Input Capital Corp. Announces Fiscal 2016 First Quarter Results

REGINA, Aug. 18, 2015 /CNW/ - Input Capital Corp. ("Input" or the "Company") (TSX Venture: INP) (US: INPCF) is pleased to announce its unaudited results for the fiscal 2016 first quarter ended June 30, 2015. All figures are presented in Canadian dollars.

FIRST QUARTER HIGHLIGHTS

• Revenue from streaming contracts of $2.844 million on the sale of 6,079 MT of canola at an average price of $468 per MT. The Company generated an additional $5.157 million of sales revenue from canola trading for total quarterly sales revenue of $8.002 million.
• Cash operating margin¹ from streaming contracts of $2.474 million, or $407 per MT (87% cash operating margin);
• Adjusted net income of $0.263 million, or $0.00 per share;
• Adjusted operating cash flow¹ of $1.531 million, or $0.02 per share;
• Invested $9.856 million of upfront payments², gaining twelve new multi-year streaming contracts, including the Company's first twelve year contract, adding 37,600 contracted MT to the Company's future canola sales;
• Finished the quarter with:
  • Cash and cash equivalents of $27.215 million;
  • Total canola interests (current portion and long-term portion) and other financial assets of $90.694 million;
  • Multi-year streaming contracts with 78 farm partners, up from only 20 a year ago;
  • Total shareholder's equity of $114.562 million; and
  • No debt.

"We took positive strides in a traditionally quiet quarter," said President & CEO Doug Emsley. "We increased our streaming contract count by ten, from 68 to 78 (an increase of 15%) and we have now deployed over $90 million into streaming contracts. We also took in nearly $3 million of revenue from streaming contracts, generating a cash operating margin of $407 per tonne sold.

"We are in the midst of another year that will be transformational to our business, as we continue to add to our sales force, generate significant revenues from streaming contracts and continue to expand our growing portfolio of streaming contracts."

KEY PERFORMANCE INDICATORS FOR THE FIRST QUARTER ARE SUMMARIZED BELOW:

CAD millions, unless otherwise noted	Quarter ended June 30, 2015	Quarter ended June 30, 2014	% change
Revenue from Streaming Contracts	$2.844	$2.261	+26%
Gross Profit from Streaming Contracts	$1.109	$0.621	+79%
Canola Sold from Streaming Contracts	6,079 MT	4,585 MT	+33%
Average Price per Streaming MT	$468	$493	-5%
Total Gross Capital Deployed^1	$9.856	$11.650	-15%
Total Gross Capital Deployed to Date^1	$90.076	$42.738	+108%
Streaming Contracts	78	20	+290%
Canola Reserves	324,000 MT	179,000 MT	+81%
Cash operating margin^2	$2.474	$1.820	+36%
Cash Operating Margin per Streaming MT^2	$407	$397	+3%
Adjusted Net Income^2	$0.263	$0.036	+640%
Adjusted Net Income / Share^2	$0.00	$0.00	NMF
Adjusted EBITDA^2	$1.664	$1.241	+34%
Adjusted EBITDA / Share^2	$0.02	$0.02	+1%
Adjusted Operating Cash Flow^2	$1.531	$1.494	+2%
Adjusted Operating Cash Flow / Share^2	$0.02	$0.02	NMF

REVENUES

During the first quarter, Input had total revenue of $8.002 million, up 254% from the same quarter last year.

Revenue of $2.844 million was generated from the sale of 6,079 MT of canola from streaming contracts for an average realized price of $468 per MT. Input's average realized price on streaming contract tonnes was 1.6% higher than the average cash canola price (RSY00) of $461 during the quarter.

The 26% increase in revenue from canola streaming during the fiscal year was driven by an expanded portfolio of streaming contracts, which grew 290% to 78 streams at the end of the first quarter from 20 one year ago.

The Company's core business is canola streaming, but it also generates revenue from canola trading. Canola trading is a high revenue, but low margin activity undertaken by the Company to improve pricing and delivery logistics options for its own streaming tonnes, to offer similar opportunities to its streaming clients, and to generate business development opportunities with prospective streaming clients. During the quarter, additional revenue of $5.157 million was generated from canola trading; the Company did not generate any trading revenue in the comparable quarter last year.

