EX-99.1 2 exh_991.htm PRESS RELEASE EdgarFiling

EXHIBIT 99.1

Colliers International reports financial results for third quarter

Quarterly revenue up 10% (11% in local currency); Year to date revenue up 13% (16% in local currency)

Operating highlights:

  Three months ended Nine months ended
  September 30 September 30
(in millions of US$, except EPS measures)2016 2015 2016 2015
             
Revenues$462.1 $420.3 $1,320.7 $ 1,165.9 
Adjusted EBITDA (note 1) 37.6  43.0  112.6   102.2 
Adjusted EPS (note 2) 0.40  0.52  1.22   1.21 
             
             
GAAP Operating Earnings 23.6  29.8  70.1   15.4 
GAAP EPS from continuing operations 0.24  0.20  0.61   (0.37)

TORONTO, Oct. 28, 2016 (GLOBE NEWSWIRE) -- Colliers International Group Inc. (NASDAQ:CIGI) (TSX:CIG) today reported solid financial results for its third quarter ended September 30, 2016. All amounts are in US dollars.

Revenues for the third quarter were $462.1 million, a 10% increase (11% in local currency (note 3)) relative to the same quarter in the prior year and Adjusted EBITDA (note 1) was $37.6 million, down from a strong $43.0 million in the prior year period. Adjusted EPS (note 2) was $0.40, relative to $0.52 in the prior year period. GAAP Operating Earnings were $23.6 million, relative to $29.8 million in the prior year and GAAP EPS was $0.24 per share, versus $0.20 per share for the same quarter a year ago.

For the nine months ended September 30, 2016, revenues were $1.32 billion, a 13% increase (16% in local currency) relative to the comparable prior year period and Adjusted EBITDA was $112.6 million, up 10% (13% in local currency). Adjusted EPS was $1.22, up 1% versus the prior year period. Year-to-date Adjusted EPS would have been approximately $0.04 higher excluding foreign exchange impacts. GAAP Operating Earnings were $70.1 million, relative to $15.4 million in the prior year period and GAAP EPS was $0.61 per share, compared to a loss of $0.37 per share in the prior year period. Similarly, year-to-date GAAP EPS would have been approximately $0.04 higher excluding changes in foreign exchange rates. Prior year GAAP Operating Earnings and GAAP EPS results included one-time charges related to the separation from FirstService Corporation completed on June 1, 2015.

“Colliers delivered solid results in the third quarter despite challenging market conditions in the UK and Europe, highlighting the strength of our geographic and service line diversification,” said Jay S. Hennick, Chairman and CEO of Colliers International. “We completed three acquisitions during the quarter, two in the Americas and one in EMEA and just after the quarter ended, we added a fourth in the UK. We also appointed a new member to our board of directors, adding Canada’s former Prime Minister Stephen Harper who brings a wealth of experience as a former G7 leader. Most importantly, our strategy remains focused on building Colliers over the long term - investing prudently and strategically, and leveraging our strong balance sheet to capture opportunities as they present themselves. Assuming stable market conditions and with our strong pipelines currently in place, we expect to exceed the results reported in the fourth quarter of 2015,” he concluded.

About Colliers International Group Inc.
Colliers International Group Inc. (NASDAQ:CIGI) (TSX:CIG) is an industry leading global real estate services company with more than 16,000 skilled professionals operating in 66 countries. With an enterprising culture and significant employee ownership, Colliers professionals provide a full range of services to real estate occupiers, owners and investors worldwide. Services include strategic advice and execution for property sales, leasing and finance; global corporate solutions; property, facility and project management; workplace solutions; appraisal, valuation and tax consulting; customized research; and thought leadership consulting.

Colliers professionals think differently, share great ideas and offer thoughtful and innovative advice that help clients accelerate their success. Colliers has been ranked among the top 100 outsourcing firms by the International Association of Outsourcing Professionals’ Global Outsourcing for 11 consecutive years, more than any other real estate services firm.

For the latest news from Colliers, visit Colliers.com or follow us on Twitter: @Colliers and LinkedIn.

