Onex Reports Second-Quarter 2018 Results

Transcription

1 FOR IMMEDIATE RELEASE All amounts in U.S. dollars unless otherwise stated Onex Reports Second-Quarter 08 Results Toronto, August 9, 08 Onex Corporation (TSX: ONEX) today announced its consolidated financial results for the second quarter and six months ended June 30, 08 and an update on matters following quarter-end. Year to Date Highlights We have invested and committed to invest $.8 billion in five operating companies, of which Onex portion is expected to be approximately $690 million: - SMG Holdings, a leading global manager of convention centers, stadiums, arenas, theatres, performing arts centers and other venues; - PowerSchool Group, a leading education technology platform for K- schools; - Ryan Specialty Group, a leading international specialty insurance organization, which includes a wholesale brokerage firm and an underwriting management organization; - KidsFoundation Holdings, the largest childcare provider in the Netherlands; and - Precision Global, a leading global manufacturer of dispensing solutions. We returned approximately $865 million to our limited partners, through realizations and distributions, of which Onex portion was approximately $335 million, including $ million of carried interest: - We sold Mavis Discount Tire for a gross multiple of invested capital of 3.5 times; - We completed a secondary offering for Emerald Expositions and continue to own a majority stake. Onex Partners remaining investment is valued at approximately $735 million as of yesterday s closing price, which reflects a gross multiple of invested capital of.0 times, including prior realizations; and - We completed a secondary offering for Pinnacle Holdings and continue to own a significant minority stake. ONCAP s remaining investment is valued at approximately C$65 million as of yesterday s closing price, which reflects a gross multiple of invested capital of 3.3 times, including prior realizations. Assets under management in our platform increased by approximately $700 million to $0.5 billion, primarily driven by the closing of our 5 th U.S. collateralized loan obligation for approximately $65 million.

2 In the first seven months of 08, 754,38 Subordinate Voting Shares ( SVS ) were repurchased for a total cost of $54 million, or an average cost per share of C$9.77. Recent Performance We re pleased with the pace of our investing activity having found five great businesses so far this year, said Gerry Schwartz, Chairman and Chief Executive Officer of Onex. With more than 40% of our private equity investments made in the last two years, our portfolio is still relatively immature. We believe this sets the foundation of future growth at Onex. Today, Onex has approximately $8.9 billion of uncalled capital available to deploy for new private equity investments, including $.5 billion committed by Onex. Onex management continues to share in the risks and rewards of our businesses through the team s significant investment in everything Onex owns. Today the team has approximately $. billion invested in the underlying private equity operating businesses, credit funds and Onex shares, including $00 million invested so far this year. Creating Value for Shareholders We create value for shareholders by growing both our capital per share and our fee-generating assets. For the twelve months ended June 30, 08, Onex capital per share increased by 4% to $64.59 and our private equity investments grew by 9%. Over the same period, our fee-generating assets increased by 43% to $.7 billion largely driven by our success in raising Onex Partners V. Over the last five years, Onex capital per share and our fee-generating assets grew by 8% and 8% per year, respectively. With larger private equity funds and a growing credit platform, we are well positioned to grow the profitability of our asset management business in the years to come. Onex paid a second-quarter dividend of C$ per SVS on July 3, 08 to shareholders of record on July 0, 08. Results Onex quarterly and full-year consolidated financial results do not follow any specific trends due to acquisitions and dispositions of businesses, changes in the value of its publicly traded and privately held operating companies and varying business cycles at its operating companies. On a consolidated basis for the second quarter, revenues increased by 4% 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 IntraPac, Laces and SMG. Net loss for the second quarter of 08 was $6 million compared to net earnings of $.7 billion in the same quarter of 07. This decrease in earnings was primarily driven by $3.3 billion of gains recognized in the second quarter of 07 from the loss of control over JELD-WEN and the sale of USI, partially offset by a decrease in the limited partners interests charge.

