Input Capital Corp. Announces Fiscal Sept2016 Q1 Results

REGINA, Aug. 16, 2016 /CNW/ - Input Capital Corp. ("Input" or the "Company") (TSX Venture: INP) (US: INPCF) has released its unaudited results for the fiscal Sept2016 first quarter ended June 30, 2016. All figures are presented in Canadian dollars.

"The April to June quarter should normally be a fairly quiet quarter for Input, and that's exactly what Input experienced this year," said President and CEO Doug Emsley. "Virtually all of our canola from last year's crop had already been sold prior to March 31st, which is great news—this of course means our cash from the crop is already in the bank and available for new streaming contracts with farmers. We are also pleased to have recorded new deployment of $6.1 million in what is also a normally quiet quarter for deployment."

"The most important development during the quarter is that we were able to finalize a $25 million revolving credit facility with HSBC Bank Canada. This positions Input with additional resources as we prepare for the busy deployment season which begins this fall."

Q1 HIGHLIGHTS

  • Revenue from streaming contracts of $0.115 million on the sale of 250 MT of canola equivalent at an average price of $459 per MT;

  • The Company did not generate any canola trading revenue during the quarter;

  • Cash operating margin1 from streaming contracts of $0.100 million, or $400 per MT (87.3% cash operating margin);

  • Adjusted net loss1 of $1.139 million, or $0.01 per share;

  • Adjusted operating cash flow1 of negative $0.763 million, or $0.01 per share;

  • Mutually agreed with one of our farm partners to exchange $8 million of future canola streaming delivery obligations in return for land of equivalent value. The contractual obligations with this farm operator were current and the decision to proceed with this exchange is consistent with Input's move towards smaller contracts and lower portfolio concentration risk. This land will be sold and the funds will be used in the company's future deployment efforts;

  • Invested $6.124 million of upfront payments2 into twenty streaming contracts, adding fourteen new contracts to the portfolio and almost 23,000 MT to the Company's future canola sales;

  • Announced a $25 million revolving credit facility with HSBC Bank Canada; and

  • Finished the quarter with:
    • Cash and cash equivalents of $15.095 million;
    • Total canola interests (current portion and long-term portion) and other financial assets (herein referred to collectively as "canola interests") of $84.517 million;
    • Multi-year streaming contracts with 107 farm operators, up from 78 a year ago;
    • Total shareholders' equity of $116.021 million; and
    • No debt.

KEY PERFORMANCE INDICATORS FOR FISCAL SEPT2016 Q1 ARE SUMMARIZED BELOW:





CAD millions, unless otherwise noted

Quarter ended

June 30, 2016

Quarter ended

June 30, 2015

% Change

Revenue from Streaming Contracts

0.115

2.844

-96%

Gross Profit from Streaming Contracts

(0.857)

1.354

nmf

Canola Sold from Streaming Contracts (MT)

250

6,079

-96%

Average Price per Streaming MT

$458.64

$467.92

-2%





Total Gross Capital Deployed2

6.124

9.856

-38%

Active Streaming Contracts at end of period

107

78

37%

Canola Reserves (MT) 2

271,000

325,000

-17%





Cash operating margin1

0.100

2.474

-96%

Cash Operating Margin per Streaming MT1

$400.56

$406.96

-2%





Cash margin1

0.027

1.109

-98%

Cash Margin per Streaming MT1

$106.22

$182.35

-42%





Adjusted Net Income (loss)1

(1.139)

0.263

nmf

Adjusted Net Income (loss) / Share1

$(0.01)

$0.00

nmf





Adjusted EBITDA1

(1.464)

1.664

nmf

Adjusted EBITDA / Share1

$(0.02)

$0.02

nmf





Adjusted Operating Cash Flow1

(0.763)

1.734

nmf

Adjusted Operating Cash Flow / Share1

$(0.01)

$0.02

nmf

 

REVENUE

For the three months ended June 30, 2016, Input generated revenue from streaming contracts of $0.115 million on the sale of 250 MT of canola or equivalents for an average price of $459 per MT, 3.1% lower than the average cash canola price (RSY00) (net of an assumed basis level) of $473 during the quarter.

As a result of a successful canola marketing program last fall, Input sold almost all of its 2015 harvest volume by the end of its previous fiscal year, with sales concentrated between September and December of 2015. The volume sold in the first quarter represents the final tonnes from that canola marketing program, which were sold into the cash market rather than at previously contracted sales prices, as is the norm for the majority of the Company's canola sales program.

Because Input experienced crop shipping delays in previous years which pushed revenue past the March 31 year end and into the April to June quarter, comparisons of the results of the most recent quarter to previous years' appear low. However, they are in fact an indication that Input's canola sales program this last year went according to plan.

For the same reasons, the sales from streaming tonnes for the quarter represent a significant decrease in quarterly volume over the same quarter last year, when the Company sold 6,079 MT of canola equivalent for revenue of $2.844 million.

With all of the Company's sales contracts being fulfilled prior to the beginning of the quarter, Input did not generate any revenue from canola trading during the quarter compared to $5.157 in the same quarter last fiscal year.

CAPITAL DEPLOYMENT AND STREAMING CONTRACT PORTFOLIO

Gross capital deployed into streaming contracts during the first quarter was $6.124 million2.

Input ended the quarter with 107 active streaming contracts diversified across Manitoba, Saskatchewan, and Alberta, up from 78 at the same time last year.

