Wilmington Announces 2011 Fourth Quarter Results
24 März 2012 - 1:00AM
Marketwired Canada
Wilmington Capital Management Inc. (TSX:WCM.A)(TSX:WCM.B) today announced a net
loss for the three months ended December 31, 2011 of $485,000 or ($0.06)
compared to a net income of $70,000 or $0.01 for the same period in 2010. For
the year ended December 31, 2011, net income amounted to $19.7 million or $2.43
per share compared to a net income of $37,000 or $0.00 per share for the same
period in 2010.
In 2011, Wilmington completed its strategic plan and took comprehensive steps to
broaden its investment strategy to include selective investments in the energy
as well as the real estate sectors. The Corporation's principal objective will
continue to focus on investments capable of generating appreciation in value as
opposed to current income and on maximizing shareholder returns by investing its
own capital alongside partners and co-investors in hard assets and private
equity fund. These assets will be managed through existing operating platforms
where the Corporation can add scale and improve valuations.
On January 7, 2011, British Columbia Investment Management Corporation ("bcIMC")
purchased all of the issued and outstanding shares in Parkbridge at a price of
$7.30 per common share. Pursuant to this transaction, Wilmington received $40.6
million in gross proceeds, realized a pre-tax gain of $23.6 million and repaid
its loan payable secured by the Parkbridge shares of $14.6 million.
In February 2011, Wilmington acquired a 46.15% indirect interest in a portfolio
of five self-storage facilities and two development properties through its
interest in Real Storage Private Trust (the "Trust"). The five operating
facilities are in the initial lease up stage and are expected to reach
stabilized occupancy and cash flow in 2012. Wilmington's share of the cash
consideration required to complete this transaction totaled $4.125 million and
consisted of a $2.5 million subscription for additional equity in the Trust and
a $1.625 million bridge loan advanced to the Trust. The bridge loan was due on
demand and bore interest at 7% per annum. During the second quarter, the bridge
loan and accrued interest were repaid with proceeds from the sale of one of the
Trust's development properties. The Trust now owns 17 self-storage facilities
comprising 645,978 square feet of rentable area and one development property.
On August 17, 2011, the Corporation acquired 50% of the issued and outstanding
voting shares in Network Capital Management Inc. ("NCI") for consideration
consisting of 589,673 Class A shares issued by the Corporation. NCI is an
investment company focused on private equity having a mandate to identify and
invest in early stage opportunities in energy, energy services, real estate and
special situations. Pursuant to the transaction, the vendor retains control of
day to day operations for a period of two years. During the year ended December
31, 2011, the Corporation loaned $50,000 to NCI by way of a non interest bearing
promissory notes for working capital purposes. The loan is due on demand.
On October 26, 2011, the Corporation, through the Shackleton Partnership,
acquired a 100% working interest in certain natural gas producing and processing
assets in the Shackleton Field in Saskatchewan. The aggregate cost of the
acquisition including closing costs, amounted to approximately $19 million and
was funded by a combination of cash and debt. Wilmington's share of the cash
consideration to complete the acquisition was $6.215 million which was funded by
providing cash for subscription units in the Shackleton Partnership. The
Corporation's effective interest in the Shackleton Partnership is 59%. The
remaining 41% indirect interest was acquired by four other investors in equal
amounts and their share of the cash consideration to complete the acquisition
was $4.285 million which was funded by providing cash for subscription units in
the Shackleton Partnership. In connection with the acquisition, the Shackleton
Partnership also entered into a credit facility with a Canadian bank in the
amount of $9 million of which $8.5 million was drawn to fund the acquisition.
The credit facility is secured by the assets. The assets are being
professionally managed by Airwell Services Ltd. (the "Operator"), an entity
whose purpose is to provide management services to the Shackleton Partnership.
Wilmington has a 51% direct interest in the Operator. The remaining 49% interest
is held by another entity with over 30 years of oil and gas field operations
experience.
Wilmington also owns land leased to commercial property owners which is located
at 370 Third Street in San Francisco, California. During the fourth quarter of
2010, Wilmington reorganized its investment in this property and entered into a
new secured credit facility on which $1.6 million net is drawn, bears interest
at 4% per annum and is repayable on January 1, 2013. At maturity this credit
facility is payable, at the borrower's discretion, in cash or in shares of the
Corporation's wholly owned subsidiary which owns the property.
Beginning January 1, 2011, the Corporation has prepared its financial statements
in accordance with IFRS. Accordingly, certain adjustments were made to comply
with IFRS for the current and comparable periods.