Consolidated Revenues

 (in thousands of US$) Three months ended   Nine months ended  
 (RC = reporting currency) September 30GrowthGrowth September 30GrowthGrowth
 (LC = local currency) 2016 2015in RC %in LC % 2016 2015in RC %in LC %
                  
 Outsourcing & Advisory$180,223 $154,239 17% 18% $519,850 $443,498 17% 20%
 Lease Brokerage 147,958  136,742 8% 9%  412,650  378,236 9% 11%
 Sales Brokerage 133,871  129,297 4% 3%  388,196  344,138 13% 15%
                  
 Total revenues $462,052 $420,278 10% 11% $1,320,696 $1,165,872 13% 16%

Consolidated revenues for the third quarter grew 11% on a local currency basis, with each service line contributing strongly with the exception of Sales Brokerage which was up only 3%. Consolidated internal revenue growth in local currencies was 1% (note 3) with the balance coming from acquisitions completed during the past year.

For the nine months ended September 30, 2016, consolidated revenues grew 16% on a local currency basis with each service line contributing strongly. Year-to-date consolidated internal revenue growth in local currencies was 6% with the balance coming from acquisitions completed during the past year.

Segmented Quarterly Results
Revenues in the Americas region totalled $256.5 million for the third quarter compared to $223.9 million in the prior year quarter, up 15% (15% on a local currency basis). All local currency revenue growth came from recent acquisitions. Internal revenue growth was flat relative to the strong results reported in the prior year quarter, with a change in mix toward Outsourcing & Advisory services. Adjusted EBITDA was $22.6 million, versus $22.8 million in the prior year quarter. Margins were negatively impacted by a reduction in broker productivity resulting from smaller average transaction sizes, as well as a greater proportion of more stable Outsourcing & Advisory revenues which generate lower margins. GAAP Operating Earnings were $16.3 million, versus $17.9 million in the prior period.

EMEA region revenues totalled $106.6 million for the third quarter compared to $107.6 million in the prior year quarter, down 1% (up 4% on a local currency basis). Local currency revenue growth was comprised of a 1% internal decline and 5% growth from recent acquisitions. Internal revenues were impacted by a decline in Sales Brokerage, reflecting both the strong comparative quarter in 2015 and the effect of the June 2016 “Brexit” referendum, largely offset by a 15% increase in Outsourcing & Advisory services revenues. Adjusted EBITDA was $4.5 million, versus $13.2 million in the prior year quarter, and was impacted primarily by the above-noted change in revenue mix. The GAAP Operating Loss was $0.4 million, versus Operating Earnings of $8.5 million in the prior year quarter.

Asia Pacific region revenues totalled $98.6 million for the third quarter compared to $88.5 million in the prior year quarter, up 12% (9% on a local currency basis), entirely from internal growth, with contributions from all three service lines. Adjusted EBITDA was $13.2 million versus $8.7 million in the prior year quarter. The prior year quarter results were impacted by recruiting costs and transaction costs for an acquisition that was ultimately not completed. GAAP Operating Earnings were $11.6 million, up from $6.8 million in the prior year period.

Global corporate costs were $2.6 million in the third quarter, relative to $1.7 million in the prior year period. The GAAP Operating Loss for the third quarter was $4.0 million, relative to $3.4 million in the prior period. Prior year costs were favourably impacted by foreign currency translation.

Conference Call
Colliers will be holding a conference call on Friday, October 28, 2016 at 11:00 a.m. Eastern Time to discuss the quarter’s results. The call, as well as a supplemental slide presentation, will be simultaneously web cast and can be accessed live or after the call at www.colliers.com in the “Shareholders / Newsroom” section.

