TORONTO, Nov. 07, 2017 (GLOBE NEWSWIRE) -- Wilmington Capital Management Inc. (“Wilmington” or the “Corporation”) reported net loss attributable to shareholders for the three months ended September 30, 2017 of $1.9 million or ($0.18) per share compared to a net loss of $0.4 million or ($0.01) per share for the same period in 2016. For the nine months ended September 30, 2017, the Corporation generated a net loss attributable to shareholders of $1.8 million or ($0.18) per share compared to net loss of $1.1 million or ($0.11) per share for the same period in 2016.
THIRD 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”) completed a refinancing secured by mortgages totaling $41.0 million. After repayment of existing mortgages and bridge loans advanced by unitholders of the Trust and payment of a special distribution of $5.0 million ($2.1 million attributable to the Corporation), the Trust had approximately $11.1 million. The Trust paid a regular distribution of $0.4 million, during the period representing an annual return of 4% on invested capital.
In July, the Trust acquired a self-storage facility and a redevelopment property in Ontario for total consideration of $4.0 million. The Trust intends to convert the redevelopment property to a self-storage facility in 2018.
The Trust generated net operating income of $3.0 million for the three months ended September 30, 2017, a 3% increase over the comparable period in 2016. The Ontario properties continued to perform well and occupancy levels and operating margins continue to stabilize in Alberta.
Private equity
Northbridge’s assets under management of approximately $42.1 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 $21.7 million remains to be deployed.
Discontinued operations
In October 2017, the Shackleton Partnership entered into an agreement with a third party to purchase the natural gas property, plant and equipment and the associated decommissioning liabilities for $1.6 million (“Asset Sale”) with an effective date November 1, 2017. Concurrent with the Asset Sale, The Shackleton Partnership reached an agreement with its lender to discharge the amounts outstanding under the revolving loan facility for $1.6 million. As a result of the Asset Sale, an impairment charge of $3.4 million was recorded as at September 30, 2017 and an offsetting gain on the sale of the asset in the amount of $3.1 million will be recognized upon closing in the fourth quarter 2017.
The Corporation does not expect to receive a distribution when the Shackleton Partnership is wound-up in December 2017.
Subsequent event
In October 2017, the Corporation entered into a binding agreement to acquire an 18.15% interest in a recreation oriented property portfolio situated a 1.5 hour drive north of Toronto, Ontario. The portfolio comprises five operating marinas with over 100 acres of waterfront land, approximately 2,000 boat slips and development land. The net investment of $3.5 million is expected to generate attractive returns and provide longer-term upside. Wilmington will also own a 33.3% interest in the asset manager. The transaction is expected to close on November 30, 2017.
As at September 30, 2017, Wilmington had assets under management in its operating platforms of approximately $189.5 million ($70 million representing Wilmington’s share).
OPERATIONS REVIEW
Self-Storage Facilities Real Storage Private Trust
For the three months ended September 30, 2017, net operating income increased 3% compared to the same period in 2016, largely the result of continued strong performance of the Ontario properties and results from recently acquired properties. The properties in Western Canada showed signs of stabilization during the nine months ended September 30, 2017. In Ontario, the Trust completed the acquisition of two properties, an income producing property and a redevelopment property.
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 $400,000 had been funded as at September 30, 2017.
The Corporation anticipates it will receive approximately $0.7 million of its remaining share of capital invested in the Network 2012 Fund in the latter part of 2017. The Corporation expects the maturity date of the Network 2012 Fund to be extended up to December 31, 2019, with its remaining share of capital invested of $1.3 million to be realized during that time.
Northbridge’s assets under management amounted to approximately $42.1 million as at September 30, 2017, consistent with those managed at December 31, 2016.
The Shackleton Partnership production during the three months ended September 30, 2017 declined 12% compared to the same period in 2016 to 431 boe/d. The Shackleton Partnership realized a netback of $0.42 per mcf in the three months ended September 30, 2017, a decrease of $0.35 per mcf compared to the same period in 2016 which is primarily due to a 14% decrease in natural gas prices.