BALANCE SHEET

KEY BALANCE SHEET ITEMS ARE SUMMARIZED BELOW:





Statement of Financial Position 

CAD millions, unless otherwise noted

As at

Jun 30, 2016

As at

Mar 31, 2016

Change

Cash and cash equivalents

15.095

24.772

-39%

Canola interests and other financial assets

84.517

91.089

-7%

Total assets

119.483

121.000

-1%

Total liabilities

3.462

4.978

-30%

Total shareholders' equity

116.021

116.022

0%

Working capital

61.521

60.062

2%

Debt

-

-

N/A

 

OUTLOOK

Input has largely finalized its canola sales and logistics planning for the 2016 crop. Over 80% of this year's crop will be sold to domestic crushers, and over 94% of anticipated canola sales are already contracted and booked at an average net realized price in excess of $485 per MT. These efforts mirror last year's effective plan, and management wants to repeat that success this year.

Input continues to make progress on the collection of capital associated with the three terminated streaming contracts. From the largest of the three collections, the Company now holds titled possession of approximately 5,000 acres of farmland which is rented out for the 2016 farming season, and has concluded two successful farm equipment auctions with total gross sales of approximately $5 million. The other two collection processes associated with terminated contracts continue to proceed as expected.

Harvest has begun in some areas on early crops, and the canola harvest will begin in the weeks ahead, beginning the high revenue part of Input's annual cycle. A wetter than average growing season means that harvest may turn out to be a lengthy drawn-out process, but anecdotal reports about crop yields seem very positive.  Input's next capital deployment season kicks off shortly after harvest is complete.

WEBCAST AND CONFERENCE CALL DETAILS

A conference call will be held on Wednesday, August 17, 2016 starting at 8:30 am Saskatchewan time (10:30 am Eastern time) to further discuss the Q1 results. To participate in the conference call use the following dial-in number:

Participant Dial in #: (888) 231-8191 (North America Toll Free)
Participant Dial in #: (647) 427-7450 (International)

Webcast URL: http://event.on24.com/r.htm?e=1226912&s=1&k=AA196731D19F59FF51A556C0CC59B014

It is recommended that participants dial in five minutes prior to the commencement of the conference call. Soon after the completion of the call, the webcast will be available for download on the Input Capital website at www.inputcapital.com.  

NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

ABOUT INPUT

Input is an agriculture commodity streaming company with a focus on canola, the largest and most profitable crop in Canadian agriculture. Input enters into multi-year canola streaming contracts with canola farmers in western Canada. Pursuant to the streaming contract, Input purchases a fixed portion of the canola produced, at a fixed price, for the duration of the term of the contract.  Input is a non-operating farming company with a diversified portfolio of canola streams, all of which produce canola and revenue for Input within a year of being signed. Input plans to grow and diversify its low cost canola production profile through entering into additional canola streaming contracts with farmers across western Canada. Input is focused on farmers with quality production profiles, excellent upside yield potential, and strong management teams.

Forward Looking Statements

This release includes forward-looking statements regarding Input and its business. Such statements are based on the current expectations and views of future events of Input's management. In some cases the forward-looking statements can be identified by words or phrases such as "may", "will", "expect", "plan", "anticipate", "intend", "potential", "estimate", "believe" or the negative of these terms, or other similar expressions intended to identify forward-looking statements. The forward-looking events and circumstances discussed in this release may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting Input, including risks regarding the agricultural industry, economic factors and the equity markets generally and many other factors beyond the control of Input. No forward-looking statement can be guaranteed. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement or information. Accordingly, readers should not place undue reliance on any forward-looking statements or information. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Input undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

Non-IFRS Measures

Input measures key performance metrics established by management as being key indicators of the Company's strength, using certain non-IFRS performance measures, including:

  • Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per share;
  • Adjusted Operating Cash Flow and Adjusted Operating Cash Flow per share;
  • Adjusted EBITDA and Adjusted EBITDA per share;
  • Crop Payment per Tonne;
  • Cash Operating Margin and Cash Operating Margin per Tonne;
  • Cash Margin and Cash Margin per Tonne; and
  • Cost per Tonne Acquired.

The Company uses these non-IFRS measures for its own internal purposes. These non-IFRS measures do not have any standardized meaning prescribed by IFRS, and these measures may be calculated differently by other companies. The presentation of these non-IFRS measures is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The Company provides these non-IFRS measures to enable investors and analysts to understand the underlying operating and financial performance of the Company in the same way as it is frequently evaluated by Management. Management will periodically assess these non-IFRS measures and the components thereof to ensure their continued use is beneficial to the evaluation of the underlying operating and financial performance of the Company, and to confirm that these measures remain useful for comparison purposes to other royalty/streaming companies.  For more detailed information, please refer to Input's Management Discussion and Analysis available on the Company's website at www.inputcapital.com and on SEDAR at www.sedar.com

_______________________________

1 Non-IFRS financial measures with no standardized meaning under IFRS. For further information and a detailed reconciliation, refer to "Non-IFRS Measures" in the accompanying MD&A.


2 Includes contracts that were signed but not completely funded at the end of the fiscal year.

 

SOURCE Input Capital Corp.

For further information: Doug Emsley, President & CEO, (306) 347-1024, doug@inputcapital.com; Brad Farquhar, Executive Vice-President & CFO, (306) 347-7202, brad@inputcapital.com

RELATED LINKS
http://www.inputcapital.ca/

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