Onex Reports Third-Quarter 2017 Results

Transcription

1 FOR IMMEDIATE RELEASE All amounts in U.S. dollars unless otherwise stated Onex Reports Third-Quarter 207 Results Toronto, November 0, 207 Onex Corporation (TSX: ONEX) today announced its consolidated financial results for the third quarter nine months ended September 30, 207 an update on matters following quarter-end. Highlights We raised nearly $7 billion in aggregate commitments for our private equity credit platforms. - Onex Partners V: We surpassed the original $6.5 billion target, raising a total of $6.7 billion in aggregate commitments to date, including $2.0 billion from Onex. - Onex Lending Partners I: We raised aggregate commitments of approximately $290 million towards our $500 million target, including $00 million from Onex. Year to date, we ve returned nearly $3 billion to our limited partners, through realizations distributions, of which Onex portion is approximately $875 million, including $0 million of carried interest. The value of Onex private equity investments increased by 7% during the twelve months ended September 30, 207, including realizations distributions. We priced our second European collateralized loan obligation for approximately 437 million. After giving effect to the closing of this offering, our credit platform will manage approximately $9 billion. In the ten months ended October 3, 207, approximately one million Subordinate Voting Shares ( SVS ) were repurchased for a total cost of $78 million (C$03 million), or an average cost per share of C$95.5. Recent Performance While the current investment environment remains challenging, our prudent approach to investing keeps us focused on finding the right opportunities for Onex our investors, said Gerry Schwartz, Chairman Chief Executive Officer of Onex. We have approximately $9.6 billion of uncalled fund investor capital available to deploy for new private equity investments, including $3. billion of uncalled capital available from Onex. This capital provides Onex with the strength flexibility to invest in future opportunities.

2 Onex management continues to share in the risks rewards of our businesses through the team s significant investment in everything Onex owns. At September 30, 207, the team has approximately $2. billion invested in the underlying private equity operating businesses, credit funds Onex shares. Creating Value for Shareholders We create value for shareholders by growing both our capital per share our fee-generating assets. For the twelve months ended September 30, 207 the company s capital per share increased by 2% to $63.88 our fee-generating assets increased by 30% to $9.4 billion. The growth in our fee-generating assets was driven by our success in raising ONCAP IV Onex Partners V. Over the last five years, Onex capital per share grew 0% per year our feegenerating assets grew by 9% per year. Over the long term, we believe Onex shares will reflect both the growth in the value of our investments the growing contribution from managing capital for our fund investors. For the twelve months ended September 30, 207 our share price increased by 20% (4% in Canadian dollars). Onex paid a third-quarter dividend of C$0.075 per SVS on October 3, 207 to shareholders of record on October 0, 207. Consolidated Results Onex quarterly full-year consolidated financial results do not follow any specific trends due to acquisitions dispositions of businesses, changes in the value of its publicly traded privately held operating companies varying business cycles at its operating companies. On a consolidated basis for the third quarter, revenues increased by 47% to $6.4 billion compared to the same period of the prior year. The increase was largely due to the inclusion of revenues from the acquisitions of Clarivate Analytics, Parkdean Resorts, Save-A-Lot WireCo. Net earnings for the third quarter of 207 were $363 million compared to a loss of $76 million in the same quarter of 206. This increase in net earnings was primarily attributable to the gain recognized by Carestream on the sale of its Dental Digital business an increase in the fair value of investments in joint ventures associates. On a consolidated basis for the nine months ended September 30, 207, revenues increased 46% to $8.2 billion as compared to the same period of the prior year. Onex reported consolidated net earnings of $2. billion during the first nine months of 207 compared to $6 million in the same period of 206. This increase in net earnings was primarily driven by $3.3 billion of gains from the loss of control over JELD-WEN the sale of USI, partially offset by an increase in the limited partners interests charge. 2