Forward-looking Statements
This press release includes or may include forward-looking statements. Forward-looking statements include the Company’s financial performance outlook and statements regarding goals, beliefs, strategies, objectives, plans or current expectations. These statements involve known and unknown risks, uncertainties and other factors which may cause the actual results to be materially different from any future results, performance or achievements contemplated in the forward-looking statements. Such factors include: economic conditions, especially as they relate to commercial and consumer credit conditions and consumer spending, particularly in regions where our business may be concentrated; commercial real estate property values, vacancy rates and general conditions of financial liquidity for real estate transactions; trends in pricing and risk assumption for commercial real estate services; the effect of significant movements in average cap rates across different property types; a reduction by companies in their reliance on outsourcing for their commercial real estate needs, which would affect revenues and operating performance; competition in the markets served by the Company; the ability to attract new clients and to retain major clients and renew related contracts; the ability to retain and incentivize producers; increases in wage and benefit costs; the effects of changes in interest rates on the cost of borrowing; unexpected increases in operating costs, such as insurance, workers’ compensation and health care; changes in the frequency or severity of insurance incidents relative to historical experience; the effects of changes in foreign exchange rates in relation to the US dollar on the Company’s Canadian dollar, Australian dollar, UK pound and Euro denominated revenues and expenses; the ability to identify and make acquisitions at reasonable prices and successfully integrate acquired operations; the ability to execute on, and adapt to, information technology strategies and trends; the ability to comply with laws and regulations related to our global operations, including real estate licensure, labour and employment laws and regulations, as well as the anti-corruption laws and trade sanctions; political conditions, including political instability and any outbreak or escalation of terrorism or hostilities and the impact thereof on our business; and changes in government laws and policies at the federal, state/provincial or local level that may adversely impact the business.

Additional information and factors are identified in the Company’s Annual Information Form for the year ended December 31, 2015 under the heading “Risk Factors” (which factors are adopted herein and a copy of which can be obtained at www.sedar.com) and other periodic filings with Canadian and US securities regulators. Forward looking statements contained in this press release are made as of the date hereof and are subject to change. All forward-looking statements in this press release are qualified by these cautionary statements. Except as required by applicable law, Colliers undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Summary financial information is provided in this press release. This press release should be read in conjunction with the Company's quarterly financial statements and MD&A to be made available on SEDAR at www.sedar.com.

Notes
1. Reconciliation of net earnings (loss) from continuing operations to adjusted EBITDA:

Adjusted EBITDA is defined as net earnings from continuing operations, adjusted to exclude: (i) income tax; (ii) other expense (income); (iii) interest expense; (iv) depreciation and amortization; (v) acquisition-related items; (vi) corporate costs allocated to spin-off; (vii) restructuring costs and (viii) stock-based compensation expense. We use adjusted EBITDA to evaluate our own operating performance and our ability to incur debt, as well as an integral part of our planning and reporting systems. Additionally, we use this measure in conjunction with discounted cash flow models to determine the Company’s overall enterprise valuation and to evaluate acquisition targets. We present adjusted EBITDA as a supplemental measure because we believe such measure is useful to investors as a reasonable indicator of operating performance because of the low capital intensity of the Company’s service operations. We believe this measure is a financial metric used by many investors to compare companies, especially in the services industry. This measure is not a recognized measure of financial performance under GAAP in the United States, and should not be considered as a substitute for operating earnings, net earnings from continuing operations or cash flow from operating activities, as determined in accordance with GAAP. Our method of calculating adjusted EBITDA may differ from other issuers and accordingly, this measure may not be comparable to measures used by other issuers. A reconciliation of net earnings from continuing operations to adjusted EBITDA appears below.

  Three months ended Nine months ended
(in thousands of US$)September 30 September 30
  2016 2015 2016 2015
             
Net earnings (loss) from continuing operations$ 13,461  $ 18,414  $ 41,250  $ (2,904)
Income tax  8,207    9,226    24,138    12,076 
Other income, net  (362)   (461)   (2,183)   (287)
Interest expense, net  2,321    2,631    6,913    6,522 
Operating earnings (loss)  23,627    29,810    70,118    15,407 
Depreciation and amortization  11,390    9,794    33,038    28,068 
Acquisition-related items  352    1,655    2,397    3,696 
Spin-off stock-based compensation costs  -    -    -    35,400 
Spin-off transaction costs  -    1,013    -    14,147 
Corporate costs allocated to spin-off  -    -    -    2,010 
Restructuring costs  1,804    -    4,580    - 
Stock-based compensation expense  471    771    2,489    3,463 
Adjusted EBITDA$ 37,645  $ 43,043  $ 112,622  $ 102,191 

2. Reconciliation of net earnings (loss) from continuing operations and diluted net earnings (loss) per share from continuing operations to adjusted net earnings and adjusted earnings per share:

