CALGARY, Alberta, May 03, 2022 (GLOBE NEWSWIRE) -- Wilmington Capital Management Inc. (“Wilmington” or the “Corporation”) (TSX: WCM.A WCM.B) reported net income attributable to shareholders for the three months ended March 31, 2022 of $0.9 million or $0.07 per share compared to a net loss of $0.3 million or $0.00 per share for the same period in 2021.
OPERATIONS REVIEW – For the Period Ended March 31, 2022
As at March 31, 2022, Wilmington had assets under management in its operating platforms of approximately $335 million ($83 million representing Wilmington’s share). A summary of the Corporation and the operation of its investments is set out below.
Marinas
Maple Leaf Partnerships
In January 2022, the Corporation advanced $5.0 million to the Maple Leaf Partnerships to bridge finance an acquisition. The advance was secured by promissory note bearing interest at 7.5% per annum and was repaid in full on April 4, 2022.
In February 2022, the Corporation entered into a credit agreement with Maple Leaf Partnerships to provide a revolving loan to a maximum borrowing of $5.0 million bearing interest at 7.5% and a non-revolving loan of $1.25 million bearing interest at 6% which replaced the previous $1.25 million promissory note. The credit facilities are available on a demand basis and will provide flexibility in financing the redevelopment costs of Champlain Shores, an 84-unit waterfront residential development.
During the period ended March 31, 2022, the Maple Leaf Partnerships acquired one marina in Ontario having approximately 438 boat slips (including dry rack slips) and situated on 5 acres of waterfront land. The acquisition was funded with cash on hand.
Real Estate
Bow City Partnership
The Bow City Self Storage facility continues to be well received by customers and is leasing ahead of expectations. To date, the Corporation has invested $2.5 million in the Bow City Partnerships.
Sunchaser Partnership
The Sunchaser Partnership has commenced pre-opening operations for the 2022 season with strong seasonal renewals and continued advancement of approvals and permits required for development of over 100 expansion sites.
Private Equity
Northbridge Capital Partners Ltd. (“Northbridge”), Northbridge Fund 2016 Limited Partnership, Northbridge Fund 2021 Limited Partnership and Northbridge Fund 2022 Limited Partnership
The fair value of Northbridge Fund 2016 and Northbridge Fund 2021 increased 34% and 19% respectively during period ended March 2022, as a result of continued increase in energy prices and a strategy of investing into “best in class” energy companies.
In March, the Corporation committed $2.5 million to Northbridge Fund 2022, a special purpose fund which invested in a specified private oil and gas company. To date, half of the commitment has been called. The fund raised $16.9 million in commitments.
Outlook
During the quarter, the Corporation made progress in supporting its various real estate platforms and committed an additional $2.5 million to its energy platform.
The Maple Leaf Partnerships acquired one additional marina during the period adding 438 slips and 5 acres of waterfront land to its portfolio and continues to seek additional opportunities. Boater retention appears to be strong as we enter the 2022 boating season. Availability of new and used boats remains a challenge in the industry and it remains to be seen what the impact of higher fuel prices may have on the business.
The re-development of Champlain Shores (formerly Bay Moorings Marina) continues to progress with initial construction of the first 17-unit phase of town houses and single-family homes. Sites available for the 2022 building season have been sold out.
Bow City Storage continues to capitalize on the strategic positioning of its downtown Calgary location and strong rental rates and is actively looking for other attractive development locations.
The Sunchaser Partnership is anticipating a busy 2022 season based on improved year over year seasonal site bookings. The focus for the upcoming camping season is to continue improving the camper experience at both campgrounds. The expansion approval process for both campgrounds continue to progress albeit at a slower than anticipated pace.
During the quarter, the Corporation participated in Northbridge’s newly formed energy fund having funded half of its $2.5 million commitment. The special purpose fund is invested in a private oil and gas company lead by a strong team with a strong track record.
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 March 31, | |||||
| (CDN $ Thousands, except per share amounts) | 2022 | 2021 | ||||
| Management fee revenue | 95 | 61 | ||||
| Interest and other income | 244 | 251 | ||||
| 339 | 312 | |||||
| Expenses | ||||||
| General and administrative | (468 | ) | (314 | ) | ||
| Amortization | (7 | ) | (48 | ) | ||
| Finance costs | (2 | ) | (3 | ) | ||
| Stock-based compensation | (138 | ) | (77 | ) | ||
| (615 | ) | (442 | ) | |||
| Fair value adjustments and other activities | ||||||
| Fair value changes in Bow City Partnerships | 574 | --- | ||||
| Fair value changes in Northbridge Fund 2021 | 476 | --- | ||||
| Fair value changes in Northbridge Fund 2022 | (70 | ) | --- | |||
| Fair value changes in Energy Securities | 89 | 30 | ||||
| Equity accounted income (loss) | 162 | (22 | ) | |||
| 1,231 | 8 | |||||
| Income (loss) before income taxes | 955 | (122 | ) | |||
| Current income tax recovery | 44 | 83 | ||||
| Deferred income tax recovery (expense) | (133 | ) | 12 | |||
| Provision for income taxes | (89 | ) | 95 | |||
| Net income (loss) | 866 | (27 | ) | |||
| Other comprehensive income | ||||||
| Items that will not be reclassified to net income (loss): | ||||||
| Fair value changes in Northbridge Fund 2016 | 353 | 208 | ||||
| Related tax | (45 | ) | (49 | ) | ||
| Other comprehensive income, net of tax | 308 | 159 | ||||
| Comprehensive income | 1,174 | 132 | ||||
| Net income per share | ||||||
| Basic | 0.07 | --- | ||||
| Diluted | 0.07 | --- | ||||
BALANCE SHEETS
| (unaudited) | (audited) | |||||
| March 31, | December 31, | |||||
| (CDN $ Thousands) | 2022 | 2021 | ||||
| Assets | ||||||
| NON-CURRENT ASSETS | ||||||
| Investment in Maple Leaf Partnerships | 15,887 | 15,887 | ||||
| Investment in Bow City Partnerships | 3,584 | 3,010 | ||||
| Investment in Sunchaser Partnership | 1,366 | 1,366 | ||||
| Investment in Northbridge and Energy Securities | 6,240 | 3,980 | ||||
| Note receivable | 4,058 | 2,058 | ||||
| Right-of-use asset | 113 | 120 | ||||
| 31,248 | 26,421 | |||||
| CURRENT ASSETS | ||||||
| Cash | 1,491 | 1,924 | ||||
| Short term securities | 27,000 | 35,000 | ||||
| Income taxes receivable | 19 | --- | ||||
| Amounts receivable and other assets | 5,659 | 676 | ||||
| Total assets | 65,417 | 64,021 | ||||
| Liabilities | ||||||
| NON-CURRENT LIABILITIES | ||||||
| Deferred income tax liabilities | 752 | 574 | ||||
| Lease liabilities | 128 | 145 | ||||
| 880 | 719 | |||||
| CURRENT LIABILITIES | ||||||
| Lease liabilities | 38 | 19 | ||||
| Income taxes payable | --- | 25 | ||||
| Amounts payable and other | 571 | 642 | ||||
| Total liabilities | 1,489 | 1,405 | ||||
| Equity | ||||||
| Shareholders’ equity | 51,179 | 51,179 | ||||
| Contributed surplus | 1,292 | 1,154 | ||||
| Retained earnings | 5,452 | 4,586 | ||||
| Accumulated other comprehensive income | 6,005 | 5,697 | ||||
| Total equity | 63,928 | 62,616 | ||||
| Total liabilities and equity | 65,417 | 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.
