Q1 2025 Aimia Inc Earnings Call

Okay.

[music].

Operator: Good morning, ladies and gentlemen, and welcome to the IMEA Inc. First Quarter 2025 Results Conference Call. At this time, all lines are in listen-only mode.

Good morning, ladies and gentlemen, and welcome to the <unk>, Inc. First quarter 'twenty twenty-five results conference call. At this time all lines are in 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.

Operator: 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.

Speaker Change: Sorry zero for the operator this call is being recorded and Tuesday may 13th 2025, I would now like to turn the conference over to Joe Reckon Nowy. Please go ahead.

Operator: This call is being recorded on Tuesday, May 13, 2025.

Operator: I would now like to turn the conference over to Joe Racanelli. Please go ahead.

Joe Racanelli: Thank you, Operator, and good morning, everyone. Joining me on today's call are AMIA's Executive Chairman, Reece Somerton, and AMIA's President and CFO, Stephen Leonard.

Speaker Change: Thank you operator, and good morning, everyone. Joining me on today's call are <unk> executive Chairman Reef, Somerton, and Amy as President and CFO, Steven Leonard before we begin I'd like to point out a couple of items, we issued our financial results for the first quarter earlier, this morning, and all of our materials, including the news release MD&A financial statements.

Joe Racanelli: Before we begin, I'd like to point out a couple of items. We issued our financial results for the first quarter earlier this morning, and all of our materials, including the news release, MD&A, financial statements, are available from our website in CDAR Plus. We will be using a presentation today, and for those listening to our discussion by phone, a copy of the presentation is available from the IR section of our website. Now, 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 section of our financial statements, our MD&A, and as well as the annual information form.

We are available from our website and SEDAR plus we will be using a presentation today and for those listening to our discussion by phone a copy of it is available a copy of the presentation is available from the IR section of our website.

Speaker Change: Now some of the statements made on today's call may constitute forward looking information in our future results may differ materially from what we discuss.

Speaker Change: Refer to the risks and uncertainties.

Speaker Change: <unk> of our financial statements are in MD&A and as well as the annual information form.

Joe Racanelli: In addition, we will be making note of GAAP and non-GAAP financial measures. Reconciliation of these is provided in the appendix of our presentation.

Speaker Change: In addition, we will be making note of GAAP and non-GAAP financial measures reconciliation of these is provided in the appendix of our presentation.

Joe Racanelli: Following today's presentation, after a Q&A session, if you do have any other points to discuss with us, please reach out to me and we'll make arrangements to do so.

Speaker Change: Following todays presentation. After our Q&A session. If you do have any other points to discuss with US. Please reach out to me and will make arrangements to do so with that I'd like to turn the call now to <unk> <unk>. Please go ahead.

Joe Racanelli: With that, I'd like to turn the call now to Rhys. Please go ahead, Rhys. Thanks, Jeff.

Speaker Change: Thanks, Joe Good morning, and thank you for joining us today I think.

Reece Somerton: Good morning, and thank you for joining us today. I think, on balance, there's much to be pleased about with these results. On a consolidated basis, we increased adjusted EBITDA, lowered whole core costs to below $3 million. And on a non-operational basis, we generated a gain of almost $54 million from the completion of our substantial issuer bid. We also benefited from the positive impact on foreign currency fluctuations, efforts to rein in SG&A expenses both at the holdco level and at our core holdings were also contributing factors to our improved financial performance. Our core holdings didn't have any significant impact from tariffs in Q1.

Speaker Change: Unbalance, there's much to be pleased about with these results on a consolidated basis, we increased adjusted EBITDA lowered holdco costs to below $3 million and other non operational basis, we generated a gain of almost $54 million from the completion of our substantial issuer bid.

Speaker Change: We also benefited from the positive impact on foreign currency fluctuations, if it's to rein in SG&A expenses, both at the Holdco level and at our core holdings were also contributing factors to our improved financial performance.

Speaker Change: Core holdings it didn't have any significant impact from tariffs in Q1.

Reece Somerton: We continue to monitor the impact of tariffs on these businesses and remain cautiously optimistic about the outlook for both Bizetta and Cortland for the remainder of the year. As a result, we are reiterating our guidance for the year.

Speaker Change: We continue to monitor the impact of tariffs on these businesses and remain cautiously optimistic about the outlook for both visitor and cotton for the remainder of the year.

Speaker Change: As a result, we are reiterating our guidance for the year.

Reece Somerton: At the end of March, we optimized the size of our board, which we've alluded to before, and adjusted director compensation, generating savings of $1.3 million. But that leaves us at this current juncture.

Speaker Change: At the end of March.

Speaker Change: <unk> optimized the size of our board, which we've alluded to before and adjusted director compensation generating savings of $1 $3 million.

Speaker Change: But that leaves us at this current juncture much work is in fact still needed to address the discount to our shares are trading at relative to <unk>.

Reece Somerton: Much work is, in fact, still needed to address the discount our shares are trading at relative to our estimate of net asset value and the balance sheet value, and to utilise efficiently the $1 billion of tax loss carry-forwards not being utilised currently.

Speaker Change: Estimates of net asset value and the balance sheet value and to utilize efficiently the $1 billion of tax loss carryforwards not being utilized currently.

Reece Somerton: In my closing remarks, I will expand on our strategy going forward and outline some of the steps we plan to take.

Speaker Change: In my closing remarks, I will expand on our strategy going forward and outline some of the steps we plan to take but first Steve will provide a summary of our financial results and operational highlights for the first quarter.

Stephen Leonard: But first, Steve will provide a summary of our financial results and operational highlights for the first quarter.

Stephen Leonard: Thank you, Reese. Good morning, everyone. I'd like to begin my remarks with a review of our consolidated results. As you'll note from slide 7, Q1 was marked by improvements to a number of our key financial metrics when comparing our performance to last year. Consolidated revenue grew by 6% to $129.8 million, or 2% on a constant currency. Gross profit was up almost 4% to 35.6%. Adjusted EBITDA increased to $19.7 million, up from $6.7 million. Net earnings were $400,000, up from a loss of $4.5 million. These improvements were driven by a combination of factors, including the solid performance from our core holdings and the $10.1 million decline in Holco costs.

