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REGINA, Dec. 6, 2017 /CNW/ - Input Capital Corp. ("Input" or the "Company") (TSX Venture: INP) (US: INPCF) has released its year end results for the 2017 fiscal year. All figures are presented in Canadian dollars.

"Fiscal 2017 has been a profitable year of growth and expansion in many areas for Input Capital," said President & CEO Doug Emsley. "Not only did we successfully launch our new marketing stream, we expanded our client base by 168%, grew capital deployed by 42%, increased adjusted streaming sales by 37%, increased adjusted EBITDA by 16%, initiated a quarterly dividend, and became a Canadian Grain Commission licensed and bonded grain dealer.

"We are very excited about marketing streams because they require less upfront capital, have higher returns with less risk to Input, and are designed to help every farmer improve their bottom line. Combined with capital streams, they represent what Input Capital is all about – helping farmers improve their bottom lines by improving working capital and canola marketing opportunities."

FY2017 FULL YEAR HIGHLIGHTS

Adjusted streaming sales1 of $35.767 million on the delivery of 75,285 canola equivalent metric tonnes1 ("MT" or "tonnes") at an average price of $475 per MT. This is an increase in adjusted streaming sales of 37% and a volume increase of 40% compared to the previous comparable twelve month period (all full year highlights below are compared to the previous comparable twelve month period);

Cash operating margin1 of $26.196 million (up 16% over the comparable period last year), or $347.96 per MT (73.24% cash operating margin). Cash operating margin per MT is lower than last year due to the first sales of tonnes from marketing streams, which feature lower nominal cash margins than capital streams. As marketing streams grow as a percentage of Input's portfolio, management expects the cash operating margin to decline on a per tonne basis, but grow in total dollar amounts;

Adjusted operating cash flow1 of $18.773 million or $0.23 per share. This is an increase of 1% compared to last year and is in line with management's expectations for the year;

Adjusted net income1 of $1.792 million, or $0.02 per share. This is a decline of 29% from last year and is a result of planned investments made in client acquisition and the launch of marketing streams, positioning the company for strong future growth.

Recorded gross capital deployment of $36.794 million in upfront payments into 195 streaming contracts, adding 128 new producers to the portfolio and more than 307,000 MT to the Company's future canola sales. This is an increase of 42% in capital deployed and a 168% increase in streaming clients over the same period last year. Canola reserves have increased by 56% year over year;

In January 2017, Input soft-launched Marketing Streams, a new variation on streaming that targets farmers looking to get better pricing for their canola. By year-end, Input had signed over 190 marketing stream contracts with farmers, including more than 160 with new clients;

The Company received a grain dealer licence from the Canadian Grain Commission ("CGC") and is now licenced and bonded by the CGC, increasing Input's credibility and profile within the western Canadian agriculture marketplace and providing an additional level of assurance to farmers and other industry participants; and

In December 2016, Input initiated a quarterly dividend. It has made four dividend payments to date, paying out a total of $3.280 million to shareholders.
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1 Non-IFRS financial measures with no standardized meaning under IFRS. For further information and a detailed reconciliation, refer to "Non-IFRS Measures" beginning on page 27 of the MD&A.


FY2017 Q4 Highlights

Adjusted streaming sales1 of $13.681 million on the delivery of 28,799 canola equivalent metric tonnes ("MT" or "tonnes") at an average price of $475 per MT;

Generated an additional $0.786 million in sales from canola trading for total adjusted sales1 of $14.467 million;

Cash operating margin1 $7.110 million, or $247 per MT (51.97% cash operating margin);

Adjusted operating cash flow1 of $5.799 million or $0.07 per share;

Adjusted net income1 of $1.237 million, or $0.02 per share;

Recorded gross capital deployment of $1.751 million in upfront payments into 11 streaming contracts, adding 4 new producers to the portfolio and more than 10,000 MT to the Company's future canola sales;

On August 23, 2017, Input announced it retained Stonegate Capital Partners Inc. of Dallas, Texas to provide advisory and institutional outreach services in the United States;

On September 11, 2017, the Board of Directors declared a dividend of $0.01 per common share for the quarter ending September 30, 2017;

