Operating highlights:

         
    Three months ended   Six months ended
    June 30   June 30
(in millions of US$, except EPS measures)   2016   2015   2016   2015
                         
Revenues $ 482.5   $   409.8     $ 858.6   $   745.6  
Adjusted EBITDA (note 1)   52.8       44.6       75.0       59.1  
Adjusted EPS (note 2)   0.63       0.58       0.82       0.69  
                         
                         
GAAP Operating Earnings   37.6       (16.7 )     46.5       (14.4 )
GAAP EPS from continuing operations   0.55       (0.79 )     0.37       (0.58 )
                               

TORONTO, July 26, 2016 (GLOBE NEWSWIRE) — Colliers International Group Inc. (NASDAQ:CIGI) (TSX:CIG) today reported strong financial results for its second quarter ended June 30, 2016. All amounts are in US dollars.

Revenues for the second quarter were $482.5 million, an 18% increase (21% in local currency) relative to the same quarter in the prior year and Adjusted EBITDA (note 1) was $52.8 million, up 18% (23% in local currency). Adjusted EPS (note 2) was $0.63, up 9% versus the prior year quarter, impacted by a higher income tax rate. Second quarter Adjusted EPS would have been approximately $0.03 higher excluding foreign exchange impacts. GAAP Operating Earnings were $37.6 million, relative to a loss of $16.7 million in the prior year period. GAAP EPS from continuing operations was $0.55 per share in the quarter, versus a loss of $0.79 per share for the same quarter a year ago. Second quarter GAAP EPS would have been approximately $0.03 higher excluding changes in foreign exchange rates. Prior year GAAP Operating Earnings and GAAP EPS results included one-time costs related to the separation from FirstService Corporation completed on June 1, 2015.

For the six months ended June 30, 2016, revenues were $858.6 million, a 15% increase (19% in local currency) relative to the comparable prior year period and Adjusted EBITDA was $75.0 million, up 27% (32% in local currency). Adjusted EPS was $0.82, up 19% versus the prior year period, impacted by a higher income tax rate. Year-to-date Adjusted EPS would have been approximately $0.05 higher excluding foreign exchange impacts.  GAAP Operating Earnings were $46.5 million, relative to a loss of $14.4 million in the prior year period. GAAP EPS from continuing operations for the six month period was $0.37 per share, compared to a loss of $0.58 per share in the prior year period. Year-to-date GAAP EPS would have been approximately $0.05 higher excluding changes in foreign exchange rates. Prior year GAAP Operating Earnings and GAAP EPS results included one-time costs related to the separation from FirstService Corporation completed on June 1, 2015.

“Colliers delivered excellent results in the second quarter despite key operating currencies declining against the US dollar and negatively impacting our results on a reported basis. Strong internal growth continued in most major markets, especially in the Americas region,” said Jay S. Hennick, Chairman and CEO of Colliers International. “Since the beginning of the second quarter, and shortly after, we have expanded operations in Florida, Michigan and New York and added to our project and development management services business in the Northeast US. With a disciplined growth strategy, long-term track record of success and strong balance sheet, Colliers International is better positioned than ever to continue capitalizing on growth opportunities and strengthening the Colliers International brand and global platform,” 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

             
    Three months ended     Six months ended  
(in thousands of US$)   June 30   Growth   June 30   Growth
(LC = local currency)   2016   2015   in LC %   2016   2015   in LC %
                                 
Outsourcing & Advisory   $ 179,809   $ 158,268   17 %   $ 339,627   $ 290,792   22 %
Lease Brokerage     151,807     136,880   13 %     264,692     241,494   13 %
Sales Brokerage     150,920     114,684   34 %     254,325     213,308   22 %
                                 
Total revenues   $ 482,536   $ 409,832   21 %   $ 858,644   $ 745,594   19 %
                                     

Consolidated revenues for the second quarter grew 21% on a local currency basis, with each service line contributing strongly. Consolidated internal revenue growth in local currencies was 11% with the balance coming from acquisitions completed during the past year.

For the six months ended June 30, 2016, consolidated revenues grew 19% on a local currency basis with each service line contributing strongly. Year-to-date consolidated internal revenue growth in local currencies was 9% with the balance coming from acquisitions completed during the past year.

Segmented Quarterly Results
The Americas region’s revenues totalled $263.0 million for the second quarter compared to $205.8 million in the prior year quarter, up 28% (30% on a local currency basis). Local currency revenue growth was comprised of 14% internal growth and 16% growth from recent acquisitions. Internal growth for the quarter was driven by Sales Brokerage and Outsourcing & Advisory revenues in the US and Canada. Adjusted EBITDA was $28.4 million, up 63% from the prior year quarter as a result of operating leverage and the impact of acquisitions. GAAP Operating Earnings were $22.6 million, up 89%.