3 Attached are the unaudited Consolidated Balance Sheets, Statements of Earnings, Statements of Cash Flows information by industry segment for the three nine months ended September 30, The complete financial statements as prepared under International Financial Reporting Stards applicable to the preparation of interim financial statements, Management s Discussion Analysis of the results, are posted on Onex website, are also available on SEDAR at A supplemental information package, which includes the How We Are Invested schedule, Schedules of Fees Expenses additional information, is available on Onex website, Webcast Onex management will host a conference call to review Onex third-quarter results on Friday, November 0 at :00 a.m. ET. A live webcast of this conference call will be available in listenonly mode on its website, About Onex Onex is one of the oldest most successful private equity firms. Through its Onex Partners ONCAP private equity funds, Onex acquires builds high-quality businesses in partnership with talented management teams. At Onex, Onex manages invests in leveraged loans, collateralized loan obligations other credit securities. Onex has approximately $30 billion of assets under management, including $6.7 billion of Onex proprietary capital, in private equity credit securities. With offices in Toronto, New York, New Jersey London, Onex invests alongside its fund investors is the largest limited partner in each of its private equity funds. Onex businesses have assets of $45 billion, generate annual revenues of $30 billion employ approximately 6,000 people worldwide. Onex shares trade on the Toronto Stock Exchange under the stock symbol ONEX. For more information on Onex, visit its website at Onex security filings can also be accessed at This news release may contain forward-looking statements that are based on management s current expectations are subject to known unknown uncertainties risks, which could cause actual results to differ materially from those contemplated or implied by such forward- looking statements. Onex is under no obligation to update any forward-looking statements contained herein should material facts change due to new information, future events or otherwise. For further information: Emilie Blouin Director, Investor Relations Tel:

4 CONSOLIDATED BALANCE SHEETS Assets Current assets Cash cash equivalents Short-term investments Accounts receivable Inventories Other current assets Property, plant equipment Long-term investments Other non-current assets Intangible assets Goodwill Liabilities Equity Current liabilities Accounts payable accrued liabilities Current portion of provisions Other current liabilities Current portion of long-term debt of operating companies credit strategies, without recourse to Onex Corporation Current portion of Limited Partners Interests Non-current portion of provisions Long-term debt of operating companies credit strategies, without recourse to Onex Corporation Other non-current liabilities Deferred income taxes Limited Partners Interests Equity Share capital Non-controlling interests Retained earnings (deficit) accumulated other comprehensive loss As at September 30, 207 $ 2, ,095 2, ,35 5,20, ,72 8,028 As at December 3, 206 $ 2, ,868 2,73,90 0,34 4,275 8,672,92 9,286 9,74 $ 42,74 $ 42,93 $ 4,09 224, , ,385 2,050,47 7,827 $ 4, , , ,456 2,69,537 8,385 38,052 4, ,2 2, ,84 (84) 4,689,35 $ 42,74 $ 42,93

5 CONSOLIDATED STATEMENTS OF EARNINGS (in millions of U.S. dollars except per share data) Revenues Cost of sales (excluding amortization of property, plant equipment, intangible assets deferred charges) Operating expenses Amortization of intangible assets deferred charges Interest expense of operating companies credit strategies Increase in value of investments in joint ventures associates at fair value, net Stock-based compensation expense Other expense Impairment of goodwill, intangible assets long-lived assets, net Earnings (loss) before income taxes discontinued operations Provision for income taxes Earnings (loss) from continuing operations Earnings (loss) from discontinued operations Three months ended September 30 Nine months ended September $ 6,362 $ 4,342 $ 8,229 $ 2,458 (4,607) (,063) 97 (66) (72) (30) 279 (99) (88) (288) 50 (47) 363 (3,48) (693) 92 (07) (07) (203) 99 (56) 28 (8) (25) (40) (63) (3) (3,350) (3,30) 272 (479) (50) (882) 399 (80) (529) (,64) (774) (73) (947) 3,042 Net Earnings (Loss) $ 363 $ (76) $ 2,095 $ 6 (9,020) (2,7) 249 (36) (328) (605) 36 (89) 36 (9) (235) (454) (294) (79) (373) 489 Earnings (Loss) from Continuing Operations attributable to: Equity holders of Onex Corporation Non-controlling Interests $ $ (4) 5 $ (988) 4 $ (445) 72 Earnings (Loss) from Continuing Operations $ 363 $ (63) $ (947) $ (373) Net Earnings (Loss) attributable to: Equity holders of Onex Corporation Non-controlling Interests $ $ (30) 54 $ 2,2 (26) $ 5 Net Earnings (Loss) $ 363 $ (76) $ 2,095 $ 6 Net Earnings (Loss) per Subordinate Voting Share of Onex Corporation Basic Diluted: Continuing operations Discontinued operations $ 3.4 $ (.) (0.6) $ (9.66) $ (4.29) 4.34 Net Earnings (Loss) per Subordinate Voting Share $ 3.4 $ (.27) $ $ 0.05

