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 December 31, 2013 of $466,000 or $0.05 per share compared to
a net loss of $938,000 or ($0.11) per share for the same period in 2012. For the
year ended December 31, 2013, the Corporation generated a net income
attributable to shareholders of $723,000 or $0.08 per share compared to a net
loss of $1.5 million or ($0.18) per share for the same period in 2012.
To view a full copy of the Corporation's audited financial results for the year
ended December 31, 2013 including the Corporation's audited consolidated
financial statements and accompanying MD&A, please refer to the SEDAR website
www.sedar.com.
FOURTH QUARTER 2013 HIGHLIGHTS
During the fourth quarter, the Corporation took further steps to solidify and
build upon the foundation of its three operating platforms - self storage
facilities, private equity funds and natural gas assets. For the three months
ended December 31, 2013, the Corporation:
-- Realized a distribution of $76,000 from Real Storage Private Trust
representing the Corporation's share of a 3% per annum distribution on
invested capital which is paid quarterly.
-- Realized a distribution of $716,000 from the Network 2012 Fund
representing the Corporation's share of the distribution of proceeds on
the sale of an oil and gas investment which $502,000 represents a return
of capital.
-- Generated $1.0 million in revenue during the fourth quarter of 2013,
compared to $1.2 million during the same period in 2012. This decrease
was primarily due to decrease in natural gas production which was offset
by higher natural gas prices.
-- Reported net income from continuing operations of $466,000 compared to a
loss of $293,000 during the same period in 2012, of which $540,000
related to an income tax recovery.
As at December 31, 2013, Wilmington had assets under management in its operating
platforms of approximately $144 million ($56 million representing Wilmington's
share).
OPERATIONS REVIEW
Wilmington continues to execute it principal objectives of making investments
capable of generating appreciation in value as opposed to current income and to
maximize shareholder returns by investing its own capital alongside partners and
co-investors in hard assets and private equity funds. These assets are managed
through the Corporation's operating platforms where Wilmington can add scale and
improve valuations.
Storage Facilities
Real Storage Private Trust ("Trust")
The Trust (42.13% owned) owns 20 self-storage facilities comprising 787,000
square feet of rentable area and one development property. The Trust recorded
significant improvements in 2013 as the facilities in Western Canada, which were
for the most part in the initial lease up stage, achieved stabilized occupancy
levels. During 2013, same store occupancy levels averaged 82%, compared to 78%
in 2012. Same store operating margins improved to 56% in 2013 from 52% in 2012.
During the third quarter 2013, the Trust commenced quarterly distributions to
its unit holders equivalent to 3% per annum on invested capital. For the year
ended December 31, 2013, quarterly distributions paid by the Trust were $336,000
(Corporation's share - $151,000).
Private Equity
Network Capital Management Inc. ("NCI") and Network 2012 Fund
NCI (50% owned) has funds under management now totaling approximately $39.4
million and the majority of Network's available capital has been successfully
deployed in a strong mix of junior oil and gas and service companies. Wilmington
invested $8.0 million of capital in the Network 2012 Fund.
During fourth quarter of 2013, the Network 2012 Fund distributed $2.0 million in
proceeds from the disposition of an investment, net of fees to unit holders
(Corporation's share - $716,000). Approximately $1.4 million represents a return
of capital (Corporation's share - $502,000).
Natural Gas Assets
Shackleton 2011 Limited Partnership (the "Shackleton Partnership" or the
"Partnership")
The Shackleton Partnership (59% owned) owns a 100% interest in natural gas wells
in southwestern Saskatchewan. The weighted average price realized during 2013
was $3.16 per mcf and operating netbacks averaged $1.67 per mcf (realized price
of $2.33 per mcf and netbacks of $0.98 per mcf for the comparable period in
2012). The Partnership's natural gas production volumes amounted to 4,170 mcf
per day (695 boe per day) for the year. Of its 2014 production, approximately
50% has been hedged under fixed price contracts with an average price of $3.61
per GJ.
Northpoint Resources Ltd. ("Northpoint")
On July 30, 2013, the Corporation added to its natural gas platform by investing
in Northpoint, a privately held oil and gas producer with assets in the Altares
region of northeastern British Columbia. Northpoint's production during since
July 30, 2013 was 6,862 mcfe per day (1,144 boe per day) and as at December 31,
2013 had total proved plus probable reserves totaling approximately 7,650 Mboe
(45,900 Mmcfe). The Corporation acquired a 36.5% ownership interest in
Northpoint for total cash consideration of $2.2 million. In addition and as part
of an overall recapitalization plan, Wilmington acquired $798,000 of a 10%, $5.0
million debenture issue in Northpoint which matures on August 1, 2017.
Northpoint is professionally managed by an experienced executive team. As part
of the transaction, the Corporation is entitled to nominate three of the seven
directors to the Northpoint board.
Discontinued Operations
On July 31, 2013, the Corporation completed the sale of its interests in
commercial land in San Francisco, California. The Corporation received total
proceeds of USD $20.0 million comprised of cash proceeds of USD $983,000 and the
transfer of the secured debt of USD $19.0 million to the purchaser. Cash
proceeds from the sale were used to settle certain loans payable. The sale was
part of the steps in rationalizing the Corporation's core business.