Steve: Thank you Chris Good morning, everyone I'd like to begin my remarks with a review of our consolidated results. As you will note from slide seven Q1 was marked by improvements to a number of our key financial metrics when comparing our performance to last year consolidated revenue grew by 6% to $129 eight.

Speaker Change: Or 2% on a constant currency basis.

Speaker Change: Gross profit was up almost 4% to $35 6 million.

Speaker Change: Adjusted EBITDA increased to $19 7 million up from $6 7 million.

Speaker Change: Net earnings were 400000.

Speaker Change: Up from a loss of $4 5 million. These.

Speaker Change: These improvements were driven by a combination of factors, including the solid performance from our core holdings and the $10 $1 million decline in Holdco costs.

Stephen Leonard: To put the decline in Holco costs in perspective, Q124 included $6.9 million of shareholder activism costs and $1.6 million of expenses related to termination benefits for former executives. What's important to take away from our consolidated results for Q1 is that our strategy to improve the operational performance at our core holdings and reduce whole-to-whole costs We reported earnings per share of 55 cents in Q1. This was due primarily to a 53.8 million net gain from the substantial issue they completed in February 25. A breakdown of the net gain under IFRS is presented on slide 8. As you'll note, the gain is essentially determined from the difference between the carrying value of the preferred shares exchanged and the conversion value of the shares, which is net of the notes issued, the value of the notes issued in the exchange less transaction cost.

Speaker Change: The decline in Holdco costs in perspective, Q1, 'twenty four included $6 9 million of shareholder activism costs and $1 6 million of expenses related to termination benefits for former executives.

Speaker Change: What's important to take away from our consolidated results for Q1 is that our strategy to improve the operational performance at our core holdings and reduce holdco costs is working.

Speaker Change: We reported earnings per share of <unk> 55.

Speaker Change: In Q1.

Speaker Change: This was due primarily to a $53 8 million net gain from the substantial issuer bid completed in February 25.

Speaker Change: A breakdown of the net gain under <unk> as presented on slide eight as Youll note. The gain is essentially determined from the difference between the carrying value of the preferred shares exchanged and the conversion value of the shares which is net of that.

Speaker Change: The notes issued the value of the notes issued in the exchanged less transaction costs in.

Stephen Leonard: In simple terms, the gain was triggered because the preferred shares were acquired at a discount to their fair value. face value. The gain effectively boosted our EPS for Q1, recognizing the value transfer to our common shareholder.

Speaker Change: In simple terms the gain was triggered because the preferred shares were acquired at a discount to their fair value.

Speaker Change: This value the gain effectively boosted our EPS for Q1, recognizing the value transfer to our common share shareholders.

Stephen Leonard: Turning the performance of our core holdings, starting with Bizetto on slide. Result of our specialty chemical business. We're again solid in Q1 when compared to the performance in the preceding quarters. In Q1-25, Bizetto generated revenue of $89.1 million, up from $88.1 million for the same period last year. On a constant currency basis, But Zetto's revenue was down 2%, or $1.8 million, due to lower volume sold by the textile solutions. This revenue decline was partially offset by improved pricing and product mix at Bazzetto's dispersion solution. In Q1-25, Bizetto generated adjusted EBITDA of $17 million. which represents a margin of 19.1%.

Speaker Change: Turning to performance of our core holdings, starting with <unk> on slide nine.

Speaker Change: The result of our specialty chemical business.

Speaker Change: Were again solid in Q1, when compared to the performance in the preceding quarters and Q1 'twenty five zero generated revenue of $89 1 million up from $88 1 million for the same period last year.

Speaker Change: On a constant currency basis.

Speaker Change: <unk> revenue was down 2% or $1 8 million due to lower volume sold by the tech to also textile solutions sector. This revenue decline was partially offset by improved pricing and product mix at <unk> dispersion solutions sector and <unk>.

Speaker Change: Q1, 25 is that all generated adjusted EBITDA of $17 million.

Speaker Change: Which represents a margin of 19, 1%.

Stephen Leonard: These results were achieved through strategic procurement and improving product mix, as well as reducing SG&A expenses. by $1.4 million excluding the transaction related items in both quarters. In the same period last year, Bizetto generated adjusted EBITDA of $15.5 million at a margin of 17.3%.

Speaker Change: These results were achieved through strategic procurement and improving product mix as well as reducing SG&A.

Speaker Change: G&A expenses by $1 4 million, excluding the transaction related items in both quarters.

Speaker Change: In the same period last year does that have generated adjusted EBITDA of $15 5 million and a margin of 17, 6%.

Stephen Leonard: Results of Cortland International for the first quarter are presented on slide. Cortland grew in Q125 by almost 20% from last year to $40.7 million. On a constant currency basis, Cortlandt grew its revenue by $4.3 million, or $13 billion. The growth was driven by increased market demand, particularly among customers within the fishing and aquaculture and marine and shipping industries. Additional factors driving Cortland's growth included improved product Portland's adjusted EBITDA grew by 35% to $5.4 million. While he adjusted, EBITDA margin improved to 13.3% in Q125. The improvements were largely driven by higher gross profit and by the positive impact of the Business Transformation and Operational Improvement Initiative.

Speaker Change: Results of Cortland International for the first quarter are presented on slide 10, Cortland grew in Q1 25 by almost 20% from last year to $40 7 million.

Speaker Change: On a constant currency basis, Cortland grew its revenue by $4 3 million or 13%.

Speaker Change: The growth was driven by increased market demand, particularly among customers within the fishing and agriculture, and marine and shipping industries.

Speaker Change: Additional factors driving Cortland growth included improved product mix.

Speaker Change: Portland, adjusted EBITDA grew by 35% to $5 4 million while.

Speaker Change: While the adjusted EBITDA margin improved to 13, 3% in Q1 25.

Speaker Change: The improvements were largely driven by higher gross profit and by the positive impact of the business transformation and operational improvement initiatives.

Stephen Leonard: We started in prior periods aimed at building Cortlandt's market share and strengthening his sales force and launching new products. We ended the first quarter with $94.7 million of cash, down slightly from $95.4 million at the end of 2014. Slide 11 shows the waterfall, the cache movements in Q125. We generated $12.2 million in cash flow from operations. reduced by $5.9 million of Part 6.1 tax related to dividends paid.