3 On a consolidated basis for the six months ended June 30, 08, revenues increased by 5% to $.5 billion as compared to the same period of the prior year. Onex reported a consolidated net loss of $46 million during the first half of 08 compared to net earnings of $.7 billion in the same period of 07. The same factors that contributed to the second-quarter increase in revenues and decrease in earnings drove the changes in revenues and earnings for the first half of 08. Prior year comparative information has been restated to conform with IFRS 5, Revenue from Contracts with Customers, which was adopted by Onex retrospectively on January, 08 (refer to Note in the interim consolidated financial statements for further details). Attached are Onex unaudited interim Balance Sheets at June 30, 08, December 3, 07 and January, 07; Statements of Earnings and by Industry Segment for the three and six months ended June 30, 08 and 07; and Statements of Cash Flows for the six months ended June 30, 08 and 07 prepared in accordance with International Financial Reporting Standards. The complete financial statements, including Management s Discussion and Analysis of the results, are posted on Onex website, and are also available on SEDAR at A supplemental information package, which includes the How We Are Invested schedule, Schedules of Fees and Expenses and additional information, is available on Onex website, Webcast Onex management will host a webcast to review Onex second-quarter 08 results on Thursday, August 9 at :00 a.m. ET. The webcast will be available in listen-only mode from the Presentations and Events section of Onex shareholder website, A 90-day on-line replay will be available shortly following the completion of the event. About Onex Onex is one of the oldest and most successful private equity firms. Through its Onex Partners and ONCAP private equity funds, Onex acquires and builds high-quality businesses in partnership with talented management teams. At Onex, Onex manages and invests in leveraged loans, collateralized loan obligations and other credit securities. Onex has more than $33 billion of assets under management, including $6.8 billion of Onex proprietary capital, in private equity and credit securities. With offices in Toronto, New York, New Jersey and London, Onex and the team are collectively the largest investors across Onex platforms. Onex businesses have assets of $48 billion, generate annual revenues of $3 billion and employ approximately,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 3

4 This news release may contain forward-looking statements that are based on management s current expectations and are subject to known and unknown uncertainties and 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:

5 CONSOLIDATED BALANCE SHEETS Assets Current assets Cash and cash equivalents Short-term investments Accounts receivable Inventories Other current assets Property, plant and equipment Long-term investments Other non-current assets Intangible assets Goodwill Liabilities and Equity Current liabilities Accounts payable and accrued liabilities Current portion of provisions Other current liabilities Current portion of long-term debt of operating companies and credit strategies, without recourse to Onex Corporation Current portion of Limited Partners Interests Non-current portion of provisions Long-term debt of operating companies and 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) and accumulated other comprehensive earnings (loss) As at June 30, 08 $, ,6,50, 9,73 5,078, ,97 8,67 As at December 3, 07 $ 3, ,30,48,9 0,3 5,36,4 85 7,887 8,3 As at January, 07 $, ,873,50,4 0,30 4,75 8,67,94 9,86 9,74 $ 45,3 $ 44,696 $ 4,9 $ 4,5 0,504, ,907 7,585,09,08 7,95 $ 4,396 35, ,493 43,76,05,90 7,965 $ 4,94 305, , ,456,69,533 8,385 40,85 39,658 4,557 39,08,043 3,45,57 34,857 (87) 4,470 5,038,364 $ 45,3 $ 44,696 $ 4,9 See notes to the unaudited interim consolidated financial statements, including the changes in accounting policies retrospectively adopted on January, 08.

6 CONSOLIDATED STATEMENTS OF EARNINGS Three months ended June 30 Six months ended June 30 (in millions of U.S. dollars except per share data) Revenues Cost of sales (excluding amortization of property, plant and equipment, intangible assets and deferred charges) Operating expenses Amortization of intangible assets and deferred charges Interest expense of operating companies and credit strategies Increase (decrease) in value of investments in joint ventures and associates at fair value, net Other gain Other expense Loss before income taxes and discontinued operations Provision for income taxes Loss from continuing operations Earnings from discontinued operations $ 6,448 (4,759) (,080) 3 (68) (340) (70) (56) (98) (57) (40) () (6) $ 6,99 (4,557) (,053) 89 (6) (67) (304) 95 (6) (49) (357) (48) (506) 3,74 $,470 (9,4) (,5) 46 (339) (38) (65) (55) 8 (37) (77) (398) (8) $,890 (8,773) (,060) 75 (33) (39) (58) Net Earnings (Loss) $ (6) $,668 $ (46) $,73 (46) 0 (78) (359) (876) (,84) (6) (,30) 3,04 Earnings (Loss) from Continuing Operations attributable to: Equity holders of Onex Corporation Non-controlling Interests $ (53) $ (57) $ $ (,308) Loss from Continuing Operations $ (6) $ (506) $ (46) $ (,30) Net Earnings (Loss) attributable to: Equity holders of Onex Corporation Non-controlling Interests $ (53) $,7 (44) $ $,80 (69) Net Earnings (Loss) $ (6) $,668 $ (46) $,73 Net Earnings (Loss) per Subordinate Voting Share of Onex Corporation Basic and Diluted: Continuing operations Discontinued operations $ (.50) $ (5.05) 3.65 $ (4.06) $ (.77) Net Earnings (Loss) per Subordinate Voting Share $ (.50) $ 6.60 $ (4.06) $ 7.60 See notes to the unaudited interim consolidated financial statements, including the changes in accounting policies retrospectively adopted on January, 08.

