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
----------------------------------------------------------------------------
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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.
Contacts: Wilmington Capital Management Inc. (403) 800-0869
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