it’s kind of, been the reverse of that.

But then we had in the first quarter twenty twenty five, we completed the substantial issuer bid, and that realized a gain of $54,000,000. And we kind of intend to reverse the historic performance so that this metric can grow as we create value for shareholders. Going forward, we anticipate enhancing our disclosure by reporting our net asset value per share and our estimate of intrinsic value per share. We think that will be really helpful to shareholders to monitor the discount to NAV per share. As you have heard, Q2 was marked by an improvement in a number of financial metrics, and we’ve made progress on the three step strategy which we outlined in prior quarters.

When taken as a whole, our performance in q two puts us firmly on the path of becoming a sustainable permanent capital vehicle. We still want our holdco costs down. You know, we reiterate that longer term, we still want to get to 1.5% and below of our equity value. So there’s still work to do, but we’re making good progress. Focus over the next twelve to eighteen months will be to sustain this momentum and continue to execute on our three step strategy.

In the near term, we will continue to focus on holdco costs, continue with our share buyback program, and continue on that step three, which will be, getting confidence on the underlying value of our holdings and how we can best allocate that, capital. We look forward to providing updates on that progress as soon as we can. Thank you for your time today, and we’d love to hear your questions.

Conference Operator: Operator? Thank and gentlemen, you. We will now begin the question and answer session. To ask a question, you may press star followed by the number one on your telephone keypad. With that, our first question comes from the line of Surinder Thind with Jefferies.

Please go ahead.

Surinder Thind, Analyst, Jefferies: Thank you. So if we take a step back and we think about getting value for the assets, we think about the strategic options here, How do you think about the actual value that you’re getting in the current environment in terms of is it okay that you get what you what you get that’s fair in the current environment, or are there options here where maybe if there’s a bigger delta than you would like to see that that you would want to wage? How do how do we think about the the different options there?

Reese Somerton, Executive Chairman, Aimia Inc.: Yeah. Thanks. I think that’s an excellent question. And it’s it’s one that I spent a lot of time on. You mentioned taking a step back and I’m going to ask you to take a step back as well for a second because if you just think back to where Aimia was heading a couple of months ago, there were kind of no real solutions to what to do with Aimia.

I think that’s what I picked up when I was you know, before I took on this role. Now that we know where we’re going, I think it’s it’s it’s a really good question to to kind of consider what is the best possible outcome for these assets. And all the way through, I’ve I’ve indicated that what we try to do is get to the best market value for them. And the more we get to know them and also the environment we’re in, the more we kind of understand what we need to do to get to that best value for them. So in in some cases, it might be that, you know, now is a good time to create value.

In other cases, it might be that we see multiples of the current market or or the current valuation that’s on the balance sheet as being realizable if we made a few adjustments to the to the assets. And and, you know, I I would just say sort of from a outsider’s point of view that I would say, you know, all our core assets, I would say, are better than I thought they were before I was involved with Aimia. You know, it’s just my personal view, but I kind of have the outside of you and the inside of you, and and and I would say that they are better quality businesses with brighter futures than I initially anticipated. So a very long answer, but the point is that we don’t have to sell any assets right now, but it might make sense to, you know, create value, because there’s there’s there’s the other side of the coin. And and the other side of the coin is what we can do with that capital that that that we, might raise.

And, you know, those are very exciting opportunities, which I kind of salivate it on a daily basis. So so I’m looking forward to to the future of of Aimia, but I I would say that, you know, you should be rest assured we will make the best decision possible, and we are in a very strong position to make those decisions now that we know what the strategy is of Aimia.

Surinder Thind, Analyst, Jefferies: That’s helpful. And then maybe one more question just on the NCIB. Just any color on how we should think about the cadence on a go forward basis over the next twelve months or anything there that you can provide that would be helpful.