7 CONSOLIDATED STATEMENTS OF CASH FLOWS Six months ended June Operating Activities Loss for the period from continuing operations Adjustments to loss from continuing operations: Provision for income taxes Interest expense of operating companies and credit strategies Earnings (loss) before interest and provision for income taxes Cash taxes paid Items not affecting cash and cash equivalents: Amortization of intangible assets and deferred charges Decrease (increase) in value of investments in joint ventures and associates at fair value, net Other gain Foreign exchange (gain) loss Change in provisions Change in carried interest Other Changes in non-cash working capital items: Accounts receivable Inventories Other current assets Accounts payable, accrued liabilities and other current liabilities Decrease in cash and cash equivalents due to changes in non-cash working capital items Increase (decrease) 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 Issuance of share capital by operating companies Proceeds from sale of interests in operating companies under continuing control Distributions paid to non-controlling interests and Limited Partners Increase (decrease) due to other financing activities Cash flows from financing activities of discontinued operations Investing Activities Acquisitions, net of cash and cash equivalents in acquired companies of $58 (07 $6) Purchase of property, plant and equipment Proceeds from sales of operating companies and businesses no longer controlled Proceeds from sales of investments in joint ventures and associates Distributions received from investments in joint ventures and associates Purchase of investments in joint ventures and associates Cash interest received Change in restricted cash Net sales (purchases) of investments and securities for credit strategies Net sales (purchases) of investments and securities at parent company and operating companies Increase (decrease) due to other investing activities Cash flows used in investing activities of discontinued operations Increase (Decrease) in Cash and Cash Equivalents for the Period Increase (decrease) in cash due to changes in foreign exchange rates Cash and cash equivalents, beginning of the period continuing operations Cash and cash equivalents, beginning of the period discontinued operations Cash and Cash Equivalents Cash and cash equivalents held by disposal group $ (46) 8 (46) (8) 9 77 (39) (06) 4 (38) (08) $ (,30) 6 (75) 58 (878) () (0) 7 (56) (6) (74) (39) ,959 (,476) (604) () (54) (587) (),400 (,587) (504) (0) (58) (,836) (,656) (,347) (363) (,389) 383 (58) (6) (3), (6) 8 46 (48) 46 (40) (,063),333 (6) 3,376,78 Cash and Cash Equivalents Held by Continuing Operations $,78 $, ,69 0,68 See notes to the unaudited interim consolidated financial statements, including the changes in accounting policies retrospectively adopted on January, 08.

