IBI Group Inc. Announces Third Quarter 2017 Financial Results

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| Source: IBI Group, Canada

      -   Third quarter revenue increased by 1.8% to $89.8 million over the same period in 2016. 
      -   Adjusted EBITDA increased to $11.1 million in the third quarter, an 8.8% increase compared to the third quarter of 2016. 
      -   Adjusted EBITDA was 12.3% of revenue. 
      -   Days sales outstanding decreased by 2 days compared to the same period in 2016.

TORONTO, Nov. 09, 2017 (GLOBE NEWSWIRE) -- IBI Group Inc. (the "Company") (TSX:IBG) today announced financial results for the three months ended September 30, 2017.

OPERATIONAL HIGHLIGHTS

  • Revenue increased to $89.8 million for the quarter compared to $88.2 million for the same period in 2016, which reflects an increase of $1.6 million.
  • This quarter, adjusted EBITDA increased to $11.1 million compared to $10.2 million for the same period in 2016. This reflects an increase of 8.8% and is the result of stronger operating performance.
  • Days sales outstanding decreased to 78 days as at September 30, 2017 compared to 80 days as at December 31, 2016.
  • Management is forecasting approximately $360 million in total revenue for the year ended December 31, 2017 and has approximately 10 months of backlog.
  • Interest expense decreased this quarter to $2.5 million compared with $14.4 million for the same period in 2016.

“We are pleased with the continued growth we’ve seen this quarter. The Company remains focused on enhancing and integrating technology into all areas of our practice. This sets us apart from other firms in our industry,” said Scott Stewart, IBI Group Inc. Chief Executive Officer.

FINANCIAL HIGHLIGHTS

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

 

 THREE MONTHS ENDED
SEPTEMBER 30,
 NINE MONTHS ENDED
SEPTEMBER 30,
 2017
(unaudited)
2016
(unaudited)
 2017
(unaudited)
2016
(unaudited)
      
Number of working days 64  63   190  189 
Revenue$  89,828 $  88,211  $  274,522 $  267,299 
Net income (loss)$  5,495 $  (4,728) $  14,263 $  (4,101)
Cash flows provided by operating activities$  10,829 $  13,895  $  11,835 $  13,601 
Basic and diluted earnings (loss) per share$  0.15 $  (0.15) $   0.38 $   (0.13)
Adjusted EBITDA1 $  11,061 $  10,220  $  32,972 $  31,767 
Adjusted EBITDA1 as a percentage of revenue 12.3% 11.6%  12.0% 11.9%

See “Definition of Non-IFRS Measures” defined in MDA. 

  

FINANCIAL OVERVIEW

Revenue for the three months ended September 30, 2017 was $89.8 million, compared with $88.2 million in the same period in 2016, an increase of $1.6 million. Revenue for the nine months ended September 30, 2017 was $274.5 million, compared with $267.3 million for the same period in 2016, an increase of $7.2 million. The increase in revenue is due to growth in the Canadian geographic segment, including continuing work on significant transit projects.

For the three months ended September 30, 2017, the Company had net income of $5.5 million compared with a net loss of $4.7 million for the same period in 2016. Net income for the quarter is inclusive of foreign exchange gains of $2.3 million, compared with foreign exchange gains of $0.4 million for the same period in 2016. The foreign exchange gain during the quarter 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.

This quarter, adjusted EBITDA increased to $11.1 million from $10.2 million for the same period in 2016. The increase of $0.9 million is a result of stronger operating performance. Adjusted EBITDA was $33.0 million (or 12.0% of revenue) for the nine months ended September 30, 2017 compared to $31.8 million (or 11.9% of revenue) for the same period in 2016, which reflect an increase of $1.2 million or 3.8%. The Company’s adjusted EBITDA margins are in line with industry averages.

Basic and diluted earnings per share was $0.15 per share for the three months ended September 30, 2017, compared to a basic and diluted loss per share of $0.15 per share for the same period in 2016.

OUTLOOK

Management is forecasting approximately $360 million in total revenue for the year ended December 31, 2017. The Company has approximately 10 months of backlog (calculated on the basis of the current pace of work that the Company has achieved during the 12 months ended September 30, 2017).

Ongoing efforts are underway to improve the monitoring of financial results, identify synergies and implement cost management initiatives. The Company continues to seek out opportunities to enhance profitability.

INVESTOR CONFERENCE CALL

The Company invites you to join its conference call on Friday, November 10th, 2017 at 8:30 a.m. EST. To participate in the conference call, please dial toll-free 1-800-679-2940 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 21857504 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 November 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. IBI Group is a lead partner of the Smart Cities Council North America. Follow on Twitter @ibigroup and Instagram @ibi_group.

 

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