GlobeNewswire Inc | Aug 6, 2020 07:01AM EDT

August 06, 2020

All amounts in U.S. dollars unless otherwise stated

TORONTO, Aug. 06, 2020 (GLOBE NEWSWIRE) -- Onex Corporation (TSX: ONEX) today announced its financial results for the second quarter and six-months ended June 30, 2020 and an update on matters following quarter end.

Gerry Schwartz, Chairman and Chief Executive Officer of Onex, stated: As expected, valuations for the quarter rebounded significantly. As important is the significant progress made within our operating companies to ensure they manage any challenges ahead and prosper as economies gradually improve. The quarters performance is further evidence of the strength and depth of the Onex team.

Highlights

-- Onex reported segment net earnings for the three months ended June 30, 2020 of $689million ($7.02 per fully diluted share), comprised of net earnings of $657 million from its investing segment and net earnings of $32 million from its asset and wealth management segment. -- Onex reported a segment net loss for the six months ended June 30, 2020 of $363 million ($3.64 per fully diluted share), comprised of a net loss of $328 million from its investing segment and a net loss of $35 million from its asset and wealth management segment. -- Onex private equity investments generated a gross return of 16% during the three-months ended June 30, 2020 and a gross loss of 4% in the first six months of the year. -- Onex total shareholder capital per fully diluted share increased by approximately 12% in the second quarter to $67.11 (C$91.46), primarily driven by net increases in Onex private equity and credit investments. -- In June, Onex Partners sold approximately 20.8 million shares of Clarivate (NYSE: CCC) at a price of $22.50 per share. Onex share of the net proceeds was $171million as a Limited Partner in Onex Partners IV and as a co-investor. -- In June, Onex invested $72 million in Onex Partners V as part of the Funds investment in preferred shares of Emerald (NYSE: EEX). In August, Onex expects to invest an additional $35 million in Onex Partners V for preferred shares of Emerald as part of the Funds backstopping of a rights offering completed with existing public shareholders. -- In June, Onex agreed to invest up to an additional $125 million in preferred shares of Ryan Specialty Group in connection with an add-on acquisition. -- In August, Onex Partners agreed to sell approximately 32.0 million shares of SIG Combibloc Group (SIX: SIGN) at a price of CHF 15.50 per share. Onex share of the gross proceeds will be approximately $190 million as a Limited Partner in Onex Partners IV and as a co-investor. -- Onex Credit increased its assets under management by approximately 5% year-to-date to $12.2 billion. This was driven by the issuance of three collateralized loan obligations totalling $1.1 billion. The firm has issued 23 CLOs since launching its CLO platform in 2012. -- Onex Credit continued to grow its team with four new senior hires, including a Head of Structured Credit, Head of High Yield and two Opportunistic Credit portfolio managers.

Financial ResultsFor the three-months ended June 30, 2020, total segment net earnings were $689 million ($7.02 per fully diluted share). Net earnings from the investing segment totalled $657 million ($6.68 per fully diluted share) in the quarter and were primarily driven by net gains on Onex private equity and credit investments consistent with the recovery in those markets during the quarter. The second quarter net earnings from the asset and wealth management segment totalled $32 million ($0.34 per fully diluted share) driven by management and advisory fees as well as an increase in unrealized carried interest.

For the six-months ended June 30, 2020, total segment net loss was $363 million ($3.64 per fully diluted share). Net loss from the investing segment totalled $328 million ($3.31 per fully diluted share) in the same period which was primarily driven by net losses on Onex private equity and credit investments associated with the significant decline in those markets during the quarter. The net loss for the six-months ended June 30, 2020 from the asset management segment totalled $35 million ($0.33 per fully diluted share) driven primarily by a net reversal of unrealized carried interest.

Enclosed are supplementary schedules and non-IFRS measures related to Onex consolidated net earnings for the three- and six-months ended June 30, 2020, shareholder capital at June 30, 2020 and cash and near-cash change for the six-months ended June 30, 2020. The complete financial statements prepared in accordance with International Financial Reporting Standards (IFRS), including Managements Discussion and Analysis of the results, are posted on Onex website, www.onex.com, and are also available on SEDAR at www.sedar.com. A supplemental information package with additional information is available on Onex website, www.onex.com.

WebcastOnex management will host a webcast to review Onex second-quarter 2020 results on Thursday, August 6 at 11:00 a.m. ET. The webcast will be available in listen-only mode from the Presentations and Events section of Onex website, https://ir.onex.com/events-and-presentations. A 90-day on-line replay will be available shortly following the completion of theevent.

About OnexFounded in 1984, Onex invests and manages capital on behalf of its shareholders, institutional investors and high net worth clients from around the world. Onex platforms include: Onex Partners, private equity funds focused on larger opportunities in North America and Europe; ONCAP, private equity funds focused on middle market and smaller opportunities in North America; Onex Credit, which manages primarily non-investment grade debt through collateralized loan obligations, senior loan strategies and other private credit strategies; and Gluskin Sheffs wealth management services including its actively managed public equity and public credit funds. In total, Onex has approximately $35.6billion of assets under management, of which approximately $6.6 billion is its own shareholder capital. With offices in Toronto, New York, New Jersey and London, Onex and its experienced management teams are collectively the largest investors across Onex platforms.

