Input Capital Corp. Announces Sept 2016 YE Results

REGINA, Dec. 7, 2016 /CNW/ - Input Capital Corp. ("Input" or the "Company") (TSX Venture: INP) (US: INPCF) has released its audited results for the fiscal period ending September 30, 2016. Due to the Company's previously announced change in year end from March 31 to September 30, the six month period of April 1, 2016 to September 30, 2016 forms a transitional fiscal year with a year end at September 30, 2016. All figures are presented in Canadian dollars.

"The July to September quarter is the second normally quiet quarter for Input because that is when farmers are busy growing crops," said President and CEO Doug Emsley. "In spite of the quiet nature of this time period, we were able to make significant progress in a number of key areas for our business.  In the last six months, Input has: sold $7.77 million of canola from the 2016 crop, and deployed $7.91 million into 30 streaming contracts; substantially collected on its largest terminated stream; announced a revolving credit facility with HSBC Bank Canada; and hired a new Director of Sales and made substantial improvements to our sales approach.

"Now that we are into the post-harvest period, our outreach efforts to farmers have begun, and we are optimistic and confident about growing our book of canola streams over the months ahead. And we now have between $75 million and $100 million in resources available for deployment over the next twelve months."

FY Sept 2016 Highlights

  • Revenue from streaming contracts of $7.771 million on the sale of 16,166 metric tonnes ("MT" or "tonnes") of canola equivalent at an average price of $481 per MT;

  • The Company generated an additional $0.271 million in sales revenue from canola trading for total FY Sept 2016 sales revenue of $8.042 million;

  • Cash operating margin1 from streaming contracts of $6.614 million, or $409 per MT (85.1% cash operating margin);

  • Adjusted net loss1 of $0.589 million, or $0.00 per share;

  • Adjusted operating cash flow1 of $4.891 million or $0.06 per share;

  • Completed a previously announced buyback of a large streaming contract, exchanging $8 million of future canola streaming delivery obligations for land of equivalent value. This transaction is consistent with Input's move towards smaller contracts and lower portfolio concentration risk;

  • Invested $7.908 million of upfront payments2 into thirty streaming contracts, adding twenty new contracts (six in Alberta, thirteen in Saskatchewan and one in Manitoba) and more than 32,000 MT to the Company's canola reserves;

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

  • Finished FY Sept 2016 with:
    • Cash and cash equivalents of $16.643 million;
    • Total canola interests (current portion and long-term portion) and other financial assets (herein referred to collectively as "canola interests") of $77.757 million;
    • Multi-year streaming contracts with 112 farm operators, up from 79 a year ago;
    • Canola reserves of 261,000 MT;
    • Total shareholders' equity of $115.613 million; and
    • No debt.

KEY PERFORMANCE INDICATORS FOR THE TWO MOST RECENT TRAILING TWELVE MONTH PERIODS ARE SUMMARIZED BELOW:






CAD millions, unless otherwise noted


Twelve Months
ended
Sept 30, 2016

Twelve Months
ended
Sept 30, 2015

% Change

Revenue from Streaming Contracts


26.044

18.651

40%

Gross Profit from Streaming Contracts


6.686

6.117

9%

Canola Sold from Streaming Contracts (MT)


53,949

39,653

36%

Average Price per Streaming MT


$483

$470

3%






Total Gross Capital Deployed2


25.826

54.749

-53%

Active Streaming Contracts at end of period


112

79

42%

Canola Reserves (MT)2


261,000

328,000

-20%






Cash operating margin1


22.548

15.987

41%

Cash Operating Margin per Streaming MT1


$417.96

$403.18

4%






Cash margin1


7.804

6.116

28%

Cash Margin per Streaming MT1


$144.43

$154.24

-6%






Adjusted Net Income (loss)1


2.046

1.442

42%

Adjusted Net Income (loss) / Share1


$0.02

$0.02

42%






Adjusted EBITDA1


17.556

11.340

55%

Adjusted EBITDA / Share1


$0.22

$0.14

55%






Adjusted Operating Cash Flow1


23.200

11.735

98%

Adjusted Operating Cash Flow / Share1


$0.28

0.14

97%

 

________________________

1 Non-IFRS financial measures with no standardized meaning under IFRS. For further information and a detailed reconciliation, refer to "Non-IFRS Measures" beginning on page 22 of the MD&A.

2 Includes contracts that were signed but not completely funded at the end of the year ended September 30, 2016.

 

REVENUE

For the six months ended September 30, 2016, Input generated revenue from streaming contracts of $7.771 million on the sale of 16,166 MT of canola or equivalents for an average price of $481 per MT.

In the same period last year, Input sold 24,461 MT of canola for revenue from streaming contracts of $11.803 million. Year-over-year canola sales and revenue comparisons during the April to September period are difficult to make due to variable harvest conditions which can affect canola delivery timing. This year, some revenue was received in late September as a result of a good start to the harvest season, but this may not happen every year.

During the six month fiscal year, Input generated $0.271 million in revenue from canola trading.

CAPITAL DEPLOYMENT AND STREAMING CONTRACT PORTFOLIO

Gross capital deployed into streaming contracts during the transition year was $7.908 million2.

Input ended the quarter with 112 active streaming contracts diversified across Manitoba, Saskatchewan, and Alberta, up from 79 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

Sept 30, 2016

As at

Mar 31, 2016

Change

Cash and cash equivalents


16.643

24.772

-33%

Canola interests and other financial assets


77.757

91.089

-15%

Total assets


118.548

121.000

-2%

Total liabilities


2.935

4.978

-41%

Total shareholders' equity


115.613

116.022

0%

Working capital


71.181

60.062

19%

Debt


-

-

N/A

 

OUTLOOK

The 2016 growing season featured an unusual harvest, which was broadly interrupted by a significant snowfall in early October. Due to wet harvest conditions, most farmers were not able to harvest or deliver crop during October and concerns emerged regarding how much crop might be stranded in field over winter. However, a good turn in the weather in early November provided a much needed dry period and harvest resumed in earnest. The vast majority of the harvest is now complete in most areas. In those areas where harvest is not complete recent cold weather has frozen the wet ground and may help farmers to finish. In spite of the unpredictable weather, reported canola yields have been very strong.

Input continues to make progress on the collection of capital associated with the three terminated streaming contracts. Approximately $6.6 million of the original $18.4 million remains outstanding as a result of successful collection efforts previously announced earlier this year. The collection processes associated with these funds continues to proceed as expected.

Input's capital deployment season began slowly in October due to the long harvest period and is now beginning to pick up with harvest activity completed. In June, the Company hired a full time Director of Sales to lead streaming sales efforts, and management is pleased with efforts to improve sales and marketing efforts to meet capital deployment and canola acquisition objectives over the new fiscal year that runs from October 1, 2016 to September 30, 2017.

WEBCAST AND CONFERENCE CALL DETAILS

A conference call will be held on Thursday, December 8, 2016 starting at 9:30 am Saskatchewan time (10:30 am Eastern time) to further discuss the year end 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=1298417&s=1&k=C51FB5FE9EE3BB3D29E910AEE80B8144

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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