OUTLOOK Entering into the fourth quarter of 2017, the Corporation took steps to further increase its investments in assets that will generate income and provide upside over the longer term. The investment in an 18.5% interest recreation orientated property portfolio, which is scheduled to be completed in November 30, 2017, will meet both of these growth objectives. The Corporation will no longer be in natural gas hard assets and will focus on continuing to add scale to its operating platforms. The self-storage business is well funded to carry-out its strategy of acquiring and developing self-storage facilities in Canada and a number of acquisitions are being evaluated. The private equity platform is focused on deploying the balance of the capital raised in the Northbridge 2016 Fund which closed in the fall of 2016. Northbridge 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. Wilmington looks forward to completing its latest initiative and will continue to look at other initiatives where it can add value and deliver superior returns to shareholders.
FINANCIAL RESULTS CONSOLIDATED STATEMENTS OF LOSS
For the three months ended September 30,
For the nine months ended September 30,
(CDN $ Thousands, except per share amounts) (unaudited)
2017
2016
2017
2016
Revenues
37
118
80
245
Share of net income (loss) from equity accounted investees:
Real Storage Private Trust
290
(2
)
714
101
Northbridge Capital Partners Ltd.
(5
)
---
(47
)
(53
)
Network 2012 Limited Partners
(9
)
(12
)
(26
)
42
Gain on ownership change in Northbridge Capital Partners Ltd.
---
48
---
166
Expenses
General and administrative
(173
)
(182
)
(624
)
(605
)
Business development costs
---
(318
)
---
(473
)
Stock-based compensation
(23
)
(51
)
(69
)
(157
)
Income tax recovery (expense)
33
68
30
(29
)
Net income (loss) from continuing operations
150
(331
)
58
(763
)
Net loss from discontinued operations, net of tax
(3,390
)
(86
)
(3,167
)
(603
)
Net income (loss)
(3,240
)
(417
)
(3,109
)
(1,366
)
Net income (loss) from continuing operations attributable to:
Owners of the Corporation
150
(331
)
58
(763
)
Non-controlling interest
---
---
---
---
150
(331
)
58
(763
)
Net loss from discontinued operations attributable to:
Owners of the Corporation
(2,007
)
(51
)
(1,872
)
(357
)
Non-controlling interest
(1,383
)
(35
)
(1,295
)
(246
)
(3,390
)
(86
)
(3,167
)
(603
)
Net income (loss) per share from continuing operations:
Basic
0.02
(0.03
)
0.01
(0.07
)
Diluted
0.02
(0.03
)
0.01
(0.07
)
CONSOLIDATED BALANCE SHEETS
(unaudited)
(audited)
As at
September 30,
December 31,
(CDN $ Thousands)
2017
2016
Assets
NON-CURRENT ASSETS
Investment in Real Storage Private Trust
13,943
15,864
Investment in Northbridge Capital Partners Ltd.
233
280
Investment in Northbridge Fund 2016 Limited Partnership
400
100
Investment in Network 2012 Limited Partnership
1,955
2,019
Deferred income tax assets
624
606
17,155
18,869
CURRENT ASSETS
Accounts receivables and other assets
2,965
1,114
Cash
3,437
3,590
6,402
4,704
Assets held for sale
2,027
5,614
Total assets
25,584
29,187
Liabilities
CURRENT LIABILITIES
Accounts payable and accrued liabilities
621
682
621
682
Liabilities related to assets held for sale
4,951
5,371
Total liabilities
5,572
6,053
Equity
Shareholders’ equity
21,225
23,052
Non-controlling interest
(1,213
)
82
Total equity
20,012
23,134
Total liabilities and equity
25,584
29,187
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
For the three months ended September 30,
For the nine months ended September 30,
(CDN $ Thousands) (unaudited)
2017
2016
2017
2016
Net loss
(3,240
)
(417
)
(3,109
)
(1,366
)
Items that may be reclassified to net loss
Share of other comprehensive income (loss) from equity accounted investees
(13
)
112
(83
)
(161
)
Deferred income tax expense (recovery)
(3
)
(15
)
1
22
Other comprehensive income (loss)
(16
)
97
(82
)
(139
)
Comprehensive loss
(3,256
)
(320
)
(3,191
)
(1,505
)
Comprehensive loss attributable to:
Owners of the Corporation
(1,873
)
(285
)
(1,896
)
(1,259
)
Non-controlling interest
(1,383
)
(35
)
(1,295
)
(246
)
(3,256
)
(320
)
(3,191
)
(1,505
)
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.
Executive Officers of the Corporation will be available at 403-705-8038 to answer any questions on the Corporation’s financial results.
