SOURCE: IBI Group Inc.

IBI Group Inc.

March 08, 2017 16:00 ET

IBI Group Inc. Announces Fourth Quarter and Year End 2016 Financial Results

TORONTO, ON--(Marketwired - March 08, 2017) -

  • Revenue increased by 8.3% to $354 million for the year ended December 31, 2016.
  • Adjusted EBITDA as a percentage of revenue increased to 11.1% or $39.2 million for the year ended December 31, 2016.
  • Revenue in the US increased by 15% in 2016.
  • Forecasting $363 million of total revenue in 2017.
  • Total debt decreases to 3.4 times Adjusted EBITDA.

IBI Group Inc. (the "Company") (TSX: IBG) today announced financial results for the three months and year ended December 31, 2016.

OPERATIONAL HIGHLIGHTS

  • Revenue for the three months ended December 31, 2016 increased to $86.8 million compared to $84.9 million for the same period in 2015, which reflects an increase of 2.3%. Revenue for the year ended December 31, 2016 was $354.1 million compared to $327.1 million for the same period in 2015, an increase of 8.3%.

  • Adjusted EBITDA was $7.5 million for the three months ended December 31, 2016 compared to $8.3 million for the same period in 2015, which reflects a decrease of $0.8 million or 9.7% and is the result of a decrease in results in the UK. For the year ended December 31, 2016, adjusted EBITDA as a percentage of revenue increased to 11.1% or $39.2 million compared to $34.4 million for the same period in 2015, which reflects an increase of $4.9 million or 14.1%.

  • The Company is forecasting $363 million in total revenue for the year ended December 31, 2017.

  • The Company currently has $331 million of work that is committed and under contract for the three years 2017 through 2019 and approximately ten months of backlog.

KEY EVENTS

  • The Company issued 5.5% convertible unsecured subordinated debentures (principal $46 million, maturing on December 31, 2021) on September 30, 2016. The net proceeds of $43.4 million upon issuance were used to repay the Company's credit facilities.

  • On October 24, 2016, the Company financed the partial redemption of its 6.0% debentures for $43.8 million cash from the credit facilities. On December 30, 2016, the Company redeemed the remaining portion of the 6.0% convertible debentures for $13.7 million cash using the funds available from its Sinking Fund balance.

  • On October 31, 2016, the Company redeemed the 7.0% debentures under Options B and C for $31.2 million by issuing 6,220,076 common shares.

"This was a good year with solid revenue growth, financial performance and debt reduction. IBI remains committed to delivering its' business plan and strengthening its' balance sheet. We currently have approximately $331 million of work that is committed and under contract through 2019 and we remain focused on growing that number," said Scott Stewart, Chief Executive Officer, IBI Group Inc.

FINANCIAL HIGHLIGHTS
(in thousands of Canadian dollars except for per share amounts)

  THREE MONTHS ENDED
DECEMBER 31,
   YEAR ENDED
DECEMBER 31,
  2016
(unaudited)
 2015
(unaudited)
   2016 2015
 Number of working days (unaudited)   63    63    251    251
 Revenue $ 86,841  $ 84,913  $ 354,140  $ 327,092
 Net income (loss) from continuing operations $ 7,594  $ 990  $ 3,494  $ 11,336
 Net loss from discontinued operations $ -  $ (462)  $ -  $ (1,873)
 Net income (loss) $ 7,594  $ 528  $ 3,494  $ 9,463
                    
 Cash flows provided by operating activities $ 17,247  $ 14,248  $ 30,850  $ 30,826
                    
 Basic and diluted earnings per share $ 0.24  $ 0.02  $ 0.11  $ 0.41
 Basic earnings per share from continuing operations $ 0.24  $ 0.04  $ 0.11  $ 0.49
 Basic and diluted earnings per share from discontinued operations $ -  $ (0.02)  $ -  $ (0.08)
 Adjusted EBITDA1(unaudited) $ 7,480  $ 8,279  $ 39,247  $ 34,387
 Adjusted EBITDA1 as a percentage of revenue (unaudited)   8.6%    9.7%    11.1%    10.5%
                    

1See "Definition of Non-IFRS Measures" defined in MD&A

FINANCIAL OVERVIEW

Revenue for the three months ended December 31, 2016 was $86.8 million, compared with $84.9 million in the same period in 2015, an increase of 2.3%. Revenue for the year ended December 31, 2016 was $354.1 million, compared with $327.1 million for the same period in 2015, an increase of 8.3%.

For the three months ended December 31, 2016, the Company had net income from continuing operations of $7.6 million compared with $1.0 million for the same period in 2015. The change in net income from continuing operations for the three months ended December 31, 2016 is attributable to an increase in revenue, a decrease in interest expense and a positive impact of the gain on fair value of the derivative liability.

