IBI Group Inc. Announces Second Quarter 2017 Financial Results

– Q2 2017 revenue increased by 3.2% over Q2 2016 to $93.3 million.

– Adjusted EBITDA was $11.8 million or 12.6% of revenue including a reduction of $0.8 million or approximately 90 basis points of margin related to the settlement of DSUs.

– The Company is forecasting approximately $363 million in total revenue for the year ended December 31, 2017 and has approximately 9 months of backlog.

– Interest expense decreased to $2.5 million in Q2 2017 compared to $4.1 million for the same period in 2016.

TORONTO, ONTARIO–(Marketwired – Aug. 10, 2017) – IBI Group Inc. (the „Company”) (TSX:IBG) today announced financial results for the three months ended June 30, 2017.

OPERATIONAL HIGHLIGHTS

  • Revenue for the three months ended June 30, 2017 was $93.3 million compared to $90.4 million for the same period in 2016, which reflects an increase of $2.9 million or 3.2%.
  • Adjusted EBITDA1 decreased to $11.8 million (or 12.6% of revenue) for the three months ended June 30, 2017 compared to $12.3 million (or 13.6% of revenue) for the same period in 2016. Adjusted EBITDA was reduced by $0.8 million (or approximately 90 basis points of revenue) as a result of two members of the board of directors (the „Board”) settling 123,641 deferred share units („DSUs”) upon leaving the Board.
  • Management is forecasting approximately $363 million in total revenue for the year ended December 31, 2017 and the Company currently has approximately 9 months of backlog.
  • Days sales outstanding remained unchanged at 80 days as at June 30, 2017 compared to December 31, 2016.
  • Cash flows used in operating activities decreased to $1.2 million for the three months ended June 30, 2017 compared to $6.1 million for the same period in 2016, which reflects a decrease of $4.9 million or 80.3%.
  • Interest expense decreased to $2.5 million for the three months ended June 30, 2017 compared with $4.1 million for the same period in 2016, and decreased to $5.2 million for the six months ended June 30, 2017 compared with $8.1 million for the same period in 2016.

„This quarter, our adjusted EBITDA margins continue to compare favourably with industry averages and we are pleased with the consistent strength we are seeing in our business. On June 30, 2017, the Company successfully negotiated a new credit facility with its lenders. As part of the agreement, the Company is no longer required to make contributions or maintain the sinking fund and is now able to use the balance of this account for operating activities. The Company believes the terms of the new credit facility exemplify the continued improvement in the Company’s financial position over the past 12 months,” said Scott Stewart, Chief Executive Officer, IBI Group Inc.

FINANCIAL HIGHLIGHTS
(in thousands of Canadian dollars except for per share amounts)
Three Months Ended June 30,
2017 2016
(unaudited) (unaudited)
Number of working days 63 64
Revenue $ 93,328 $ 90,443
Net income $ 4,850 $ 4,464
Cash flows used in operating activities $ (1,193 ) $ (6,099 )
Basic and diluted earnings per share $ 0.13 $ 0.14
Adjusted EBITDA1 $ 11,751 $ 12,317
Adjusted EBITDA1 as a percentage of revenue 12.6 % 13.6 %
1See „Definition of Non-IFRS Measures”

FINANCIAL OVERVIEW

Revenue for the three months ended June 30, 2017 was $93.3 million, compared with $90.4 million in the same period in 2016, an increase of 3.2%. The increase in revenue is due to growth in the Canadian and International geographic segments, including continuing work on significant transit projects.

For the three months ended June 30, 2017, the Company had net income of $4.8 million compared with $4.5 million for the same period in 2016. Net income for the three months ended June 30, 2017 is inclusive of foreign exchange loss of $1.1 million, compared with foreign exchange loss of $1.7 million for the same period in 2016. The foreign exchange loss during the three months ended June 30, 2017 reflects the positive trend in the Canadian dollar currency, as the Canadian dollar strengthened against the U.S. dollar and British pound compared with the same period in 2016.

Adjusted EBITDA for the three months ended June 30, 2017 decreased to $11.8 million from $12.3 million for the same period in 2016. On May 11th, 2017, two members of the Board settled 123,641 DSUs for $846,000 upon leaving the Board. This reduced adjusted EBITDA balances for the three months ended June 30, 2017 by $0.8 million.

Basic and diluted earnings per share were $0.13 per share for the three months ended June 30, 2017, compared to a basic and diluted earnings per share of $0.14 per share for the same period in 2016.

OUTLOOK

Management is forecasting approximately $363 million in total revenue for the year ended December 31, 2017. The Company has approximately 9 months of backlog (calculated on the basis of the current pace of work that the Company has achieved during the 12 months ended June 30, 2017).

INVESTOR CONFERENCE CALL

The Company invites you to join their conference call on Friday, August 11, 2017 at 8:30 a.m. EDT. To participate in the conference call, please dial toll-free 1-877-295-2342 for North America and 1-312-281-1210 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 21852988 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 August 9, 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.

SOURCE: IBI Group Inc.

1See „Definition of Non-IFRS Measures”.