Wilmington Capital Management Inc.
TSX : WCM.A
TSX : WCM.B

Wilmington Capital Management Inc.

March 19, 2013 21:40 ET

Wilmington Announces 2012 Fourth Quarter Results

TORONTO, ONTARIO--(Marketwire - March 19, 2013) - Wilmington Capital Management Inc. ("Wilmington" or the "Corporation") (TSX:WCM.A)(TSX:WCM.B) today announced a net loss attributable to shareholders for the three months ended December 31, 2012 of $938,000 or ($0.11) compared to a net loss attributable to shareholders of $398,000 or ($0.05) for the same period in 2011. For the year ended December 31, 2012, net loss attributable to shareholders amounted to $1.5 million or ($0.18) per share compared to a net income of $19.7 million or $2.43 per share for the same period in 2011.

To view a full copy of the Corporation's audited financial results for the year ended December 31, 2012 including the Corporation's audited consolidated financial statements, accompanying MD&A and Annual Information Form, please refer to the SEDAR website www.sedar.com.

Operations Review

Strategic Plan

The Corporation's principal objectives are to make investments capable of generating appreciation in value as opposed to current income and to maximize shareholder returns by investing its own capital alongside partners and co-investors in hard assets and private equity funds. These assets are managed through the Corporation's operating platforms where Wilmington can add scale and improve valuations.

During 2012, Wilmington continued to take steps to solidify the foundation of its three operating platforms - self-storage facilities, private equity funds and natural gas assets. Core management teams, operational, accounting and reporting systems as well as a pipeline of new opportunities are in place. As at December 31, 2012, Wilmington had assets under management in its operating platforms of approximately $135 million ($64 million representing Wilmington's share).

Investment in Real Storage Private Trust (the "Trust")

The Trust (44.78% owned) owns 17 self-storage facilities comprising 645,978 square feet of rentable area and one development property. The Trust showed significant improvements in 2012 as the five properties in western Canada, which were for the most part in the initial lease up stage, approached stabilized occupancy levels. Across the portfolio of 17 properties, occupancy levels averaged 78%, compared to 73% in 2011. Operating margins improved to 52% up from 47% achieved in 2011.

Investment in Network Capital Management Inc. ("NCI") and Network 2012 Fund

NCI (50% owned) successfully closed its $22.3 million fund in early 2012 bringing total assets under management to $49 million. The majority of the capital in the 2012 fund was deployed during the year in a strong mix of junior oil and gas and service companies. Wilmington invested $8 million in the 2012 fund.

Investment in Shackleton 2011 Limited Partnership (the "Shackleton Partnership" or the "Partnership")

The natural gas assets owned through the Shackleton Partnership (59% owned) have proven to be of high quality and present good opportunities for growth and future development once we reach a more favorable natural gas pricing environment. The weighted average price realized during 2012 was $2.33 per mcf and operating netbacks averaged $0.98 per mcf. Natural gas production volumes for the 100% interest in the Shackleton field amounted to 5,283 mcf per day (881 boepd) for the year. Estimated proved plus probable reserves attributable to the Shackleton assets as evaluated by GLJ Petroleum Consultants Ltd. with an effective date of December 31, 2012 were 19,702 MMcf. The outlook for natural gas pricing has improved significantly and a better pricing environment will be beneficial to the operating performance of the Shackleton assets. Of its 2013 production, approximately 50% has been hedged under fixed price contracts with an average price of $3.18 per mcf.

Discontinued Operations

During the fourth quarter, the Corporation took further steps to rationalize its core business and entered into an agreement to sell its interest in commercial land in San Francisco, California. The sale is scheduled to close during the second quarter of 2013.

2013 Outlook

The Corporation is pleased with the progress made in solidifying and building upon its three operating platforms - the Trust, NCI and the Shackleton Partnership. In 2013 and in the years ahead, the Corporation expects to add scale to these operating platforms, improve valuations and earn attractive cash flow and total returns for shareholders.

