Input Capital Corp. Publishes Q4 Operations Update

REGINA, April 11, 2016 /CNW/ - Input Capital Corp. ("Input", or the "Company") (TSX Venture: INP) (US: INPCF), is releasing its quarterly operations update for Q4 of its 2016 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 March 31, 2016. The final accounting of quarterly results will be published in Input's Q4 and year-end financial statements and MD&A when these are finalized and released in due course.

Quarterly Revenue from Canola Streaming Sales

Input sold 5,884 metric tonnes ("tonnes" or "MT") of canola equivalent volume from streaming during the quarter at an average price of $448 per MT, for quarterly streaming revenue of $2.6 million. This brings Input's total streaming revenue for fiscal 2016 to a record $30.1 million, on the sale of 62,235 MT at an average price of $483 per MT.

Year-over-year, Input's streaming revenue has increased by 173% on an increase in canola streaming volume of 160%.

"This is the first time in Input's history that we have been able to accomplish a total and complete sale of all of our tonnes of canola by fiscal year end, and it is as a result of a pro-active on-farm pick up and canola delivery program instituted by our management and logistics team this year," said President & CEO Doug Emsley.  "This supports our objective of converting canola to cash as quickly as possible in order to fund our ongoing deployment efforts, but it also creates strong loyalty and buy-in from our farmer partners who are able to free up storage space and reduce on-farm handling costs."

The following table summarizes canola equivalent sales for the 2016 fiscal year, compared to the 2015 fiscal year:







Fiscal Quarter

Q1

Q2

Q3

Q4

FY Total

FY2015 Canola Streaming Volume (MT)

Average Net Realized Price

4,585

$493

4,146

$463

8,182

$441

7,011

$465

23,924

$462

FY2016 Canola Streaming Volume (MT)

Average Net Realized Price

6,079

$468

18,382

$487

31,889

$490

5,884

$448

62,235

$483

% Change (in Volume)

+33%

+343%

+290%

-16%

+160%

$11.0 Million in New Capital Deployment

During the quarter, Input signed 38 canola streaming contracts for total up-front payments of $11.0 million.

Of the 38 contracts signed in the quarter, 17 are with new clients in Alberta (6) and Saskatchewan (11) and 21 contracts are renewals/expansions in Alberta (1), Saskatchewan (19) and Manitoba (1). This brings Input's streaming portfolio to 94 active canola streams in Alberta (14), Saskatchewan (75) and Manitoba (5).

A summary of the capital deployment for the previous three fiscal years is summarized in the table below:







Fiscal Year

2013

2014

2015

2016

Total

Deployment ($ millions)

Total Number of Active Streams

Total Number of Inactive Streams

$6.1

5

-

$25.0

15

-

$49.1

68

-

$35.1

94

3

$115.3

94

3

Total Active Canola Reserves (MT)

Total Inactive Canola Reserves (MT)

22,000

-

134,000

-

303,000

-

280,000

67,000


These newly announced investments increase Input's total capital deployment to date to $115.3 million. Input's longest streaming contract has a 12 year term until 2026, and the portfolio average contract length for active streams is 6.6 years.

A higher level of sales activity and farmer interactions over the last year led to an 18% increase in the number of individual contracts signed with farmers during the year (from 73 to 86), and a 38% increase in the number of active streams in Input's portfolio (from 68 to 94). Portfolio and counterparty risk continues to be reduced as a result of improved process and underwriting procedures during due diligence and by significantly reducing the average streaming contract size.

"As the founders of Input Capital and significant shareholders in our own right, the management team has always intended to focus on building a strong business for the long-term," said President & CEO Doug Emsley. "We are in the foundational growth period for the company, and it is on the strength of contracts that we write today that the future success of our business lies.  It is our intention to ensure that Input's streaming portfolio is strong as we continue to build our streaming business."

Update on Terminated Streaming Contracts

On November 12, 2015, Input announced the termination of three streaming contracts and which are now classified as inactive contracts. Input immediately began legal proceedings to begin the process of recovering its investment in these three contracts.

Management is pleased to report that the recovery process is proceeding smoothly and is either on track or ahead of previously expected timeframes.

On the largest of the contracts, Input has now taken titled possession of 12.3 quarters of farmland (approximately 2,000 acres), and the foreclosure process on the balance of the land associated with the security package for this contract is proceeding ahead of schedule. Input is in the process of finalizing rental arrangements with local farmers for the upcoming growing season to ensure that the land is maintained in good condition in preparation for a sale of the entire property once the foreclosure process is fully complete. In the interim, the farmers will pay a market rental rate to the benefit of Input for the use of the land this year.

In addition, Input has consigned a significant number of pieces of farm equipment to a regularly scheduled auction to be held on May 1. An additional batch of equipment associated with this contract will be auctioned this summer.

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.

Canola Reserves Update

Periodically, Input updates its projections for anticipated canola streaming tonnes to be sold in the current fiscal year. Due to the fact that this year's capital deployment season remains ongoing, projections for F2017 canola deliveries will be published in the next quarterly operational update, scheduled for early July 2016.

The table below updates 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

Total Active Canola Reserves (MT)

280,000

$60 / 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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