Speaker Change: We started in prior periods aimed at building cortland market share and strengthening our sales force and launching new products.

Speaker Change: We ended the first quarter with $94 7 million of cash down slightly from $95 4 million at the end of 'twenty four.

Speaker Change: Slide 11 shows the waterfall of the cash movements in Q1 25.

Speaker Change: We generated $12 $2 million in cash flow from operations reduced by $5 9 million of park six one tax related to dividends paid in.

Stephen Leonard: in 2020. Part 6.1 tax will be significantly reduced going forward due to the decrease in preferred shares following the completion of the SIB in February. Other cash movements this quarter included $3.8 million of CapEx, $3.8 million of transaction costs related to the SIPP, $1.9 million of Bazzetto debt repayments, and $1.6 million related... Shared by back under the NCID. As measured By the 22.4 million of adjusted EBITDA for Bizetto in Cortland on a combined basis. and the $2.7 million of HOLCO costs. Our results for Q1 put us on track to achieve our guidance for the year.

Speaker Change: In 2024.

Speaker Change: <unk> $6, one tax will be significantly reduced going forward due to the decrease in preferred shares following the completion of the SIB in February.

Speaker Change: Other cash movement. This quarter included $3 8 million of Capex $3 8 million of transaction costs related to the same.

Speaker Change: $1 9 million or a zero debt repayments and $1 6 million related to the.

Speaker Change: Share buyback under the and CIB.

Speaker Change: As measured.

Speaker Change: By the $22 4 million of adjusted EBITDA for <unk>, and Cortland on a combined basis and the $2 $7 million of Holdco costs. Our results for Q1 put us on track to achieve our guidance for the year.

Stephen Leonard: We're often asked about the impacts of tariffs on our core holdings. To date, Bizetto and Cortland have seen modest impacts by the introduction of new tariffs to the global economy. Each core holding benefits from its diversity of its geographical markets and product mix providing mitigation and sales opportunities. It's for this reason that we've maintained our guidance for the... As illustrated on slide 12, we continue to forecast adjusted EBITDA in 2025 in the range of 88 to 95 million for our core hold. on a combined basis, and expect whole co-costs to be below $11 million. Needless to say, we closely monitor the macroeconomic development.

Speaker Change: We're often asked about the impacts of tariffs on our core holdings to date.

Speaker Change: That own Cortland have seen modest impacts by the introduction of new tariffs to the global economy.

Speaker Change: Each core holding benefits from its diversity of its geographical markets and product mix, providing mitigation and sales opportunities.

Speaker Change: For this reason that we've maintained our guidance for the year.

Speaker Change: As illustrated on Slide 12, we continue to forecast adjusted EBITDA and 25 in the range of $88 million to $95 million for our core holdings on.

Speaker Change: On a combined basis and expect holdco costs to be below $11 million.

Speaker Change: Needless to say, we closely monitor the macroeconomic developments and the impacts on tariffs on the performance of our core holdings closely and will adjust our outlook if necessary.

Stephen Leonard: and the impacts on tariffs on the performance of our core holdings. And we'll adjust our outlook if needed.

Stephen Leonard: We continue to receive positive feedback from investors on the valuation metrics we shared previously and thought it would be helpful to update them again relative to our position at March 31st. As a reminder, the metrics presented on slide 13 are taken from our financial disclosure materials available on CDERplus and our website. This information is presented here in a simplified manner to help investors with their modeling. I should point out, with the completion of the substantial issuer bid in February, we have added $142.6 million of debt related to the 2030 note. And we've also provided Bizetto's long-term debt to the slide.

Speaker Change: We continue to receive positive feedback from investors on the valuation metrics, we shared previously and thought it would be helpful to update them again relative to our position at March 31.

Speaker Change: As a reminder, the metrics presented on slide 13 are taken from our financial disclosure materials available on SEDAR, plus and our website.

Speaker Change: This information is presented here in a simplified manner to help investors with their modeling.

Speaker Change: I should point out with the completion of the substantial issuer bid in February we have added $142 6 million of debt related to the 2030 notes.

Speaker Change: And we've also provided <unk> long term debt to the slide.

Reece Somerton: This concludes my summary of financial results and I'd like to turn the call back to Reece for his closing remarks.

Speaker Change: This concludes my summary of financial results and I'd like to turn the call back to Reece for his closing remarks.

Reece Somerton: Thanks, Steve. Since becoming Executive Chairman at the end of March, I've shared my vision on how AMIA can unlock its value with a number of investors. I thought it would be helpful to share this vision more broadly today. As illustrated on slide 15, our path to enhancing shareholder value really centers on three key steps. Firstly, reduce whole co-costs, and we have a plan in place there. Two, reduce the discount AMIA shares are trading relative to the intrinsic value of the asset. And then three, allocate capital effectively with the goal of utilizing tax loss. The first two steps of our strategy will be our priorities over the next 12 months.

Reece: Thanks, Steve.

Reece: Since becoming executive chairman at the end of March.

Reece: Sure My vision on how EMEA can unlock its value with a number of investors I thought it would be helpful to share this vision more broadly today.

Reece: As illustrated on slide 15, our path to enhancing shareholder value.

Reece: It really centers on three key steps.

Reece: Firstly reduce holdco costs, and we have a plan in place there.

Reece: To reduce the discounts Amy shares are trading relative to the intrinsic value of the assets.

Reece: And then three allocate capital effectively with the goal of utilizing tax loss tax losses.

Reece: First two steps of our strategy will be our priorities over the next 12 months.

Reece Somerton: Success at each stage will earn us the right to proceed with allocating capital effectively through new investments. With the ultimate goal being of realizing tax loss carry-forwards, our investments may take the form of equity investments in undervalued companies, whereby AMIA gains a controlling stake. But that's in the future, and only if we can qualify on reducing whole co-costs and reducing the discount that AMIA shares are trading relative to intrinsic value. Following this blueprint, this will put us on the road to becoming a permanent capital company. We have already made headway on our first priority, reducing whole-cow costs.

Reece: Success at each stage will aid us the rights to proceed with allocating capital effectively through new investments.

Reece: With the ultimate goal being of realizing tax loss carryforwards, our investments may take the form of equity investments in undervalued companies, whereby EMEA gains a controlling stake.

