All amounts in U.S. dollars unless otherwise stated
TORONTO, Aug. 05, 2021 (GLOBE NEWSWIRE) -- Onex Corporation (TSX: ONEX) today announced its financial results for the second quarter and six-months ended June 30, 2021, and an update on matters following quarter end.
“Onex had another good quarter of activity, with each of our platforms executing on important initiatives,” said Gerry Schwartz, Chairman and Chief Executive Officer of Onex. “Our goal is to create value every day and continue to build on our strong foundation. As a well-capitalized asset manager with a deep bench of talent, we’re well-positioned to benefit from the opportunities ahead.”
Highlights
- Onex reported total segment net earnings for the three-months ended June 30, 2021 of $280 million ($3.04 per fully diluted share), comprised of net earnings of $225 million from its investing segment and net earnings of $55 million from its asset and wealth management segment.
- Onex reported total segment net earnings for the six-months ended June 30, 2021 of $752 million ($8.15 per fully diluted share), comprised of net earnings of $549 million from its investing segment and net earnings of $203 million from its asset and wealth management segment.
- Onex’ investing capital per share grew 3% in the second quarter and 9% since December 31, 2020 to $80.32 (C$99.55), driven by growth in its private equity and credit investments. As of June 30, 2021, Onex had approximately $7.5 billion of investing capital.
- Onex’ private equity investments generated a gross return of 4% in the quarter and 13% year-to-date.
- Onex had approximately $1.3 billion of cash and near-cash on its balance sheet as of June 30, 2021. Pro forma for activity announced in July, Onex’ cash and near-cash increased to $1.6 billion.
- As of the end of July 2021, Onex had deployed approximately $504 million and received approximately $787 million of realizations and distributions through its private equity investing activities so far this year. Most notable were Onex Partners V’s investments in Weld North Education and Newport Healthcare and Onex’ partial realization of Ryan Specialty Group.
- Onex ended the quarter with third-party fee-generating assets under management of $31.7 billion. Run-rate management fees on this capital were $271 million.
- Onex Credit’s fee-generating assets under management increased 4% in the quarter to approximately $15.7 billion.
- Gluskin Sheff fee-generating client capital increased 4% in the quarter and 9% since December 31, 2020, reflecting positive gross client inflows and good investment performance.
- Onex repurchased 699,100 Subordinate Voting Shares in the first seven months of 2021 for a total cost of $44 million (C$55 million), or at an average cost per share of C$79.35.
Financial Results
For the three-months ended June 30, 2021, total segment net earnings were $280 million ($3.04 per fully diluted share). Investing segment earnings of $225 million ($2.44 per fully diluted share) were primarily driven by net gains on Onex’ private equity and credit investments. The second-quarter net earnings from the asset and wealth management segment totalled $55 million ($0.60 per fully diluted share), driven largely by an increase in carried interest.
For the six-months ended June 30, 2021, total segment net earnings were $752 million ($8.15 per fully diluted share). Investing segment earnings of $549 million ($5.94 per fully diluted share) were primarily driven by net gains on Onex’ private equity and credit investments. The second-quarter net earnings from the asset and wealth management segment totalled $203 million ($2.21 per fully diluted share), driven largely by an increase in carried interest.
Enclosed are supplementary schedules and non-IFRS measures related to Onex’ consolidated net earnings, investing capital and cash and near-cash changes for the three- and six-months ended June 30, 2021. The financial statements prepared in accordance with International Financial Reporting Standards (IFRS), including Management’s 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.
Webcast
Onex management will host a webcast to review Onex’ second-quarter 2021 results on Thursday, August 5 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://www.onex.com/events-and-presentations. A 90-day on-line replay will be available shortly following the completion of the event.
About Onex
Founded in 1984, Onex manages and invests 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 mid- to large-cap opportunities in North America and Western 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 tradeable, private and opportunistic credit strategies as well as actively managed public equity and public credit funds; and Gluskin Sheff’s wealth management services. In total, Onex has approximately $46 billion of assets under management, of which approximately $7.5 billion is its own investing capital. With offices in Toronto, New York, New Jersey, Boston and London, Onex and its experienced management teams are collectively the largest investors across Onex’ platforms.
