CALGARY, Alberta, Aug. 09, 2023 (GLOBE NEWSWIRE) -- Wilmington Capital Management Inc. (“Wilmington” or the “Corporation”) reported net income for the three months ended June 30, 2023 of $0.7 million or $0.06 per share compared to net income of $1.1 million or $0.09 per share for the same period in 2022. For the six months ended June 30 2023, the Corporation reported net income of $0.1 million or $0.01 per share compared to net income of $2.0 million or $0.16 per share for the same period in 2022.
OPERATIONS REVIEW – For the Quarter Ended June 30, 2023
As at June 30, 2023, Wilmington had assets under management in its operating platforms of approximately $447 million ($102 million representing Wilmington’s share). A summary of the Corporation and the operations of its investees is set out below.
Marinas
Maple Leaf Partnerships
In Q2 2023, the Maple Leaf Partnerships successfully completed the acquisition of a marquee marina in Ontario. The Corporation’s share of the Q2 2023 capital raise was $1.3 million. The Maple Leaf Partnerships now own 21 marinas with over 8,800 boat slips and dry rack slips, all within 2 hours driving time from Toronto, Ontario.
Closing of lot sales continues at Champlain Shores (formerly Bay Moorings). Proceeds from lot sales were used to repay $3 million of the outstanding revolving loan facility.
Real Estate
Land Held for Development
In Q2 2023, the Corporation acquired development lands for $6.2 million in the high growth area of Seton in SE Calgary. The lands had been secured under a purchase agreement. Completion of the acquisition was subject to obtaining land use redesignation. The lands have been rezoned for self-storage and ancillary uses. The development will be comprised of three phases and a development permit application has been filed. The transaction is in keeping with Wilmington’s strategy of seeking undervalued investment opportunities.
Bow City Partnership
Today the Corporation entered into a binding agreement to sell its 19.72% interest in the Bow City Partnerships at its fair market value for a total consideration of $3.9 million (the “Transaction”). The Corporation determined that a majority of the development upside in the Bow City Partnerships had been realized and the proceeds realized on the sale were better redeployed in new opportunities. Under the terms of the Bow City partnership agreements, the Corporation’s interest in the Bow City Partnerships must first be offered to non-selling partners which include management and certain directors. Management and certain directors elected to acquire the Corporation’s interest in the Bow City Partnerships. The transaction was approved by the independent directors of the board on July 18, 2023 and its expected to close no later than August 15, 2023.
Sunchaser Partnership
The Sunchaser Partnership has experienced strong seasonal demand during the opening months of the season. Seasonal rental rates remain healthy and the 150-site expansion of one of the existing RV resorts is expected to be fully complete in the third quarter.
Private Equity
Northbridge, Northbridge Fund 2016, Northbridge Fund 2021 SP#1 and Northbridge Fund 2022 SP#2 and Northbridge Fund SP#4
During Q2, 2023 Northbridge invested the remaining capital of its most recent fund, Northbridge Fund SP#4. The funds have generated returns of 16% to date. The largest fund, Fund 16, is scheduled to wind up in Q4 and will result in the return of capital to unitholders. Unitholders initially invested $1,000 per unit and are expected to receive cash and in-kind investments of approximately $1,500 per unit.
Northbridge manages approximate $69.4 million of committed assets as of June 30, 2023 (December 31, 2022 - $74 million).
Outlook
The first half of 2023 was an active period for the Corporation which included the acquisition of two marquee marinas in Ontario. These acquisitions bring substantial completion to the Maple Leaf Partnerships strategy of acquiring the “best in class” marinas in the Muskoka region of Ontario. Our near-term focus will be on fully integrating the marina operations and maximizing returns.
The sale of the Bow City Partnerships, subsequent to June 30, 2023, represents another successful realization event for the Corporation. Proceeds will, in part, be earmarked for the development of the new self-storage facility previously described. Northbridge continues to generate good returns on invested funds and efforts are focused on raising additional assets under management in an ever-changing private equity landscape in the oil and gas industry.
Wilmington is focused on growth opportunities inherent in each of its operating platforms and will continue to assess market conditions to best realize on its investments.
Exception from MI 61-101
As certain limited partner purchasers of the Corporation’s interests in the Bow City partnerships are “related parties” of the Corporation (within the meaning of MI 61-101 - “Protection of Minority Security Holders in Special Transactions” (“MI 61-101”)), the Transaction is considered a “related party transaction” under MI 61-101. The Corporation is relying on exemptions from the formal valuation and minority approval requirements of MI 61-101 that would otherwise apply in respect of the Transaction, pursuant to Section 5.5(a) and Section 5.7(a) (Fair Market Value Not More Than 25% of Market Capitalization) of MI 61-101.
