Wilmington Announces 2021 Third Quarter Results
CALGARY, Alberta, Nov. 02, 2021 (GLOBE NEWSWIRE) -- Wilmington Capital Management Inc. (“Wilmington” or the “Corporation”) reported net loss for the three months ended September 30, 2021, of $0.5 million or $(0.04) per share compared to net income of $0.1 million or $0.01 per share for the same period in 2020. For the nine months ended September 30, 2021, the Corporation reported a net loss of $0.5 million or $(0.04) per share compared to a net loss of 13,000 or $(0.00) per share for the same period in 2020.
OPERATIONS REVIEW – For the Period Ended September 30, 2021
As at September 30, 2021, Wilmington’s assets under management in its operating platforms totaled approximately $280 million ($78 million representing Wilmington’s share). A summary of the Corporation and the operations of its investee entities are set out below.
Marinas
Maple Leaf Partnerships
The Maple Leaf Partnerships own and operate 12 marinas in Ontario, having approximately 4,560 slips and 66 acres of redevelopment and expansion lands. The slip count represents an increase of 98% in the number of slips owned a year ago. The Corporation has invested $7.9 million in the Maple Leaf Partnerships to date and continues to look for follow on investment opportunities.
Slip occupancies for the 2021 boating season was strong across the portfolio averaging 90% with strong customer retention. Staffing remained a challenge largely due to general labor shortages related to Covid-19. New boat inventory also remains a challenge due to Covid-19 related supply shortages.
The Maple Leaf Partnerships have historically distributed 10% on invested capital attributed to income producing properties.
Real Estate
Bow City Partnership
The Bow City Self Storage facility continues to be well received by customers and is leasing ahead of expectations. Outdoor parking is expected to be completed and available to the public in Q4/2021 which will offer an additional service and source of revenue. The Corporation has invested $2.5 million in the Bow City Partnerships to date.
Sunchaser Partnership
During the nine months ended September 30, 2021, the Corporation invested in a newly formed partnership, the Sunchaser Partnership, which has a mandate to acquire opportunistic recreational vehicle (“RV”) resorts and campgrounds in Canada. The Sunchaser Partnership raised $8.7 million of which the Corporation’s proportionate share was $1.4 million. The proceeds of the capital raise, together with proceeds from additional debt financing, were used to acquire two campgrounds in Alberta, located on approximately 280 acres of land and having approximately 650 sites.
Private Equity
Northbridge, Northbridge Fund 2021 and Northbridge Fund 2016
In April 2021, the Corporation invested $2.5 million in the Northbridge Fund 2021, a special purpose Fund which invested in a specified private oil and gas company. The total amount raised was $13.7 million.
The Northbridge Fund 2016 increased 3% and 18% in value during the three and nine months ended September 30, 2021, reflecting the continued recovery in energy prices and efforts placed on repositioning investments into high preforming energy companies. As at September 30, 2021, Northbridge is pleased to see a nearly full recovery in the value of the underlying investments held by the Fund, after experiencing the worst oil and gas downturn in recent memory.
Outlook
During the third quarter, the Corporation continued to make progress optimizing the business in which it is invested.
The Maple Leaf Partnerships have successfully integrated the four marinas acquired earlier in the year as well as the two marinas acquired in late 2020. Negotiations are in the advanced stages on a number of new marina acquisitions. The 84-unit waterfront residential development continues to progress, albeit at a slower pace than anticipated rate due to labor, material and approval constraints. However, pre-sales remain strong and site servicing has begun. The 2021 boating season has been exceptionally strong with all time high occupancies and high demand for recreational boating.
Lease up of Bow City Storage continues to exceed expectations and is a reflection of the property’s unique downtown Calgary location, management’s experience in the self-storage business and strong demand for self-storage generally. The addition of long-term parking is nearly complete and will further diversify the services offered at Bow City.
The Sunchaser Partnership has successfully integrated the two RV resorts acquired earlier in the year. The camping season has now closed for the season with demand for the 650 sites being stronger than expected. The Sunchaser Partnership is actively looking to expand the site count at both resorts and expects these sites to be completed for the latter part of the 2022 season. Negotiations for an additional RV Resort is also under way.
Northbridge is actively seeking investment opportunities in the private oil and gas market in order to take advantage of the experience of its management team and a positive oil and gas outlook.
The Corporation is pleased with the performance of its operating platforms and the investment opportunities that lie ahead.
