TORONTO, Aug. 07, 2019 (GLOBE NEWSWIRE) -- Wilmington Capital Management Inc. (“Wilmington” or the “Corporation”) reported net income for the three months ended June 30, 2019 of $34.7 million or $3.40 per share compared to a net income of $0.1 million or $0.01 per share for the same period in 2018. For the six months ended June 30, 2019, the Corporation generated a net income attributable to shareholders of $34.6 million or $3.38 per share compared to net loss of $0.5 million or ($0.05) per share for the same period in 2018.
SECOND QUARTER 2019 HIGHLIGHTS
The financial highlights of the Corporation and those of its associated entities are set out below.
Sale of Real Storage Private Trust
On April 15, 2019, the Corporation together with other vendors (collectively, the “Vendors”) completed the sale of all of the interests in Real Storage Private Trust, Woodfield Limited Partnership, SNS Storage (Ontario) Limited Partnership, Real Storage GP Inc. and 2242907 Ontario Inc., which includes all of the Corporation’s interests in the self-storage business owned and operated by Real Storage Private Trust to Storage Vault Canada Inc. for a gross purchase price payable to the Vendors of $275 million (the “Purchase Price”). The Purchase Price was paid in cash subject to debt repayment of approximately $111 million, aggregate holdbacks of $4.75 million and customary adjustments. The Corporation’s proceeds were $54.5 million. The Corporation’s ownership was 41.3%.
As at June 30, 2019, Wilmington had assets under management in its operating platforms of approximately $135 million ($63 million representing Wilmington’s share).
OPERATIONS REVIEW
Real Estate
Bow City Partnership
On April 30, 2019, the Corporation acquired an 19.7% interest in the Bow City partnerships for cash consideration of $2.475 million which owns two adjacent parcels of land. The Western parcel, a 40,000 sq ft parcel located in the west end of Calgary, Alberta’s downtown, is being developed into a six-storey self-storage facility containing approximately 92,000 sq ft of net rentable area. The project is scheduled for completion in the fall of 2020. The Eastern parcel, a 51,000 sq ft parcel, contains 32,000 sq ft of warehouse space leased to the vendor for a 2-year term.
Private Equity
Northbridge Capital Partners Ltd. (“Northbridge”) and Northbridge Fund 2016 Limited Partnership
The Northbridge Fund 2016 value was unchanged from December 31, 2018 and with improving oil prices the value of the underlying investments in oil and gas entities has stabilized. Northbridge Fund 2016 deployed its remaining capital of $5.2 million during the three months ended June 30, 2019.
The Corporation’s expects its remaining share of invested capital in Network 2012 Fund of $1.0 million to be realized before December 31, 2019.
Special Situations
Maple Leaf Partnerships
The Maple Leaf Partnerships 2019 boating season got off to a slow start due to the heavy spring rains; however, boat slip lease renewals are in-line with the 2019 budgets. The Maple Leaf Partnerships remain focused on optimizing its service department financial performance in 2019.
The re-development plan for the Bay Moorings Marina whereby the former 344-boat slip marina is to be re-developed into a water-front residential community, is awaiting approval of the re-zoning application, which is expected in the fall of 2019. Management has removed existing structures and commenced earthwork in anticipation of the re-zoning approval.
Board of Directors
The Corporation also announces the retirement of Mr. Edward C. Kress from the board of directors as of August 7, 2019 and the appointment of Mr. Manfred Walt to the board of directors as of August 7, 2019. The board and management wish to thank Mr. Kress for his services to Wilmington and wish him continued success in his endeavourers. Mr. Walt brings a long history of real estate, financial and investment experience to the Corporation.