2012 OUTLOOK
In 2011, the Corporation took significant steps to put in place the foundation
for achieving future growth by investing in three operating platforms - the
Trust, NCI and the Shackleton Partnership. In 2012 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
As reported under International Financial Reporting Standards
CONSOLIDATED STATEMENTS OF INCOME
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Three months ended Years ended
Unaudited December 31 December 31
(Thousands of Canadian Dollars,
except per share amounts) 2011 2010 2011 2010
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Income
Natural gas sales $ 1,124 $ --- $ 1,124 $ ---
Royalties (218) --- (218) ---
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Natural gas revenue 906 --- 906 ---
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Income from investment property 302 299 1,168 1,219
Investment and other income 81 211 314 631
Foreign exchange gain --- 34 --- 62
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1,289 544 2,388 1,912
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Expenses
Petroleum operations 740 --- 740 ---
Interest 359 472 1,231 1,600
General and administrative 343 132 582 296
Depletion, depreciation and
amortization 303 --- 303 ---
Stock compensation 30 --- 30 ---
Foreign exchange loss (5) --- 54 ---
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1,770 604 2,940 1,896
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Income (loss) before gain on
sale, share of net loss from
equity accounted investment and
income tax expense (benefit) (481) (60) (552) 16
Gain on sale of investment in
Parkbridge Lifestyle
Communities Inc. --- --- 23,581 ---
Share of net loss from Real
Storage Private Trust (8) 44 (223) (181)
Share of net loss from Network
Capital Management Inc. (59) --- (73) ---
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Income (loss) before income
taxes (548) (16) 22,733 (165)
Income tax expense (benefit) (63) (86) 3,012 (202)
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Net Income (loss) $ (485) $ 70 $ 19,721 $ 37
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Net income (loss) attributable
to:
Owners of the Corporation $ 572 $ --- $ 19,808 37
Non-controlling interest (87) --- $ (87) ---
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$ (485) $ --- 19,721 37
Net income (loss) per share -
basic $ (0.06) $ 0.01 $ 2.43 $ 0.00
Net income (loss) per share -
diluted $ (0.06) $ 0.01 $ 2.43 $ 0.00
CONSOLIDATED BALANCE SHEET
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Unaudited December 31, December 31, January 1,
(Thousands of Canadian Dollars) 2011 2010 2010
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Assets
Non-current assets
Investment property $ 18,933 $ 18,507 $ 19,489
Investment in Real Storage
Private Trust 7,096 4,819 ---
Investment in Network Capital
Management Inc. 1,755 --- ---
Investment in Parkbridge
Lifestyle Communities Inc. --- 40,466 28,109
Natural gas properties and
equipment 19,436 --- ---
Deferred tax asset 135 --- ---
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47,355 63,792 47,598
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Current assets
Loan to Network Capital
Management Inc. 50 --- ---
Receivables and other assets 923 67 56
Cash and cash equivalents 18,688 2,085 1,569
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19,661 2,152 1,625
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Total assets $ 67,016 $ 65,944 $ 49,223
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Liabilities
Non-current liabilities
Secured debt $ 19,403 $ 18,949 $ 19,962
Loan payable 1,615 16,103 10,501
Asset retirement obligations 708 --- ---
Deferred tax liabilities --- 3,431 1,933
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21,726 38,483 32,396
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Current liabilities
Accounts payable and accrued
liabilities 1,481 588 700
Revolving loan facility 7,830 --- ---
Income taxes payable 3,336 --- ---
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12,647 588 700
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Total liabilities 34,373 39,071 33,096
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Equity
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Shareholders' equity 28,445 26,873 16,127
Non-controlling interest 4,198 --- ---
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Total liabilities and equity $ 67,016 $ 65,944 $ 49,223
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
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Unaudited Three months ended
December 31 Year ended December 31
(Thousands of Canadian
Dollars) 2011 2010 2011 2010
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net income (loss) $ (485) $ 70 $ 19,721 $ 37
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Foreign currency
translation 3 (23) 33 (55)
Reversal of the fair
value increment of
available for sale
securities --- 9,587 (23,414) 12,357
Future income taxes on
above items 2 (1,102) 3,287 (1,583)
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Other comprehensive
income (loss) 5 8,272 (20,094) 10,709
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Comprehensive income
(loss) $ (480) $ 8,342 $ (373) $ 10,746
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Comprehensive income
(loss) attributable to:
Owners of the
Corporation $ (393) $ 8,342 $ (286) $ 10,746
Non-controlling
interest (87) --- (87) ---
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$ (480) $ 8,342 $ (373) $ 10,746
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.
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