Wilmington Capital Management Inc. ("Wilmington" or the
"Corporation") (TSX:WCM.A)(TSX:WCM.B) today announced a net loss
for the three months ended September 30, 2012 of $11,000 or ($0.01)
per share compared to a net loss of $35,000 or ($0.00) per share
for the same period in 2011. For the nine months ended September
30, 2012, the net loss amounted to $671,000 or ($0.07) per share
compared to net income of $20.2 million or $2.52 per share for the
same period in 2011.
To view a full copy of the Corporation's unaudited condensed
financial results for the period ended September 30, 2012 including
the Corporation's unaudited condensed interim consolidated
financial statements and accompanying MD&A, please refer to the
SEDAR website www.sedar.com.
OPERATING HIGHLIGHTS
During the third quarter, the Corporation continued to take
steps to solidify the foundation of its three newly formed
operating platforms - self storage facilities, private equity funds
and natural gas assets. Those steps included enhancing the
management teams, implementing operational, accounting and
reporting systems and developing a solid pipeline of new
opportunities.
Real Storage Private Trust (44.78% owned) continued to show
operational improvements across its portfolio of 17 self-storage
facilities containing 648,978 square feet of rentable area and one
development site. The five properties located in western Canada,
which were acquired in February, 2011, performed exceptionally well
and are expected to reach stabilized occupancy levels in 2012. The
majority of the western facilities are newly constructed and in the
initial lease-up stage. Overall, occupancy across the portfolio
averaged 81% for the three months ended September 30, 2012 as
compared to 75% for the same period in 2011. Operating margins for
the three months ended September 30, 2012 increased to 57%, up from
54% achieved for the comparable period in 2011.
On the private equity front, Network Capital Management Inc.
(50% owned) successfully closed its $22.3 million 2012 fund.
Network's committed funds under management now total $50 million
and the majority of Network's available capital has been
successfully deployed in a strong mix of junior oil and gas and
service companies. Wilmington committed $8 million of capital to
the 2012 fund.
The natural gas assets owned through the Shackleton Partnership
(59% owned) have proven to be of high quality and present good
opportunities for growth and future development once we reach a
more favorable natural gas pricing environment. The weighted
average price realized during the quarter was $2.28 per mcf and
operating netbacks averaged $0.81 per mcf. Natural gas production
volumes amounted to 4,911 mcf per day (818 boepd) for the third
quarter. Estimated proved plus probable reserves attributable to
the Shackleton assets as evaluated by GLJ Petroleum Consultants
Ltd. with an effective date of December 31, 2011 were 24,392 MMcf.
The outlook for natural gas pricing has improved significantly and
a better pricing environment will be beneficial to the future
operating performance of the Shackleton assets. Of its 2013
production, approximately 25% has been hedged at $3.65 per mcf.
OUTLOOK
The Corporation believes that the foundation for achieving
future growth through its three operating platforms - the Real
Storage Private Trust, Network Capital Management Inc. and the
Shackleton Partnership - are now firmly in place. In the years
ahead, the Corporation expects to add scale to these operating
platforms, improve valuations and earn attractive cash flow and
total returns for shareholders.