8 INFORMATION BY INDUSTRY SEGMENT FOR THE THREE MONTHS ENDED JUNE 30, 08 Revenues Cost of sales (excluding amortization of property, plant and equipment, intangible assets and deferred charges) Operating expenses Amortization of intangible assets and deferred charges Interest expense of operating companies and credit strategies Decrease in value of investments in joint ventures and associates at fair value, net Other income (expense) $,696 (,57) (56) (8) (8) care $ 45 (06) (6) 8 $ 449 (336) (8) $ 97 (77) () (8) and $ 676 (44) (8) (57) (59) (3) $ 403 (97) (05) (80) (3) Food Retail and $, (949) (50) () () $ () 0 (78) (3) (8) $,489 (,03) (3) 7 (37) (77) (70) (38) (49) $ 6,448 Earnings (loss) before income taxes 8 () (75) (40) Recovery of (provision for) income taxes (8) 0 () Net earnings (loss) $ 6 $ 5 $ 0 $ (3) $ (3) $ (74) $ $ $ (84) $ (6) (4,759) (,080) 3 (68) (340) (70) (56) (98) (57) Net earnings (loss) attributable to: Equity holders of Onex Corporation $ $ 3 $ 9 $ () $ (3) $ (55) $ (8) $ $ (78) $ (53) Non-controlling interests 4 (6) Net earnings (loss) $ 6 $ 5 $ 0 $ (3) $ (3) $ (74) $ $ $ (84) $ (6) (a) Includes Flushing Town Center, Meridian Aviation, Parkdean Resorts, Survitec, Schumacher, WireCo, the operating companies of ONCAP II, III and IV (excluding IntraPac) and the parent company. Investments in joint ventures and associates recorded at fair value include AIT, BBAM, Incline Aviation Fund, JELD-WEN, Pinnacle Renewable Energy and Venanpri Group.

9 INFORMATION BY INDUSTRY SEGMENT FOR THE THREE MONTHS ENDED JUNE 30, 07 Revenues Cost of sales (excluding amortization of property, plant and equipment, intangible assets and deferred charges) Operating expenses Amortization of intangible assets and deferred charges Interest expense of operating companies and credit strategies Increase in value of investments in joint ventures and associates at fair value, net Other income (expense) $,557 (,430) (54) (6) care $ 504 (88) (3) () (39) (8) $ 446 (338) (79) (8) $ 9 (67) () (8) and $ 57 (370) (74) (49) (37) (50) $ 99 (96) (64) (50) (45) Food Retail and $,96 (,003) (39) (6) (0) $ (6) 83 (36) $,434 (,003) (97) 3 (43) (3) (68) 95 (99) (35) (354) $ 6,99 Earnings (loss) before income taxes and discontinued operations 38 0 (90) (398) (48) Recovery of (provision for) income taxes (0) 3 7 (3) Earnings (loss) from continuing operations 34 7 (6) (8) (90) (8) (506) Earnings from discontinued operations (b) 3,74 3,74 Net earnings (loss) $ 34 $ $ 7 $ (6) $ (8) $ (90) $ (8) $ $,763 $,668 (4,557) (,053) 89 (6) (67) (304) 95 (6) (49) (357) Net earnings (loss) attributable to: Equity holders of Onex Corporation $ 4 $ $ 7 $ (6) $ (8) $ $ (8) $ $,88 $,7 Non-controlling interests 30 (55) (44) Net earnings (loss) $ 34 $ $ 7 $ (6) $ (8) $ (90) $ (8) $ $,763 $,668 (a) (b) Includes Flushing Town Center, Meridian Aviation, Parkdean Resorts, Survitec, Schumacher, WireCo, the operating companies of ONCAP II, III and IV and the parent company. Investments in joint ventures and associates recorded at fair value include AIT, BBAM, Incline Aviation Fund, JELD-WEN (since May 07), Mavis Discount Tire and Venanpri Group. Represents the after-tax results of JELD-WEN and USI. See notes to the unaudited interim consolidated financial statements, including the changes in accounting policies retrospectively adopted on January, 08.