Reece: But that's in the future and only if we can qualify on reducing holdco costs and reducing the discount that Amy shares are trading relative to intrinsic value.

Reece: Following this brief blueprint, we will this will put us on the road to becoming a permanent capital company.

We have already made headway on our first priority reducing holdco costs.

Reece Somerton: Earlier this spring, Steve and I launched a line-by-line review of all AMIA Holco costs, looking for potential savings. In 2025, we plan Holco costs to be below $11 million, down from $12 million in 2024. We've already started by reducing the size of our board, which was an important first step. This measure alone will generate annual savings of $1.3 million, including cash costs of $350,000. Other opportunities, as presented on slide 16 for cost saving, include reducing office rent, audit fees, and software licensing. We've already started to implement these cost-saving measures, and you'll see the benefit of this both in the second half of 2025 and into 2026.

Reece: Earlier this spring Steven are launched a line by line review of all EMEA Holdco costs looking for potential savings in 2025, we played healthcare cost to be below $11 million down from $12 million in 2024.

Reece: We've already started by reducing the size of our board, which was an important first step.

Reece: Measure alone will generate annual savings of $1 $3 million, including cash cost of $350000.

Reece: Other opportunities as presented on slide 16 for cost savings include reducing office rate audit fees and software licenses.

Reece: We've already started to implement these cost saving measures and youll see the benefit of this both in the second half of 2025 and enter 2026.

Reece Somerton: We should have firmer plans which we will release in our second quarter results in August. On the longer-term ambition, annual Holco costs... should be below 1.5% of our net asset value, which is far better than the benchmark of several of our peers. especially some recently announced permanent capital vehicles. Closing the discount that our shares are trading is a second priority. We will be able to achieve this in a number of ways, including being more aggressive with our shared buyback program. In Q1, we acquired almost 700,000 shares. To date, we have purchased 4.2 million shares, or 60% of the 7 million shares available in our current program, as you can see on slide 17.

Reece: We should have seen that.

Reece: Plans, which we will release in our second quarter results in August.

Reece: On the longer term ambition annual holdco costs should.

Reece: It should be below one 5% of our net asset value.

Reece: Which is far better than the benchmark of several of our peers, especially some recently announced permanent capital vehicles.

Reece: Closing the discount that our shares are trading as a second priority.

Reece: We will be able to achieve this in a number of ways, including being more aggressive with our share buyback program.

Reece: In Q1, we acquired on a 700000 shares to date, we have purchased four 2 million shares or 60% of the 7 million shares available in our current program as you can see on slide 17.

Reece Somerton: Given our increased focus on reducing the discount of share price relative to NAV, we plan to renew the NCRB in June when the current program expires. We will share more details of the renewal once the parameters are finalized with the TSA. Another way for us to reduce the share price discount will be to extract value from our core and non-core holdings. We are advanced with plans to obtain reliable valuations of our assets, ensuring that we receive a fair return on our investment.

Reece: Given our increased focus on reducing the discount of share price relative to NAV, we plan to renew the NCI be in June with the current when the current program expires.

Reece: We will share more details of the renewal once the parameters are finalized with the TSA.

Reece: Another way for us to reduce the share price discount will be to extract value from our core and non core holdings.

Reece: We are advanced with plans to obtain reliable valuations of our assets ensuring that we receive a fair return on our investment.

Reece Somerton: In the coming months we will share more details as we make progress with these plans. As you have heard, Q1 was marked by progress on multiple fronts. Most significantly, our core holdings combined to generate $22.4 million of adjusted EBITDA and we reduced our whole co-costs to $2.7 million. These results put us on track to reach our guidance for the year. In the coming months, we expect to build on this momentum and plan to take concrete steps to transition AMIA into a permanent capital vehicle. The goal, as you have heard, is to reduce whole co-costs, close the discount that our share price trades at relative to NAV, and then, if we qualify, effectively allocate capital for new investment.

Reece: In the coming months, we will share more details as we make progress with these plans.

Reece: As you've heard Q1 was marked by progress on multiple fronts, most significantly our core holdings combined to generate $22 $4 million of adjusted EBITDA, and we reduced our holdco costs to $2 7 million.

Reece: These results put us on track to reach our guidance for the year.

Reece: In the current in the coming months, we expect to build on this momentum and plan to take concrete steps to transition EMEA into a permanent capital vehicle.

Reece: So as you have heard to reduce holdco costs close the discount that our share price trades relative to NAV.

Reece: And then if we qualify effectively allocate capital for new investments.

Reece Somerton: We look forward to providing updates on the progress.

Reece: We look forward to providing updates on the progress.

Reece Somerton: Before we open the call to questions, and just a reminder that everybody can ask questions on this call, I would like to remind everyone that we'll be holding our AGM in Toronto on May 21. I hope to meet as many of you as possible who can make it in person.

Reece: Before we open the call to questions and just a reminder, that everybody can ask questions on this call I would like to remind everyone that we will be holding our AGM in Toronto on May 21.

Joe: I hope to meet as many of you as possible you can make it in person. Thank you for your time today I will hand back to Joe.

Reece Somerton: Thank you for your time today.

Joe Racanelli: I'll hand back to Joe.

Operator: Operator, if you wouldn't mind providing instructions on how to pose questions, please. Operator Thank you.

Joe: Operator, if you wouldn't mind, providing instructions on how to pose questions. Please.

Joe: Operator.

Joe: Thank you.

Operator: Ladies and gentlemen, we will now begin the question and answer session.

Joe: Ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press the star followed by the number one on your Touchtone filing and you will hear from that your hand has been a race should you wish to decline from the polling process. Please press <unk>.

Operator: Should you have a question, please press the star followed by the number one on your touchtone phone and you will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the number two.

Joe: <unk>, followed by the number and to use the speaker phone. Please lift the handset before pressing any Keith one moment. Please for your first question.

Operator: And to use a speakerphone, please lift the handset before pressing any keys. One moment please for your first question.

Surinder Senth: Your first question comes from Surinder Senth with Jefferies. Please go ahead. Thank you.

Speaker Change: Your first question comes from Jeremy enduring spin.

Jeremy: With Jefferies. Please go ahead.

Speaker Change: Thank you.