Outlook
2012 and 2013 have been formative years and the Corporation believes that the
foundation for achieving future growth through its three operating platforms -
self-storage, private equity and oil and natural gas - is now in place. 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 RESULTS
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
----------------------------------------------------------------------------
(unaudited) (audited)
Three months ended Years ended
December 31, December 31,
(CDN $ Thousands, except per share
amounts) 2013 2012 2013 2012
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Revenue
Natural gas sales 1,172 1,403 4,812 4,498
Royalties (220) (269) (801) (822)
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Natural gas revenue 952 1,134 4,011 3,676
Investment and other income 48 40 274 233
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1,000 1,174 4,285 3,909
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Expenses
Petroleum operations 387 469 1,463 1,808
General and administrative 320 425 1,325 1,201
Depletion, depreciation and
amortization 375 419 1,498 1,628
Stock-based compensation 52 71 177 210
Foreign exchange loss (gain) 43 9 144 (33)
Finance costs 67 95 317 377
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1,244 1,488 4,924 5,191
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Loss before share of equity
accounted investments and income
taxes (244) (314) (639) (1,282)
Dilution gain of investment in Real
Storage Private Trust 2 12 2 12
Share of net income from Real
Storage Private Trust 154 25 422 163
Share of net loss from Network
Capital Management Inc. (2) (27) (61) (43)
Loss on revaluation of investment in
Network Capital Management Inc. --- --- (1,584) ---
Share of net income (loss) from
Network 2012 Fund 171 (39) 59 (147)
Share of net loss from Northpoint
Resources Ltd. (119) --- (359) ---
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Loss before income taxes from
continuing operations (38) (343) (2,160) (1,297)
Income tax benefit 504 50 595 327
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Net loss from continuing operations 466 (293) (1,565) (970)
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Income (loss) from discontinued
operations, net of tax --- (944) 2,579 (938)
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Net income (loss) 466 (1,237) 1,014 (1,908)
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Net income (loss) attributable to:
Owners of the Corporation 466 (938) 723 (1,524)
Non-controlling interest --- (299) 291 (384)
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466 (1,237) 1,014 (1,908)
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(CDN $ per share)
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Net loss per share from continuing
operations
Basic 0.05 --- (0.22) (0.07)
Diluted 0.05 --- (0.22) (0.07)
Net income (loss) per share
Basic 0.05 (0.11) 0.08 (0.18)
Diluted 0.05 (0.11) 0.08 (0.18)
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CONSOLIDATED BALANCE SHEET
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(audited)
As at December 31,
(CDN $ Thousands) 2013 2012
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Assets
Non-current assets
Investment in Real Storage Private Trust 10,079 7,271
Investment in Network Capital Management Inc. 67 1,712
Investment in Network 2012 Fund 8,341 7,554
Investment in Northpoint Resources Ltd. 1,819 ---
Northpoint Debenture 798 ---
Natural gas property, plant and equipment 16,597 17,840
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37,701 34,377
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Current assets
Loan to Network Capital Management Inc. 25 ---
Income tax receivable 299 435
Receivables and other assets 1,451 885
Cash and cash equivalents 730 6,601
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2,505 7,921
Assets held for sale --- 18,541
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2,505 26,462
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Total assets 40,206 60,839
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Liabilities
Non-current liabilities
Decommissioning liabilities 792 750
Deferred tax liabilities 65 259
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857 1,009
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Current liabilities
Accounts payable and accrued liabilities 991 1,024
Revolving loan facility 5,200 6,700
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6,191 7,724
Liabilities held for sale --- 21,432
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6,191 29,156
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Total liabilities 7,048 30,165
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Equity
Shareholders' equity 29,053 26,860
Non-controlling interest 4,105 3,814
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Total equity 33,158 30,674
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Total liabilities and equity 40,206 60,839
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
----------------------------------------------------------------------------
(unaudited) (audited)
Three months ended Years ended
December 31, December 31,
(CDN $ Thousands) 2013 2012 2013 2012
----------------------------------------------------------------------------
Net income (loss) 466 (1,237) 1,014 (1,908)
Items that may subsequently be
reclassified to net income (loss)
Share of other comprehensive
income (loss) from Network 2012
Fund 1,009 81 1,444 (299)
Deferred income (taxes) benefit on
above items (130) (9) (190) 39
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Other comprehensive income (loss)
from continuing operations 879 72 1,254 (260)
Items reclassified to net income
(loss), net of tax 50 18 50 ---
Items that may subsequently be
reclassified to net income (loss)
Other comprehensive income (loss)
from discontinued operations, net
of tax --- (14) (11)
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Total other comprehensive income
(loss) 929 90 1,290 (271)
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Comprehensive income (loss) 1,395 (1,147) 2,304 (2,179)
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Comprehensive income (loss)
attributable to:
Owners of the Corporation 1,395 (848) 2,013 (1,795)
Non-controlling interest --- (299) 291 (384)
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1,395 (1,147) 2,304 (2,179)
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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.
FOR FURTHER INFORMATION PLEASE CONTACT:
Wilmington Capital Management Inc.
Executive Officers
(403) 800-0869
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