Input Capital Corp. Publishes Q1 Operations Update and Announces Change in Year-End

REGINA, July 11, 2016 /CNW/ - Input Capital Corp. ("Input", or the "Company") (TSX Venture: INP) (US: INPCF), is releasing its quarterly operations update for Q1 of its 2017 fiscal year, which provides a preliminary summary of quarterly canola sales and a summary of capital deployed in the acquisition of new canola streams during the quarter ending June 30, 2016. The final accounting of quarterly results will be published in Input's Q1 financial statements and MD&A when these are finalized and released next month.

$6.1 Million in New Capital Deployment

During the quarter, Input signed 21 canola streaming contracts for total up-front payments of $6.1 million.

Of the 21 contracts signed in the quarter, 14 are with new clients in Alberta (4), Saskatchewan (9) and Manitoba (1) and 7 contracts are renewals/expansions with existing clients. This brings Input's streaming portfolio to 107 active canola streams in Alberta (17), Saskatchewan (84) and Manitoba (6).

A summary of historical capital deployment is summarized in the table below:








Fiscal Year

2013

2014

2015

2016

2017

Total

Deployment ($ millions)

$6.1

$25.0

$49.0

$35.4

$6.1

$121.6

Total Number of Active Streams

5

15

68

94

107

107

Total Number of Inactive Streams

-

-

-

3

3

3

Total Active Canola Reserves (MT)

22,000

134,000

303,000

280,000

271,000


 

These newly announced investments increase Input's total capital deployment to date to $121.6 million. Input's longest streaming contract has a 12 year term until 2026, and the portfolio average contract length for active streams is 6.5 years.

Quarterly Revenue from Canola Streaming Sales

Input sold 250 metric tonnes ("tonnes" or "MT") of canola equivalent volume from streaming during the quarter at an average price of $459 per MT, for quarterly streaming revenue of $0.1 million.

The following table summarizes canola equivalent sales for the current fiscal year, compared to the previous fiscal year:







Fiscal Quarter

Q1

Q2

Q3

Q4

FY Total

FY2016 Canola Streaming Volume (MT)

6,079

18,382

31,889

5,894

62,244

Average Net Realized Price

$468

$487

$490

$448

$483

FY2017 Canola Streaming Volume (MT)

250




250

Average Net Realized Price

$459




$459

% Change (in Volume)

-96%





 

"The success of Input's logistics program after the last harvest is reflected in these canola sales figures. Effectively all of last year's crop was sold during the last fiscal year, so we did not have much to sell in this quarter. If we incur no revenue between April and mid-September, it means our business is working smoothly," said President & CEO Doug Emsley. "With regard to deployment, we continue to be encouraged by the growing number of farmers who see streaming as a useful tool to manage their working capital requirements. As we grow our book of streams, we further diversify against weather and individual counterparty risks."

Update on Capital Recovery Associated with Terminated Streaming Contracts

The capital associated with the largest of the three streaming contracts previously announced as terminated due to default has now been collected. The Company has taken titled ownership of 5,000 acres of farmland and the farm equipment has been sold via two auctions. The farmland has been rented out to local farmers for this growing season, and Input has begun efforts to market the farmland for sale after this year's harvest is complete.

The recovery efforts associated with the two smaller terminated contracts are progressing and are on track with previous expectations. Management continues to expect to fully recover all of the capital associated with the three terminated contracts.

Change in Year End

The Company is also announcing that it will change its financial year end from March 31 to September 30 to better align its financial reporting periods with its business cycle. Brad Farquhar, Executive Vice-President and Chief Financial Officer commented: "The old March 31 year end fell in the middle of Input's capital deployment season as well as its crop sales season, creating an artificial deadline and cut-off that made planning, budgeting, reporting, and analysis a significantly bigger challenge to the Company and to investors than necessary. The new September 30 year end lines up with Input's capital deployment season, which begins October 1, and is a good fit with the crop sales cycle, which ramps up in earnest in October as well. By making this change, capital deployment in one fiscal year will lead to crop sales in the following fiscal year, without the uncertainties of potentially material amounts of capital deployment and crop sales falling unexpectedly into different fiscal periods, making year-over-year comparisons more useful."

The six month period of April 1, 2016 to September 30, 2016 will form a transition year, which will be referred to by the Company after today as FYSept2016. The new twelve month 2017 fiscal year will begin on October 1, 2016 and run until September 30, 2017. For more information, please see the Company's Notice of Change in Year End which has been filed on SEDAR at www.sedar.com.

Projected Streaming Tonnes and Total Active Canola Reserves

Periodically, Input updates its projections for anticipated canola streaming tonnes to be sold in the current fiscal year. The table below also includes Input's Total Active Canola Reserves, which is the sum of all contracted canola streaming tonnes for all contract years on all active contracts, less canola streaming tonnes sold to date.





Tonnes

Avg Crop Payment

Projected Streaming Tonnes in FYSept2016

Negligible

N/A

Projected Streaming Tonnes in F2017

60,000 - 70,000

$55 / MT

Total Active Canola Reserves (MT)

271,000

$68 / MT

 

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.

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.

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.

(1) 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; and
  • Cost per Tonne Acquired and Canola Replacement Ratio

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.

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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