Reece Somerton: Rhys, are you able to provide maybe any more color on, in terms of a strategic update or your thoughts on a go-forward basis, when we think about, you know, how do we, you know, what you want the hold code to look like and if there's the potential to maybe look at a sale of one or both core assets and then just kind of reboot the hold code. It's a good question. I think the first answer to that is we want the whole culture to have lower expenses. And so before we do anything else, we need to implement our strategy of reducing whole co-costs materially.

Speaker Change: Are you able to provide maybe any more color on in terms of our strategic update or your thoughts on a go forward basis, when we think about.

Speaker Change: What you want the Holdco to look like and if there's the potential that may be looking at a sale of one or both core assets and then just kind of a reboot the holdco.

Speaker Change: Yes. Thanks Thats a good question I think the first answer to that is we want the whole cut you have lower expenses.

Speaker Change: And so before we do anything else.

Speaker Change: To implement our strategy of reducing holdco costs materially.

Reece Somerton: We've given some guidance on that, but I think there's going to be more to do and you'll probably see much more evidence of it in 2026 than 2025 as some of the expenses have a runoff. So once we've done that and work on, remember that second step that we brought up, which is kind of closing the discount to NAV, now to do that, we need to know what a market value is for these assets. And so we will, and we are, advancing that as quickly as possible. And I think, you know, we'll break from the history of AMIA and we'll report things when we are ready to announce anything material, obviously.

Speaker Change: We've given some guidance on that but I think this is going to be more to do and youll, probably see much more evidence of it in 2026 and 2025 has some of the expenses have a runoff.

Speaker Change: So once you've done that.

Speaker Change: And work on remember that second step that we brought up which is.

Speaker Change: Kind of closing the discount to NAV not to do that we need to know what a market value is for these assets.

Speaker Change: And so we will and we are.

Speaker Change: Advancing that.

Speaker Change: Quickly as possible.

Speaker Change: Thank you.

Speaker Change: We'll break from from the history of EMEA, and we'll report things when we are ready to.

Speaker Change: Two announce anything material obviously.

Reece Somerton: But we are moving very, very rapidly in that direction.

But we are moving very very rapidly in that direction.

Reece Somerton: And once we've done that, if those two steps are closed, so let's say we've reduced whole co-costs and we've closed the discount materially, then at that point we can look at it and decide how we allocate the capital. And that capital allocation decision is really what excites me in the longer term. We only get there, though, if we can fulfill the first two steps. That's helpful.

Speaker Change: And once you've done that.

Speaker Change: If those two steps are close so let's say, we've reduced holdco costs.

Speaker Change: Close the discount materially.

Speaker Change: Then at that point, we can look at it and decide how we allocate the capital and that capital allocation decision is really what excites me and in the longer term.

Andy: Andy get data if we can fulfill the first two steps.

Andy: That's helpful and then when we think about just.

Reece Somerton: And then when we think about just your willingness to buy back shares or the aggressiveness, how do you think about that in the current environment relative to maybe making investments to, let's say, get growth rebooted at like Bazzetto or something like that? Where is that trade-off? Because obviously the discount reflects the challenges of the underlying asset. Yeah, I think the discount reflects a few things. There's a fairly high correlation with permanent capital vehicles and higher whole co-costs and big discounts. So by closing that, by reducing whole co-costs, we think you end up reducing the discounts that these companies should trade at.

Andy: <unk>.

Andy: Your willingness or to buy back shares or the aggressiveness.

Andy: Do you think about that in the current environment relative to maybe.

Andy: Making investments to let's say get grows rebooted, it et cetera, or something like that.

Andy: Where is that trade off because obviously the discount reflects.

Andy: The challenges at the underlying assets.

Andy: Yes, I think the discount reflects a few things.

Andy: There's a fairly high correlation with.

Permanent capital vehicles, and Holdco costs and big discounts.

Andy: At closing that.

Andy: By reducing Holdco costs, we think you end up reducing the discount that these companies should trade at.

Reece Somerton: Secondly, if you look at our two core investments, they're both very cash flow generative. So it's not as though we're stifling them in any way by conducting a share buyback and preventing reinvestment of their cash flows. So what we're allocating to buybacks is really what we have at the whole co-level already. And some of that cash is upstream to the Holco from the core holdings.

Andy: Secondly, if you look at our two core investments they are both very cash flow generative.

Andy: So it's not as though we start selling them in any way by conducting a share buyback.

Andy: And preventing reinvestment.

Andy: Their cash flows.

Andy: What are we allocating to buybacks is really what we have at the holdco level already.

Andy: And some of that cash is upstream to the holdco from the core holdings, if there's investments to be made there we will definitely look at it that we look at it through the lens of what is the most efficient form of capital allocation.

Reece Somerton: If there's investments to be made there, we'll definitely look at it. But we look at it through the lens of what is the most efficient form of capital allocation. And so when you think about buybacks, every share we buy back, you know, we add significant value relative to the price we pay. And so it's a very simple and easy decision. We know what the quality of the underlying assets are like. And so we have that knowledge. And we have confidence that buying shares back makes a lot of sense at this level.

Andy: When you think about buybacks every share we buy back.

Andy: We add significant value.

Andy: Relative to the price we pay.

Andy: It's a very simple and easy decision, we know what the quality of the underlying assets of lag and so we can we have that knowledge and we have confidence that buying shares back makes a lot of sense at this level.

Reece Somerton: But that's helpful and understood on the early part of the strategic strategy here.

Andy: Alright.

Andy: That's helpful.

Andy: Understood on that early part of the strategic strategy here.

Surinder Senth: And then in terms of just when we think about Tariffs and your commentary around kind of the limited impact If I was to rewind, part of the strategy with some of the core holdings was greater penetration into the U.S., how does the tariffs or the potential volatility around that impact that strategy at this point?

Andy: And then in terms of just when we think about.

Andy: Tariffs and your commentary around kind of the limited impact.

If I was to rewind part of the strategy with some of the core holdings was.

Andy: Greater penetration into the U S. How does the tariffs.

Andy: The potential volatility around that impact that strategy at this point.

