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

Wilmington Capital Management Inc.

May 14, 2013 20:00 ET

Wilmington Announces 2013 First Quarter Results

TORONTO, ONTARIO--(Marketwired - May 14, 2013) - Wilmington Capital Management Inc. (TSX:WCM.A)(TSX:WCM.B) ("Wilmington" or the "Corporation") today announced a net loss attributable to shareholders for the three months ended March 31, 2013 of $57,000 or ($0.01) compared to a net loss attributable to shareholders of $324,000 or ($0.04) for the same period in 2012.

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.

Operating Highlights

Business Strategy

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 the first 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. As at May 14, 2013, Wilmington had assets under management in its operating platforms of approximately $148 million ($68 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 2013 as the five properties in western Canada, which were for the most part in the initial lease up stage, approached stabilized occupancy levels. During the first quarter of 2013, occupancy levels averaged 78%, compared to 75% in 2012. Operating margins in the first quarter of 2013 improved to 51% up from 43% for the comparable quarter in 2012.

Subsequent to March 31, 2013, the Trust acquired two self-storage facilities - one located in the western region in Red Deer, Alberta (the "Alberta Facility") and the other located in the eastern region in Barrie, Ontario (the "Ontario Facility"). The Alberta Facility is comprised of approximately 78,000 square feet of rentable area, a portable storage business and a file retention business. The Ontario Facility is comprised of approximately 39,000 square feet of rentable area with an additional 12,000 square foot expansion currently under construction. The two acquisitions were funded by two separate five-year, fixed-rate mortgages, an unsecured credit facility, equity of the Trust and available cash. Wilmington's cash contribution was $2.5 million bringing its total investment in the Trust to approximately $10 million.

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

Network Capital Management Inc. (50% owned) has funds under management now totalling approximately $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 Network 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 the three months ended March 31, 2013 was $3.17 per mcf and operating netbacks averaged $1.90 per mcf (realized price of $2.10/mcf and netbacks of $0.65/mcf for the comparable period in 2012). Natural gas production volumes for the 100% interest in the Shackleton field amounted to 4,452 mcf per day (742 boepd). 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 of 2012, the Corporation took 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.

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

CONSOLIDATED STATEMENTS OF INCOME

Unaudited Three months ended March 31
(Thousands of Canadian Dollars, except per share amounts) 2013 2012
Income
Natural gas sales $ 1,275 $ 1,130
Royalties (177 ) (191 )
Natural gas revenue 1,098 939
Investment and other income 38 32
Foreign exchange gain --- 27
1,136 998
Expenses
Petroleum operations 334 602
General and administrative 340 301
Depletion, depreciation and amortization 388 439
Stock compensation 46 41
Foreign exchange loss 28 ---
Operating loss --- (385 )
Finance costs 78 86
Loss before share of equity accounted investments and income taxes (78 ) (471 )
Share of net income (loss) from Real Storage Private Trust 23 (30 )
Share of net loss from Network Capital Management Inc. (22 ) (24 )
Share of net loss from Network 2012 Fund (38 ) ---
Loss before income taxes from continuing operations (115 ) (525 )
Income tax benefit 16 142
Net Loss from continuing operations (99 ) (383 )
Income (loss) from discontinued operations, net of tax 95 (15 )
Net Loss $ (4 ) $ (398 )
Net Loss attributable to:
Owners of the Corporation $ (57 ) $ (324 )
Non-controlling interest 53 (74 )
$ (4 ) $ (398 )
Net Loss per share from continuing operations
Basic $ (0.02 ) $ (0.04 )
Diluted $ (0.02 ) $ (0.04 )
Net Loss per share
Basic $ (0.01 ) $ (0.04 )
Diluted $ (0.01 ) $ (0.04 )

CONSOLIDATED BALANCE SHEET

(Thousands of Canadian Dollars) March 31, 2013 December 31, 2012
Assets
Non-current assets
Investment in Real Storage Private Trust 7,294 7,271
Investment in Network Capital Management Inc. 1,690 1,712
Investment in Network 2012 Fund 7,777 7,554
Natural gas property, plant and equipment 17,606 17,840
34,367 34,377
Current assets
Income taxes receivable 494 435
Receivables and other assets 784 885
Cash and cash equivalents 6,502 6,601
7,780 7,921
Assets held for sale 19,243 18,541
27,023 26,462
Total assets $ 61,390 $ 60,839
Liabilities
Non-current liabilities
Asset retirement obligations 758 750
Deferred tax liabilities 343 259
1,101 1,009
Current liabilities
Accounts payable and accrued liabilities 936 1,024
Revolving loan facility 6,300 6,700
7,236 7,724
Liabilities held for sale 22,095 21,432
29,331 29,156
Total liabilities 30,432 30,165
Equity
Shareholders' equity 27,091 26,860
Non-controlling interest 3,867 3,814
Total equity 30,958 30,674
Total liabilities and equity $ 61,390 $ 60,839

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Unaudited Three months ended March 31
(Thousands of Canadian Dollars) 2013 2012
Net Loss $ (4 ) $ (398 )
Items that may subsequently be reclassified to Profit or Loss
Share of other comprehensive loss from Network 2012 Fund 261 ---
Future income taxes on above items (34 ) ---
Other comprehensive income from continuing operations 227 ---
Items that may subsequently be reclassified to Profit or Loss
Other comprehensive (loss) income from discontinued operations, net of tax 15 (17 )
Total other comprehensive income (loss) 242 (17 )
Comprehensive income (loss) $ 238 $ (415 )
Comprehensive income (loss) attributable to:
Owners of the Corporation $ 185 $ (341 )
Non-controlling interest 53 (74 )
$ 238 $ (415 )

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