FINANCIAL HIGHLIGHTS
As reported under International Financial Reporting Standards
CONSOLIDATED STATEMENTS OF INCOME
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Three months Nine months
ended September ended September
Unaudited 30 30
(Thousands of Canadian Dollars, except
per share amounts) 2012 2011 2012 2011
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Income
Natural gas sales $ 1,031 $ --- $ 3,095 $ ---
Royalties (191) --- (553) ---
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Natural gas revenue 840 --- 2,542 ---
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Income from investment property 293 288 887 866
Investment and other income 86 72 221 223
Foreign exchange gain 36 --- 42 ---
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1,255 360 3,692 1,099
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Expenses
Petroleum operations 393 --- 1,371 ---
Interest 377 293 1,120 872
General and administrative 190 44 796 239
Depletion, depreciation and amortization 368 --- 1,209 ---
Stock compensation 57 --- 139 ---
Foreign exchange loss --- 75 --- 59
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1,385 412 4,635 1,170
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Loss before gain on sale of investment,
share of net loss from equity accounted
investment and income tax expense
(benefit) (130) (52) (943) (71)
Gain on sale of investment in Parkbridge
Lifestyle Communities Inc. --- --- --- 23,581
Share of net income (loss) from Real
Storage Private Trust 91 39 138 (215)
Share of net loss from Network Capital
Management Inc. (12) (14) (16) (14)
Share of net loss from Network 2012 Fund (5) --- (108) ---
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Income (loss) before income taxes (56) (27) (929) 23,281
Income tax expense (benefit) (45) 8 (258) 3,075
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Net income (loss) $ (11) $ (35) $ (671) $20,206
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Net income (loss) attributable to:
Owners of the Corporation $ (123) $ (35) $ (586) $20,206
Non-controlling interest $ 112 $ --- $ (85) $ ---
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$ (11) $ (35) $ (671) $20,206
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Net income (loss) per share - basic $ (0.01) $ (0.00) $ (0.07) $ 2.52
Net income (loss) per share - diluted $ (0.01) $ (0.00) $ (0.07) $ 2.52
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CONSOLIDATED BALANCE SHEET
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Unaudited September 30, December 31,
(Thousands of Canadian Dollars) 2012 2011
----------------------------------------------------------------------------
Assets
Non-current assets
Investment property $ 18,239 $ 18,933
Investment in Real Storage Private Trust 7,234 7,096
Investment in Network Capital Management
Inc. 1,740 1,755
Investment in Network 2012 Fund 4,830 ---
Natural gas properties and equipment 18,227 19,436
Deferred tax asset --- 135
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50,270 47,355
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Current assets
Loan to Network Capital Management Inc. --- 50
Receivables and other assets 1,095 923
Cash and cash equivalents 9,647 18,688
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10,742 19,661
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Total assets $ 61,012 $ 67,016
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Liabilities
Non-current liabilities
Secured debt $ --- $ 19,403
Loan payable --- 1,615
Asset retirement obligations 740 708
Deferred tax liabilities 212 ---
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952 21,726
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Current liabilities
Secured debt 18,678 ---
Loan payable 1,613 ---
Accounts payable and accrued liabilities 969 1,481
Revolving loan facility 7,050 7,830
Income taxes payable --- 3,336
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28,310 12,647
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Total liabilities 29,262 34,373
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Equity
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Shareholders' equity 27,637 28,445
Non-controlling interest 4,113 4,198
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Total liabilities and equity $ 61,012 $ 67,016
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
----------------------------------------------------------------------------
Three months ended Nine months ended
Unaudited September 30 September 30
(Thousands of Canadian Dollars) 2012 2011 2012 2011
----------------------------------------------------------------------------
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Net income (loss) $ (11) $ (35) $ (671) $ 20,206
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Foreign currency translation (24) 66 (29) (30)
Fair value increment of available
for sale securities --- --- --- (23,414)
Share of other comprehensive loss
from Network 2012 Fund (99) --- (380) ---
Future income taxes on above items 48 --- 48 3,285
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Other comprehensive income (loss) (75) 66 (361) (20,099)
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Comprehensive income (loss) $ (86) $ 31 $ (1,032) $ 107
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Comprehensive income (loss)
attributable to:
Owners of the Corporation $ (198) $ 31 $ (947) $ 107
Non-controlling interest 112 --- (85) ---
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$ (86) $ 31 $ (1,032) $ 107
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Executive Officers of the Corporation will be available at
403-800-0869 to answer any questions on the Corporation's financial
results.
This news release contains forward-looking statements concerning
the Corporation's business and operations. The Corporation cautions
that, by their nature, forward-looking statements involve risk and
uncertainty and the Corporation's actual results could differ
materially from those expressed or implied in such statements.
Reference should be made to the most recent Annual Information Form
for a description of the major risk factors.
Boe Conversion: Certain natural gas volumes have been converted
to barrels of oil equivalent ("boe") whereby 6,000 cubic feet (mcf)
of natural gas is equal to 1 barrel (bbl) of oil. This conversion
ratio (6:1) is based on an energy equivalency conversion applicable
at the burner tip and does not represent a value equivalency at the
wellhead.
Contacts: Wilmington Capital Management Inc. (403) 800-0869
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