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

Wilmington Capital Management Inc.

August 09, 2017 18:20 ET

Wilmington Announces 2017 Second Quarter Results

TORONTO, ONTARIO--(Marketwired - Aug. 9, 2017) - Wilmington Capital Management Inc. ("Wilmington" or the "Corporation") (TSX:WCM.A)(TSX:WCM.B) reported net income attributable to shareholders for the three months ended June 30, 2017 of $28,000 or $0.00 per share compared to a net loss of $0.3 million or ($0.02) per share for the same period in 2016. For the six months ended June 30, 2017, the Corporation generated a net income attributable to shareholders of $40,000 or $0.00 per share compared to net loss of $0.7 million or ($0.07) per share for the same period in 2016.

SECOND 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 $2.7 million for the three months ended June 30, 2017, an 11% increase over the comparable period in 2016. The Ontario properties continued to perform well and occupancy levels and operating margins are continuing to stabilize in Alberta.
  • In May 2017, the Trust acquired a facility in Ontario for total consideration of $4.8 million.
  • In June 2017, the Trust completed the expansion of two facilities, adding approximately 19,000 square feet of rentable area.
  • The Trust distributed $0.4 million (Q2 2016 - $0.4 million) to unit holders during the period representing an annual return of 4% on invested capital.

Private equity

  • Northbridge's assets under management of approximately $43.0 million were consistent with those managed at December 31, 2016. The most recent energy fund raised in late 2016 amounted to $32.4 million of which approximately $22.2 million remains to be deployed.

Discontinued operations

  • The Shackleton 2011 Limited Partnership ("Shackleton Partnership") publicly marketed the assets during the three and six months ended June 30, 2017. Management continues to evaluate all offers received to date. A sale is expected to be completed in 2017.

As at June 30, 2017, Wilmington had assets under management in its operating platforms of approximately $172.6 million ($61 million representing Wilmington's share).

OPERATIONS REVIEW

Self-Storage Facilities

Real Storage Private Trust

For the three months ended June 30, 2017, net operating income increased 11% 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 six months ended June 30, 2017. In Ontario, the Trust completed the expansion of two properties, adding approximately 19,000 net rentable square feet and acquired a facility in Ontario. Subsequent to June, 30, 2017, the Trust acquired two additional facilities in Ontario.

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 $32.4 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 June 30, 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 $43.0 million as at June 30, 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 six months ended June 30, 2017 declined 10% compared to the same period in 2016 to 446 boe/d. The Shackleton Partnership realized a netback of $0.85 per mcf in the six months ended June 30, 2017, an increase of $0.70 per mcf compared to the same period in 2016 which is primarily due to a 55% increase in natural gas prices. The Shackleton Partnership publicly marketed the assets during the six months ended June 30, 2017. The marketing program is ongoing and management is evaluating next steps, with a sale expected to be completed in 2017.

The Shackleton Partnership has fully drawn the $3.87 million available under its Revolving Loan Facility. The amount available is reduced monthly by increments of $50,000. The loan is secured solely by a floating fixed charge over the assets of the Shackleton Partnership.

OUTLOOK

The Corporation continues to grow 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 has adopted a disciplined approach to investing capital and 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. 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 June 30,
For the six months
ended June 30,
(CDN $ Thousands, except per share amounts) (unaudited) 2017 2016 2017 2016
Revenue
Investment and other income 21 92 43 127
Expenses
General and administrative 247 203 451 423
Business development costs --- 155 --- 155
Stock-based compensation 23 53 46 106
Loss from continuing operations before the undernoted (249 ) (319 ) (454 ) (557 )
Share of net income from Real Storage Private Trust 223 48 425 103
Share of net loss from Northbridge Capital Partners Ltd. (15 ) (21 ) (43 ) (53 )
Gain on ownership change in Northbridge Capital Partners Ltd. --- 118 --- 118
Share of net income (loss) from Network 2012 Limited Partnership (9 ) 132 (17 ) 54
Loss from continuing operations before income taxes (50 ) (42 ) (89 ) (335 )
Income tax expense 4 49 3 97
Net loss from continuing operations (54 ) (91 ) (92 ) (432 )
Net income (loss) from discontinued operations, net of tax 138 (303 ) 223 (517 )
Net income (loss) 84 (394 ) 131 (949 )
Net loss from continuing operations attributable to:
Owners of the Corporation (54 ) (91 ) (92 ) (432 )
Non-controlling interest --- --- --- ---
(54 ) (91 ) (92 ) (432 )
Net income (loss) from discontinued operations attributable to:
Owners of the Corporation 82 (180 ) 132 (306 )
Non-controlling interest 56 (123 ) 91 (211 )
138 (303 ) 223 (517 )
Net loss per share from continuing operations:
Basic (0.01 ) (0.01 ) (0.01 ) (0.04 )
Diluted (0.01 ) (0.01 ) (0.01 ) (0.04 )

CONSOLIDATED BALANCE SHEETS

(unaudited) (audited)
As at June 30, December 31,
(CDN $ Thousands) 2017 2016
Assets
NON-CURRENT ASSETS
Investment in Real Storage Private Trust 15,933 15,864
Investment in Northbridge Capital Partners Ltd. 237 280
Investment in Network 2012 Limited Partnership 270 100
Investment in Northbridge Fund 2016 Limited Partnership 1,977 2,019
Deferred income tax assets 608 606
19,025 18,869
CURRENT ASSETS
Accounts receivables and other assets 1,290 1,114
Cash 3,069 3,590
4,359 4,704
Assets held for sale 5,551 5,614
Total assets 28,935 29,187
Liabilities
CURRENT LIABILITIES
Accounts payable and accrued liabilities 604 682
604 682
Liabilities related to assets held for sale 5,085 5,371
Total liabilities 5,689 6,053
Equity
Shareholders' equity 23,073 23,052
Non-controlling interest 173 82
Total equity 23,246 23,134
Total liabilities and equity 28,935 29,187

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

For the three months
ended June 30,
For the six months
ended June 30,
(CDN $ Thousands) (unaudited) 2017 2016 2017 2016
Net income (loss) 84 (394 ) 131 (949 )
Items that may be reclassified to net income (loss)
Share of other comprehensive loss from equity accounted investees (37 ) (110 ) (70 ) (273 )
Deferred income tax expense (recovery) (7 ) (15 ) (5 ) (37 )
Other comprehensive loss (30 ) (95 ) (65 ) (236 )
Comprehensive income (loss) 54 (489 ) 64 (1,185 )
Comprehensive income (loss) attributable to:
Owners of the Corporation (2 ) (366 ) (27 ) (974 )
Non-controlling interest 56 (123 ) 91 (211 )
54 (489 ) 64 (1,185 )

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.

Contact Information

  • Wilmington Capital Management Inc.
    Executive Officers
    403-705-8038