On September 28, 2017, Input President and CEO Doug Emsley presented at the Sidoti & Company Fall 2017 Conference in New York, and;

Finished the quarter with:
Cash of $17.615 million;
Total canola interests (current portion and long-term portion) and other financial assets (liabilities) (herein referred to collectively as "canola interests") of $68.423 million;
Multi-year active streaming contracts with 301 farm operators, up from 112 a year ago;
Total shareholders' equity of $105.119 million;
$6.351 million drawn on its $25 million revolving credit facility; and
No long-term debt.
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1 Non-IFRS financial measures with no standardized meaning under IFRS. For further information and a detailed reconciliation, refer to "Non-IFRS Measures" beginning on page 27 of the MD&A.


KEY PERFORMANCE INDICATORS FOR THE COMPARABLE PERIODS ARE SUMMARIZED BELOW:




Selected non-IFRS measures1
Three months ended
Sep 30
Twelve months ended
Sep 30
CAD millions, unless otherwise noted
2017
2016
2017
2016
Adjusted streaming sales
13.681
7.656
35.767
26.044
Adjusted streaming volume (MT)
28,799
15,916
75,285
53,949
Average selling price from streaming contracts
$475.04
$481.03
$475.09
$482.75





Cash operating margin
7.110
6.514
26.196
22.548
Cash operating margin per tonne
$246.88
$409.27
$347.96
$417.95





Cash margin
1.991
1.835
7.403
7.803
Cash margin per tonne
$69.13
$115.29
$98.33
$144.64





Adjusted EBITDA
6.351
5.481
20.634
17.824
Adjusted EBITDA per share (basic)
$0.08
$0.07
$0.25
$0.22





Adjusted operating cash flow
5.799
5.891
18.773
18.480
Adjusted operating cash flow per share (basic)
$0.07
$0.07
$0.23
$0.23





Adjusted net income (loss)
1.237
0.550
1.792
2.256
Adjusted net income (loss) per share (basic)
$0.02
$0.01
$0.02
$0.03





Upfront payment per tonne2
$171.16*
$181.84
112.23*
280.49

*Upfront payment per tonne reflects upfront payments made into both Capital Streams and Marketing Streams. For more information about Marketing Streams, refer to discussion on Marketing Streams beginning on page 14 of the accompanying MD&A.


SALES

For the fiscal year ended September 30, 2017, Input generated adjusted sales from streaming contracts of $35.767 million on the adjusted streaming volume of 75,285 MT an average price of $475 per MT.

The sales from streaming tonnes plus net settlements from streaming tonnes for the twelve months ended September 30, 2017, represent a 40% increase in quarterly volume over the comparable period one year ago, when the Company sold 53,949 MT of canola equivalent for revenue of $26.044 million for an average price of $483 per MT.

For the quarter ended September 30, 2017, Input generated adjusted sales from streaming contracts of $13.681 million on adjusted streaming volume of 28,799 MT for an average price of $475 per MT.

The sales from streaming tonnes plus net settlements of canola interests for the quarter represent a significant increase in quarterly volume over the comparable quarter one year ago, when the Company sold 15,916 MT of canola equivalent for revenue of $7.656 million for an average price of $481 per MT.

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1 Non-IFRS financial measures with no standardized meaning under IFRS. For further information and a detailed reconciliation, refer to "Non-IFRS Measures" beginning on page 27 of the MD&A.


CAPITAL DEPLOYMENT AND STREAMING CONTRACT PORTFOLIO

Year to Date

For the fiscal year ended September 30, 2017, Input recorded gross capital deployment of $36.794 million (compared to $25.825 million in the same period last year) into 202 streaming contracts for the right to purchase more than 307,000 MT of canola over the life of the streaming contracts. Net deployment for accounting purposes was $32.507 million.

During the twelve months, Input added 189 new contracts; 134 in Saskatchewan, 52 in Alberta and 3 in Manitoba. The remaining contracts were renewals, expansions and of existing contracts. During the comparable twelve month period ended September 30, 2016, Input added 33 new producers to its portfolio.