6 CONSOLIDATED STATEMENTS OF CASH FLOWS Operating Activities Loss for the period from continuing operations Adjustments to loss from continuing operations: Provision for income taxes Interest expense of operating companies credit strategies Earnings (loss) before interest provision for income taxes Cash taxes paid Items not affecting cash cash equivalents: Amortization of intangible assets deferred charges Increase in value of investments in joint ventures associates at fair value, net Stock-based compensation expense Foreign exchange loss (gain) Impairment of goodwill, intangible assets long-lived assets, net Change in provisions Other Changes in non-cash working capital items: Accounts receivable Inventories Other current assets Accounts payable, accrued liabilities other current liabilities Decrease in cash cash equivalents due to changes in non-cash working capital items Increase in other operating activities Cash flows from operating activities of discontinued operations Financing Activities Issuance of long-term debt Repayment of long-term debt Cash interest paid Cash dividends paid Repurchase of share capital of Onex Corporation Repurchase of share capital of operating companies Contributions by Limited Partners Contribution from investor for pending acquisition Issuance of share capital by operating companies Proceeds from sale of interests in operating companies under continuing control Proceeds from sale-leaseback transaction Distributions paid to non-controlling interests Limited Partners Limited Partnership interest acquired by Onex, the parent company Decrease due to other financing activities Cash flows from (used in) financing activities of discontinued operations Investing Activities Acquisitions, net of cash cash equivalents in acquired companies of $69 (206 $62) Purchase of property, plant equipment Proceeds from sales of operating companies businesses no longer controlled Distributions received from investments in joint ventures associates Purchase of investments in joint ventures associates Change in restricted cash for acquisition of an operating company Cash interest received Cash dividends received Net purchases of investments securities for credit strategies Net sales (purchases) of investments securities at parent company operating companies Increase (decrease) due to other investing activities Cash flows used in investing activities of discontinued operations Decrease in Cash Cash Equivalents for the Period Increase in cash due to changes in foreign exchange rates Cash cash equivalents, beginning of the period continuing operations Cash cash equivalents, beginning of the period discontinued operations Cash Cash Equivalents Cash cash equivalents held by discontinued operations Nine months ended September 30 $ (947) (272) 882 (64) (65) (399) 26 () 30 7, ,20 96 (85) 6 (55) (38) 38 0 $ (373) 79 (249) (37) (36) 77 (36) (47),075 (0) (366) 44 (337) 53 32,2,03 2,929 (3,058) (787) (6) (78) (29) (,866) (354) 26,247 (565) (535) (84) (50), (829) (86) (2,49) 399 (724) (496) 3, (58) (569) (59) (240) (502) (324) (44) (,635) (907) (274) 900 (,890) (38) 28 2, ,36 Cash Cash Equivalents Held by Continuing Operations $ 2,36 $,88 (388) 7 2,5 3 2,045 64

7 INFORMATION BY INDUSTRY SEGMENT FOR THE THREE MONTHS ENDED SEPTEMBER 30, 207 Revenues Cost of sales (excluding amortization of property, plant equipment, intangible assets deferred charges) Operating expenses Amortization of intangible assets deferred charges Interest expense of operating companies credit strategies Increase in value of investments in joint ventures associates at fair value, net Stock-based compensation recovery (expense) Other income (expense) Recovery (impairment) of goodwill, intangible assets long-lived assets, net $,529 (,405) (50) (6) care $ 467 (262) (27) () (40) $ 445 (335) (78) $ 95 (70) (2) (9) 2 $ 605 (38) (39) (54) (05) $ 333 (36) (09) (70) (35) 2 $,269 (,08) (55) (29) (27) 20 Strategies Other (a) Consolidated Total $ $,58 $ 6,362 Earnings (loss) before income taxes (8) (96) (30) (67) 50 Recovery of (provision for) income taxes (8) (07) 3 (6) 3 (24) (47) Net earnings (loss) $ 34 $ 558 $ 7 $ $ (00) $ (9) $ $ $ (9) $ 363 (4) 89 (55) (2) (,007) (289) 7 (44) (30) (66) (57) (07) (285) (4,607) (,063) 97 (66) (72) (30) 279 (99) (88) (288) Net earnings (loss) attributable to: Equity holders of Onex Corporation $ 5 $ 507 $ 6 $ $ (00) $ (3) $ $ $ (60) $ 320 Non-controlling interests 29 5 (3) 43 Net earnings (loss) $ 34 $ 558 $ 7 $ $ (00) $ (9) $ $ $ (9) $ 363 (a) Includes Survitec, Schumacher, WireCo, ONCAP II, III IV, Flushing Town Center, Meridian Aviation, Parkdean Resorts the parent company. Investments in joint ventures associates recorded at fair value include AIT, BBAM, Incline Aviation Fund, ITG, JELD-WEN Mavis Discount Tire.