Stephen Leonard: I surrender it Steve. I mean, we're still still in the early innings, you know, as we said, our Q1, I mean, there was some wind that we faced in our sights on the tariff on Bazzetto. You probably saw by my comments, the textile side of the business was a little softer. And that, you know, was basically because some of the clients in the Bazzetto side of the business downstream were ultimately going to be selling into the U.S. and were delaying production or purchase pending what was going to happen with the tariff. But conversely, Bizetto was able to take advantage outside of the U.S.

Andy: Hi, Surinder, it's Steve I mean, we're still we're still in the early innings.

Speaker Change: As we said our Q1.

Andy: There was some.

Andy: Wind that we faced in the in our sites.

Andy: Sites on on a tariff on <unk>.

Andy: You probably saw by my comments.

Andy: The textile side of the business was a little soffer softer than that.

Andy: It was basically because some of the clients in the <unk> side of the business downstream.

Andy: We're ultimately going to be selling into the U S and we're delaying.

Andy: Production or purchases pending what was going to happen with the tariffs.

Andy: But Conversely, bizerte was able to take advantage outside of the U S and other markets.

Stephen Leonard: in other markets, particularly in the dispersion side of it, with different initiatives relative to, you know, different verticals that they're approaching. So there was some mitigation there, and it, you know, gives us some comfort in terms of what we're thinking about for the full year. It's still a strategy for Bizetto to gain more access to the U.S. market. That was primarily through the Honduras acquisition. So, you know, again, it's early days because we have to monitor more closely what's going on between that country and the U.S. in terms of what's going to happen on tariffs.

Andy: Particular in a dispersion side of it with.

Andy: Different initiatives relative to different verticals that they're approaching so there was some mitigation there.

Andy: It gives us some comfort in terms of what we're thinking about for the full year, it's still a strategy for <unk> to gain more access to the U S market that was <unk>.

Andy: Primarily through the Honduras acquisition so.

Andy: Again, it's early it's early.

Andy: <unk>, because we have to monitor more closely what's going on between that country in the U S. In terms of what's going to happen on tariffs.

Stephen Leonard: On the Cortland side, as you know, we have a big operation in India and we're producing in India, but we also have a footprint in the U.S. and that gives us an advantage not only because we have domestic production in the U.S., but it also gives us an advantage in terms of, you know, how different products will be measured in terms of what's going to be sold to the end customer, how much is going to be produced in India versus in the U.S., et cetera. So, again, as many companies, we're still in the evaluation stage, but we're not seeing, you know, at least in the first three, four months to date, significant impact on our That that's helpful.

Andy: On the on the Cortland side.

Andy: As you know we have a big operation in India, and we're producing in India, but we also have a footprint in the U S and that gives us an advantage.

Andy: Not only.

Andy: Because we have domestic production in the U S. But it also gives us an advantage in terms of.

Andy: How different products will be measured in terms of what's going to be sold to the end customer how much is going to be produced in India versus in the U S et cetera.

Andy: <unk>.

Andy: Again as many companies were still in the evaluation stage.

Andy: We're not seeing.

Andy: At least in the first three four months to date significant impact on our business.

Andy: Okay. That's helpful. Thank you.

Surinder Senth: Thank you Thank you.

Andy: Thank you.

Brian Morrison: The next question comes from Brian Morrison with Tiddi Cohen. Please go ahead. Yeah, good morning.

Speaker Change: The next question comes from Brian Morrison with TD Cowen. Please go ahead.

Brian Morrison: Yes, good morning.

Brian Morrison: Three, step one, the holdco process. Things well underway and step two also sounds like reducing share price discount whether it be potential monetization of your core assets or your buyback sounds like it's progressing as well.

Brian Morrison: Re step one the holdco.

Brian Morrison: Process seems well underway and step two.

Brian Morrison: So sounds like reducing share price discount whether it'd be potential monetization of your core assets or are you buyback sounds like it's progressing as well so I wanted to focus on.

Reece Somerton: So I want to focus on step three here because there's a little bit of a change of course and the old management team stated a similar strategy and then went off kilter or off strategy investments. So help me get comfort in the process in terms of the team that determines idea generation, the governance on these investments and your clear criteria for capital allocation. I assume other than utilizing the NOLs would be top of mind. I want to know what goes into your capital allocation strategy. Yeah, that's what excites me the most about this. Cutting whole code costs and reducing discounts is kind of the easy part.

Brian Morrison: Three here, because there's a little bit of a change of course and the old management team stayed at a similar strategy and then went off kilter or off strategy investments. So help me get comfort in the process in terms of the team that determines the igen your idea generation the governance on these investments and your clear criteria for capital allocation I assume.

Brian Morrison: Other than utilizing the Nols would be top of mind I want to know what goes into your capital allocation strategy.

Brian Morrison: Yes.

Brian Morrison: What excites me the most about this heading.

Brian Morrison: Heading holdco costs, and reducing discounts as kind of the easy part.

Reece Somerton: I would say that you are right about being well down the line on reducing the whole code costs. I think on step two, there's a lot of work that we've done and a lot more work still to do there. And with all these things, it does take time. So, you know, we'll continue to push that very, very hard.

Brian Morrison: I would say that.

Brian Morrison: You are right about.

Brian Morrison: Being well down the line on reducing the holdco costs.

Brian Morrison: I think on step two theres a lot of work that we've done and a lot more work still to do that.

<unk>.

Brian Morrison: With all these things.

Brian Morrison: It does take time.

Brian Morrison: So.

Brian Morrison: We will continue to push that very very hard.

Reece Somerton: And I'll go back to the point that we can only get to Stage 3 once we've really executed well on Stages 1 and 2, or Steps 1 and 2. What we do then, I think, will be interesting from a capital allocation point of view. When we look at companies, at least in my history of investing, we've kind of allocated capital successfully to companies that are out of favor, are on the smaller end of the market cap spectrum. But equally, what we like is companies that have very strong balance sheets, so net cash balance sheets, who have very high or very strong free cash flow generative underlying businesses.

Brian Morrison: And I'll go back to the point that we could only get to stage III once we've.

Brian Morrison: Really executed well on stages, one and two steps one and two.

Brian Morrison: What we do then I think will be interesting from a from a capital allocation point of view.

Brian Morrison: When we look at companies at least.

Brian Morrison: My history of investing.

Brian Morrison: We've kind of.

Brian Morrison: Allocated capital.