Reese Somerton, Executive Chairman, Aimia Inc.: Yes, I wouldn’t want to talk too much about that. I I think we’ve made the disclosure we can make, and what we’ve done just to make sure shareholders, are kept abreast of the developments is is on a monthly basis, you’ll see how many shares we we are able to execute on, and we continue to do that. You know, there’s no change to that to that strategy, and it does run until June 26. I would think that we will get there a little bit sooner, but, you know, we can’t really say too much more about that because we don’t want anybody to game the number of shares we’re buying back with what’s happening in in the company.

Surinder Thind, Analyst, Jefferies: Of course. And then I’ll sneak in one more just on Cortland. When we think about just the the revenues over the past year plus and the how much of this is do you think it’s tariff related? How much is just other, what I would call global changes in the business itself? It just seems like revenues have been pressured for quite some time.

And when I think about where Q3 was and then Q4 and then Q1 and now Q2, What is the normalized level here that we should be thinking about?

Reese Somerton, Executive Chairman, Aimia Inc.: So there’s good revenue and there’s I’d say good revenue. When you look at it, there’s, you know, I would say good revenue is high margin revenue, and and not so good revenue is is revenue you don’t wanna fight too hard for. The way I kind of look at Portland, particularly during this kind of tariff related issues and some uncertainty around the world, the way I look at it is is Cortland gaining market share or losing market share? And I think we’re fairly confident that Cortland is not losing market share anywhere, that that we don’t want to lose. So there might be some bottlenecks in in growing market share, particularly in some of the high margin, revenues that we’re looking at.

But, on on the whole, we kind of satisfied that we will get to an inflection over the next quarter, and you’ll see revenue stabilize and then start to pick up again. But like I said, there’s nothing that causes me any concern there because I think if you look at our market share, our market share is actually, at least our estimated market share, would say is stable if not improving in the areas that we want to compete in.

Surinder Thind, Analyst, Jefferies: That’s helpful. I appreciate the color. Thank you.

Conference Operator: And your next question comes from the line of Brian Morrison with TD Cowen. Please go ahead.

Brian Morrison, Analyst, TD Cowen: Oh, thank you. Good morning. Steve, just a housekeeping question to start with. What is the reason behind the delay in the receipt of the tax refund? Is there any probability of, any change of potential probability of receipt, or you feel pretty good that it’s gonna be coming through?

Steven Leonard, President and CFO, Aimia Inc.: Hi, Brian. No, we feel there’s two parts to it. There’s about $27,000,000 that we expect from Revenue Canada and around $6,000,000 from Revenue Quebec. We’ll expect the Revenue Canada piece to come in a short timeframe likely within this quarter. And the Revenue Quebec will be a little bit longer just because they have to follow, have to understand the terms of the settlement and we’re working on that.

So that’ll take a few more months probably, we’re thinking by the end of the year. But that’s the timing we’re expecting and we have confidence we’ll receive from both government authorities.

Joe Rakenley, Investor Relations, Aimia Inc.: Operator?

Conference Operator: Yes. Our next question One second. One

Steven Leonard, President and CFO, Aimia Inc.: second. Can we

Conference Operator: open Brian? There you go.

Reese Somerton, Executive Chairman, Aimia Inc.: There you go.

Steven Leonard, President and CFO, Aimia Inc.: Go ahead, Brian.

Brian Morrison, Analyst, TD Cowen: Yes. Sorry. I’m not sure

Joe Rakenley, Investor Relations, Aimia Inc.: I dropped from the call.

Brian Morrison, Analyst, TD Cowen: I apologize for that. I wanna turn to, Buzzetto. And looking at results, I see there’s a constant currency decline. Is that due to destocking on textiles because of tariff uncertainty? And now that there’s a deal with Bangladesh, have we now started to see that normalize?

Surinder Thind, Analyst, Jefferies: So

Steven Leonard, President and CFO, Aimia Inc.: definitely there was uncertainty in Q2 with all the tariff noise and that was impacting the markets that Bezetto sells into primarily in Bangladesh. And that was reflected in the second quarter in their textile segment. We’re early into Q3. July was better than June. And as you noted with things stabilizing with all those Asian markets being roughly around the same level, I’m talking about some of the other markets like Vietnam, Malaysia that produce garments being around the same level of tariffs exporting to The US.

