TORONTO, ONTARIO–(Marketwired – May 10, 2017) – Wilmington Capital Management Inc. (TSX:WCM.A)(TSX:WCM.B) (“Wilmington” or the “Corporation”) reported net income attributable to shareholders for the three months ended March 31, 2017 of $12,000 or $0.00 per share compared to a net loss of $0.5 million or ($0.05) per share for the same period in 2016.
FIRST QUARTER 2017 FINANCIAL HIGHLIGHTS
The financial highlights of the Corporation and those of its associated and controlled entities are set out below. Investments in associated and controlled entities account for the majority of the Corporation’s financial results and are accounted for using the equity method of accounting or a consolidated basis.
Self-storage facilities
- Real Storage Private Trust (42.5% owned – the “Trust”) generated net operating income of $2.2 million for the three months ended March 31, 2017, a 4% increase from the comparable period in 2016. The Ontario properties continued to perform well and occupancy levels and operating margins are continuing to stabilize in Alberta.
- The Trust distributed $0.4 million (Q1 2016 – $0.4 million) to unit holders during the period representing the equivalent of 4% of invested capital per annum.
Private equity
- Northbridge’s assets under management of approximately $41.6 million were consistent with those managed at December 31, 2016.
Discontinued operations
- The Shackleton 2011 Limited Partnership (“Shackleton Partnership”) publicly marketed the assets during the three months ended March 31, 2017. Subsequent to the period than ended, the marketing program was completed and management is evaluating all offers. A sale is expected in 2017.
As at March 31, 2017, Wilmington had assets under management in its operating platforms of approximately $166 million ($59 million representing Wilmington’s share).
OPERATIONS REVIEW
Self-Storage Facilities
Real Storage Private Trust
For the three months ended March 31, 2017, net operating income increased 4% compared to the same period in 2016, largely the result of continued strong performance of the Ontario properties. The properties in Western Canada showed signs of stabilization during the first quarter 2017. The expansion of two properties located in Ontario are nearing completion and are expected to be operational in the second quarter 2017. A number of potential acquisitions are under active negotiation.
Private Equity
Northbridge Capital Partners Ltd. (“Northbridge”) and Northbridge Fund 2016 Limited Partnership
In late 2016, the Corporation completed a key initiative by aligning the ownership of Northbridge with a strategic partner specializing in the oil and gas industry. The ownership makeup of Northbridge consists of 45% owned by each of Wilmington and the strategic partner and 10% by management.
Concurrently, Northbridge closed a $30.9 million energy fund (“Northbridge Fund 2016”) having a mandate to invest in public and private companies in the energy sector. The Corporation subscribed for $1.0 million in Northbridge Fund 2016, of which $270,000 had been funded as at March 31, 2017.
The Corporation expects to receive its remaining share of capital invested in the Network 2012 Fund in the latter part of 2017, with realization proceeds estimated at $2.0 million.
Northbridge’s assets under management amounted to approximately $41.6 million as at March 31, 2017, consistent with those managed at December 31, 2016.
Discontinued operations
Shackleton 2011 Limited Partnership
The Shackleton Partnership owns and operates a 100% interest in natural gas assets in Southwestern Saskatchewan. Production during the three months ended March 31, 2017 declined 8% compared to the same period in 2016 to 455 boe/d. The Shackleton Partnership realized a netback of $0.75 per mcf in 2017, an increase of $0.40 per mcf compared to the same period in 2016 which is primarily due to a 33% increase in natural gas prices. The Shackleton Partnership publicly marketed the assets during the three months ended March 31, 2017. Subsequent to the period than ended, the marketing program was completed and management is evaluating next steps. A 2017 sale is expected.
The Shackleton Partnership has fully drawn the $3.96 million available under its Revolving Loan Facility. The amount available is reduced monthly by increments of $30,000 until the next bank review expected to be in June 2017. The loan is secured solely by a floating fixed charge over the assets of the Shackleton Partnership.
OUTLOOK
The Corporation will concentrate on growing its two core businesses being – the private equity platform and the self-storage business as well as seeking out new opportunities. The private equity platform is focused on deploying capital raised in the Northbridge 2016 Fund which closed in the fall of 2016. It is well positioned to participate in the energy sector as it moves into the recovery phase. The self-storage business held through Real Storage Private Trust sees a continuation of growth generated both organically, through development and through acquisition. In addition, Wilmington continues to look at other initiatives where it can add value and deliver superior returns to shareholders.
