WI Western Investment Company of Canada Limited

The Western Investment Company of Canada Limited (TSXV: WI) (“Western” or the “Corporation”) today reported its financial and operating results for the three months ended March 31, 2024. The interim financial statements and management’s discussion and analysis have been filed on SEDAR+. Unless otherwise indicated, financial figures are expressed in Canadian dollars and comparisons are to the prior period ended March 31, 2023.

The first quarter is generally slow for Western’s associate companies (“Associates”) that are seasonal, often leading to an equity loss which is completely in-line with expectations. Last year was an unusual exception in large part due to Western’s share of the $1.1 million one-time gain recognized on the sale of the Foothills Creamery warehouse in Kelowna. As income (loss) from equity investments returned to normal levels, total revenue for the three months ended March 31, 2024 decreased $588,072 compared with the same period in 2023 which benefited from the one-time gain and lower interest expenses. Removing one-time items would have resulted in equity earnings that were comparable between both periods. All Associates performed in-line with their budgets for the first quarter.

	Three Months Ended March 31,
$	2024	2023	Change
Income (loss) from equity investments	(271,751)	348,387	(620,138)
Finance income	190,415	158,349	32,066
Management fees	37,500	37,500	0
Total Revenue	(43,836)	544,236	(588,072)

“Our Associates are primed and well positioned as we head into our busy spring and summer season to deliver what we believe will be a solid year for Western,” said Scott Tannas, President and Chief Executive Officer of Western. “We deliberately built-up inventory levels through the first quarter at both GlassMasters and Foothills to ensure we have product on hand to meet customer demand. GlassMasters will also benefit from the four new locations it has added over the last year and the ICBC accreditation it received in the first quarter that will allow it to serve BC customers with insurance claims.

We have also made significant progress on our proposed transaction with Paul Rivett to transform Western into a property and casualty insurance and investment holding company, We expect to provide an update in the coming days on the status of this transaction.”

2023 Portfolio Company Report

Fortress Insurance Company (“Fortress”) Fortress’ strong growth trajectory continues to be driven by increased capacity across all of its products, and the recent addition of liability and transportation insurance to its product lineup. Despite management’s expectation of a softening insurance market, continued growth in written premiums is expected throughout the year with a focus on diversification of both product lines, geography, and a focus on growing business in Ontario, Manitoba, and Saskatchewan. New programs in Ontario and Alberta with established partners were also added during the first quarter.

Key Highlights:

• Gross written premiums grew 40% to $5.2 million compared with $3.7 million in the prior year.
• Q1 2024 includes two new programs, which didn’t exist in Q1 2023. Such programs add geographic diversity and class of insurance to the portfolio.
• Q1 2024 saw growth of 127% in its in-house offer and acceptance offerings.

For the three months ended March 31, 2024, Western recognized equity income of $16,630 from Fortress compared to $26,879 in equity income for the quarter ended March 31, 2023.

	Three Months Ended March 31,
$	2024	2023	Change
Insurance revenue	5,718,658	4,646,118	1,072,540
Insurance service result	192,484	460,297	(267,813	)
Investment income (loss)	265,278	308,445	(43,167	)
Net income (loss)	58,454	274,401	(215,947	)
Gross written premiums1	5,217,772	3,719,218	1,498,554

1 Supplementary financial measure – total gross insurance premiums written during the year.2 Prior year numbers have been restated to conform with the new standard, IFRS 17, Insurance Contracts, which was adopted by Fortress on January 1, 2023, with retrospective application.

GlassMasters Autoglass (“GlassMasters”)Stronger sales than expected in the quarter resulted in a slight reduction in margins due to lower inventory levels (creating the need to obtain glass at higher prices) and staff training that needed to occur sooner than budgeted. As a result, net income for the quarter came in just slightly below their budgeted loss of $510,000. Being a seasonal business a loss is expected for the first quarter.

Key Highlights:

• Revenue hit new record on a 14.5% increase to $7.6 million compared with $6.6 million in the prior year.
• The addition of one warehouse, two stores, and an investment in an existing full-service glass shop in 2023 positions GlassMasters for a strong year.
• GlassMasters' newest location in Kelowna is up and running, and Winnipeg is poised to open in the third quarter of 2024.

Foothills Creamery (“Foothills”)Foothills reported a net loss and EBITDA for the three months ended March 31, 2024 of $89,170 and $570,997 respectively. For the prior three months ended March 31, 2023, EBITDA and net income was inflated by a large one-time gain realized on the sale of real estate. Foothills sold their Kelowna warehouse in the first quarter of 2023 and is leasing the space back. Removing this $1.1 million gain from 2023 provides for an adjusted net loss of $404,101, and adjusted EBITDA of $401,450.

Key highlights:

• Gross Profit grew 15% to $1.75 million in Q1 2024 compared with $1.52 million in Q1 2023 as a result of a focus on higher margin products.
• If the gain on sale of real estate recognized in 2023 is removed, EBITDA grew 42% to $570,997 in Q1 2024 compared with $401,450 (adjusted) in Q1 2023.
• As at March 31, 2024, Foothills had $2.1 million more inventory on hand compared to March 31, 2023 and is well positioned for the spring and summer season.