FINANCIAL RESULTS
STATEMENT OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) (unaudited)
| For the | Three Months ended September 30, | Nine Months ended September 30, | ||||||||
| (CDN $ thousands, except per share amounts) | 2021 | 2020 | 2021 | 2020 | ||||||
| Management fee revenue | 120 | 76 | 286 | 145 | ||||||
| Interest and other income | 206 | 307 | 937 | 1,335 | ||||||
| 326 | 383 | 1,223 | 1,480 | |||||||
| Expenses | ||||||||||
| General and administrative | (409 | ) | (279 | ) | (1,053 | ) | (893 | ) | ||
| Amortization | (16 | ) | (48 | ) | (112 | ) | (144 | ) | ||
| Finance costs | --- | (7 | ) | (6 | ) | (22 | ) | |||
| Stock-based compensation | (155 | ) | (66 | ) | (408 | ) | (283 | ) | ||
| (580 | ) | (400 | ) | (1,579 | ) | (1,342 | ) | |||
| Fair value adjustments and other activities | ||||||||||
| Fair value changes in Bow City Partnerships | 304 | --- | 304 | --- | ||||||
| Fair value changes in Northbridge Fund 2021 | (57 | ) | --- | (57 | ) | --- | ||||
| Fair value changes in Energy Securities | (503 | ) | 115 | (526 | ) | 27 | ||||
| Equity accounted income (loss) | (10 | ) | (22 | ) | 66 | (59 | ) | |||
| (266 | ) | 93 | (213 | ) | (32 | ) | ||||
| Income (loss) before income taxes | (520 | ) | 76 | (569 | ) | 106 | ||||
| Current income tax recovery | 6 | 38 | 97 | 8 | ||||||
| Deferred income tax recovery (expense) | 13 | (2 | ) | (33 | ) | (127 | ) | |||
| Provision for income taxes | 19 | 36 | 64 | (119 | ) | |||||
| Net income (loss) | (501 | ) | 112 | (505 | ) | (13 | ) | |||
| Other comprehensive income (loss) | ||||||||||
| Items that will not be reclassified to net income (loss): | ||||||||||
| Fair value changes in Northbridge Fund 2016 | 46 | 45 | 396 | (321 | ) | |||||
| Related income taxes | (6 | ) | (5 | ) | (47 | ) | 47 | |||
| Other comprehensive income (loss), net of income taxes | 40 | 40 | 349 | (274 | ) | |||||
| Comprehensive income (loss) | (461 | ) | 152 | (156 | ) | (287 | ) | |||
| Net income (loss) per share | ||||||||||
| Basic | (0.04 | ) | 0.01 | (0.04 | ) | --- | ||||
| Diluted | (0.04 | ) | 0.01 | (0.04 | ) | --- | ||||
BALANCE SHEETS
| (unaudited) | September 30, | December 31, | ||
| (CDN $ thousands) | 2021 | 2020 | ||
| Assets | ||||
| NON-CURRENT ASSETS | ||||
| Investment in Maple Leaf Partnerships | 13,310 | 12,184 | ||
| Investment in Bow City Partnerships | 3,010 | 2,706 | ||
| Investment in Sunchaser Partnership | 1,366 | --- | ||
| Investment in Northbridge and Energy Securities | 3,944 | 1,565 | ||
| Right-of-use asset | 155 | --- | ||
| Note receivable | 2,058 | 510 | ||
| 23,843 | 16,965 | |||
| CURRENT ASSETS | ||||
| Cash | 171 | 3,055 | ||
| Short term securities | 37,000 | 41,000 | ||
| Income taxes receivable | 80 | --- | ||
| Amounts receivable and other assets | 1,458 | 1,240 | ||
| Total assets | 62,552 | 62,260 | ||
| Liabilities | ||||
| NON-CURRENT LIABILITIES | ||||
| Deferred income tax liabilities | 348 | 268 | ||
| Lease liabilities | 155 | --- | ||
| 503 | 268 | |||
| CURRENT LIABILITIES | ||||
| Lease liabilities | --- | 138 | ||
| Income taxes payable | --- | 78 | ||
| Amounts payable and other | 602 | 581 | ||
| Total liabilities | 1,105 | 1,065 | ||
| Equity | ||||
| Shareholders’ equity | 51,179 | 51,179 | ||
| Contributed surplus | 1,009 | 601 | ||
| Retained earnings | 4,542 | 5,047 | ||
| Accumulated other comprehensive income | 4,717 | 4,368 | ||
| Total equity | 61,447 | 61,195 | ||
| Total liabilities and equity | 62,552 | 62,260 |
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.