CAPITAL DEPLOYMENT, STREAMING CONTRACT BUYBACKS AND STREAMING CONTRACT PORTFOLIO

Gross capital deployed into streaming contracts during the quarter decreased by 15% to $9.856 million³ during the first quarter, from $11.650 million³ during the previous first quarter. Due to an early spring seeding season, Input was able to advance significant capital deployment to the fiscal 2015 fourth quarter.

During the quarter, Input exited two streaming contracts calling for approximately 11,000 MT of canola over the term of the streaming contracts for total cash of $2.243 million. Input enters into streaming contracts as multi-year commitments and prefers to see the contract fully executed over its original term. However, as circumstances dictate, the Company may negotiate contract buyback terms with farmers or the Company will look to exit from streaming contracts where the underlying fundamentals of the farm operation or operators has changed. Upon exiting these two contracts, both in Saskatchewan, Input generated total annualized rates of return of 15% and 21%.

At the end of the first quarter, Input had total gross deployment $90.076 million³ across 78 streaming contracts in Manitoba, Saskatchewan, and Alberta. Compared to the end of the previous first quarter, these figures represent growth of 108% and 290%, respectively, consistent with our focus on investing in a greater number of smaller streams. The Company continues to bring on Regional Account Managers across the Prairies in its key geographies.

During the quarter, Input invested in its longest streaming contract to date, a 12-year stream with a farmer in Manitoba. This contract trumps a recent 11-year contract, a 9-year contract, and two 8-year deals, all with farmers in Saskatchewan. These longer-term contracts have a smaller effect on the near-term contracted annual volumes, but are equally or more important to the Company's strategy of building out a long-term portfolio of geographically diversified production. Contract length across the portfolio has increased to 6.3 years from 6.1 years at the end of the first quarter last year.

BALANCE SHEET

KEY BALANCE SHEET ITEMS ARE SUMMARIZED BELOW:

CAD millions, unless otherwise noted	Quarter ended June 30, 2015	Quarter ended June 30, 2014	% change
Cash and Cash Equivalents	$27.215	$20.871	+30%
Canola Interests and Other Financial Assets	$90.694	$35.754	+154%
Total Assets	$120.439	$59.413	+103%
Total Liabilities	$5.877	$0.397	+1379%
Total Shareholders' Equity	$114.562	$59.016	+94%
Working Capital	$51.994	$31.914	+63%
Debt	None	None	NMF

OUTLOOK

The Company expects to generate streaming revenue from over 75,000 tonnes of canola from the 2015 harvest with an increased focus on timely canola deliveries. This will lead to more cash available to invest in streaming contracts, perpetuating the compounding growth trajectory of the business.

The Company will also continue its efforts to scale down average streaming contract size and invest in more streaming contracts, diversifying its counterparty and geographic risk profile.

The Company is continuing to drive profitable and accretive growth for shareholders with further expansion of marketing efforts and additions to the front-line Regional Account Manager team. The Company remains confident that streaming agricultural production is on its way to becoming a standard tool in the financial toolkit of farmers across the Canadian prairies.

WEBCAST AND CONFERENCE CALL DETAILS

A conference call will be held on Wednesday, August 19, 2015 starting at 8:30 am Saskatchewan time (10:30 am Eastern time) to further discuss the first quarter results. To participate in the conference call use the following dial-in number:

Participant Dial in #: [phone] (North America Toll Free)
Participant Dial in #: [phone] (International)

Webcast URL: 
http://event.on24.com/r.htm?e=1025987&s=1&k=DC24613B56D96CE08C16B737A2E4057F

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. Input has multi-year canola streams with seventy eight farmers located across Alberta, Saskatchewan and Manitoba.

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; 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. 

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¹ Includes contracts that have been signed but not completely funded at the end of the quarter ended June 30, 2015.
² Non-IFRS financial measures with no standardized meaning under IFRS. For further information and a detailed reconciliation, refer to "Non-IFRS Measures" of the accompanying MD&A.
³ Includes contracts that were signed but not completely funded at the end of the quarter ended June 30, 2015. Does not include contract buybacks.

SOURCE Input Capital Corp.

Doug Emsley, President & CEO, [phone], [email protected]; Brad Farquhar, Executive Vice-President & CFO, [phone], [email protected]