It’s a level playing field. So some of that uncertainty is coming away. Bangladesh is also going through a little bit of political instability, which is also having some impact on that market for the bizettle business. But yeah, we’re feeling that second half will start showing better signs. And the other piece that’s important in my remarks is in their dispersion segment.

So they’ve made a focus in terms of putting more priority in agrochemical and plasterboard in terms of their business and it’s yielding results both on the top line, but more importantly, and this is what Pizzetto focuses on, is on gross margin. They’re yielding much better margins in those two sub sectors of their dispersion segment.

Brian Morrison, Analyst, TD Cowen: Okay, I wanted to just move on for a second here and congratulations on the progression of your three step strategy. I wanted to ask you on the process of evaluating the market value of your core holdings, you addressed that. Sounds like you’re potentially a bit more optimistic. Could we potentially see the disposition as a possible 2020 step permit potential 2025 event?

Reese Somerton, Executive Chairman, Aimia Inc.: We’ve got a lot of interest in in in our underlying assets. You know, that that is that is clear. And, you know, we’ve engaged with many different players, you know, in in the time that I’ve been involved with different options. You know, some of those options might materialize in the short term. Some of those options, you know, we might take take a bit longer, but the the the end results will be a positive one, I believe, for for Aimia shareholders.

It will at least be positive in terms of being able to allocate that, you know, any kind of capital that might might come into to to the group. You know, at at times, you you go down the road with with some partners that that, you know, kind of turn out to be less reliable than you would have liked. But I think I think it’s it’s possible that 2025 does crystallize some value. I wouldn’t put a probability on it, but it’s definitely a possibility.

Brian Morrison, Analyst, TD Cowen: Okay. So if you take that one step forward and you look at the next steps of potentially putting capital into public assets, you’ve got $23,000,000 of cash on the HoldCo balance sheet. You’re gonna get this tax refund of $33,000,000 You’re going to remain active to some extent in the NCIB. Would you be willing in advance of potential monetization of moving forward with that next step of deploying capital?

Reese Somerton, Executive Chairman, Aimia Inc.: Yes. Absolutely. Yeah. You know, there’s there’s opportunities that that are available. And and we have, you know, different ways of of of accessing those opportunities.

Some of them are with cash. Some of them might be other kind of transactions. We will evaluate them. But, you know, the point for for Aimia shareholders, you know, of which I’m the second biggest, is the fact that we will only do deals that are that are fair and and are beneficial on where the the the relative value will be. In other words, it doesn’t make sense for us to to buy things that are fully valued, if Aimia is is still undervalued.

So that’s part of the capital allocation decision which I make.

Brian Morrison, Analyst, TD Cowen: Thank you very much.

Reese Somerton, Executive Chairman, Aimia Inc.: But the point is we’re eager to get going.

Brian Morrison, Analyst, TD Cowen: I appreciate that.

Joe Rakenley, Investor Relations, Aimia Inc.: We have a couple other questions in the queue. Also received a couple via email. Can you provide some color on the performance of Clear Media?

Reese Somerton, Executive Chairman, Aimia Inc.: I’ll hand it over to Steve, and if I have anything to add, I’ll come back in.

Steven Leonard, President and CFO, Aimia Inc.: Yeah, I mean, Media, as we’ve said previously, has had some challenges with what’s going on in the you know, basically follows path of what goes on in the consumer spending side of the Chinese market, which has had weakness over the last two years exiting COVID. The management team there has been focusing on optimizing its cost structure and ensuring that it has a good foundation on the cost structure. And we’re starting to see some glimmers of improved results. We don’t disclose the results, but we have recently seen some good news come out of Clear Media and we expect as the Chinese consumer comes back and starts spending more advertising dollars will be put in that market and we expect that business to start providing healthy returns. And one more.