8 INFORMATION BY INDUSTRY SEGMENT FOR THE THREE MONTHS ENDED SEPTEMBER 30, 206 Revenues Cost of sales (excluding amortization of property, plant equipment, intangible assets deferred charges) Operating expenses Amortization of intangible assets deferred charges Interest expense of operating companies credit strategies Increase in value of investments in joint ventures associates at fair value, net Stock-based compensation expense Other income (expense) Impairment of goodwill, intangible assets long-lived assets, net $,554 (,425) (53) 7 (6) care $ 472 (268) (22) (6) (37) 2 $ 446 (338) (74) (8) $ 90 (64) (0) (6) $ 62 (388) (49) (38) (55) (2) $ 00 (24) (0) (2) $ 90 (72) Strategies Other (a) Consolidated Total $ $ 868 $ 4,342 Earnings (loss) before income taxes discontinued operations (78) Recovery of (provision for) income taxes (6) (8) (40) Earnings (loss) from continuing operations (86) (63) Loss from discontinued operations (b) (3) (3) Net earnings (loss) $ 53 $ 5 $ 6 $ $ $ 22 $ 7 $ 38 $ (99) $ (76) 8 (42) 26 (20) (633) (74) 3 (3) (26) (28) 99 (46) 28 (25) (3,48) (693) 92 (07) (07) (203) 99 (56) 28 (8) (25) Net earnings (loss) attributable to: Equity holders of Onex Corporation $ 7 $ 5 $ 6 $ $ $ 22 $ 6 $ 38 $ (206) $ (30) Non-controlling interests Net earnings (loss) $ 53 $ 5 $ 6 $ $ $ 22 $ 7 $ 38 $ (99) $ (76) (a) (b) Includes Survitec, Schumacher, WireCo (since September 206), ONCAP II III, Flushing Town Center, Meridian Aviation the parent company. Investments in joint ventures associates recorded at fair value include AIT, BBAM, Incline Aviation Fund, ITG Mavis Discount Tire. Represents the after-tax results of JELD-WEN, KraussMaffei USI.

9 INFORMATION BY INDUSTRY SEGMENT FOR THE NINE MONTHS ENDED SEPTEMBER 30, 207 Revenues Cost of sales (excluding amortization of property, plant equipment, intangible assets deferred charges) Operating expenses Amortization of intangible assets deferred charges Interest expense of operating companies credit strategies Increase in value of investments in joint ventures associates at fair value, net Stock-based compensation expense Other expense Impairment of goodwill, intangible assets long-lived assets, net $ 4,557 (4,82) (57) (49) (9) (2) care $,392 (802) (392) 2 (46) (37) (6) (8) $,33 (,004) (236) (22) () (6) $ 574 (503) (34) (55) $,674 (,078) (22) 2 (48) (2) (55) (78) $ 978 (399) (37) (87) (27) (44) $ 3,585 (3,023) (430) (79) (3) (6) (73) Strategies Other (a) Consolidated Total $ 3 $ 4,35 $ 8,229 Earnings (loss) before income taxes discontinued operations (30) (8) (0) (46) (,55) (774) Recovery of (provision for) income taxes (20) (20) (2) 0 (33) 44 (37) (73) Earnings (loss) from continuing operations (20) (50) (57) (46) (,92) (947) Earnings from discontinued operations (b) 3,042 3,042 Net earnings (loss) $ 9 $ 527 $ 23 $ (20) $ $ (50) $ (57) $ (46) $,850 $ 2,095 (39) 252 (54) (88) (6) (2,862) (835) 5 (22) (97) (89) 399 (3) (2) (09) (,48) (3,350) (3,30) 272 (479) (50) (882) 399 (80) (529) (,64) Net earnings (loss) attributable to: Equity holders of Onex Corporation $ 2 $ 480 $ 22 $ (8) $ $ (06) $ (57) $ (46) $,957 $ 2,2 Non-controlling interests (44) (07) (26) Net earnings (loss) $ 9 $ 527 $ 23 $ (20) $ $ (50) $ (57) $ (46) $,850 $ 2,095 As at September 30, 207 care Consolidated Strategies Other (a) Total Total assets $ 2,872 $,345 $ 993 $,548 $ 6,420 $ 5,68 $ 2,50 $ 8,628 $ 3,67 $ 42,74 Long-term debt (c) $ 93 $,276 $ 39 $ 939 $ 3,653 $ 2,53 $ 954 $ 6,743 $ 4,049 $ 20,729 (a) (b) (c) Includes Survitec, Schumacher, WireCo, ONCAP II, III IV, Flushing Town Center, Meridian Aviation, Parkdean Resorts (since March 207) the parent company. Investments in joint ventures associates recorded at fair value include AIT, BBAM, Incline Aviation Fund, ITG, JELD-WEN (since May 207) Mavis Discount Tire. Represents the after-tax results of JELD-WEN (up to May 207) USI. Long-term debt includes current portion, excludes finance leases is net of financing charges.

