IBI Group Inc. Announces 2015 4th Quarter & Year End Financial Results

IBI Group Inc. Announces 2015 4th Quarter & Year End Financial Results

IBI-inves

Thursday, March 17, 2016

  • Revenue of $84.9 million in the fourth quarter and $327.1 million for the year ended December 31, 2015
  • Adjusted EBITDA of $8.3 million in the fourth quarter and $34.4 million for the year ended December 31, 2015
  • Forecasting $355 million of total revenue in 2016
  • Secured agreement to refinance credit facilities
  • Redemption of 5.75% convertible debentures for $20.0 million
  • Successful completion of rights offering and private placement

 

TORONTO, ON / March 17, 2016/ – IBI Group Inc. (the “Company”) (TSX:IBG) today announced financial results for the three months and year ended December 31, 2015.

OPERATIONAL HIGHLIGHTS

  • Revenue for the three months ended December 31, 2015 was $84.9 million compared with $75.0 million for the same period in 2014, an increase of 13.2%. Revenue for the year ended December 31, 2015 was $327.1 million compared with $298.3 million for the same period in 2014, an increase of 9.7%.
  • Adjusted EBITDA was $8.3 million (or 9.7% of revenue) for the three months ended December 31, 2015 compared to $4.5 million (or 6.0% of revenue) for the same period in 2014. Adjusted EBITDA for the year ended December 31, 2015 was $34.4 million (or 10.5% of revenue) compared with $23.7 million (or 8.0% of revenue) for the same period in 2014.
  • Forecasting $355 million in total revenue for the year ended December 31, 2016.
  • The Company currently has $365 million of work that is committed and under contract for the next three years and approximately eleven months of backlog.

 

KEY EVENTS 

  • On October 5, 2015, the Company secured an agreement to refinance its credit facilities under the existing banking arrangement with its senior lenders. The new arrangement consists of a $90 million revolver facility at improved interest rates that will mature on June 30, 2018.
  • On December 18, 2015, the Company financed the redemption of its 5.75% convertible debentures for $20.0 million cash from the credit facilities at principal of $1,000 principal per unit, plus accrued and unpaid interest.
  • On December 18, 2015, the Company issued common shares under a rights offering, the proceeds of which were used to repay the Company’s credit facilities (from gross cash proceeds received of $5.6 million) and the indebtedness owing by the Company to IBI Group Management Partnership (the “Management Partnership”). Concurrently with the rights offering, IBI Group Partnership issued to the Management Partnership, Class B partnership units on terms substantially similar to those of the rights offering, the proceeds of which were used to repay the indebtedness owing by the Company to the Management Partnership. On December 31, 2015, the Company completed a private placement, issuing shares to the Management Partnership in full satisfaction of the remainder of the indebtedness owing to the Management Partnership.

 

“We are very pleased with the strength in our underlying business, which has facilitated material improvements in our balance sheet and capital structure. The refinancing of our credit facilities, redemption of our 5.75% convertible debentures, successful completion of the rights offering and the private placement with the Management Partnership, were key contributors to these improvements,” said Scott Stewart, Chief Executive Officer, IBI Group Inc.

 

FINANCIAL HIGHLIGHTS

(in thousands of dollars except for per share amounts)

 

THREE MONTHS ENDED DECEMBER 31, 2015 (unaudited) THREE MONTHS ENDED DECEMBER 31, 2014(unaudited) YEAR ENDED DECEMBER 31, 2015 YEAR ENDED DECEMBER 31, 2014
Number of working days   63 63   251 251
Revenue $ 84,913 $ 75,030 $ 327,092 $ 298,274
Net income (loss) from continuing operations $ 990 $ (4,125) $ 11,336 $ 5,919
Net loss from discontinued operations $ (462) $ (2,849) $ (1,873) $ (9,079)
Net income (loss) $ 528 $ (6,974) $ 9,463 $ (3,160)
Cash flows provided by operating activities $ 14,248 $ 9,905 $ 30,826 $ 24,636
Basic and diluted earnings per share $ 0.02 $ (0.30) $ 0.41 $ (0.14)
Basic earnings per share from continuing operations $ 0.04 $ (0.18) $ 0.49 $ 0.26
Basic and diluted earnings per share from discontinued operations $ (0.02) $ (0.12) $ (0.08) $ (0.40)
Adjusted EBITDA $ 8,279 $ 4,490 $ 34,387 $ 23,730
Adjusted EBITDA as a percentage of revenue   9.7% 6.0%   10.5% 8.0%


FINANCIAL OVERVIEW
 

Revenue from continuing operations for the three months ended December 31, 2015 was an increase of $9.9 million or 13.2%, compared to the same period in 2014. Revenue from continuing operations for the year ended December 31, 2015 was an increase of $28.8 million or 9.7%, compared to the same period in 2014. The increase in revenue from continuing operations is due to the growth in the Canadian business, including the commencement of work on the Eglinton Crosstown Light Rail Transit (ECLRT) Project and other public transit infrastructure projects such as Viva Next, as well as the impact of foreign exchange on U.S and International revenues which are comparable to the prior period in local currencies.

For the three months ended December 31, 2015, the Company had net income from continuing operations of $1.0 million compared to a loss of $4.1 million for the same period in 2014. Net income from continuing operations for the year ended December 31, 2015 was $11.3 million compared to $5.9 million for the same period in 2014.

Adjusted EBITDA for the three months ended December 31, 2015 increased to $8.3 million from $4.5 million for the same period in 2014. Adjusted EBITDA for the year ended December 31, 2015 increased to $34.4 million from $23.7 million for the same period in 2014.

Basic and diluted earnings per share from continuing operations was $0.04 per share for the three months ended December 31, 2015, compared to a loss per share of $0.18 for the same period in 2014. Basic and diluted earnings per share from continuing operations was $0.49 per share for the year ended December 31, 2015, compared to earnings per share from continuing operations of $0.26 for the same period in 2014.

OUTLOOK

Management is forecasting approximately $355 million in total revenue for the year ended December 31, 2016. The Company currently has $365 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 2016. The Company has approximately eleven months of backlog, calculated on the basis of the current pace of work that the Company has achieved during the last twelve months ended December 31, 2015.

“We remain cautiously optimistic as we look towards 2016, particularly amid the prospect of an increase in public infrastructure spending in Canada and the continued acceleration of the U.S. economy. IBI Group has demonstrated sustained success in areas like major public infrastructure and transportation projects around the world, that we believe will benefit from this increased public spending,” continued Mr. Stewart.

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, 2015. 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 17, 2016.

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 invites you to join their conference call on Friday March 18, 2016 at 8:30 a.m. Eastern Time. To participate in the conference call, please dial 1-800-920-2977 for local and toll-free North American access, or 1-212-271-4657 for international access.

Following the call, an audio replay will be available at http://www.ibigroup.com/investors/investor-news/.

Audio replay of March 18th, 2016 Investor Conference Call

As well, an audio replay will be available for 14 days by dialing 1-800-633-8284 and entering passcode 21804456 followed by the number sign on your telephone keypad.

About IBI Group Inc.

IBI Group Inc. (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 West, 7th Floor
Toronto, ON M4V 2Y7
Tel: 416-596-1930

Media:

Riyaz Lalani
Bayfield Strategy, Inc.
416-907-9365

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