Input Capital Corp. Announces Fiscal 2016 Second Quarter Results

REGINA, Nov. 5, 2015 /CNW/ - Input Capital Corp. ("Input" or the "Company") (TSX Venture: INP) (US: INPCF) is announcing its unaudited results for the fiscal 2016 second quarter ended September 30, 2015. All figures are presented in Canadian dollars.

SECOND QUARTER HIGHLIGHTS

• Revenue from streaming contracts of $8.959 million on the sale of 18,382 metric tonnes ("MT" or "tonnes") of canola at an average price of $487 per MT. The Company generated an additional $1.455 million of sales revenue from canola trading for total quarterly sales revenue of $10.413 million
• Cash operating margin¹ from streaming contracts of $7.843 million, or $427 per MT (87.6% cash operating margin)
• Adjusted net income of $1.573 million, or $0.02 per share;
• Adjusted operating cash flow¹ of $5.884 million or $0.07 per share;
• Invested $7.642 million of upfront payments² into eight streaming contracts, adding 22,287 MT to the Company's future canola sales;
• Finished the quarter with:
  • Cash and cash equivalents of $28.869 million;
  • Total canola interests (current portion and long-term portion) and other financial assets of $91.995 million;
  • Multi-year streaming contracts with 79 farm partners, up from only 21 a year ago;
  • Total shareholder's equity of $114.375 million; and
  • No debt.

YEAR-TO-DATE HIGHLIGHTS

• Revenue from streaming contracts of $11.803 million on the sale of 24,461 metric tonnes ("MT" or "tonnes") of canola at an average price of $483 per MT. The Company generated an additional $6.612 million of sales revenue from canola trading for total year-to-date sales revenue of $18.415 million
• Cash operating margin¹ from streaming contracts of $10.317 million, or $422 per MT (87.4% cash operating margin)
• Adjusted net income of $1.836 million, or $0.02 per share;
• Adjusted operating cash flow¹ of $7.415 million or $0.09 per share;
• Invested $17.497 million of upfront payments² into twenty streaming contracts, adding 59,891 MT (gross of contract buybacks) to the Company's future canola sales;

"During the quarter, we set a quarterly record with $8.9 million in revenue on the sale of 18,382 tonnes of canola from streaming contracts," said President & CEO Doug Emsley. "We have now sold approximately 25% of the canola volume we are scheduled to sell from the 2015 harvest. This is a result of an early start to harvest and increased efforts by management to diversify our sales channels, a strategy meant to reduce delivery uncertainties and provide timely cash flow to fund our next season of deployment."

"For the first two quarters of fiscal 2016, we have now generated $11.8 million in revenue from streaming contracts from the sale of 24,461 tonnes of canola, surpassing all of fiscal 2015 across both measures. We are excited about the opportunities in front of us as we now begin the busy season of selling this last year's canola and building our book of streams by investing capital with more and more farmers across western Canada."

KEY PERFORMANCE INDICATORS FOR THE SECOND QUARTER ARE SUMMARIZED BELOW:

CAD millions, unless otherwise noted	Three months ended Sep 30, 2015	Three months ended Sep 30, 2014	Change	Six months ended Sep 30, 2015	Six months ended Sep 30, 2014	Change
Revenue from Streaming Contracts	$8.959	$1.920	367%	$11.803	$4.181	182%
Gross Profit from Streaming Contracts	2.951	0.560	427%	4.059	1.180	244%
Canola Sold from Streaming Contracts (MT)	18,382	4,146	343%	24,461	8,730	180%
Average Price per Streaming MT	$487.36	$463.08	5%	$482.53	$478.91	1%
Total Gross Capital Deployed^1	$7.642	$0.202	3690%	$17.497	$11.852	48%
Total Gross Capital Deployed since inception to end of period^1				$97.7	$42.9	128%
Streaming Contracts at end of period				79	21	276%
Canola Reserves (MT)				329,000	176,000	87%
Cash operating margin^2	7.843	1.671	370%	10.317	3.490	196%
Cash Operating Margin per Streaming MT2	$426.69	$402.95	6%	$421.79	$399.79	6%
Adjusted Net Income^2	1.573	0.065	2312%	1.836	0.101	1722%
Adjusted Net Income / Share^2	$0.02	$0.00	2255%	$0.02	$0.00	1476%
Adjusted EBITDA^2	7.051	1.065	562%	8.715	2.306	278%
Adjusted EBITDA / Share^2	$0.09	$0.01	546%	$0.11	$0.03	227%
Adjusted Operating Cash Flow^2	5.884	0.712	726%	7.415	2.207	236%
Adjusted Operating Cash Flow / Share^2	$0.07	$0.01	706%	$0.09	$0.03	191%

REVENUE

During the second quarter, Input had total revenue of $10.413 million, up 247% from the same quarter last year.

Revenue of $8.959 million was generated from the sale of 18,382 MT of canola from streaming contracts for an average realized price of $487 per MT. Input's average realized price on streaming contract tonnes was 0.9% higher than the average cash canola price (RSY00) of $483 during the quarter.

The 367% increase in revenue from canola streaming during the fiscal year was driven by an expanded portfolio of streaming contracts, which grew to 79 streams at the end of the second quarter, up from 21 streams a 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 $1.455 million was generated from canola trading; an increase from the $1.082 of trading revenue in the comparable quarter last year.

Fiscal year to date, Input had total revenue of $18.415 million, up 250% from the same quarter last year.

During the six months, $11.803 million was generated from the sale of 24,461 MT of canola from streaming contracts for an average realized price of $483 per MT. Both of these metrics surpass the totals from the previous fiscal year. Year to date, additional revenue of $6.612 million was generated from canola trading; an increase from the $1.082 of trading revenue in the comparable period last year.

CAPITAL DEPLOYMENT AND STREAMING CONTRACT PORTFOLIO

Gross capital deployed into streaming contracts during the quarter increased to $7.642 million[3] during the second quarter, from $0.202 million³ during the previous second quarter.

During the quarter, the Company found opportunities to renew contracts, thus extending the original term of the streaming contract. This allows the Company to extend relationships with producers with which it is already comfortable.

At the end of the second quarter, Input had total gross deployment $97.7 million³ across 79 streaming contracts in Manitoba, Saskatchewan, and Alberta.

The Company recently added Regional Account Managers in each of the Prairie provinces to fill in some key geographies. The sales force is now ten strong.

BALANCE SHEET

KEY BALANCE SHEET ITEMS ARE SUMMARIZED BELOW:

Statement of Financial Position  CAD millions, unless otherwise noted	As at Sep 30, 2015	As at Sep 30, 2014	Change
Cash and cash equivalents	$26.869	$64.097	-58%
Canola interests and other financial assets	91.995	34.865	164%
Total assets	124.585	103.528	20%
Total liabilities	10.211	0.581	1659%
Total shareholders' equity	114.375	102.948	11%
Working capital	56.093	78.679	-29%
Debt	-	-	N/A

Webcast and Conference Call Details

A conference call will be held on Friday, November 6, 2015 starting at 9:30 am Saskatchewan time (10:30 am Eastern time) to further discuss the Q2 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=1080331&s=1&k=04328F089CE5B012A5EB3ECDCA59A125

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 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 September 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 September 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]