Golden Health Care (“Golden”)For the period ended March 31, 2024 Western recognized equity income from Golden of $54,902 compared with a $14,532 loss for the period ended March 31, 2023.

Key Highlights:

• Revenue grew 10.4% to $2.4 million in Q1 2024 compared with $2.2 million in Q1 2023 as a result of efforts to improve occupancy at underutilized homes.
• Net income grew to $181,803 in Q1 2024 compared with a net loss of $49,105 in Q1 2023.
• EBITDA grew 109% to $483,793 in Q1 2024 compared with $230,971 in Q1 2023.

OutlookThe tremendous growth in gross written premiums at Fortress is expected to moderate somewhat as it navigates its entry into the Ontario marketplace. Fortress continues to work on adding new product offerings to its lineup. GlassMasters is expected to continue its trend of revenue growth. The cool spring, has tempered Foothills forecasts for 2024 somewhat affecting the demand for ice cream, which will be highly dependent on a return to more seasonal warmer temperatures.

About the TransactionThe Transaction proposes an investment of at least $20 million from companies affiliated with Paul Rivett to transform Western into an insurance and investment holding company. The concurrent rights offering is expected to raise up to an additional $30 million. Upon the successful closing of the Transaction, Paul Rivett is to be appointed to President and Chief Executive Officer of Western with the following initial priorities:

• Grow the Fortress platform to $100 million per annum in written premiums by 2028 through a combination of prudent organic growth and accretive acquisitions; and
• Continue managing Western’s non-insurance holdings as long-term investments.

You can watch a recording of the webcast that took place on March 27, 2024 here.

Completion of the Transaction (including any rights offering) is subject to a number of conditions including, but not limited to, acceptance of the TSX Venture Exchange (the "Exchange" or "TSXV"), shareholder approval, and various other conditions. The Transaction as contemplated constitutes a Change of Business under the policies of the TSXV. There is a risk that the Transaction will not be accepted or that the terms of the Transaction may change substantially prior to acceptance.

About The Western Investment Company of Canada Limited Western is a unique publicly traded, private equity company founded by a group of successful Western Canadian businesspeople, and dedicated to building and maintaining ownership in successful Western Canadian companies, and helping them to grow. Western's shares are traded on the Exchange under the symbol WI.

For more information on Western, please visit its website at www.winv.ca.

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CONTACT INFORMATION - The Western Investment Company of Canada Limited

Scott Tannas President and Chief Executive Officer (403) 652-0408 stannas@winv.ca  

Advisories Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable, disinterested shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Western should be considered highly speculative.

The TSXV has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this news release.

This news release may contain certain forward-looking information and statements, including without limitation, statements pertaining to future results and plans for Western and its associated companies, acquisitions, financings and returns. Statements containing the words: 'believes', 'intends', 'expects', 'plans', 'seeks' and 'anticipates' and any other words of similar meaning are forward-looking. All statements included herein involve various risks and uncertainties because they relate to future events and circumstances beyond Western's control.

More particularly, this document contains statements concerning: the completion of the transactions contemplated by the Definitive Agreement (as defined in the March 22, 2024 news release), including the completion of the Transaction, the appointment of the new CEO and additional directors; the use of proceeds from the Transaction; the future strategy and focus for Western; and future acquisitions and growth opportunities. Readers are cautioned that the foregoing list of factors should not be construed as exhaustive.

The forward-looking statements are based on certain key expectations and assumptions made by Western, including expectations and assumptions concerning the ability of Western to successfully implement its strategic plans and initiatives, the timing of receipt of required shareholder and regulatory approvals (including TSXV approval) and third party consents and the satisfaction of other conditions to the completion of the Transaction.

Although Western believes that the expectations and assumptions on which the forward-looking statements made by Western are based are reasonable, undue reliance should not be placed on the forward-looking statements because no assurance can be provided that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks that required shareholder, TSXV, regulatory and third party approvals and consents are not obtained on terms satisfactory to the parties within the timelines provided for in the Definitive Agreement, or at all, and risks that other conditions to the completion of the Transaction are not satisfied on the timelines set forth in the Definitive Agreement or at all, the ability of management to execute its business strategy, and the impact of general economic conditions in Canada and the United States. A description of additional assumptions used to develop such forward-looking information and a description of risk factors that may cause actual results to differ materially from forward-looking information can be found in Western's disclosure documents on the SEDAR+ website at www.sedarplus.ca.

The forward-looking statements contained in this news release are made as of the date hereof and Western undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

This news release also contains financial outlook information ("FOFI") about prospective results of operations and book value, which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth in the above paragraphs. FOFI contained in this news release was made as of the date of this news release to provide information about management's current expectations and plans relating to the future. Readers are cautioned that such information may not be appropriate for any other purpose. Western disclaims any intention or obligation to update or revise any FOFI contained in this news release, whether as a result of new information, future events or otherwise, except as required by applicable law.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The rights issued under any rights offering and underlying Single Voting Shares and the Multiple Voting Shares (as defined in the March 22, 2024 news release) being offered have not been, nor will they be, registered under the 1933 Act or under any U.S. state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the 1933 Act, as amended, and applicable state securities laws.

"Neither the TSX Venture Exchange nor its Regulatory Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release."