Brian Morrison: Essentially to companies that.

Brian Morrison: All out of favor.

Brian Morrison: Are on the smaller end of the market cap spectrum.

Brian Morrison: But equally what we like is companies that have very strong balance sheets net cash.

Brian Morrison: Our balance sheets.

Brian Morrison: Who have very high or very strong free cash flow generative underlying businesses.

Reece Somerton: And so that's where, if we get to that stage, what we'll really look forward to sharing ideas about. And we think that there is a very wide pool of public assets listed in various markets which have exposure to the U.S. and Canada, where they are perhaps forgotten about by the current markets, which has continued to ignore high-free cash flow generators on the value side of the market. So what we'll do is speak to all investors in AMIA about that when the time is right. But we have targets already in mind, probably seven or eight companies that we think would fulfil our criteria, and then it would be a case of executing on it.

Brian Morrison: And so that's where.

Brian Morrison: If we get to that stage.

Really look forward to sharing ideas about.

Brian Morrison: And we think that there is a very.

Brian Morrison: Wide pool of public assets.

Listed in various markets, which have.

Brian Morrison: Exposure to the U S and Canada.

Brian Morrison: They are perhaps forgotten about by the current market, which.

Brian Morrison: Has continued to ignore.

Brian Morrison: Half free cash flow generative generators on the value side of them off the market.

Brian Morrison: What we will do is.

Brian Morrison: Speak to all investors and EMIR about that when the time is right, but we have targets already in mind, probably seven or eight.

Brian Morrison: Companies that we think would fulfill our criteria.

Brian Morrison: And then it would be a case of executing on it.

Reece Somerton: And we'd only execute if the valuation made enormous sense.

Brian Morrison: And would only execute if the valuation made enormous sense.

Reece Somerton: And if we could do it once we have a very efficient AMIA to manage those assets with, we wouldn't even think about doing anything before Steps 1 and 2 are done.

Brian Morrison: And if we could do it.

Brian Morrison: With.

Brian Morrison: Once once we have a very efficient EMEA.

Brian Morrison: To manage that.

Brian Morrison: Those assets with we wouldn't even think about doing anything before steps, one and two and done right.

Brian Morrison: I get that, Reece, but what I'm trying to understand is, maybe you can share with us what your track with Milkwood is over like a one, five, ten-year time frame. I'm trying to digest why investors, other than the NOL access, would allocate capital to AMIA rather than to invest, do so themselves. And how will investments by AMIA differ from those of your own investments at Milkwood? I think there would be some overlap with those investments potentially, but if you just think about the nature of permanent capital vehicles. The attraction is not to own shares in public markets, but really to own 100% of companies.

Brian Morrison: Yes.

Brian Morrison: I get that but what I'm trying to understand as well.

Brian Morrison: Maybe share with us what your track Wood wood with no cord is over like a 105 to 10 year timeframe I'm, just I'm trying to digest why investors other than the NOL access would allocate capital to India rather than to invest.

Brian Morrison: Show themselves and how investments by EMEA differ from those of your own investments at Milkwood.

Brian Morrison: Yes, I think so I think there would be.

Brian Morrison: Some overlap.

Brian Morrison: With those investments potentially.

Brian Morrison: If you just think about the nature of permanent capital vehicles.

Brian Morrison: The attraction is.

Brian Morrison: Not to own.

Brian Morrison: The shaded in public markets, but really to own 100% of companies and I think thats really what it is there is an opportunity here is to build up stakes in public companies.

Reece Somerton: And I think that's really where there's an opportunity here, is to build up stakes in public companies and eventually turn them into wholly owned holdings of AMIA. And that's really the attraction. of a permanent capital vehicle into the long term.

Brian Morrison: And eventually.

Brian Morrison: Turning them into wholly owned.

Brian Morrison: Holdings of EMEA.

Brian Morrison: And Thats really the attraction.

Brian Morrison: Other permanent capital vehicles into the long term.

Reece Somerton: As regards Milkwood, I don't want to obfuscate what we're doing right now, and that's talking about AMIA, but you're welcome to go onto the Milkwood website, and we'd be very happy to provide any investors in AMIA with access to our letters. And you'll be able to see exactly how we've done and the investments that we've made. But this is, you know, our focus, if you like, is definitely on AMIA, and when the time is right for us to allocate capital, we will share all the details with you. But it'll be along very similar lines to what we've done in the past.

Brian Morrison: As regards.

Brian Morrison: Liquid.

Brian Morrison: I don't want to.

Speaker Change: Sort of office gauge, what we're doing right now and Thats talking about EMEA, but you're welcome to.

Speaker Change: Now onto the <unk> website, and we'd be very happy to provide it.

Speaker Change: Any investors in EMEA with access to <unk>.

Speaker Change: Letters and Youll be able to see exactly how we've done and the investments that we've made.

Speaker Change: This is this is this is a focus if you like.

Speaker Change: Is definitely on an on EMEA and when the time is right for us to allocate capital we.

Speaker Change: We will share all the details with you, but it'll be a long very similar lines to what we've what we've done in the past.

Brian Morrison: Okay.

Brian Morrison: But just last, well, we only need two questions, but you say that some of these investments could overlap. Would these be investments that you currently hold, or would they be new investments? Because I know that you and NIFIC, specifically Children's Place, have a relationship there. And I just want to understand, you know, I'm not sure that we want to see, or maybe that's not fair. I'm wondering if there's any potential related party investments that could get vended into AMIA over time.

Speaker Change: Okay, but just the last well we didn't need to questions that you say that some of these investments could overlap.

Speaker Change: Would these be investments that you currently hold or would they be new investments because I know that you and miss it specifically childrens place.

Speaker Change: Our relationship there and I just want to understand.

Speaker Change: I'm not sure that we want to see or maybe its maybe thats not fair I'm wondering if there's any potential related party investments that could get blended into Asia over time.

Reece Somerton: I can categorically say we don't own any Children's Place shares. The only relationship we have is we share some interests in looking at companies in a very similar way, as well as having some board representation on similar companies. But the idea is not to invest in any of Methack's current investments. In fact, I don't even think I know what all Methack's investments are, so that's not the idea at all. We come up with our own ideas, and I think if you had to go and look at our letters, you would see what kind of investments we make.

