CALGARY, Alberta, Aug. 03, 2022 (GLOBE NEWSWIRE) — Wilmington Capital Management Inc. (“Wilmington” or the “Corporation”) (TSX: WCM.A WCM.B) reported net income for the three months ended June 30, 2022 of $1,142,000 or $0.09 per share compared to net income of $23,000 or $0.00 per share for the same period in 2021. For the six months ended June 30 2022, the Corporation reported net income of $2,008,000 or $0.16 per share compared to a net loss of $4,000 or ($0.00) per share for the same period in 2021.
OPERATIONS REVIEW – For the Period Ended June 30, 2022
As at June 30, 2022, Wilmington’s assets under management in its operating platforms totaled approximately $353.0 million ($86.7 million representing Wilmington’s share). A summary of the Corporation and the operations of its investee entities is set out below.
Marinas
Maple Leaf Partnerships
During the six months ended June 30, 2022, the Maple Leaf Partnerships acquired two marinas in Ontario having approximately 804 boat slips (including dry rack slips). The Maple Leaf Partnerships now own and operate 16 marinas in Ontario, having approximately 5,737 slips, which represents an increase of 26% in the number of slips owned a year ago.
In June 2022, the Maple Leaf Partnerships declared a distribution of $2.5 million to unitholders (Wilmington’s share – $0.4 million), representing an annual cash return of 10% on invested capital.
Real Estate
Bow City Partnership
The Bow City Self Storage facility continues to lease up ahead of expectations with strong year to date move-ins and rental rates. Net move-ins are slightly behind plan. Rental rates remain healthy.
Sunchaser Partnership
The Sunchaser Partnership has experienced strong seasonal demand during the opening months of the season. Nightly rentals are slightly behind plan due to poor spring weather. Rental rates remain healthy.
Private Equity
Northbridge, Northbridge Fund 2016, Northbridge Fund 2021 and Northbridge Fund 2022
The fair value of Northbridge Fund 2016, Northbridge Fund 2021 and Northbridge Fund 2022 increased 4%, 18% and nil respectively during the three months ended June 30, 2022, as a result of continued strength in energy prices and a strategy of investing in “best in class” energy companies.
Outlook
During the second quarter, the Corporation continued to make progress in advancing its goal of investing in alternative asset classes. The Maple Leaf Partnerships closed its second acquisition of 2022 and negotiations are in the early stages on a number of new marina acquisitions. The 84-unit waterfront residential development continues to progress, albeit at a slower than anticipated construction pace, and strong pre-sales are in hand. The demand for boating remains strong and the marinas are enjoying high occupancies, averaging approximately 90%.
Lease up of Bow City Storage continues to exceed expectations and is a reflection in part of its unique location and management’s experience in the self-storage business. Long term parking was recently added as an additional service offering.
The Sunchaser Partnership continues to benefit from pent up demand for camping showing an increase in year over year seasonal rentals and supports upcoming expansion plans. Final approval for the over 100 site expansion is expected to be received in the fall.
Northbridge and the various funds it managements continue to perform well reflecting a strong oil and gas market and investment selection by Northbridge’s management which is also seeking new investment opportunities.
The Corporation is continuing to seek out opportunities to grow each of its operating platforms and is well positioned to continue to support both existing and new initiatives.
