On Wednesday, Aimia (TSX:AIM) discussed first-quarter financial results during its earnings call. The full transcript is provided below.

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Summary

AIM ImmunoTech Inc announced the divestiture of its specialty chemicals business, Bazzetto, and received regulatory approvals for the transaction, which will close by the end of May.

The company invested $1.4 million in share buybacks and plans to eliminate Holdco debt while seeking investments in undervalued companies.

Adjusted EBITDA for Q1 remained flat due to decreased operating profit, although SGA expenses fell by $2 million.

Cortland's revenue declined by 19.7% due to lower sales volume and geopolitical issues but showed improved net earnings by $3.4 million.

The sale of Bazzetto is expected to generate $267 million in net proceeds, with plans to use these for investments and redeeming senior notes.

The company aims to become a permanent capital vehicle, focusing on shareholder returns and potential UK market listing.

Full Transcript

OPERATOR

Good morning, ladies and gentlemen, and welcome to AIM ImmunoTech Inc. First Quarter 2026 Results Conference Call at this time, all participants 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 press star zero for the operator. This call is being recorded on Wednesday, May 13, 2026. I would now like to turn the conference over to Joe Racknelli. Please go ahead, sir.

Joe Racknelli

Thank you, operator. And good morning everyone. Joining me on Today's call are AIM ImmunoTech Inc's executive chairman, Reece Somerton, as well as our President and CFO Stephen Leonard. Before we begin, I'd like to point out that we issued our financial statements for the first quarter earlier this morning. And all our materials, including the news release, MDA and financial statements, are available from our website as well as from SEDAR Plus. We will be using a presentation today and for those listening to our discussion 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 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 as well as our MDA. In addition, we will be making note of GAAP and non GAAP financial measures. Reconciliation is provided in the appendix of our presentation. And following today's presentation, please reach out to me if you have any outstanding questions or require any clarification on matters discussed today. With that, I'd like to turn the call over now to Rhys. Go ahead, please.

Rhys Somerton

Yeah, good morning, everybody. Good afternoon. We had a particularly busy first quarter on multiple fronts. Most notably, we announced the divestiture of the specialty chemicals business, Bazzetto. We invested $1.4 million in share buybacks, and most importantly, we worked hard on identifying several target companies that meet our investment criteria, which we can start getting active on subsequent to the quarter end. We received all the necessary regulatory approvals for the Bazzetto transaction to be completed, paving the way for the deal to close in the next couple of weeks, certainly by the end of May.

Rhys Somerton

Combined with these efforts, we are now in a position to eradicate the Holdco debt, in particular reference to the notes, and begin to make investments in undervalued companies. We expect to build on the progress in the second half of the year, given a number of initiatives that we've planned, such as making an offer for those notes that we referenced earlier. We are also optimistic about Cortland. We think there's a lot of improvement that Cortland will see in the second half of the year, subject to obviously the geopolitical situation in the Middle east calming down.

Rhys Somerton

But we've worked hard to realign the management team and we're confident that the new leadership will take Cortland to the next level. I'll expand on our outlook and priorities later in the presentation, but first I will ask Steve to review the financial results in more detail. Over to you, Steve.

Stephen Leonard (President and CFO)

Thank you, Rhys. Good morning and afternoon to everyone. Before I begin my review of the financial results for Q1, I want to point out that we are presenting Bazzetto as discontinued operations given the pending sale of the business. As such, Bazzetto's contributions are excluded from the financial highlights Presented on slide 7, with the exception of cash flow from operations and net earnings. With that out of the way, our Q1 results reflect the impact of geopolitical and macroeconomic developments. Adjusted EBITDA in Q1.26 was relatively flat when compared to last year, largely due to a decrease in operating profit offset by a decline in SGA expenses by 2 million. The decrease in SG and A expenses included the benefits of ongoing efforts to reduce holding company costs for items such as insurance, rent, professional services, as well as some currency gains. At Cortland, net earnings in Q1.26 improved by 3.4 million, benefiting from the reduced SGA expenses as noted, and earnings contributed from Bazetto.