Speaker Change: Yes, I can.

Speaker Change: I can get it categorically said, we don't own any.

Speaker Change: Children's place.

Speaker Change: She is.

Speaker Change: The only relationship we have is as we see some interest in looking at companies in a very similar way.

Speaker Change: As well as I'm, having some.

Speaker Change: Board representation on some of the companies that.

Speaker Change: The idea is not to invest in any of <unk>.

Speaker Change: Current investments in fact.

Speaker Change: I don't even think I know.

Speaker Change: <unk> investments are so that's not the idea at all.

Speaker Change: Come up with their own ideas.

Speaker Change: And.

Speaker Change: I think if you if you had to go and look at our latest you would see what kind of investments we make now to answer your first part of your question.

Reece Somerton: Now, to answer your first part of your question, I think you said, is anything in the existing portfolio of milkweed going to end up in Amia? We would evaluate it each time, but I would suspect that that won't be the case in the short term, it might be the case in the long term. Okay. I appreciate it. I'm sorry to ask those questions, but I appreciate the clarification. I think they're very valid.

Speaker Change: I think you said.

Speaker Change: Is there anything on the existing portfolio of milkweed going to end up in in EMEA.

Speaker Change: We would evaluate it each time, but I would suspect that that won't be the case in the short term it might be the case in.

Speaker Change: In the long term.

Speaker Change: Okay I appreciate I'm, sorry to ask those questions, but I appreciate the clarification.

Speaker Change: Thank you.

Stephen Leonard: Okay, and Steve, the state of your cash deposit, can you just fill me in on that and then I'll pass the line. Yeah, Brian, I was hoping to have more firm news this quarter, but I would say we're in the ninth inning, and I think we'll have news between now and our Q2 results. You know, yeah, we're very close to concluding. All right. Thank you. Thank you very much. Thanks, Brian.

Speaker Change: Okay and Steve the state of your cash deposit can you just fill me in on that and then I'll pass the line.

Steve: Yes, Brian I was hoping to have.

Steve: More firm news this quarter, but I would say we're like we're in the ninth inning and I think we will have news between now and <unk>.

Steve: Our Q2 results.

Steve: Yes, we're very close to.

Steve: Concluding something.

Steve: Alright. Thank you. Thank you very much.

Speaker Change: Thanks, Brian Recency, if we got a couple of questions and via text and if you wouldn't mind. So first is.

Reece Somerton: Reece and Steve, we got a couple of questions in via text, and if you wouldn't mind. So first is, what type of companies would you invest in? Yeah, I think what we've said is when we get to that point, we want to be able to utilize the tax losses, so that is most likely that we'll invest in companies eventually that are in the US and Canada.

Steve: What kind of what type of companies would you invest them.

Steve: Yes, I think what we said is when we get to that point.

Steve: We want to be able to utilize the tax losses.

Steve: So that is most likely that we will invest in companies.

Steve: Eventually.

Steve: In the U S and Canada.

Reece Somerton: to draw down on that, but operationally I think what we want to do is find companies that have sustainable, strong free cash flow generative ability, that are good companies and have very, very solid balance sheets with a net cash position. But we'll share more details when and if the time comes to do that.

Steve: To drill down on that but operationally I think what we want to do is find companies that have sustainable.

Steve: Strong free cash flow generative ability.

Steve: That.

Steve: Good companies and have very very solid balance sheets with a net cash position.

Steve: But we will share more details when the time when and if the time comes to do that.

Reece Somerton: Next question. Can you expand on what you mean by determining the value of holdings? Does that entail the potential sale of these assets?

Steve: Next question can you expand on what you mean by determining the value of holdings does that entail the potential sale of these assets.

Steve: Yes.

Reece Somerton: Remember what I said earlier was that we will break from the past. And we don't want to promise something and then, you know, take a long time to deliver it. What we would much rather do is come back to you, shareholders of AMIA, once we have something to say. But rest assured, we are working very, very hard at having something to say.

Steve: Remember, what I said earlier was that.

Steve: We will.

Steve: A break from the past.

Steve: And we don't want to promise something and then take a long time to deliberate what we would much rather do is come back to shareholders of EMEA. Once we have something to say.

Steve: Rest assured we are working very very hard.

Steve: Having something to say.

Stephen Leonard: And a question for Steve. What are your plans for interest payments related to the 23 notes? Will you pick them or pay out the interest? No, we're going to pay them. We disclosed in our NDNA our next 12 months' use of cash, and it's in there. So we'll have a June payment coming up, and right now, the current plan is to pay the notes, the interest.

Steve: And a question for Steve what are your plans for interest payments related to the to the 23 notes will you pick them or pay up the interest no. We're going to pay them. They are in are we disclosed in our MD&A. Our next 12 months use of cash in and its in there. So we'll have a June payment coming up in.

Steve: Right now the current plan is to pay down the interest on the notes.

Stephen Leonard: Okay. And you talked about planning to renew the NCIB. Is that going to happen in June or when is the timing on that? Yeah, that comes up for renewal in June and where process is underway. expect to renew it in early June.

Speaker Change: Okay, and you talked about planning to renew the in CIB is that going to happen in <unk>.

Speaker Change: June or when is the timing on that yeah that comes up for renewal in June and were process is underway.

Speaker Change: <unk>.

Speaker Change: We expect to renew it in early June.

Speaker Change: Yes.

Joe Racanelli: Well, thank you for joining us. That's the extent of our questions for today. And as Reese mentioned, we are hosting our annual general meeting next week in Toronto. We're hopeful that many of you will be able to attend in person. We will have and provide links for a webcast of our AGM, and we'll also provide, through that link, opportunity for anyone to post questions. So thank you, and if you do already follow up, please reach out to us. Have a good day, everyone.

Speaker Change: Okay, well, thank you for joining us.

Speaker Change: The extent of our questions for today and as Reece mentioned, we are hosting our annual general meeting next week in Toronto, We are hopeful that many of you will be able to attend in person. We will have and provide links for a webcast of our AGM and we will also provide through that linked opportunity for anyone to pose questions. So thank you and if you're already follow up please reach out to.

Speaker Change: Have a good day everyone.

Operator: There are no further questions at this time. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Speaker Change: There are no further questions at this time.

Speaker Change: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Yes.