10 INFORMATION BY INDUSTRY SEGMENT FOR THE NINE MONTHS ENDED SEPTEMBER 30, 206 Revenues Cost of sales (excluding amortization of property, plant equipment, intangible assets deferred charges) Operating expenses Amortization of intangible assets deferred charges Interest expense of operating companies credit strategies Increase in value of investments in joint ventures associates at fair value, net Stock-based compensation expense Other income (expense) Impairment of goodwill, intangible assets long-lived assets, net $ 4,393 (4,02) (58) 7 (48) (8) care $,42 (807) (396) 2 (49) (58) (0) () (9) $,347 (,026) (243) (2) (8) 8 $ 557 (490) (3) (48) (226) $,74 (,25) (22) (4) (2) (64) (4) $ 293 (75) (68) (29) (37) $ 269 (26) (3) (2) Strategies Other (a) Consolidated Total $ 3 $ 2,443 $ 2,458 Earnings (loss) before income taxes discontinued operations 3 (30) 27 (246) (54) (423) (294) Recovery of (provision for) income taxes (6) (3) (0) 20 (4) (22) (24) (79) Earnings (loss) from continuing operations 5 (43) 7 (226) (68) (447) (373) Earnings from discontinued operations (b) Net earnings (loss) $ 5 $ (43) $ 7 $ (226) $ (68) $ 54 $ 8 $ 207 $ 42 $ 6 (25) (4) (,750) (52) 2 (42) (74) (9) 36 (55) 28 (05) (43) (9,020) (2,7) 249 (36) (328) (605) 36 (89) 36 (9) (235) (454) Net earnings (loss) attributable to: Equity holders of Onex Corporation $ 5 $ (37) $ 7 $ (99) $ (68) $ 54 $ 7 $ 207 $ $ 5 Non-controlling interests 00 (27) 43 Net earnings (loss) $ 5 $ (43) $ 7 $ (226) $ (68) $ 54 $ 8 $ 207 $ 42 $ 6 As at December 3, 206 care Consolidated Strategies Other (a) Total Total assets (c) $ 2,822 $,473 $ 995 $,545 $ 6,44 $ 5,765 $ 2,85 $ 7,624 $ 4,360 $ 42,93 Long-term debt (c)(d) $ 226 $,920 $ 42 $ 939 $ 3,447 $ 2,667 $ 886 $ 5,92 $ 6,445 $ 22,863 (a) (b) (c) (d) Includes Survitec, Schumacher, WireCo (since September 206), ONCAP II III, Flushing Town Center, Meridian Aviation the parent company. Investments in joint ventures associates recorded at fair value include AIT, BBAM, Incline Aviation Fund (since March 206), ITG Mavis Discount Tire. Represents the after-tax results of JELD-WEN, KraussMaffei, Sitel Worldwide USI. The other segment includes JELD-WEN USI, which are discontinued operations. Long-term debt includes current portion, excludes finance leases is net of financing charges.