Stephen Leonard (President and CFO)

Cortland's Results for the first quarter are presented on Slide 8. In Q1.26, Cortland generated $32.7 million of revenue, down 19.7% from last year. On a constant currency basis. Cortland's revenue declined 16% the year over. Year variance was due to a combination of factors including lower sales volume, particularly in the marine and shipping sector, the timing of sales orders and increased selling pressures caused by geopolitical developments in the Middle East. The decline was partially offset by increased sales in India. Within the fishing and aquaculture sector, Portland's adjusted EBITDA in Q1.26 was 4.5 million, down 16.7% from 5.4 million last year. Decline was due to lower sales volume and lower gross profit already discussed. The decline was partially offset by 1 million of lower SGA expenses in Q1. 26. The decrease in SGA was largely attributable to lower selling expenses due to reduced sales volume and some currency gains.

Stephen Leonard (President and CFO)

On the translation of Trade balances in Q1, Cortland announced a senior leadership chain naming Wolfgang Wandl, a business leader with more than 30 years of international business experience as CEO, Wolfgang will oversee Cortland's day to day operations with a focus on driving global sales and product innovation, deepening customer partnerships and expanding Cortland's presence in key markets. Given the increased focus on growing sales and building customer relationships, we are optimistic that Cortland is primed for a turnaround in the second half of the year pending the easing of tensions in the Middle East.

Stephen Leonard (President and CFO)

We ended the quarter with $100.3 million of cash on a consolidated basis, down from 109 million at the end of December 25th. Our consolidated total at the quarter end includes Bazzetto's cash and cash equivalents of 57.7 million, even though its liquidity was considered as cash in the asset held for sale. Slide 9 shows a waterfall of cash movements in the quarter. Key drivers for the decrease in liquidity include 5.9 million in repayments of other borrowings, 2 million in principal repayments on Bazzetto senior credit facilities, 2.2 million of capex, 1.4 million of common share buybacks and 0.7 million of preferred share dividends. This outflow was partially offset by cash flow from operations of 3.8 million, which included a lump sum payment of 5.2 million to a former executive as part of a settlement agreement of a claim initiated in 2020. A key development in Q1 was the signing of a definitive agreement to divest Baseto. While we have discussed some of the details previously, I think it would be helpful to review the salient aspects of the transaction and provide an update on the recent developments. When we announced the plan divestiture of Basetto on February 9, we noted the regulatory approvals were a necessary condition of the sale. We are delighted to announce that received all regulatory approvals and are now on track to close the transaction before the end of May. As summarized on Slide 12, the sale of Buzzetta will generate approximately 267 million in net proceeds at close, with more than 500 million of capital tax carryforwards at March 31. We do not anticipate paying any taxes on the gain from the transaction. As disclosed previously, we expect to use the net proceeds towards making investments in undervalued companies, with the ultimate goal of acquiring controlling interests in these investments. Slide 13 illustrates a cash waterfall of the main transaction components. Although the Zetto transaction is denominated in euros, we have presented it in Canadian dollars, our reporting currency. I should point out that we've entered into a hedging strategy in February to mitigate the currency risk of exposure of the net proceeds Subsequent to quarter end, we increased the notional value of our hedge instruments to 128 million euros. A large portion of the Canadian dollar proceeds from our hedging instruments will be used towards our planned offer to redeem our senior notes. Slide 14 presents our cash position on a pro forma basis taking into account the impacts of the Bazetto divestiture on our liquidity as of March 31. The impacts of the Bazetto divestiture include the deduction of cash held by Bazzetto, the use of $146.1 million towards the redemption of our Senior Notes including unpaid and accrued interest at March 31st. Since we anticipate that some holders will prefer to hang on to their notes until maturity, it's likely that our pro forma cash position could be higher. By way of illustration, our pro forma cash position could be 28.5 million higher if 20% of the note holders elect to pass on the redemption offer and continue to collect the 9.75% coupon. We will provide updates on the offer. Call our Senior Notes in the coming weeks. That concludes my prepared comments. I'd like to turn the call back to Reese to review Amy's near term priorities and outlook. Reece thanks Steve.