EMEA region revenues totalled $117.2 million for the second quarter compared to $105.1 million in the prior year quarter, up 11% (14% on a local currency basis). Local currency revenue growth was comprised of 6% internal growth and 8% growth from recent acquisitions. Internal growth was driven by strong Outsourcing & Advisory services activity, particularly project management. Adjusted EBITDA was $17.1 million, versus $17.8 million in the prior year quarter, and was primarily impacted by revenue mix, with project management assignments generating lower margins in the quarter compared to other services, and the timing of certain expenses. GAAP Operating Earnings were $11.7 million, versus $13.1 million in the prior year quarter.

Asia Pacific region revenues totalled $102.1 million for the second quarter compared to $98.7 million in the prior year quarter, up 3% (9% on a local currency basis), entirely from internal growth with foreign exchange impacting results in the US dollar reporting currency. Growth was driven by solid Sales Brokerage activity in the Australia and New Zealand markets, offset by a modest decline in revenues in Asia. Adjusted EBITDA was $10.5 million versus $12.1 million in the prior year quarter, and was impacted by significant additions of key personnel in several Asian markets. GAAP Operating Earnings were $9.1 million, versus $10.7 million in the prior year period.

Global corporate costs were $3.1 million in the second quarter, relative to $2.7 million in the prior year period. The GAAP Operating Loss for the second quarter was $5.8 million, relative to $52.5 million in the prior period, with the prior period impacted by costs related to the separation from FirstService Corporation completed on June 1, 2015.

Consolidation of Global Leadership to Toronto
During the second quarter, coinciding with Colliers’ first anniversary as an independent public company, the Company implemented a plan to consolidate global leadership in Toronto, with Seattle and Vancouver continuing as shared services centres. The plan resulted in the downsizing of the Seattle office and a modest headcount reduction. Restructuring costs incurred during the quarter totalled $2.8 million and are reflected as reconciling items in the computation of Adjusted EBITDA and Adjusted EPS. The plan will be completed, and additional costs of approximately $1.5 million will be incurred, during the third quarter of 2016.

Conference Call
Colliers will be holding a conference call on Tuesday, July 26, 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 “Investors / 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   Six months ended
(in thousands of US$) June 30   June 30
    2016   2015   2016   2015
                         
Net earnings (loss) from continuing operations   $   23,756     $   (21,359 )   $   27,787     $   (21,319 )
Income tax     12,861         3,365         15,931         2,849  
Other income, net     (1,220 )       (310 )       (1,820 )       174  
Interest expense, net     2,227         1,556         4,591         3,891  
Operating earnings (loss)     37,624         (16,748 )       46,489         (14,405 )
Depreciation and amortization     10,616         9,683         21,649         18,274  
Acquisition-related items     973         1,172         2,045         2,043  
Spin-off stock-based compensation costs             35,400                 35,400  
Spin-off transaction costs             13,134                 13,134  
Corporate costs allocated to spin-off             727                 2,010  
Restructuring costs     2,776                 2,776          
Stock-based compensation expense     806         1,197         2,018         2,692  
Adjusted EBITDA $   52,795     $   44,565     $   74,977     $   59,148  
                                       

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   Six months ended
(in thousands of US$) June 30   June 30
    2016   2015   2016   2015
                         
Net earnings (loss) from continuing operations $   23,756     $   (21,359 )   $   27,787     $   (21,319 )
Non-controlling interest share of earnings     (5,559 )       (7,421 )       (7,973 )       (8,820 )
Amortization of intangible assets     4,792         4,204         10,428         7,631  
Acquisition-related items     973         1,172         2,045         2,043  
Spin-off stock-based compensation costs             35,400                 35,400  
Spin-off transaction costs             13,134                 13,134  
Corporate costs allocated to spin-off             741                 2,048  
Restructuring costs     2,776                 2,776          
Stock-based compensation expense     806         1,197         2,018         2,692  
Income tax on adjustments     (2,548 )       (5,461 )       (4,239 )       (7,470 )
Non-controlling interest on adjustments     (432 )               (934 )       (163 )
Adjusted net earnings $   24,564     $   21,607     $   31,908     $   25,176  
                         
    Three months ended   Six months ended
(in US$) June 30   June 30
    2016   2015   2016   2015
                         
