IBI Group Inc. Announces Third Quarter 2015 Financial Results
Date
November 13, 2015
IBI Group Inc. Announces Third Quarter 2015 Financial Results
- Q3 revenue increased by 13.9% over Q3 2014 to $83.8 million
- Adjusted EBITDA of $5 million or 11.3% of revenue for Q3
- Backlog has grown to 12 months
- Signed amendment to refinance credit facilities
- Rights offering announced
- Board approves $20 million convertible debenture redemption
TORONTO, ON (Marketwired – November 12, 2015) – IBI Group Inc. (the “Company”) (TSX: IBG) today announced financial results for the three months ended September 30, 2015.
OPERATIONAL HIGHLIGHTS
- Revenue for the three months ended September 30, 2015 was $83.8 million compared to $73.6 million in the same period in 2014, an increase of 13.9%.
- Adjusted EBITDA was $5 million (or 11.3% of revenue) for three months ended September 30, 2015 compared to $5.7 million (or 7.8% of revenue) in the same period in 2014.
- Forecasting $323 million in total revenue for the year ended December 31, 2015.
- Backlog is now at 12 months and the Company currently has $337 million of work that is committed and under contract for the next three years.
- Subsequent to quarter end, on October 5, 2015, the Company signed an amendment to refinance its credit facilities under the existing banking arrangement with its senior lenders. The new arrangement consists of a $90 million revolver facility that will mature on June 30, 2018.
- Subsequent to quarter end, on November 10, 2015, the Company announced a rights offering, the net proceeds of which will be used to repay indebtedness owing by the Company to IBI Group Management Partnership.
- The Board has approved the redemption of the $20 million convertible debentures due June 30, 2017, using funds from the recently amended credit agreement.
“We continue to experience a sustained improvement in our financial and operational performance. Our EBITDA margins continue to track our industry peers and our backlog has grown to 12 months. While we are always conservative in our assumptions, we look with optimism towards the final quarter of 2015 and into 2016, particularly amid the prospect of an increase in public infrastructure spending in Canada and the continued recovery of the U.S. economy,” said CEO Scott Stewart.
“Subsequent to the third quarter, we successfully refinanced our senior lending facility, which provides a strong source of financing through to 2018. We were also pleased to have the efforts of our employees recognized by the Turnaround Management Association, who awarded IBI the International Turnaround Company of the Year,” continued Mr. Stewart.
FINANCIAL HIGHLIGHTS
| (in thousands of dollars except for per share amounts) | Three months ended September 30, 2015(unaudited) | Three months endedSeptember 30, 2014
(unaudited) |
| Number of working days | 63 | 64 |
| Revenue | $ 83,819 | $ 73,605 |
| Net income from continuing operations | $ 6,226 | $ 6,996 |
| Net loss from discontinued operations | $ (1,411) | $ (5,308) |
| Net income | $ 4,815 | $ 1,688 |
| Basic and diluted earnings per share | $ 0.21 | $ 0.07 |
| Basic and diluted earnings per share from continuing operations | $ 0.27 | $ 0.31 |
| Basic and diluted earnings per share from discontinued operations | $ (0.06) | $ (0.24) |
| Adjusted EBITDA | $ 9,456 | $ 5,749 |
| Adjusted EBITDA as a percentage of revenue | 11.3% | 7.8% |
FINANCIAL OVERVIEW
Revenue for the three months ended September 30, 2015 was $83.8 million, compared with $73.6 million in the same period in 2014. The increase in revenue from continuing operations is due to the growth in the Canadian business, as well as the impact of foreign exchange on U.S. and International revenues which are comparable to the prior period in local currencies. Adjusted EBITDA in the quarter increased to $9.5 million from $5.7 million in the same period in 2014 and is in line with industry averages.
Net income from continuing operations for the three months ended September 30, 2015 was $6.2 million compared to $7.0 million in the same period in 2014. During the three months ended September 30, 2014, net income was impacted by certain items, such as the gain on extinguishment of the 7% convertible debentures, the recognition of the onerous lease provision, as well as the impairment on property and equipment related to the Montreal leasehold improvements.
Basic and diluted earnings per share from continuing operations was $0.27 per share for the three months ended September 30, 2015, compared to basic and diluted earnings per share from continuing operations of $0.31 for the same period in 2014.
OUTLOOK
Management is forecasting approximately $323 million in total revenue for the year ended December 31, 2015. The Company currently has $337 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 2015. The Company has approximately twelve months of backlog, calculated on the basis of the current pace of work that the Company has achieved during the last 12 months ended September 30, 2015.
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 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) dividends are not guaranteed and will fluctuate with the Company’s performance; (xviii) the possibility that the Company may issue additional Common Shares diluting existing Shareholders’ interests; (xix) 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, 2014. 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 November 12, 2015.
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.
Investor Conference Call
The Company will hold a conference call on November 13th at 8:30 a.m. Eastern Time. To participate in the conference call, please dial in before 8:30 a.m. to 1-800-954-0647 for local and toll-free North American access, or 1-212-231-2900 for international access.
An audio replay of the call will be available for 14 days by dialing 1-416-626-4100 for international access or 1-800-558-5253 for local and toll-free North American access, enter pass code 21779655 followed by the number sign on your telephone keypad.
About IBI Group Inc.
IBI Group (TSX:IBG) is a globally integrated architecture, planning, engineering, and technology firm with over 2,200 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.
SOURCE: IBI Group Inc.
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
