Input Capital Corp. Announces FY2019 Q2 Results
REGINA, May 14, 2019 /CNW/ - Input Capital Corp. ("Input", "Company", "we", "our") (TSX Venture: INP) (US: INPCF) has released its second quarter results for the 2019 fiscal year. All figures are presented in Canadian dollars.
FY2019 Q2 HIGHLIGHTS
- Adjusted crop revenue1 of $13.534 million on the delivery of 27,775 canola equivalent metric tonnes1 ("MT" or "tonnes") at an average price of $487.27 per MT;
- Adjusted net income1 of $0.595 million, or $0.01 per share. This is up from $(0.00) per share over the same three month period last year, primarily as a result of weather-related harvest timing issues;
- Recorded capital deployment of $3.540 million into streaming contracts, adding 3 new producers to the portfolio bringing total producers to 400. On a trailing twelve month basis, capital deployment is up by 29% over the previous comparable period;
- In December 2018, we announced the renewal of our Normal Course Issuer Bid, allowing the company to buy back up to 6,500,856 of its Class A common shares. During the three months ended March 31, 2019, we bought back a total of 408,300 shares at an average price of $0.93 per share;
- On February 27, 2019, the Company announced the Board of Directors has initiated a comprehensive review of strategic alternatives to enhance shareholder value.
- On March 5, 2019, the Company announced the tenth consecutive quarterly dividend of $0.01 per share, or $0.04 annualized;
- Finished the quarter with:
- Cash and cash equivalents of $24.534 million;
- Total crop interests and other financial assets of $30.393 million;
- Loans and mortgages receivable of $61.823 million;
- Multi-year active streaming contracts with 400 farm operators, up from 353 a year ago;
- Total shareholders' equity of $97.262 million;
- $5.404 million drawn on its long-standing revolving credit facility; and
- Long-term debt of $19.311 million.
1Non-IFRS financial measures with no standardized meaning under IFRS. For further information and a detailed reconciliation, refer to the "Non-IFRS Measures" section of the MD&A.
KEY PERFORMANCE INDICATORS FOR THE COMPARABLE PERIODS ARE SUMMARIZED BELOW:
Twelve months ended
CAD millions, unless otherwise noted
Adjusted crop revenue
Adjusted total revenue
Corporate admin expense
Adjusted net income
Adjusted net income per share (basic)
Adjusted EBITDA per share (basic)
Ending canola reserves (MT)
Total capital deployed in period
Active streaming clients
For the quarter ended March 31, 2019, we generated adjusted crop revenue of $13.534 million on adjusted crop volume of 27,775 MT.
Adjusted crop revenue for the quarter represents a 97% increase in quarterly volume over the comparable quarter one year ago, when we sold 14,127 MT of canola equivalent for adjusted crop revenue of $6.755 million. Crop margin for the quarter was $0.951 million, compared to $0.615 million in the same quarter last year. The large increase in adjusted crop revenue is a result of weather-related delivery delays in September which pushed more of the expected 2018 crop sales into the second quarter compared to the previous year, when there were no significant weather-related delays.
During the period, the Company generated interest margin of $0.912 million compared to $0.317 million in the comparable quarter one year ago. The comparable period did not feature much interest margin because the mortgage stream was a new product at the time.
CAPITAL DEPLOYMENT AND STREAMING CONTRACT PORTFOLIO
Quarter Ended March 31, 2019
For the quarter ended March 31, 2019, Input recorded capital deployment of $3.540 million into streams, compared to $12.814 million in the same period last year.
During the quarter, Input added three net producers; decreased by four in Saskatchewan, increased by five in Alberta, and increased by two in Manitoba. The remaining contracts were renewals, and expansions of contracts with existing producers. During the comparable quarter ended March 31, 2018, Input added 27 new producers to its portfolio.
As of March 31, 2019, Input's active streaming portfolio consisted of 400 geographically diversified producers. The Company has streams with 288 producers in Saskatchewan, 102 in Alberta, and 10 in Manitoba.
The change in active streaming contracts by region on a quarterly and annual basis is demonstrated in the table below:
Mar 31, 2019
Dec 31, 2018
Mar 31, 2018
Year Over Year
KEY BALANCE SHEET ITEMS ARE SUMMARIZED BELOW:
Statements of Financial Position
CAD millions, unless otherwise noted
Mar 31, 2019
Mar 31, 2018
Crop interests and other financial assets
Loans and mortgages receivable
Total shareholders' equity
Revolving credit facility
Canola futures weakened during the quarter ended March 31 and have continued to soften since then. This is due in part to trade disruptions with China, Canada's traditionally largest canola customer, as well as general softness in the price of US soybeans, to which canola prices have a strong correlation.
It is impossible to know when or to what degree canola prices will rise, or if these trade tensions will be resolved. However, shareholders should bear in mind that while lower canola prices do have an impact on the profitability of our business, the effect is moderate, and we have a significant margin of safety. Every one of our contracts remains profitable at today's prevailing canola prices. In fact, the price of canola could fall below the marginal cost of production of our farm clients, and our canola margins would remain positive.
The Board of Directors of Input provided an update to its strategic alternatives process in a separate news release also dated May 14, 2019. Please see that news release for details.
WEBCAST AND CONFERENCE CALL DETAILS
A conference call will be held on Wednesday, May 15, 2019 starting at 8:00 am Saskatchewan time (10:00 am Eastern time) to further discuss the FY2019 second quarter 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)
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.
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.
Input is an agriculture commodity streaming company with a focus on canola, the largest and most profitable crop in Canadian agriculture. The Company has developed several flexible and competitive forms of financing which help western Canadian canola farmers solve working capital, mortgage finance and canola marketing challenges and improve the financial position of their farms. Under a streaming contract, Input provides capital in exchange for a stream of canola via multi-year fixed-volume canola purchase contracts. To a farmer, Input is like a virtual grain company, buying canola and providing financial solutions. To canola buyers, Input is like a large virtual farm which produces and sells canola over a large geographically diverse footprint, but does not own the land, or equipment or operate the farm. In production terms, Input is the largest canola farm in the world.
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.
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 Crop Revenue, Adjusted Crop Volume and Adjusted Crop Margin;
- Adjusted Total Revenue;
- Adjusted Net Income, Adjusted Net Income per share, Adjusted EBITDA and Adjusted EBITDA per share.
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 investor.inputcapital.com and on SEDAR at www.sedar.com.
SOURCE Input Capital Corp.