Diluted net earnings (loss) per share from continuing operations $   0.55     $   (0.79 )   $   0.37     $   (0.58 )
Non-controlling interest redemption increment     (0.08 )       0.01         0.14         (0.25 )
Amortization of intangible assets, net of tax     0.08         0.08         0.17         0.14  
Acquisition-related items     0.02         0.03         0.05         0.06  
Spin-off stock-based compensation costs             0.96                 0.97  
Spin-off transaction costs, net of tax             0.25                 0.25  
Corporate costs allocated to spin-off, net of tax             0.01                 0.04  
Restructuring costs, net of tax     0.04                 0.04          
Stock-based compensation expense, net of tax     0.02         0.03         0.05         0.06  
Adjusted earnings per share $   0.63     $   0.58     $   0.82     $   0.69  
                                       

 
COLLIERS INTERNATIONAL GROUP INC.
Condensed Consolidated Statements of Earnings (Loss)
(in thousands of US dollars, except per share amounts)
          Three months     Six months
          ended June 30     ended June 30
(unaudited)       2016        2015        2016        2015 
                             
Revenues   $   482,536     $   409,832     $   858,644     $   745,594  
                             
Cost of revenues       294,968         239,889         531,835         448,010  
Selling, general and administrative expenses       138,355         127,302         256,626         243,138  
Depreciation       5,824         5,479         11,221         10,643  
Amortization of intangible assets       4,792         4,204         10,428         7,631  
Acquisition-related items (1)       973         1,172         2,045         2,043  
Spin-off stock-based compensation costs (2)               35,400                 35,400  
Spin-off transaction costs (3)               13,134                 13,134  
Operating earnings (loss)       37,624         (16,748 )       46,489         (14,405 )
Interest expense, net       2,227         1,556         4,591         3,891  
Other expense (income)       (1,220 )       (310 )       (1,820 )       174  
Earnings (loss) before income tax       36,617         (17,994 )       43,718         (18,470 )
Income tax       12,861         3,365         15,931         2,849  
Net earnings (loss) from continuing operations       23,756         (21,359 )       27,787         (21,319 )
Discontinued operations, net of income tax (4)               3,041                 1,103  
Net earnings (loss)       23,756         (18,318 )       27,787         (20,216 )
Non-controlling interest share of earnings       5,559         7,421         7,973         8,820  
Non-controlling interest redemption increment       (3,205 )       321         5,608         (9,020 )
Net earnings (loss) attributable to Company   $   21,402     $   (26,060 )   $   14,206     $   (20,016 )
                             
Net earnings (loss) per common share                        
  Basic                        
    Continuing operations   $   0.55     $   (0.79 )   $   0.37     $   (0.58 )
    Discontinued operations               0.08                 0.03  
      $   0.55     $   (0.71 )   $   0.37     $   (0.55 )
                             
  Diluted                        
    Continuing operations   $   0.55     $   (0.79 )   $   0.37     $   (0.58 )
    Discontinued operations               0.08                 0.03  
      $   0.55     $   (0.71 )   $   0.37     $   (0.55 )
                             
Adjusted earnings per share (5)   $   0.63     $   0.58     $   0.82     $   0.69  
                             
Weighted average common shares (thousands)                        
    Basic       38,594         36,608         38,576         36,241  
    Diluted       38,875         37,003         38,839         36,632  
                                             

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) June 30, 2016   December 31, 2015   June 30, 2015
                   
Assets                
Cash and cash equivalents $ 96,682   $ 116,150   $ 123,724
Accounts receivable   291,156     298,466     269,240
Prepaids and other assets   93,923     81,363     83,944
  Current assets   481,761     495,979     476,908
Other non-current assets   35,759     23,209     24,747
Fixed assets   63,764     62,553     63,910
Deferred income tax, net   76,701     84,038     89,136
Goodwill and intangible assets   472,856     426,642     404,406
  Total assets $ 1,130,841   $ 1,092,421   $ 1,059,107
                   
                   
Liabilities and shareholders’ equity                
Accounts payable and accrued liabilities $ 389,501   $ 455,243   $ 355,976
Other current liabilities   18,587     20,698     15,899
Long-term debt – current   2,200     3,200     5,534
  Current liabilities   410,288     479,141     377,409
Long-term debt – non-current   337,297     257,747     375,599
Other liabilities   55,341     48,034     44,411
Deferred income tax, net   18,725     18,414     19,568
Redeemable non-controlling interests   140,632     139,592     133,819
Shareholders’ equity   168,558     149,493     108,301
  Total liabilities and equity $ 1,130,841   $ 1,092,421   $ 1,059,107
                   
                   
Supplemental balance sheet information                
Total debt $ 339,497   $ 260,947   $ 381,133
Total debt, net of cash   242,815     144,797     257,409
Net debt / pro forma adjusted EBITDA ratio   1.2     0.8     1.6
                 

               
Consolidated Statements of Cash Flows              
(in thousands of US dollars)
        Three months ended     Six months ended
        June 30     June 30
(unaudited)       2016        2015        2016        2015 
                           