OUTLOOK
The transaction involving the sale of the Corporation’s interest in the Real Storage Private Trust represented a significant monetization event which is in keeping with its strategy of seeking undervalued investment opportunities and optimizing the timing of realization. The sale marks another milestone in the Corporation’s success in executing its strategy that provides shareholders with capital appreciation over the longer term as opposed to current income. The Corporation’s recent investments in the Maple Leaf and Bow City Partnerships are an early continuum of seeking out value creation opportunities. Despite the challenges of an economic environment driven by low interest rates and high asset valuation, the Corporation remains confident in its ability to seek out attractive investment opportunities.
| FINANCIAL RESULTS | |||||||||
| CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME | |||||||||
| (unaudited) | For the three months ended June 30, | For the six months ended June 30, | |||||||
| (CDN $ Thousands, except per share amounts) | 2019 | 2018 | 2019 | 2018 | |||||
| Management fee revenue | 79 | 38 | 118 | 79 | |||||
| Interest and other income | 435 | 125 | 491 | 138 | |||||
| Gain on sale of investment in Real Storage Private Trust | 40,334 | --- | 40,334 | --- | |||||
| 40,848 | 163 | 40,943 | 217 | ||||||
| Other expenses | |||||||||
| General and administrative | (411 | ) | (214 | ) | (639 | ) | (439 | ) | |
| Finance costs | (6 | ) | --- | (12 | ) | --- | |||
| Amortization | (48 | ) | --- | (96 | ) | --- | |||
| Stock-based compensation | (117 | ) | (72 | ) | (145 | ) | (144 | ) | |
| (582 | ) | (286 | ) | (892 | ) | (583 | ) | ||
| Share of net income (loss) of equity accounted investees | 1 | 206 | 130 | (223 | ) | ||||
| Income (loss) before income tax | 40,267 | 83 | 40,181 | (589 | ) | ||||
| Current income tax expense | (3,668 | ) | --- | (3,668 | ) | --- | |||
| Deferred income tax recovery (expense) | (1,873 | ) | 21 | (1,941 | ) | 96 | |||
| Net income (loss) | 34,726 | 104 | 34,572 | (493 | ) | ||||
| Other comprehensive income | |||||||||
| Items that will not be reclassified to net income (loss) | |||||||||
| Equity accounted investees – share of other comprehensive income | --- | --- | --- | 387 | |||||
| Change in fair value of Northbridge Fund 2016 | --- | 37 | --- | 21 | |||||
| Related tax | --- | (5 | ) | --- | (55 | ) | |||
| Other comprehensive income, net of tax | --- | 32 | --- | 353 | |||||
| Comprehensive income (loss) | 34,726 | 136 | 34,572 | (140 | ) | ||||
| Net income (loss) per share: | |||||||||
| Basic | 3.40 | 0.01 | 3.38 | (0.05 | ) | ||||
| Diluted | 3.36 | 0.01 | 3.34 | (0.05 | ) | ||||
CONSOLIDATED BALANCE SHEETS
| (unaudited) | (audited) | |
| As at | June 30, | December 31, |
| (CDN $ Thousands) | 2019 | 2018 |
| Assets | ||
| NON-CURRENT ASSETS | ||
| Investment in Real Storage Private Trust | --- | 13,953 |
| Investment in Northbridge and private equity funds | 2,032 | 2,082 |
| Investment in Maple Leaf Partnerships | 3,530 | 3,530 |
| Investments in Bow City Partnerships | 2,475 | --- |
| Other non-current assets | 728 | --- |
| Deferred income tax assets | 217 | 2,158 |
| 8,982 | 21,723 | |
| CURRENT ASSETS | ||
| Amounts receivable and other assets | 1,078 | 164 |
| Short term securities | 45,000 | --- |
| Cash | 7,814 | 3,077 |
| Total assets | 62,874 | 24,964 |
| Liabilities | ||
| NON-CURRENT LIABILITIES | ||
| Lease liabilities | 304 | --- |
| 304 | --- | |
| CURRENT LIABILITIES | ||
| Lease liabilities | 143 | --- |
| Income taxes payable | 3,668 | |
| Accounts payable and other | 740 | 624 |
| Total liabilities | 4,855 | 624 |
| Equity | ||
| Shareholders’ equity | 58,019 | 24,340 |
| Total equity | 58,019 | 24,340 |
| Total liabilities and equity | 62,874 | 24,964 |
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
Certain statements included in this news release 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.
These risks and uncertainties include but are not limited to: the ability of management of Wilmington and its investee entities to execute its and their business plans; health, safety and environmental risks; uncertainties as to the availability and cost of financing; general economic and business conditions; the possibility that government policies or laws may change or governmental or regulatory approvals may be delayed or withheld; risks associated with existing and potential future law suits and regulatory actions against Wilmington; and other risks and uncertainties described in Wilmington's 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.