FINANCIAL RESULTS
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
| For the three months ended March 31, | ||||||
| (CDN $ Thousands, except per share amounts) (unaudited) | 2017 | 2016 | ||||
| Revenue | ||||||
| Investment and other income | 22 | 35 | ||||
| Expenses | ||||||
| General and administrative | 204 | 220 | ||||
| Stock-based compensation | 23 | 53 | ||||
| Loss from continuing operations before the undernoted | (205 | ) | (238 | ) | ||
| Share of net income from Real Storage Private Trust | 202 | 55 | ||||
| Share of net loss from Northbridge Capital Partners Ltd. | (29 | ) | (32 | ) | ||
| Share of net loss from Network 2012 Limited Partnership | (8 | ) | (78 | ) | ||
| Loss from continuing operations before income taxes | (40 | ) | (293 | ) | ||
| Income tax expense (recovery) | (2 | ) | 48 | |||
| Net loss from continuing operations | (38 | ) | (341 | ) | ||
| Net income (loss) from discontinued operations, net of tax | 85 | (214 | ) | |||
| Net income (loss) | 47 | (555 | ) | |||
| Net loss from continuing operations attributable to: | ||||||
| Owners of the Corporation | (38 | ) | (341 | ) | ||
| Non-controlling interest | — | — | ||||
| (38 | ) | (341 | ) | |||
| Net income (loss) from discontinued operations attributable to: | ||||||
| Owners of the Corporation | 50 | (126 | ) | |||
| Non-controlling interest | 35 | (88 | ) | |||
| 85 | (214 | ) | ||||
| Net loss per share from continuing operations: | ||||||
| Basic | — | (0.04 | ) | |||
| Diluted | — | (0.04 | ) | |||
CONSOLIDATED BALANCE SHEETS
| (unaudited) | (audited) | |||
| As at | March 31, | December 31, | ||
| (CDN $ Thousands) | 2017 | 2016 | ||
| Assets | ||||
| NON-CURRENT ASSETS | ||||
| Investment in Real Storage Private Trust | 15,866 | 15,864 | ||
| Investment in Northbridge Capital Partners Ltd. | 251 | 280 | ||
| Investment in Network 2012 Limited Partnership | 2,023 | 2,019 | ||
| Investment in Northbridge Fund 2016 Limited Partnership | 270 | 100 | ||
| Deferred income tax assets | 606 | 606 | ||
| 19,016 | 18,869 | |||
| CURRENT ASSETS | ||||
| Accounts receivables and other assets | 1,121 | 1,114 | ||
| Cash | 3,259 | 3,590 | ||
| 4,380 | 4,704 | |||
| Assets held for sale | 5,553 | 5,614 | ||
| Total assets | 28,949 | 29,187 | ||
| Liabilities | ||||
| CURRENT LIABILITIES | ||||
| Accounts payable and accrued liabilities | 554 | 682 | ||
| 554 | 682 | |||
| Liabilities related to assets held for sale | 5,226 | 5,371 | ||
| Total liabilities | 5,780 | 6,053 | ||
| Equity | ||||
| Shareholders’ equity | 23,052 | 23,052 | ||
| Non-controlling interest | 117 | 82 | ||
| Total equity | 23,169 | 23,134 | ||
| Total liabilities and equity | 28,949 | 29,187 | ||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
| For the three months ended March 31, | ||||||
| (CDN $ Thousands) (unaudited) | 2017 | 2016 | ||||
| Net income (loss) | 47 | (555 | ) | |||
| Items that may be reclassified to net income (loss) | ||||||
| Share of other comprehensive loss from equity accounted investees | (33 | ) | (163 | ) | ||
| Deferred income tax expense (recovery) | 2 | (22 | ) | |||
| Other comprehensive loss | (35 | ) | (141 | ) | ||
| Comprehensive income (loss) | 12 | (696 | ) | |||
| Comprehensive income (loss) attributable to: | ||||||
| Owners of the Corporation | (23 | ) | (608 | ) | ||
| Non-controlling interest | 35 | (88 | ) | |||
| 12 | (696 | ) | ||||
Executive Officers of the Corporation will be available at 403-705-8038 to answer any questions on the Corporation’s financial results.
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain statements included in this news release may constitute forward-looking statements or information under applicable securities legislation. Forward-looking statements that are predictive in nature, depend upon or refer to future events or conditions, include statements regarding the operations, business, financial conditions, expected financial results, performance, opportunities, priorities, ongoing objectives, strategies and outlook of the Corporation and its investee entities and contain words such as “anticipate”, “believe”, “expect”, “plan”, “intend”, “estimate”, “propose”, or similar expressions and statements relating to matters that are not historical facts constitute “forward-looking information” within the meaning of applicable Canadian securities legislation.
While the Corporation believes the anticipated future results, performance or achievements reflected or implied in those forward-looking statements are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements and information because they involve known and unknown risks, uncertainties and other factors, many of which are beyond the Corporation’s control, which may cause the actual results, performance and achievements of the Corporation to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements and information.
These risks and uncertainties include but are not limited to: the ability of management of Wilmington and its investee entities to execute its and their business plans; health, safety and environmental risks; uncertainties as to the availability and cost of financing; general economic and business conditions; the possibility that government policies or laws may change or governmental or regulatory approvals may be delayed or withheld; risks associated with existing and potential future law suits and regulatory actions against Wilmington; and other risks and uncertainties described in Wilmington’s filings with Canadian securities regulatory authorities.
The foregoing list of important factors that may affect future results is not exhaustive. When relying on the forward-looking statements, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Except as required by law, the Corporation undertakes no obligation to publicly update or revise any forward-looking statements or information, that may be as a result of new information, future events or otherwise. These forward-looking statements are effective only as of the date of this document.
This new release contains natural gas volumes which have been converted on the basis of six thousand cubic feet of natural gas to one barrel of oil equivalent. Barrels of oil equivalent (“boe”) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet to one barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
403-705-8038