Adjusted earnings per share is defined as diluted net earnings (loss) per share from continuing operations, adjusted for the effect, after income tax, of: (i) the non-controlling interest redemption increment; (ii) amortization expense related to intangible assets recognized in connection with acquisitions; (iii) acquisition-related items; (iv) corporate costs allocated to spin-off; (v) restructuring costs and (vi) stock-based compensation expense. We believe this measure is useful to investors because it provides a supplemental way to understand the underlying operating performance of the Company and enhances the comparability of operating results from period to period. Adjusted earnings per share is not a recognized measure of financial performance under GAAP, and should not be considered as a substitute for diluted net earnings per share from continuing operations, as determined in accordance with GAAP. Our method of calculating this non-GAAP measure may differ from other issuers and, accordingly, this measure may not be comparable to measures used by other issuers. A reconciliation of net earnings from continuing operations to adjusted net earnings and of diluted net earnings (loss) per share from continuing operations to adjusted earnings per share appears below.

  Three months ended Nine months ended
(in thousands of US$)September 30 September 30
  2016 2015 2016 2015
             
Net earnings (loss) from continuing operations$ 13,461  $ 18,414  $ 41,250  $ (2,904)
Non-controlling interest share of earnings  (3,286)   (4,566)   (11,259)   (13,386)
Amortization of intangible assets  5,192    4,312    15,619    11,943 
Acquisition-related items  352    1,655    2,397    3,696 
Spin-off stock-based compensation costs  -    -    -    35,400 
Spin-off transaction costs  -    1,013    -    14,147 
Corporate costs allocated to spin-off  -    -    -    2,048 
Restructuring costs  1,804    -    4,580    - 
Stock-based compensation expense  471    771    2,489    3,463 
Income tax on adjustments  (2,117)   (1,597)   (6,356)   (9,067)
Non-controlling interest on adjustments  (399)   -    (1,332)   (163)
Adjusted net earnings$ 15,478  $ 20,002  $ 47,388  $ 45,177 
             
  Three months ended Nine months ended
(in US$)September 30 September 30
  2016 2015 2016 2015
             
Diluted net earnings (loss) per share from continuing operations$ 0.24  $ 0.20  $ 0.61  $ (0.37)
Non-controlling interest redemption increment  0.02    0.16    0.16    (0.08)
Amortization of intangible assets, net of tax  0.09    0.08    0.25    0.22 
Acquisition-related items  0.01    0.04    0.06    0.10 
Spin-off stock-based compensation costs  -    -    -    0.95 
Spin-off transaction costs, net of tax  -    0.02    -    0.27 
Corporate costs allocated to spin-off, net of tax  -    -    -    0.04 
Restructuring costs, net of tax  0.03    -    0.08    - 
Stock-based compensation expense, net of tax  0.01    0.02    0.06    0.08 
Adjusted earnings per share$ 0.40  $ 0.52  $ 1.22  $ 1.21 

3. Local currency revenue growth rate and internal revenue growth rate measures

Percentage revenue variances presented on a local currency basis are calculated by translating the current period results of our non-US dollar denominated operations to US dollars using the foreign currency exchange rates from the periods against which the current period results are being compared. Percentage revenue variances presented on an internal growth basis are calculated assuming acquired entities were owned for the entire current period as well as the entire prior period. Revenue from acquired entities is estimated based on the operating performance of each acquired entity for the year prior to the acquisition date. We believe that these revenue growth rate methodologies provide a framework for assessing the Company’s performance and operations excluding the effects of foreign currency exchange rate fluctuations and acquisitions. Since these revenue growth rate measures are not calculated under GAAP, they may not be comparable to similar measures used by other issuers.

COLLIERS INTERNATIONAL GROUP INC.
Condensed Consolidated Statements of Earnings (Loss)
(in thousands of US dollars, except per share amounts)
     Three months  Nine months
     ended September 30  ended September 30
(unaudited)   2016    2015    2016    2015 
               