FINANCIAL HIGHLIGHTS
CONSOLIDATED STATEMENTS OF INCOME
Unaudited Three months ended December 31 Years ended December 31
(Thousands of Canadian Dollars, except per share amounts) 2012 2011 2012 2011
Income
Natural gas sales $ 1,403 $ 1,124 $ 4,498 $ 1,124
Royalties (269 ) (218 ) (822 ) (218 )
Natural gas revenue 1,134 906 3,676 906
Investment and other income 40 71 233 278
Foreign exchange gain --- 31 33 ---
1,174 1,008 3,942 1,184
Expenses
Petroleum operations 469 409 1,808 409
Depletion, depreciation and amortization 419 303 1,628 303
General and administrative 425 672 1,201 911
Foreign exchange loss 9 --- --- 40
Stock compensation 71 30 210 30
Operating loss (219 ) (406 ) (905 ) (509 )
Finance costs 95 87 377 87
Loss before gain on sale, share of equity accounted investments and income taxes (314 ) (493 ) (1,282 ) (596 )
Gain on sale of investment 12 --- 12 23,581
Share of net income (loss) from Real Storage Private Trust 25 (8 ) 163 (223 )
Share of net loss from Network Capital Management Inc. (27 ) (59 ) (43 ) (73 )
Share of net loss from Network 2012 Fund (39 ) --- (147 ) ---
(Loss) income before income taxes (343 ) (560 ) (1,297 ) 22,689
Income tax benefit (expense) 50 81 327 (2,985 )
Net Income (loss) from continuing operations (293 ) (479 ) (970 ) 19,704
Income from discontinued operations, net of tax (944 ) (6 ) (938 ) 17
Net income (loss) $ (1,237 ) $ (485 ) $ (1,908 ) $ 19,721
Net income (loss) attributable to:
Owners of the Corporation $ (938 ) $ (398 ) $ (1,524 ) $ 19,808
Non-controlling interest (299 ) (87 ) (384 ) (87 )
$ (1,237 ) $ (485 ) $ (1,908 ) $ 19,721
Net (loss) income per share from continuing operations
Basic $ --- $ (0.03 ) $ (0.07 ) $ 2.43
Diluted $ --- $ (0.03 ) $ (0.07 ) $ 2.43
Net (loss) income per share
Basic $ (0.11 ) $ (0.05 ) $ (0.18 ) $ 2.43
Diluted $ (0.11 ) $ (0.05 ) $ (0.18 ) $ 2.43
CONSOLIDATED BALANCE SHEET

(Thousands of Canadian Dollars)
December 31,
2012
December 31,
2011
Assets
Non-current assets
Investment property $ --- $ 18,933
Investment in Real Storage Private Trust 7,271 7,096
Investment in Network Capital Management Inc. 1,712 1,755
Investment in Network 2012 Fund 7,554 ---
Natural gas property, plant and equipment 17,840 19,436
Deferred tax asset --- 135
34,377 47,355
Current assets
Loan to Network Capital Management Inc. --- 50
Income taxes receivable 435 ---
Receivables and other assets 885 923
Cash and cash equivalents 6,601 18,688
7,921 19,661
Assets held for sale 18,541 ---
26,462 19,661
Total assets $ 60,839 $ 67,016
Liabilities
Non-current liabilities
Secured debt $ --- $ 19,403
Loan payable --- 1,615
Asset retirement obligations 750 708
Deferred tax liabilities 259 ---
1,009 21,726
Current liabilities
Accounts payable and accrued liabilities 1,024 1,481
Revolving loan facility 6,700 7,830
Income taxes payable --- 3,336
7,724 12,647
Liabilities held for sale 21,432 ---
29,156 12,647
Total liabilities 30,165 34,373
Equity
Shareholders' equity 26,860 28,445
Non-controlling interest 3,814 4,198
Total equity 30,674 32,643
Total liabilities and equity $ 60,839 $ 67,016
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Unaudited Three months ended
December 31
Year ended
December 31
(Thousands of Canadian Dollars) 2012 2011 2012 2011
Net income (loss) $ (1,237 ) $ (485 ) $ (1,908 ) $ 19,721
Share of other comprehensive loss from Network 2012 Fund 81 --- (299 ) ---
Reversal of the fair value increment of available for sale securities --- --- --- (23,414 )
Future income taxes on above items (9 ) --- 39 3,287
Other comprehensive income (loss) from continuing operations 72 --- (260 ) (20,127 )
Other comprehensive (loss) income from discontinued operations, net of tax 18 5 (11 ) 33
Comprehensive income (loss) $ (1,147 ) $ (480 ) $ (2,179 ) $ (373 )
Comprehensive income (loss) attributable to:
Owners of the Corporation $ (848 ) $ (393 ) $ (1,795 ) $ (286 )
Non-controlling interest (299 ) 87 (384 ) (87 )
$ (1,147 ) $ (480 ) $ (2,179 ) $ (373 )

Executive Officers of the Corporation will be available at 403-800-0869 to answer any questions on the Corporation's financial results.

This news release contains forward-looking statements concerning the Corporation's business and operations. The Corporation cautions that, by their nature, forward-looking statements involve risk and uncertainty and the Corporation's actual results could differ materially from those expressed or implied in such statements. Reference should be made to the most recent Annual Information Form for a description of the major risk factors.

Contact Information

  • Wilmington Capital Management Inc.
    Executive Officers
    (403) 800-0869