Wilmington Capital Management Inc.

TSX : WCM.A
TSX : WCM.B


Wilmington Capital Management Inc.

November 13, 2012 18:39 ET

Wilmington Announces 2012 Third Quarter Results

TORONTO, ONTARIO--(Marketwire - Nov. 13, 2012) - Wilmington Capital Management Inc. ("Wilmington" or the "Corporation") (TSX:WCM.A)(TSX:WCM.B) today announced a net loss for the three months ended September 30, 2012 of $11,000 or ($0.01) per share compared to a net loss of $35,000 or ($0.00) per share for the same period in 2011. For the nine months ended September 30, 2012, the net loss amounted to $671,000 or ($0.07) per share compared to net income of $20.2 million or $2.52 per share for the same period in 2011.

To view a full copy of the Corporation's unaudited condensed financial results for the period ended September 30, 2012 including the Corporation's unaudited condensed interim consolidated financial statements and accompanying MD&A, please refer to the SEDAR website www.sedar.com.

OPERATING HIGHLIGHTS

During the third quarter, the Corporation continued to take steps to solidify the foundation of its three newly formed operating platforms - self storage facilities, private equity funds and natural gas assets. Those steps included enhancing the management teams, implementing operational, accounting and reporting systems and developing a solid pipeline of new opportunities.

Real Storage Private Trust (44.78% owned) continued to show operational improvements across its portfolio of 17 self-storage facilities containing 648,978 square feet of rentable area and one development site. The five properties located in western Canada, which were acquired in February, 2011, performed exceptionally well and are expected to reach stabilized occupancy levels in 2012. The majority of the western facilities are newly constructed and in the initial lease-up stage. Overall, occupancy across the portfolio averaged 81% for the three months ended September 30, 2012 as compared to 75% for the same period in 2011. Operating margins for the three months ended September 30, 2012 increased to 57%, up from 54% achieved for the comparable period in 2011.

On the private equity front, Network Capital Management Inc. (50% owned) successfully closed its $22.3 million 2012 fund. Network's committed funds under management now total $50 million and the majority of Network's available capital has been successfully deployed in a strong mix of junior oil and gas and service companies. Wilmington committed $8 million of capital to the 2012 fund.

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 the quarter was $2.28 per mcf and operating netbacks averaged $0.81 per mcf. Natural gas production volumes amounted to 4,911 mcf per day (818 boepd) for the third quarter. Estimated proved plus probable reserves attributable to the Shackleton assets as evaluated by GLJ Petroleum Consultants Ltd. with an effective date of December 31, 2011 were 24,392 MMcf. The outlook for natural gas pricing has improved significantly and a better pricing environment will be beneficial to the future operating performance of the Shackleton assets. Of its 2013 production, approximately 25% has been hedged at $3.65 per mcf.