Cash provided by (used in)                        
                           
Operating activities                        
Net earnings (loss) from continuing operations   $   23,756     $   (21,359 )   $   27,787     $   (21,319 )
Items not affecting cash:                        
  Depreciation and amortization       10,616         9,683         21,649         18,274  
  Spin-off stock-based compensation               35,400                 35,400  
  Deferred income tax       3,430         (4,158 )       4,087         (5,489 )
  Other       6,864         5,040         8,193         5,110  
          44,666         24,606         61,716         31,976  
                           
Net change from assets/liabilities                        
  Accounts receivable       (38,047 )       (23,483 )       11,260         20,203  
  Payables and accruals       16,359         49,661         (84,835 )       (76,581 )
  Other       4,173         (1,060 )       (4,133 )       (19,632 )
  Contingent acquisition consideration paid               (141 )               (1,173 )
Discontinued operations               9,373                 29,416  
Net cash provided by (used in) operating activities       27,151         58,956         (15,992 )       (15,791 )
                           
Investing activities                        
Acquisition of businesses, net of cash acquired       (9,751 )       (16,784 )       (46,326 )       (17,274 )
Purchases of fixed assets       (6,495 )       (9,752 )       (10,682 )       (11,302 )
Other investing activities       (7,778 )       (3,244 )       (13,920 )       (3,388 )
Discontinued operations               (3,601 )               (10,448 )
Net cash used in investing activities       (24,024 )       (33,381 )       (70,928 )       (42,412 )
                           
Financing activities                        
(Decrease) increase in long-term debt, net       21         (4,390 )       86,488         48,733  
Purchases of subsidiary shares from non-controlling interests, net       (4,257 )       (2,277 )       (3,637 )       (893 )
Dividends paid to common shareholders                       (1,541 )       (3,581 )
Distributions paid to non-controlling interests       (5,143 )       (1,847 )       (10,259 )       (7,488 )
Other financing activities       (212 )       (2,906 )       978         (1,329 )
Net cash (used in) provided by financing activities       (9,591 )       (11,420 )       72,029         35,442  
                           
Effect of exchange rate changes on cash       (4,322 )       (11,133 )       (4,577 )       (10,308 )
                           
(Decrease) increase in cash and cash equivalents       (10,786 )       3,022         (19,468 )       (33,069 )
                           
Cash and cash equivalents, beginning of period       107,468         120,702         116,150         156,793  
                           
Cash and cash equivalents, end of period   $   96,682     $   123,724     $   96,682     $   123,724  
                           
                           
Cash flows excluding discontinued operations                        
  Operating activities   $   27,151     $   49,583     $   (15,992 )   $   (45,207 )
  Investing activities       (24,024 )       (29,780 )       (70,928 )       (31,964 )
           

 
Segmented Results
(in thousands of US dollars)
                               
            Asia        
(unaudited) Americas   EMEA   Pacific   Corporate   Consolidated
                               
Three months ended June 30                        
                               
2016                            
  Revenues $ 262,964   $ 117,177   $ 102,122   $   273     $   482,536  
  Adjusted EBITDA   28,360     17,086     10,488       (3,139 )       52,795  
  Operating earnings (loss)   22,581     11,747     9,127       (5,831 )       37,624  
                               
2015                            
  Revenues $ 205,768   $ 105,135   $ 98,697   $   232     $   409,832  
  Adjusted EBITDA   17,364     17,800     12,092       (2,691 )       44,565  
  Operating earnings (loss) (1)   11,936     13,080     10,688       (52,452 )       (16,748 )
                               
                               
            Asia        
    Americas   EMEA   Pacific   Corporate   Consolidated
                               
Six months ended June 30                          
                               
2016                            
  Revenues $ 473,509   $ 216,092   $ 168,563   $   480     $   858,644  
  Adjusted EBITDA   49,971     16,525     13,770       (5,289 )       74,977  
  Operating earnings (loss)   39,538     5,858     11,061       (9,968 )       46,489  
                               
2015                            
  Revenues $ 389,494   $ 186,846   $ 168,801   $   453     $   745,594  
  Adjusted EBITDA   30,700     17,822     17,978       (7,352 )       59,148  
  Operating earnings (loss) (1)   21,609     9,704     15,157       (60,875 )       (14,405 )
                                       

 (1) Operating loss of Corporate for the three month and six month periods ended June 30, 2015 includes $35,400 of spin-off stock-based compensation costs and $13,134 of spin-off transaction costs.

CONTACT: COMPANY CONTACTS:

Jay S. Hennick
Chairman & CEO
		
John B. Friedrichsen
Senior Vice President & CFO

(416) 960-9500