The Onex Partners and ONCAP businesses have assets of $45 billion, generate annual revenues of $25 billion and employ approximately 165,000 people worldwide. Onex shares trade on the Toronto Stock Exchange under the stock symbol ONEX. For more information on Onex, visit its website at www.onex.com. Onex security filings can also be accessed at www.sedar.com.

Forward-Looking StatementsThis press release may contain, without limitation, statements concerning possible or assumed future operations, performance or results preceded by, followed by or that include words such as believes, expects, potential, anticipates, estimates, intends, plans and words of similar connotation, which would constitute forward-looking statements. Forward-looking statements are not guarantees. The reader should not place undue reliance on forward-looking statements and information because they involve significant and diverse risks and uncertainties that may cause actual operations, performance or results to be materially different from those indicated in these forward-looking statements. Except as may be required by Canadian securities law, Onex is under no obligation to update any forward-looking statements contained herein should material facts change due to new information, future events or other factors. These cautionary statements expressly qualify all forward-looking statements in this press release.

Non-GAAP Financial MeasuresThis press release may contain non-GAAP financial measures which have been calculated using methodologies that are not in accordance with IFRS. The presentation of financial measures in this manner does not have a standardized meaning prescribed under IFRS and is therefore unlikely to be comparable to similar financial measures presented by other companies. Onex management believes these financial measures provide helpful information to investors. Reconciliations of the non-GAAP financial measures to information contained in the consolidated financial statements have been presented where practical.

For Further InformationClaire Glossop IraniDirector, Client and Product SolutionsTel: +1 416.362.7711

Supplementary and Non-IFRS Measures

Summarized Consolidated Net Earnings (Loss)

Investing Asset and Wealth(Unaudited) ($ millions except per ^(i) Management^(i) Totalshare amounts)Three months ended June 30, 2020Segment income $ 657 $ 97 $ 754 Segment expenses - (65 ) (65 )Segment net earnings $ 657 $ 32 $ 689 Stock-based compensation expense (49 )Amortization of property and equipment and other intangible assets, (11 )excluding right-of-use assetsIntegration expense (1 )Earnings before income taxes $ 628Recovery of income taxes 1 Net earnings $ 629 Segment net earnings per share^ $ 6.68 $ 0.34 $ 7.02 (ii)Net earnings per share Basic $ 6.44 Diluted $ 6.43

(i) Refer to the unaudited interim consolidated financial statements for segment presentation and allocation considerations.(ii) Calculated on a fully diluted basis.

Investing Asset and Wealth(Unaudited) ($ millions except per ^(i) Management^(i) Totalshare amounts)Six months ended June 30, 2020Segment income (loss) $ (328 ) $ 89 $ (239 )Segment expenses - (124 ) (124 )Segment net loss $ (328 ) $ (35 ) $ (363 ) Stock-based compensation recovery 105 Amortization of property and equipment and other intangible assets, (23 )excluding right-of-use assetsIntegration expense (2 )Impairment of goodwill (85 )Net loss $ (368 ) Segment net loss per share^(ii) $ (3.31 ) $ (0.33 ) $ (3.64 )Net loss per share Basic $ (3.72 )Diluted $ (3.72 )

(i) Refer to the unaudited interim consolidated financial statements for segment presentation and allocation considerations.(ii) Calculated on a fully diluted basis.

Shareholder Capital

(Unaudited) ($ millions except per Asset andshare amounts) Investing Wealth TotalAs at June 30, 2020 ManagementTotal segmented assets $ 6,062 $ 757 $ 6,819 Accounts payable and accrued - (27 ) (27 )liabilitiesAccrued compensation - (59 ) (59 )Lease and other liabilities - (121 ) (121 )DSU hedge assets - (61 ) (61 )Total shareholder capital^(i) $ 6,062 $ 489 $ 6,551 Shareholder capital per share^(i)(ii) $ 62.10 $ 5.01 $ 67.11

(i) Shareholder capital and shareholder capital per share are non-GAAP financial measures which have been calculated using methodologies that are not in accordance with IFRS. A reconciliation of total segmented assets to shareholder capital is presented in this table. The presentation of financial measures in this manner does not have a standardized meaning prescribed under IFRS and is therefore unlikely to be comparable to similar financial measures presented by other companies. Management believes that shareholder capital is useful to investors as the metric is used, in part, to assess Onex performance.(ii) Calculated on a fully diluted basis using the treasury stock method. Fully diluted shares for shareholder capital per share were 97.6 million at June 30, 2020.

Cash and Near-Cash

The table below provides a reconciliation of the change in cash and near-cash from December 31, 2019 to June 30, 2020.

(Unaudited) ($ millions) Cash and near-cash on hand at December 31, 2019^(i) $ 1,842 Private equity realizations 405 Private equity investments (117 )Real estate distributions 15 Net Onex Credit strategies investment activity, including warehouse (44 )facilitiesOnex share repurchases, options exercised and dividends (162 )Net other, including capital expenditures, management fees, 24 operating costs and treasury incomeCash and near-cash on hand at June 30, 2020^(i) $ 1,963

(i) Includes $928 million (December 31, 2019 $395 million) of treasury investments, $93 million (December 31, 2019 $97 million) invested in an Onex Credit unlevered senior secured loan strategy fund and $192 million (December 31, 2019 $190 million) of management fees.