What’s your Let

Reese Somerton, Executive Chairman, Aimia Inc.: me just add to that, Joe, if I can. I think we’ve also improved communication and dialogue with with Clear Media, and I think we’ll be more influential than than perhaps we have been as a as a passive bystander up to now. So, you know, we look forward to seeing what value we can help them accrete over time.

Joe Rakenley, Investor Relations, Aimia Inc.: Which core holding is more exposed to tariffs?

Reese Somerton, Executive Chairman, Aimia Inc.: I think both holdings have had exposure on on on the tariff side, But there there are swings and roundabouts. For example, if you think about Cortland, it’s obviously got the Indian business, but then the value of of The US business should it should actually become more valuable with tariffs. Might not come through in the numbers in the short term, but all things being equal, will grow in value. I think on Behzetto, the issue is more just the uncertainty that that tariff the tariffs create. But I think it’s an important point to to make sure people understand is that in both businesses, it’s you know, you’ll you’ll see swings and roundabouts in the quarters.

But over time, these are products that you can’t really do without. So so if if one quarter is slightly low, you should expect that in the subsequent quarters, there’s gonna be a catch up because the products are important and needed. So I wouldn’t read too much into quarterly numbers. I would take a longer term view. And that’s why I remarked earlier that if you take the market share numbers, at least the estimates of market share in Portland and I think the estimates of market share in Brazil, I think both businesses are actually doing well.

And there’s potential for catch up of the remaining part of ’25 and into ’26.

Steven Leonard, President and CFO, Aimia Inc.: I’ll just add that in both businesses with Cortland specifically, when you look at India, a lot of noise right now, India going into The US, but the size of the volume or the size of revenues going from India into The US on Cortland is less than 10%. It is having an impact, but Cortland is a global business. It sells in over 70 countries and it’s focused on growing not just in The US, but in the rest of the world. And then on the Bezzetto side, we commented about some of the tariffs uncertainty as we said it. We see that more as a temporary item.

And then we also have an advantage with Bezzetto with the Honduras acquisition, which when you look at the tariff rates is on the lower side. So that’s going to have an advantage. So in some places it’s having some negative effects on us, but in some places we expect to have positive outcomes related to this.

Conference Operator: Thank you. And your next question comes from the line of Chris Curry with Goodwood Funds. Please go ahead.

Chris Curry, Analyst, Goodwood Funds: Thank you very much, and, thanks for holding the call and the, great disclosure in the presentation. I wanted to ask about, if you, you know, agree with what I’m hearing that, US US companies are going to get a big boost from the big beautiful bill from tax cuts, CapEx benefits. Let’s call those in Q3, Q4 sort of the pumped up U. S. Competitors.

I was wondering how you assess the landscape, the competitive landscape vis a vis these newly pumped up U. S. Competitors.

Reese Somerton, Executive Chairman, Aimia Inc.: I don’t think we see a lot of that right now. You know, when I think about competitors, I’m also thinking about, you know, the local competitors, local manufacturing competitors in these businesses. You know, we you know, we don’t really see much from from from US competition, maybe a little bit in in Portland. You know and to go back to the previous question you know on the tariff side what’s interesting is that for example to you know produce in India even with considerable tariffs, it’s still more cost advantageous to produce in India compared to The US. So yeah, I’m not commenting on what’s going on in The US, but we just don’t see that in our businesses right now.

Chris Curry, Analyst, Goodwood Funds: Fair enough. Thank you. Just one last quick one. Along the lines, same with the theory of the pumped up U. S.

Companies, are you seeing that reflected in sort of M and A multiples of prospects that you examine?