FINANCIAL RESULTS
STATEMENT OF INCOME (LOSS) AND COMPREHENSIVE INCOME (unaudited)
| For the | Three Months ended June 30, | Six months ended June 30, | ||||||
| (CDN $ thousands, except per share amounts) | 2022 | 2021 | 2022 | 2021 | ||||
| Management fee revenue | 150 | 105 | 245 | 166 | ||||
| Interest and other income | 742 | 480 | 986 | 731 | ||||
| 892 | 585 | 1,231 | 897 | |||||
| Expenses | ||||||||
| General and administrative | (420 | ) | (330 | ) | (887 | ) | (644 | ) |
| Amortization | (7 | ) | (48 | ) | (14 | ) | (96 | ) |
| Finance costs | (2 | ) | (3 | ) | (4 | ) | (6 | ) |
| Stock-based compensation | (70 | ) | (176 | ) | (208 | ) | (253 | ) |
| (499 | ) | (557 | ) | (1,113 | ) | (999 | ) | |
| Fair value adjustments and other activities | ||||||||
| Fair value changes in Bow City Partnerships | 500 | — | 1,074 | — | ||||
| Fair value changes in Northbridge Fund 2021 | 510 | — | 986 | — | ||||
| Fair value changes in Northbridge Fund 2022 | — | — | (70 | ) | — | |||
| Fair value changes in Energy Securities | 146 | (53 | ) | 235 | (23 | ) | ||
| Realized loss in Energy Securities | (146 | ) | — | (146 | ) | — | ||
| Equity accounted income (loss) | (9 | ) | 98 | 153 | 76 | |||
| 1,001 | 45 | 2,232 | 53 | |||||
| Income (loss) before income taxes | 1,394 | 73 | 2,350 | (49 | ) | |||
| Current income tax recovery (expense) | (61 | ) | 8 | (17 | ) | 91 | ||
| Deferred income tax expense | (191 | ) | (58 | ) | (325 | ) | (46 | ) |
| Provision for income taxes | (252 | ) | (50 | ) | (342 | ) | 45 | |
| Net income (loss) | 1,142 | 23 | 2,008 | (4 | ) | |||
| Other comprehensive income (loss) | ||||||||
| Items that will not be reclassified to net loss: | ||||||||
| Fair value changes in Maple Leaf Partnerships | 550 | — | 550 | — | ||||
| Fair value changes in Northbridge Fund 2016 | 50 | 142 | 403 | 350 | ||||
| Related income taxes | (43 | ) | 8 | (88 | ) | (41 | ) | |
| Other comprehensive income (loss), net of income taxes | 557 | 150 | 865 | 309 | ||||
| Comprehensive income (loss) | 1,699 | 173 | 2,873 | 305 | ||||
| Net income (loss) per share | ||||||||
| Basic | 0.09 | — | 0.16 | — | ||||
| Diluted | 0.09 | — | 0.16 | — | ||||
BALANCE SHEETS
| (unaudited) | June 30, | December 31, | ||
| (CDN $ thousands) | 2021 | 2021 | ||
| Assets | ||||
| NON-CURRENT ASSETS | ||||
| Investment in Maple Leaf Partnerships | 16,437 | 15,887 | ||
| Investment in Bow City Partnerships | 4,084 | 3,010 | ||
| Investment in Sunchaser Partnership | 1,366 | 1,366 | ||
| Investment in Northbridge and Energy Securities | 6,778 | 3,980 | ||
| Note receivable | 6,558 | 2,058 | ||
| Right-of-use asset | 106 | 120 | ||
| 35,329 | 26,421 | |||
| CURRENT ASSETS | ||||
| Cash | 1,074 | 1,924 | ||
| Short term securities | 28,000 | 35,000 | ||
| Amounts receivable and other assets | 3,076 | 676 | ||
| Total assets | 67,479 | 64,021 | ||
| Liabilities | ||||
| NON-CURRENT LIABILITIES | 987 | 574 | ||
| Deferred income tax liabilities | 130 | 145 | ||
| 1,117 | 719 | |||
| CURRENT LIABILITIES | ||||
| Lease liabilities | 38 | 19 | ||
| Income taxes payable | 42 | 25 | ||
| Amounts payable and other | 585 | 642 | ||
| Total liabilities | 1,782 | 1,405 | ||
| Equity | ||||
| Shareholders’ equity | 51,179 | 51,179 | ||
| Contributed surplus | 1,362 | 1,154 | ||
| Retained earnings | 6,594 | 4,586 | ||
| Accumulated other comprehensive income | 6,562 | 5,697 | ||
| Total equity | 65,697 | 62,616 | ||
| Total liabilities and equity | 67,479 | 64,021 |
Executive Officers of the Corporation will be available at 403-705-8038 to answer any questions on the Corporation’s financial results.
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS AND OTHER MEASUREMENTS
Certain statements included in this document 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.
Factors and risks that could cause actual results to differ materially from those contemplated or implied by forward-looking statements include but are not limited to: the ability of management of Wilmington and its investee entities to execute its and their business plans; availability of equity and debt financing and refinancing within the equity and capital markets; strategic actions including dispositions; business competition; delays in business operations; the risk of carrying out operations with minimal environmental impact; industry conditions including changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced; operational matters related to investee entities business; incorrect assessments of the value of acquisitions; fluctuations in interest rates; stock market volatility; general economic, market and business conditions; risks associated with existing and potential future law suits and regulatory actions against Wilmington and its investee entities; uncertainties associated with regulatory approvals; uncertainty of government policy changes; uncertainties associated with credit facilities; changes in income tax laws, tax laws; changes in accounting policies and methods used to report financial condition (including uncertainties associated with critical accounting assumptions and estimates); the effect of applying future accounting changes; and other risks, factors and uncertainties described elsewhere in this document or in Wilmington’s other 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.