Reece Somerton (Executive Chairman)

So, looking ahead, we already mentioned we anticipate the Bazzetto transaction will close at the latest end of May. Once we've done the closing, we'll make the offer for the Senior Notes which will be end of May beginning of June with a purchase offer and that's the requirement of the indenture agreement which is triggered by the Bazzetto sale. The offer to holders will be made at par value of the notes plus any accrued interest. Also in June we anticipate renewing our normal course issuer bid pending regulatory approval. We anticipate being permitted to buy back approximately 5 million shares over the next 12 months through to June 2027. Just as significant, we will begin to deploy the net proceeds towards making investments in our target companies and continuing with our three step strategy, part of which is narrowing the discount that AIMIA trades relative to our view of intrinsic value. Later this summer we also expect to become listed in the UK subject to meeting the listing qualifications and that'll most likely be on the A market as you've heard. Q1 We've been busy. We've made progress towards getting AIMIA ready to be a permanent capital vehicle and that should ensure that we put shareholders first and start to generate returns that shareholders really deserve to have. Especially those that have been involved for a long time. Our focus is to keep the momentum going. In particular, we want to complete this Bazetta transaction. We don't foresee any issues with that. Our focus on the longer term, though, is really back to the net book value and growth and network value per share that will benefit all shareholders. I won't elaborate much more at this point, but I would remind you that we're hosting the AGM today later this morning, and I'll be expanding on our investment ideas, the types of companies we'll be targeting during the presentation. If you are unable to attend here in Toronto, I will recommend that you can join us on the webcast and I think the link is on our website. Thank you for your time. We'll open for questions. Thanks, Joe.

Joe Racknelli

Thank you. So, before we open up the question to callers, we have received a couple inbounds from some of our shareholders. First question relates to deployment of capital. What percentage of the deployable capital will you be making investments? And how much percentage will be kept as dry powder?

Reece Somerton (Executive Chairman)

Think of it like this. We've got kind of three buckets of value. The way I see it in amia, the one is the cash that you'll have after settling the notes. We don't know what the outcome of that will be, but we've given some indication the presentation of the cash we'll have. We'll also have kind of the second bucket, which is Cortland, that is cash generative. And particularly in the second half of the year, we expect that to be able to upstream more cash to the whole co, and then we have the tax losses that we always talk about. So when it comes to allocating the capital, we'll use all three as a way to allocate capital efficiently. Now, those three things could include Cortland making acquisitions, and we'll talk a bit about that later in the agm. But I kind of see Cortland as potentially a platform company where you can deploy further capital. We'll also have the cash balance, which we can utilize. And then the third part is the tax losses, which we see different ideas on how to monetize those. And I think that has to be part of our overall view of how we allocate the capital.

Joe Racknelli

Couple of questions related to Cortland. You've appointed a new CEO. What is going to be the. What will be his primary mandate?

Rhys Somerton

If you think about, I wrote this in the chairman's letter that, you know, Cortland, I use the word clumsy. Cortland had a clumsy management Structure. Not saying the individuals were clumsy. I'm saying, you know, the actual structure was clumsy. We had an executive chairman, we had a CEO, we had a cfo, and they weren't under one roof. We wanted to bring them together, be based in the US in one of our operations. I think Wolfgang knows the business well, knows the industry well, and also I think he's now got clear Runway to turn the business around. So his key target will be improving free cash flow generation for Cortlandt. And his second objective will be to grow the footprint of Cortlandt. Essentially what we want is manufacturing out of India and then a global distribution business across the rest of the world. And Cortland has some really powerful benefits that the competitors don't have. We're very strong in the US and continue to thrive in some of the Scandinavian countries. So I'm fairly optimistic with that. I think we can add to the business as well through some selective acquisitions.