FINANCIAL RESULTS
STATEMENT OF CONSOLIDATED INCOME AND COMPREHENSIVE INCOME (LOSS) (unaudited)
| For the | Three months ended June 30, | Three months ended March 31, | ||||||||
| (CDN $ thousands, except per share amounts) | 2023 | 2022 | 2023 | 2022 | ||||||
| Management fee revenue | 215 | 150 | 335 | 245 | ||||||
| Interest and other income | 1,012 | 742 | 1,638 | 986 | ||||||
| 1,227 | 892 | 1,973 | 1,231 | |||||||
| Expenses | ||||||||||
| General and administrative | (440 | ) | (420 | ) | (907 | ) | (887 | ) | ||
| Amortization | (7 | ) | (7 | ) | (14 | ) | (14 | ) | ||
| Finance costs | (2 | ) | (2 | ) | (4 | ) | (4 | ) | ||
| Stock-based compensation | (22 | ) | (70 | ) | (71 | ) | (208 | ) | ||
| (471 | ) | (499 | ) | (996 | ) | (1,113 | ) | |||
| Fair value adjustments and other activities | ||||||||||
| Fair value adjustments to investments | 90 | 1,156 | (520 | ) | 2,225 | |||||
| Realized loss in Energy Securities | --- | (146 | ) | --- | (146 | ) | ||||
| Equity accounted income (loss) | (13 | ) | (9 | ) | (26 | ) | 153 | |||
| 77 | 1,001 | (546 | ) | 2,232 | ||||||
| Income before income taxes | 833 | 1,394 | 431 | 2,350 | ||||||
| Current income tax expense | (73 | ) | (61 | ) | (193 | ) | (17 | ) | ||
| Deferred income tax expense | (50 | ) | (191 | ) | (102 | ) | (325 | ) | ||
| Provision for income taxes | (123 | ) | (252 | ) | (295 | ) | (342 | ) | ||
| Net income | 710 | 1,142 | 136 | 2,008 | ||||||
| Other comprehensive income | ||||||||||
| Items that will not be reclassified to net income (loss): | ||||||||||
| Fair value adjustments to investments | --- | 600 | (170 | ) | 953 | |||||
| Related income taxes | (23 | ) | (43 | ) | 13 | (88 | ) | |||
| Other comprehensive income (loss), net of income taxes | (23 | ) | 557 | (157 | ) | 865 | ||||
| Comprehensive income (loss) | 687 | 1,699 | (21 | ) | 2,873 | |||||
| Net income per share | ||||||||||
| Basic | 0.06 | 0.09 | 0.01 | 0.16 | ||||||
| Diluted | 0.06 | 0.09 | 0.01 | 0.16 | ||||||
CONSOLIDATED BALANCE SHEETS
| (unaudited) | June 30, | December 31, | |||
| (CDN $ thousands) | 2023 | 2022 | |||
| Assets | |||||
| NON-CURRENT ASSETS | |||||
| Investment in Maple Leaf Partnerships | 22,536 | 18,637 | |||
| Investment in Bow City Partnerships | 3,864 | 3,864 | |||
| Investment in Sunchaser Partnership | 2,911 | 1,806 | |||
| Investment in Northbridge and Energy Securities | 8,568 | 7,284 | |||
| Land held for development | 6,418 | --- | |||
| Right-of-use asset | 78 | 92 | |||
| 44,375 | 31,683 | ||||
| CURRENT ASSETS | |||||
| Cash | 2,700 | 4,007 | |||
| Short term securities | 14,000 | 22,000 | |||
| Amounts receivable and other assets | 9,730 | 13,083 | |||
| Total assets | 70,505 | 70,773 | |||
| Liabilities | |||||
| NON-CURRENT LIABILITIES | |||||
| Deferred income tax liabilities | 1,405 | 1,316 | |||
| Lease liabilities | 100 | 116 | |||
| 1,505 | 1,432 | ||||
| CURRENT LIABILITIES | |||||
| Lease liabilities | 38 | 38 | |||
| Income taxes payable | 166 | 118 | |||
| Amounts payable and other | 633 | 790 | |||
| Total liabilities | 2,342 | 2,378 | |||
| Equity | |||||
| Shareholders’ equity | 51,270 | 51,179 | |||
| Contributed surplus | 1,180 | 1,482 | |||
| Retained earnings | 7,518 | 7,382 | |||
| Accumulated other comprehensive income | 8,195 | 8,352 | |||
| Total equity | 68,163 | 68,395 | |||
| Total liabilities and equity | 70,505 | 70,773 |
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.