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 Statements
This 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 Measures
This 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 Information
Jill Homenuk
Managing Director – Shareholder Relations and Communications
Tel: +1 416.362.7711
Supplementary and Non-IFRS Measures
Summarized Consolidated Net Earnings
| (Unaudited)($ millions except per share amounts) Three months ended June 30, 2021 | Investing(i) | Asset and Wealth Management(i) | Total | |||||
| Segment income | $ | 225 | $ | 130 | $ | 355 | ||
| Segment expenses | - | (75) | (75) | |||||
| Segment net earnings | $ | 225 | $ | 55 | $ | 280 | ||
| Stock-based compensation expense | (91) | |||||||
| Amortization of property and equipment and other intangible assets, excluding right-of-use assets | (12) | |||||||
| Integration expense | (4) | |||||||
| Earnings before income taxes | $ | 173 | ||||||
| Recovery of income taxes | 1 | |||||||
| Net earnings | $ | 174 | ||||||
| Segment net earnings per share(ii) | $ | 2.44 | $ | 0.60 | $ | 3.04 | ||
| Net earnings per share | ||||||||
| Basic | $ | 1.95 | ||||||
| Diluted | $ | 1.95 | ||||||
(i) Refer to the consolidated financial statements for segment presentation and allocation considerations.
(ii) Calculated on a fully diluted basis.
(Unaudited)($ millions except per share amounts) Six months ended June 30, 2021 | Investing(i) | Asset and Wealth Management(i) | Total | |||||
| Segment income | $ | 549 | $ | 356 | $ | 905 | ||
| Segment expenses | - | (153) | (153) | |||||
| Segment net earnings | $ | 549 | $ | 203 | $ | 752 | ||
| Stock-based compensation expense | (134) | |||||||
| Amortization of property and equipment and other intangible assets, excluding right-of-use assets | (26) | |||||||
| Integration expense | (4) | |||||||
| Earnings before income taxes | $ | 588 | ||||||
| Recovery of income taxes | 1 | |||||||
| Net earnings | $ | 589 | ||||||
| Segment net earnings per share(ii) | $ | 5.94 | $ | 2.21 | $ | 8.15 | ||
| Net earnings per share | ||||||||
| Basic | $ | 6.55 | ||||||
| Diluted | $ | 6.54 | ||||||
(i) Refer to the consolidated financial statements for segment presentation and allocation considerations.
(ii) Calculated on a fully diluted basis.
Investing Capital(i)
| (Unaudited)($ millions except per share amounts) | June 30, 2021 | ||
| Private Equity | |||
| Onex Partners Funds | $ | 3,543 | |
| ONCAP Funds | 625 | ||
| Other Private Equity | 902 | ||
| Carried Interest | 211 | ||
| 5,281 | |||
| Onex Credit Strategies | 851 | ||
| Real Estate | 60 | ||
| Other Net Liabilities | (10) | ||
| Cash and Near-Cash | 1,280 | ||
| Investing Capital | $ | 7,462 | |
| Investing Capital per share (U.S. dollars)(ii)(iii) | $ | 80.32 | |
| Investing Capital per share (Canadian dollars)(ii)(iii) | $ | 99.55 | |
(i) Refer to Onex’ Supplemental Information Package for presentation considerations.
(ii) Investing Capital per share is a non-GAAP financial measures which has been calculated using a methodology that is 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. Management believes that Investing Capital per share is useful to investors as the metric is used, in part, to assess Onex’ performance.
(iii) Calculated on a fully diluted basis using the treasury stock method. Fully diluted shares for investing capital per share were 92.9 million at June 30, 2021.
Cash and Near-Cash
The table below provides a reconciliation of the change in cash and near-cash from December 31, 2020 to June 30, 2021.
| (Unaudited)($ millions) | |||
| Cash and near-cash on hand at December 31, 2020(i) | $ | 1,377 | |
| Private equity realizations | 295 | ||
| Private equity investments | (302) | ||
| Net Onex Credit strategies investment activity | 3 | ||
| Onex share repurchases, options exercised and dividends | (66) | ||
| Net other, including capital expenditures, management fees, operating costs and treasury income | (27) | ||
| Cash and near-cash on hand at June 30, 2021(i) | $ | 1,280 | |
(i) Includes $368 million (December 31, 2020 – $541 million) of treasury investments and associated working capital managed by a third-party investment manager and $154 million (December 31, 2020 – $122 million) of management fees. The December 31, 2020 cash and near-cash balance also includes $98 million invested in an Onex Credit unlevered senior secured loan strategy fund.