Joe Racknelli

Okay then, one last question on Cortland. What working capital conditions are you seeing there and how will that impact your free cash flow coming from Cortland over the next 12 to 24 months?

Stephen Leonard (President and CFO)

Give that to Steve. Yeah, I mean, there's a couple of drivers. One of them, I think we mentioned in our prepared remarks, as well as in some of the write up in the disclosure documents, that with the elevation in oil prices, one of the inputs in raw materials is polymers, and those are impacted by the price of oil. So that's seeing a lift in costs coming in, which also has a little bit of a drag on working capital. But we're also trying to manage working capital as efficiently as we can. We had a lift in the quarter and we're working with the management team to ensure that we have the right levels of working capital going into the second half of the year. As we mentioned, we're, we're looking for some improvements in the results. And obviously you have to have some of those raw materials and inventories ahead of the delivery of sales orders. So that's what we're seeing.

Joe Racknelli

Okay, operator, would you mind prompting again for questions, please, for those on the phone?

OPERATOR

Yes, sir. Thank you. Thank you, sir. For those on the phone lines, if you wish to ask a question, please press Star one on your telephone keypad and wait for your name to be announced once again. Star N1. If you wish to ask a question, Go ahead with Rob. Okay, sir, the first question comes from Rob by. From Zeus Capital. Your line is now open. Please go ahead.

Rob

Oh, thanks, Joe. Good morning all. Just continuing the discussion. On Cortland, you mentioned in the outlook statement that you're anticipating the improvement in second half trading. Could you perhaps provide a bit more colour on the drivers? For example, is this a normalization of the revenue run rate or perhaps tighter control of costs? And then secondly, you have touched on this issue, but are you able to actively manage your commodity price exposure for working cap and the cost lines? Thank you.

Stephen Leonard (President and CFO)

Yes, there's a couple of drivers for the second half that we're seeing. One is in the domestic Indian market. Typically their fishing season's quite strong going into the third quarter, so we're expecting orders that are going to be delivered in the second quarter will drive some of those better results that we're expecting. And then we're also making good progress, which we'll likely talk about more in our upcoming quarters on aquaculture, particularly in delivering cages in markets including in Latin America, which was a market that we invested in in 25, but we didn't really have any pull through. It took us some time to get traction in that market and we're starting to see that come through. And then on the mitigation, we have looked at elements of putting in surcharges on. On some of the revenue orders and working with our customers to mitigate the impact of the elevated pricing. That's also something that we're working through.

Rob

Great, thanks very much. Thank you once again.

OPERATOR

For those want to ask a question over the phone, just press Star one on your telephone keypad.

Joe Racknelli

And then one question that's also come in. With respect to the NCIB, you've completed about 60% of purchases so far for this year's program. Can we anticipate an acceleration before this program ends?

Reece Somerton (Executive Chairman)

We'll continue to execute on the. On the buyback. We've been a bit hamstrung this year because of being in a blackout period for much of it. As we've been working on the Bazzetto transaction, clearly we will continue subject to any other transactions we might be involved in and that might result in us being in a blackout again. But I think the intention is when, you know, when we say we want to buy back 5 million shares next year and complete the NCIB, the intention is to complete it, but it's clearly subject to what the level of the share price is. So if the share price is offering significant discount compared to what we can buy in the market or other acquisition opportunities, then we will continue to buy back the shares.

OPERATOR

Thank you and no further questions. That came through over the phone lines. I'll now turn the call over back to Joe Raccanelli, please. Go ahead, sir.

Joe Racknelli

Thank you everyone for joining us today. And as Rhys noted, we do have our annual general meeting that will begin at 10:30 Eastern Time. We will be making a more comprehensive presentation at that time. And I would encourage you to join us via webcast if you're not able to meet with us in person. So thank you. Have a good day, everyone.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.