10 INFORMATION BY INDUSTRY SEGMENT FOR THE SIX MONTHS ENDED JUNE 30, 08 Revenues Cost of sales (excluding amortization of property, plant and equipment, intangible assets and deferred charges) Operating expenses Amortization of intangible assets and deferred charges Interest expense of operating companies and credit strategies Decrease in value of investments in joint ventures and associates at fair value, net Other gain Other income (expense) $ 3,95 (,953) (08) (37) (6) (8) care $ 79 (46) (33) (8) (47) 7 $ 880 (66) (56) (8) (3) $ 397 (353) (3) (36) and $,83 (849) (66) (8) (6) $ 833 (406) (0) (57) (96) (0) (64) Food Retail and $,6 (,97) (306) (44) $ 6 (43) 4 $,87 (,965) (60) 5 (85) (75) (50) (55) (49) 8 (35) (60) $,470 Earnings (loss) before income taxes (69) (60) 44 (60) (398) Recovery of (provision for) income taxes (0) (8) (6) (6) (8) Net earnings (loss) $ 30 $ $ 3 $ (3) $ (75) $ (3) $ (39) $ 44 $ (66) $ (46) (9,4) (,5) 46 (339) (38) (65) (55) 8 (37) (77) Net earnings (loss) attributable to: Equity holders of Onex Corporation $ 4 $ $ $ (0) $ (74) $ (0) $ (40) $ 44 $ (57) $ Non-controlling interests 6 (30) Net earnings (loss) $ 30 $ $ 3 $ (3) $ (75) $ (3) $ (39) $ 44 $ (66) $ (46) As at June 30, 08 care and Food Retail and Total assets $ 3, $,7 $,00 $,48 $ 6,589 $ 6,60 $,048 $,04 $,0 $ 45,3 Long-term debt (b) $ 345 $,35 $ 383 $ 939 $ 3,80 $ 3,083 $ 97 $ 8,60 $ 3,994 $ 3,00 (a) (b) Includes Flushing Town Center, Meridian Aviation, Parkdean Resorts, Survitec, Schumacher, WireCo, the operating companies of ONCAP II, III and IV (excluding IntraPac) and the parent company. Investments in joint ventures and associates recorded at fair value include AIT, BBAM, Incline Aviation Fund, JELD-WEN, Mavis Discount Tire (up to March 08), Pinnacle Renewable Energy (since February 08) and Venanpri Group. Long-term debt includes current portion, excludes finance leases and is net of financing charges.

11 INFORMATION BY INDUSTRY SEGMENT FOR THE SIX MONTHS ENDED JUNE 30, 07 Revenues Cost of sales (excluding amortization of property, plant and equipment, intangible assets and deferred charges) Operating expenses Amortization of intangible assets and deferred charges Interest expense of operating companies and credit strategies Increase in value of investments in joint ventures and associates at fair value, net Other income (expense) $ 3,039 (,788) (07) (33) (6) care $ 95 (540) (65) (3) (6) (76) $ 883 (669) (56) (0) $ 379 (333) () (36) and $,07 (699) (50) (97) (73) (0) 6 $ 644 (63) (07) (65) Food Retail and $,36 (,94) (75) (50) (38) $ 63 (99) (67) (3) $,630 (,87) (54) 8 (78) (67) (3) 0 (45) (56) (863) $,890 Earnings (loss) before income taxes and discontinued operations 69 (8) 3 () () (,088) (,84) Recovery of (provision for) income taxes () (3) (8) 7 3 (3) (6) Earnings (loss) from continuing operations 57 (3) 5 () (3) (40) (,0) (,30) Earnings from discontinued operations (b) 3,04 3,04 Net earnings (loss) $ 57 $ (3) $ 5 $ $ () $ (3) $ (40) $ $,94 $,73 (8,773) (,060) 75 (33) (39) (58) 0 (78) (359) (876) Net earnings (loss) attributable to: Equity holders of Onex Corporation $ 7 $ $ 5 $ $ () $ (93) $ (40) $ $,07 $,80 Non-controlling interests 50 (38) (76) (69) Net earnings (loss) $ 57 $ (3) $ 5 $ $ () $ (3) $ (40) $ $,94 $,73 As at December 3, 07 care and Food Retail and Total assets $,964 $,3 $ 97 $,54 $ 6,808 $ 5,656 $,094 $ 0,048 $ 3,30 $ 44,696 Long-term debt (c) $ 87 $,3 $ 379 $ 939 $ 3,770 $,566 $ 943 $ 7,877 $ 4,56 $,049 (a) (b) (c) Includes Flushing Town Center, Meridian Aviation, Parkdean Resorts (since March 07), Survitec, Schumacher, WireCo, the operating companies of ONCAP II, III and IV and the parent company. Investments in joint ventures and associates recorded at fair value include AIT, BBAM, Incline Aviation Fund, JELD-WEN (since May 07), Mavis Discount Tire and Venanpri Group. Represents the after-tax results of JELD-WEN and USI. Long-term debt includes current portion, excludes finance leases and is net of financing charges. See notes to the unaudited interim consolidated financial statements, including the changes in accounting policies retrospectively adopted on January, 08.