During the twelve month period, Input's average upfront payment per tonne was $112.23 compared to $280.49 in the comparable period last year. The upfront payment per tonne reflects upfront payments made into Marketing Streams which are lower than Capital Streams, bringing the upfront payment per tonne down substantially.

As of September 30, 2017, Input's active streaming portfolio consisted of 301 geographically diversified streams. 221 of the Company's canola streams are with farms in Saskatchewan, 71 are located in Alberta, and 9 are in Manitoba. The Company is pleased with its continued growth across Alberta and Saskatchewan over the last year and expects to continue diversifying its asset base across the Prairies in FY2018 as it continues to add new streams to its portfolio.

The change in active streaming contracts by region on a quarterly and annual basis is demonstrated in the table below:

Active Streaming
Contracts
Sep 30, 2017
Jun 30, 2017
Quarterly
Growth
Sep 30, 2016
Year Over Year
Growth
Manitoba
9
9
-
6
3
Saskatchewan
221
220
1
87
134
Alberta
71
71
-
19
52
Total
301
300
1
112
189


Quarter Ended September 30

The quarter ended September 30 is always the slowing period of the year for capital deployment. For the three months ended September 30, 2017, Input recorded gross capital deployment of $1.751 million (compared to $1.784 million in the same quarter last year) in upfront payments into 11 streaming contracts for the right to purchase over 10,000 MT of canola over the life of the streaming contracts.

During the quarter, Input added four new producers to its streaming contract portfolio; all of them in Saskatchewan. The remaining contracts were renewals, expansions and restructures of existing contracts.

During the comparable quarter last year, Input added five new producers to its portfolio.

During the quarter, Input's average upfront payment per tonne was $171.16 compared to $181.84 in the comparable quarter last year. The upfront payment per tonne reflects upfront payments made into Marketing Streams which are lower than Capital Streams, bringing the upfront payment per tonne down substantially. As a result, Input now controls more physical canola per dollar invested than at any time in its history. For more information about Marketing Streams, refer to discussion on Marketing Streams beginning on page 14 of the MD&A.

BALANCE SHEET

Key balance sheet items are summarized below:




Statements of Financial Position
CAD millions, unless otherwise noted
As at
Sep 30, 2017
As at
Sep 30, 2016
Cash
17.615
16.643
Canola interests and other financial assets
68.423
77.757
Total assets
120.555
118.548
Total liabilities
15.436
2.935
Total shareholders' equity
105.119
115.613
Working capital
28.870
71.181
Revolving credit facility
6.351
-
Long-term debt
-
-


OUTLOOK

This is the time of year when the level of activity at Input picks up substantially versus the quiet summer months. Input's business is highly seasonal, both in terms of when the Company signs up new clients and deploys capital (starting in October and building slowly to a climax in February through June), and in terms of when it receives canola deliveries and records revenue (starting in August or September, depending on the pace of harvest, and running through to the end of March).

Except for farmers in the area of southern Saskatchewan that was very dry this year, prairie farmers generally had a good growing season in 2017 featuring a combination of good yields, strong prices, and smooth harvest weather conditions. These factors have contributed to good near-term liquidity for farmers and has the potential to contribute to lower demand for the Company's capital streams. On the other hand, confident farmers tend to expand, and management has previously found farmers who are expanding to represent a good market for capital streams. It is too soon to predict which will be the dominant outcome this year.

As a result, management has discontinued the practice of providing guidance regarding annual capital deployment. Management's objectives for the year are to continue growing its client base by deploying capital into both capital and marketing streams, and to do so at a level which is greater than the previous year's capital deployment. Since its founding in 2012, Input has grown its annual capital deployment by a Compound Annual Growth Rate (CAGR) of about 18% and management plans to continue to grow deployment year-over-year.

WEBCAST AND CONFERENCE CALL DETAILS

A conference call will be held on Thursday, December 7, 2017 starting at 9:30 am Saskatchewan time (10:30 am Eastern time) to further discuss the year end 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=1532066&s=1&k=E98FCDAEBA3F1A4CF142138CBA27681C

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 investor.inputcapital.com.