Reese Somerton, Executive Chairman, Aimia Inc.: If if, you know, what I noticed about US prospects and and things to to maybe allocate capital to, is that The US, has has forgotten that is, you know, what Charlie Munger used to say, debt is always a 100%. You know, US companies, particularly on the smaller end, have got considerable debt compared to UK companies, for example. So, you know, our strategy will be, you know, looking at UK linked companies because they’ve got, you know, much stronger balance sheets. Most of the targets that we have in mind have got net cash on the balance sheet, not net debt. That’s gonna help us as well.

And we would rather, you know, start off our capital allocation with those kind of companies than than US ones because, you know, the valuations aren’t favorable. The balance sheets are weak. It’s you know, I think we can do a lot better than than buying companies in The US right now. Hopefully, that changes in the future so that we can start utilizing the tax losses. I look forward to that time.

Conference Operator: Thank you. And your next question comes from the line of Contra Chercogle with Goldman Sachs. Please go ahead.

Contra Chercogle, Analyst, Goldman Sachs: I hope you can hear me. Thank you very much. Congratulations for the progress, especially the three pronged strategy. And then, I I recognize that the needle movers are Boseto and Cortland International, but my question goes to the holding segment. A couple of questions here.

The first is the $1,600,000 termination expense. Is done, or are we going to see it come through in in the second half of the year as well? That’s the first question. The second question is just on the holding sec segment and then goodwill. How much of goodwill is related to the holding segment?

Just so that as and when there are disposals, are we going to see a change in goodwill? Thank you.

Reese Somerton, Executive Chairman, Aimia Inc.: Yeah. I’ll I’ll I’ll thanks. I’ll ask Steve to to answer those questions.

Steven Leonard, President and CFO, Aimia Inc.: Yes. So on the second one, there’s no goodwill at the holding segment. The goodwill that’s on our balance sheet is attributable to both of the Buzzetto and Cortland businesses. When we sell, if we sell one of those businesses, the goodwill would follow with the disposition of one of those businesses. On the Holdco costs, I think for the quarter we ended up somewhere around $2,000,000 There

Surinder Thind, Analyst, Jefferies: was a small on what we

Steven Leonard, President and CFO, Aimia Inc.: call a normalized basis. There was around 100 ks related to some work that we did on the tax settlement. So on a run rate basis, and that’s why we’ve updated the guidance, if you take the next two quarters and where we’re at for June 30, I think we’re at four and a half. And then you take two over the next two quarters, that would be another four, it would give us 8.5. We’re being a little bit conservative.

We think we’ll land somewhere between that number and the nine. You never know, sometimes things will come up upon us. But as you’ve seen and what we said in our prepared remarks, we’ve taken some action on reducing our professional fees, reducing our other costs, like we said, rent and there’s other places we’ve taken action and those things will no longer be reoccurring in the forward periods.

Contra Chercogle, Analyst, Goldman Sachs: Okay. Thank thank you very much. I wish you all you have something to add, Reese?

Reese Somerton, Executive Chairman, Aimia Inc.: Yeah. I I think I’ll I’ll just reiterate that that although holdco costs will be here, you know, in terms of the guidance for ’25, we still believe that we will get below one and a half percent in future below one and a half percent in future. So there’s there’s still more room more work to be done there.

Contra Chercogle, Analyst, Goldman Sachs: Perfect. Thank you very much. I wish you well second half of the year.

Conference Operator: Alright. Thank you. And we have no further questions at this time. I would like to turn it back to Joe Rocanelli for closing remarks.

Steven Leonard, President and CFO, Aimia Inc.: Thank you for joining us. Reese, do you have any closing remarks?

Reese Somerton, Executive Chairman, Aimia Inc.: Well, thank you. Yeah, from my side as well for joining us for this call. As as I said, I I appreciate that that, you know, quarterly results are not always, you know, newsworthy events. And in our case, we we haven’t been able to elaborate on a lot of the work that we’ve done behind the scenes. But as soon as we have something to report to our shareholders, we will, be in touch.

So we look forward to that.

Conference Operator: Thank you, presenters. And ladies and gentlemen, this concludes today’s conference call. Thank you all for joining. You may now disconnect.

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