Revenues $ 462,052  $ 420,278  $ 1,320,696  $ 1,165,872 
               
Cost of revenues   301,073    265,510    832,908    713,520 
Selling, general and administrative expenses   125,610    112,496    382,235    355,634 
Depreciation   6,198    5,482    17,419    16,125 
Amortization of intangible assets   5,192    4,312    15,619    11,943 
Acquisition-related items (1)   352    1,655    2,397    3,696 
Spin-off stock-based compensation costs (2)   -    -    -    35,400 
Spin-off transaction costs (3)   -    1,013    -    14,147 
Operating earnings   23,627    29,810    70,118    15,407 
Interest expense, net   2,321    2,631    6,913    6,522 
Other expense (income)   (362)   (461)   (2,183)   (287)
Earnings before income tax   21,668    27,640    65,388    9,172 
Income tax   8,207    9,226    24,138    12,076 
Net earnings (loss) from continuing operations   13,461    18,414    41,250    (2,904)
Discontinued operations, net of income tax (4)   -    -    -    1,104 
Net earnings (loss)   13,461    18,414    41,250    (1,800)
Non-controlling interest share of earnings   3,286    4,566    11,259    13,386 
Non-controlling interest redemption increment   671    6,185    6,279    (2,835)
Net earnings (loss) attributable to Company  $ 9,504  $ 7,663  $ 23,712  $ (12,351)
               
Net earnings (loss) per common share             
 Basic            
  Continuing operations $ 0.25  $ 0.20  $ 0.61  $ (0.37)
  Discontinued operations   -    -    -    0.03 
   $ 0.25  $ 0.20  $ 0.61  $ (0.34)
               
 Diluted            
  Continuing operations $ 0.24  $ 0.20  $ 0.61  $ (0.37)
  Discontinued operations   -    -    -    0.03 
   $ 0.24  $ 0.20  $ 0.61  $ (0.34)
               
Adjusted earnings per share (5) $ 0.40  $ 0.52  $ 1.22  $ 1.21 
               
Weighted average common shares (thousands)            
  Basic   38,601    37,973    38,584    36,825 
  Diluted   38,950    38,431    38,859    37,242 

Notes to Condensed Consolidated Statements of Earnings (Loss)
(1) Acquisition-related items include transaction costs, contingent acquisition consideration fair value adjustments, and contingent acquisition consideration-related compensation expense.
(2) Stock-based compensation costs related to the exchange of non-controlling interests in the former Commercial Real Estate Services division for publicly traded shares of Colliers International Group Inc., in connection with the spin-off completed on June 1, 2015.
(3) Transaction costs related to the spin-off of FirstService Corporation completed on June 1, 2015.
(4) Discontinued operations comprise FirstService Corporation, which was spun off on June 1, 2015.
(5) See definition and reconciliation above.

Condensed Consolidated Balance Sheets        
(in thousands of US dollars)   
         
          
(unaudited)September 30, 2016 December 31, 2015 September 30, 2015
          
Assets        
Cash and cash equivalents$108,910 $116,150 $98,167
Accounts receivable 278,981  298,466  269,675
Prepaids and other assets 94,797  81,363  85,039
 Current assets 482,688  495,979  452,881
Other non-current assets 35,945  23,209  21,929
Fixed assets 63,801  62,553  61,770
Deferred income tax, net 79,743  84,038  90,273
Goodwill and intangible assets 498,100  426,642  410,210
 Total assets$1,160,277 $1,092,421 $1,037,063
          
          
Liabilities and shareholders' equity        
Accounts payable and accrued liabilities$414,194 $455,243 $388,934
Other current liabilities 15,423  20,698  17,327
Long-term debt - current 2,609  3,200  3,778
 Current liabilities 432,226  479,141  410,039
Long-term debt - non-current 333,163  257,747  316,265
Other liabilities 56,244  48,034  47,275
Deferred income tax, net 21,054  18,414  19,862
Redeemable non-controlling interests 132,660  139,592  134,527
Shareholders' equity 184,930  149,493  109,095
 Total liabilities and equity$1,160,277 $1,092,421 $1,037,063
          
          
Supplemental balance sheet information        
Total debt$335,772 $260,947 $320,043
Total debt, net of cash 226,862  144,797  221,876
Net debt / pro forma adjusted EBITDA ratio 1.1  0.8  1.3


Consolidated Statements of Cash Flows       
(in thousands of US dollars)
    Three months ended  Nine months ended
    September 30  September 30
(unaudited)   2016    2015    2016    2015 
              
Cash provided by (used in)            
              