Net income from continuing operations for the year ended December 31, 2016 was $3.5 million compared to $11.3 million for the same period in 2015. Net income from continuing operations for the year ended December 31, 2016 is inclusive of a foreign exchange loss of $7.4 million, compared to a foreign exchange gain of $8.7 million, which was included in net income for the same period in 2015. The Company recorded a foreign exchange gain of $8.7 million during the year ended December 31, 2015, as the Canadian dollar weakened against the US dollar and British pound. The foreign exchange loss during the year ended December 31, 2016 reflects the reversal of trends in global currency markets.

Adjusted EBITDA for the three months ended December 31, 2016 decreased to $7.5 million from $8.3 million for the same period in 2015. This is the result of a decrease in results in the UK. Adjusted EBITDA for the year ended December 31, 2016 was $39.2 million compared to $34.4 million for the same period in 2015. The increase of $4.8 million is a result of stronger operating performance from all geographical segments.

Basic and diluted earnings per share from continuing operations was $0.24 per share for the three months ended December 31, 2016, compared to an earnings per share of $0.04 for the same period in 2015. Basic and diluted earnings per share from continuing operations was $0.11 per share for the year ended December 31, 2016, compared to earnings per share from continuing operations of $0.49 for the same period in 2015.

OUTLOOK

Management is forecasting approximately $363 million in total revenue for the year ended December 31, 2017. The Company currently has approximately $331 million of work that is committed and under contract for the next three years. This committed workload is a material factor and assumption used to develop revenue forecasts. The Company continues to see an increase in committed work to be delivered in 2017 and has approximately ten months of backlog (calculated on the basis of the current pace of work that the Company has achieved during the 12 months ended December 31, 2016).

INVESTOR CONFERENCE CALL

The Company invites you to join their conference call on Thursday, March 9th, 2017 at 8:30 a.m. EST. To participate in the conference call, please dial toll-free 1-800-686-2368 for North America and 1-312-281-2958 for United States access.

A recording of the conference call will be available on our website within 24 hours following the call. As well, an audio replay of the call will be available for 14 days by dialing 1-800-558-5253 and entering pass code 21843358 followed by the number sign on your telephone keypad.

CAUTION REGARDING FORWARD-LOOKING INFORMATION

Certain statements in this news release may constitute "forward-looking" statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company and its subsidiary entities, including IBI Group Partnership or the industry in which they operate, to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. When used in this news release, such statements use words such as "may", "will", "expect", "believe", "plan" and other similar terminology. These statements reflect management's current expectations regarding future events and operating performance and speak only as of the date of this news release. These forward-looking statements involve a number of risks and uncertainties, including those related to: (i) the Company's ability to maintain profitability and manage its growth; (ii) the Company's reliance on its key professionals; (iii) competition in the industry in which the Company operates; (iv) timely completion by the Company of projects and performance by the Company of its obligations; (v) fixed-price contracts; (vi) the general state of the economy; (vii) risk of future legal proceedings against the Company; (viii) the international operations of the Company; (ix) reduction in the Company's backlog; (x) fluctuations in interest rates; (xi) fluctuations in currency exchange rates; (xii) upfront risk of time invested in participating in consortia bidding on large projects and projects being contracted through private finance initiatives; (xiii) limits under the Company's insurance policies; (xiv) the Company's reliance on distributions from its subsidiary entities and, as a result, its susceptibility to fluctuations in their performance; (xv) unpredictability and volatility in the price of Shares; (xvi) the degree to which the Company is leveraged and the effect of the restrictive and financial covenants in the Company's credit facilities; (xvii) the possibility that the Company may issue additional Common Shares diluting existing Shareholders' interests; (xviii) income tax matters. These risk factors are discussed in detail under the heading "Risk Factors" in the Company's Annual Information Form for the year ended December 31, 2016. New risk factors may arise from time to time and it is not possible for management of the Company to predict all of those risk factors or the extent to which any factor or combination of factors may cause actual results, performance or achievements of the Company to be materially different from those contained in forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. Although the forward-looking statements contained in this news release are based upon what management believes to be reasonable assumptions, the Company cannot assure investors that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as at March 8, 2017.

The factors used to develop revenue forecast in this news release include the total amount of work the Company has signed an agreement with its clients to complete, the timeline in which that work will be completed based on the current pace of work the Company achieved over the last 12 months and expects to achieve over the next 12 months. The Company updates these assumptions at each reporting period and adjusts its forward looking information as necessary.

ABOUT IBI GROUP INC.

IBI Group Inc. (TSX: IBG) is a globally integrated architecture, planning, engineering, and technology firm with over 2,500 professionals around the world. For more than 40 years, its dedicated professionals have helped clients create livable, sustainable, and advanced urban environments. IBI Group believes that cities must be designed with intelligent systems, sustainable buildings, efficient infrastructure, and a human touch.

Contact Information

  • FOR FURTHER INFORMATION:

    Stephen Taylor
    CFO
    IBI Group Inc.
    55 St. Clair Avenue West
    Toronto, ON M4V 2Y7
    Tel: 416-596-1930

    Media:

    Riyaz Lalani
    Bayfield Strategy, Inc.
    416-907-9365
    rlalani@bayfieldstrategy.com