OUTLOOK

The Corporation believes that the foundation for achieving future growth through its three operating platforms - the Real Storage Private Trust, Network Capital Management Inc. and the Shackleton Partnership - are now firmly in place. 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
As reported under International Financial Reporting Standards
CONSOLIDATED STATEMENTS OF INCOME
Unaudited Three months ended September 30 Nine months ended September 30
(Thousands of Canadian Dollars, except per share amounts) 2012 2011 2012 2011
Income
Natural gas sales $ 1,031 $ --- $ 3,095 $ ---
Royalties (191 ) --- (553 ) ---
Natural gas revenue 840 --- 2,542 ---
Income from investment property 293 288 887 866
Investment and other income 86 72 221 223
Foreign exchange gain 36 --- 42 ---
1,255 360 3,692 1,099
Expenses
Petroleum operations 393 --- 1,371 ---
Interest 377 293 1,120 872
General and administrative 190 44 796 239
Depletion, depreciation and amortization 368 --- 1,209 ---
Stock compensation 57 --- 139 ---
Foreign exchange loss --- 75 --- 59
1,385 412 4,635 1,170
Loss before gain on sale of investment, share of net loss from equity accounted investment and income tax expense (benefit) (130 ) (52 ) (943 ) (71 )
Gain on sale of investment in Parkbridge Lifestyle Communities Inc. --- --- --- 23,581
Share of net income (loss) from Real Storage Private Trust 91 39 138 (215 )
Share of net loss from Network Capital Management Inc. (12 ) (14 ) (16 ) (14 )
Share of net loss from Network 2012 Fund (5 ) --- (108 ) ---
Income (loss) before income taxes (56 ) (27 ) (929 ) 23,281
Income tax expense (benefit) (45 ) 8 (258 ) 3,075
Net income (loss) $ (11 ) $ (35 ) $ (671 ) $ 20,206
Net income (loss) attributable to:
Owners of the Corporation $ (123 ) $ (35 ) $ (586 ) $ 20,206
Non-controlling interest $ 112 $ --- $ (85 ) $ ---
$ (11 ) $ (35 ) $ (671 ) $ 20,206
Net income (loss) per share - basic $ (0.01 ) $ (0.00 ) $ (0.07 ) $ 2.52
Net income (loss) per share - diluted $ (0.01 ) $ (0.00 ) $ (0.07 ) $ 2.52
CONSOLIDATED BALANCE SHEET
Unaudited
(Thousands of Canadian Dollars)
September 30,
2012
December 31,
2011
Assets
Non-current assets
Investment property $ 18,239 $ 18,933
Investment in Real Storage Private Trust 7,234 7,096
Investment in Network Capital Management Inc. 1,740 1,755
Investment in Network 2012 Fund 4,830 ---
Natural gas properties and equipment 18,227 19,436
Deferred tax asset --- 135
50,270 47,355
Current assets
Loan to Network Capital Management Inc. --- 50
Receivables and other assets 1,095 923
Cash and cash equivalents 9,647 18,688
10,742 19,661
Total assets $ 61,012 $ 67,016
Liabilities
Non-current liabilities
Secured debt $ --- $ 19,403
Loan payable --- 1,615
Asset retirement obligations 740 708
Deferred tax liabilities 212 ---
952 21,726
Current liabilities
Secured debt 18,678 ---
Loan payable 1,613 ---
Accounts payable and accrued liabilities 969 1,481
Revolving loan facility 7,050 7,830
Income taxes payable --- 3,336
28,310 12,647
Total liabilities 29,262 34,373
Equity
Shareholders' equity 27,637 28,445
Non-controlling interest 4,113 4,198
Total liabilities and equity $ 61,012 $ 67,016
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Unaudited Three months ended September 30 Nine months ended September 30
(Thousands of Canadian Dollars) 2012 2011 2012 2011
Net income (loss) $ (11 ) $ (35 ) $ (671 ) $ 20,206
Foreign currency translation (24 ) 66 (29 ) (30 )
Fair value increment of available for sale securities --- --- --- (23,414 )
Share of other comprehensive loss from Network 2012 Fund (99 ) --- (380 ) ---
Future income taxes on above items 48 --- 48 3,285
Other comprehensive income (loss) (75 ) 66 (361 ) (20,099 )
Comprehensive income (loss) $ (86 ) $ 31 $ (1,032 ) $ 107
Comprehensive income (loss) attributable to:
Owners of the Corporation $ (198 ) $ 31 $ (947 ) $ 107
Non-controlling interest 112 --- (85 ) ---
$ (86 ) $ 31 $ (1,032 ) $ 107

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.

Boe Conversion: Certain natural gas volumes have been converted to barrels of oil equivalent ("boe") whereby 6,000 cubic feet (mcf) of natural gas is equal to 1 barrel (bbl) of oil. This conversion ratio (6:1) is based on an energy equivalency conversion applicable at the burner tip and does not represent a value equivalency at the wellhead.

Contact Information

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