Operating activities            
Net earnings (loss) from continuing operations $ 13,461  $ 18,414  $ 41,250  $ (2,904)
Items not affecting cash:            
 Depreciation and amortization   11,390    9,794    33,038    28,068 
 Spin-off stock-based compensation   -    -    -    35,400 
 Deferred income tax   1,664    14    5,751    (5,475)
 Other   5,051    1,187    13,241    6,298 
     31,566    29,409    93,280    61,387 
              
Net change from assets/liabilities            
 Accounts receivable   13,877    (2,665)   25,136    17,538 
 Payables and accruals   19,500    44,592    (65,335)   (31,989)
 Other   (415)   (1,774)   (4,548)   (21,406)
 Contingent acquisition consideration paid   (591)   (159)   (591)   (1,332)
Discontinued operations   -    -    -    29,416 
Net cash provided by operating activities   63,937    69,403    47,942    53,614 
              
Investing activities            
Acquisition of businesses, net of cash acquired   (26,006)   (11,626)   (72,332)   (28,900)
Purchases of fixed assets   (5,560)   (4,491)   (16,242)   (15,793)
Other investing activities   (4,363)   (3,778)   (18,283)   (7,166)
Discontinued operations   -    -    -    (10,448)
Net cash used in investing activities   (35,929)   (19,895)   (106,857)   (62,307)
              
Financing activities            
(Decrease) increase in long-term debt, net   (2,730)   (54,773)   83,758    (6,039)
Purchases of subsidiary shares from non-controlling interests, net   (9,282)   (4,317)   (12,919)   (5,210)
Dividends paid to common shareholders   (1,931)   -    (3,471)   (3,581)
Distributions paid to non-controlling interests   (3,130)   (5,290)   (13,389)   (12,778)
Other financing activities   (185)   (1,674)   793    (3,003)
Net cash (used in) provided by financing activities   (17,258)   (66,054)   54,772    (30,611)
              
Effect of exchange rate changes on cash   1,478    (9,011)   (3,097)   (19,322)
              
Increase (decrease) in cash and cash equivalents   12,228    (25,557)   (7,240)   (58,626)
              
Cash and cash equivalents, beginning of period   96,682    123,724    116,150    156,793 
              
Cash and cash equivalents, end of period $ 108,910  $ 98,167  $ 108,910  $ 98,167 
              
              
Cash flows excluding discontinued operations            
 Operating activities $ 63,937  $ 69,403  $ 47,942  $ 24,198 
 Investing activities   (35,929)   (19,895)   (106,857)   (51,859)
      


Segmented Results
(in thousands of US dollars)
                
      Asia    
(unaudited)Americas EMEA Pacific Corporate Consolidated
                
Three months ended September 30            
                
2016              
 Revenues$256,466 $ 106,601  $98,623 $ 362  $462,052
 Adjusted EBITDA 22,556   4,482   13,164   (2,557)  37,645
 Operating earnings (loss) 16,307   (363)  11,636   (3,953)  23,627
                
2015              
 Revenues$223,870 $ 107,647  $88,468 $ 293  $420,278
 Adjusted EBITDA 22,802   13,216   8,683   (1,658)  43,043
 Operating earnings (loss) 17,850   8,538   6,826   (3,404)  29,810
                
                
      Asia    
  Americas EMEA Pacific Corporate Consolidated
                
Nine months ended September 30             
                
2016              
 Revenues$729,975 $ 322,693  $267,186 $ 842  $1,320,696
 Adjusted EBITDA 72,527   21,007   26,934   (7,846)  112,622
 Operating earnings (loss) 55,847   5,495   22,697   (13,921)  70,118
                
2015              
 Revenues$613,364 $ 294,493  $257,269 $ 746  $1,165,872
 Adjusted EBITDA 53,502   31,038   26,661   (9,010)  102,191
 Operating earnings (loss) (1) 39,459   18,242   21,983   (64,277)  15,407

(1) Operating loss of Corporate for the nine month period ended September 30, 2015 includes $35,400 of spin-off stock-based compensation costs and $14,147 of spin-off transaction costs.

COMPANY CONTACTS:

Jay S. Hennick
Chairman & CEO

John B. Friedrichsen
CFO

(416) 960-9500