Wilmington Capital Management Inc. (TSX:WCM.A)(TSX:WCM.B)
("Wilmington" or the "Corporation") today announced a net loss
attributable to shareholders for the three months ended June 30,
2013 of $41,000 or ($0.00) per share compared to a net loss of
$139,000 or ($0.02) per share for the same period in 2012. For the
six months ended June 30, 2013, the net loss attributable to
shareholders amounted to $98,000 or $(0.01) per share compared to
net loss of $463,000 or $(0.05) per share for the same period last
year.
To view a full copy of the Corporation's audited financial
results for the year ended December 31, 2012 including the
Corporation's audited consolidated financial statements,
accompanying MD&A and Annual Information Form, please refer to
the SEDAR website www.sedar.com.
SECOND QUARTER 2013 HIGHLIGHTS
During the second quarter, the Corporation took significant
steps to solidify and build upon the foundation of its three
operating platforms - self storage facilities, private equity funds
and natural gas assets, through additional investment in three
self-storage facilities and natural gas assets.
In May 2013, the Corporation invested $2.5 million in Real
Storage Private Trust to fund the acquisition of three self-storage
facilities. The total cost of these acquisitions amounted to $16.0
million and were comprised of a 39,000 square foot self-storage
facility with capacity to add a 12,000 square foot expansion in
Barrie, Ontario and two self-storage facilities in Red Deer,
Alberta, comprising 78,000 square feet of rentable area, a file
retention facility and 96 portable storage units (totaling 11,000
square feet).
Subsequent to the second quarter, Wilmington invested $2.2
million to acquire a 36.5% ownership interest in Northpoint
Resources Ltd. ("Northpoint"), a privately held natural gas
producer with assets in the Altares region of northeastern British
Columbia. Northpoint currently produces approximately 7,200 mcf per
day (1,200 boepd) and has proven plus probable reserves of 7,605
Mboe (45,630 Mmcfe). In addition, the Corporation completed the
sale of its commercial land in San Francisco, California. The sale
closed on July 31, 2013.
As at June 30, 2013, Wilmington had assets under management in
its operating platforms of approximately $135 million ($66 million
representing Wilmington's share).
OPERATIONS REVIEW
Wilmington continues to execute it principal objectives of
making investments capable of generating appreciation in value as
opposed to current income and to maximize shareholder returns by
investing its own capital alongside partners and co-investors in
hard assets and private equity funds. These assets are managed
through the Corporation's operating platforms where Wilmington can
add scale and improve valuations.
Storage Facilities
Real Storage Private Trust ("Trust")
The Trust (44.78% owned) now owns 20 self-storage facilities
comprising 787,000 square feet of rentable area and one development
property. The Trust recorded significant improvements in 2013 as
the facilities in western Canada, which were for the most part in
the initial lease up stage, achieved stabilized occupancy levels.
During the second quarter of 2013, same store occupancy levels
averaged 82%, compared to 77% in 2012 and same store operating
margins for Q2 2013 of 58% compared to Q2 2012 of 55%.
Private Equity
Network Capital Management Inc. ("NCI") and Network 2012
Fund
NCI (50% owned) has funds under management now totaling
approximately $37 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 Network 2012 Fund.
Natural Gas Assets
Shackleton 2011 Limited Partnership (the "Shackleton
Partnership")
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 three months ended June 30, 2013
was $3.33 per mcf and operating netbacks averaged $1.77 per mcf
(realized price of $1.92/mcf and netbacks of $0.80/mcf for the
comparable period in 2012). Natural gas production volumes for the
100% interest in the Shackleton field amounted to 4,231 mcf per day
(705 boepd). Of its 2013 production, approximately 50% has been
hedged under fixed price contracts with an average price of $3.18
per GJ.
Northpoint Resources Ltd. ("Northpoint")
Subsequent to the second quarter of 2013, the Corporation grew
its natural gas platform by investing in Northpoint, a privately
held oil and gas producer with assets in the Altares region of
northeastern British Columbia. Northpoint's production is
approximately 7,200 mcf/d (1,200 boe/d) with total proved plus
probable reserves totaling approximately 45,630 Mmcfe (7,605 Mboe).
The Corporation acquired a 36.5% ownership interest in Northpoint
for total cash consideration of $2.2 million. In addition, and as
part of an overall recapitalization plan, Wilmington acquired $0.8
million of a 10%, $5 million debenture issue in Northpoint which
matures on July 30, 2017. Northpoint is professionally managed by
an experienced executive team. As part of the transaction, the
Corporation is entitled to nominate three of the seven directors to
the Northpoint board.
Discontinued Operations
During 2012, the Corporation took steps to nationalize its core
business and entered into an agreement to sell its interest in
commercial land in San Francisco, California. The sale closed on
July 31, 2013. As part of the transaction, the secured debt was
assumed by the purchaser and certain loans were settled.
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 RESULTS
CONSOLIDATED INTERIM STATEMENTS OF INCOME (LOSS)
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Three months ended Six months ended
Unaudited June 30 June 30
(CDN $ Thousands, except per share
amounts) 2013 2012 2013 2012
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Income
Natural gas sales 1,282 934 2,557 2,064
Royalties (241) (170) (418) (362)
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Natural gas revenue 1,041 764 2,139 1,702
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Investment and other income 151 88 189 117
Foreign exchange gain --- --- --- 6
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1,192 852 2,328 1,825
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Expenses
Petroleum operations 358 376 692 957
General and administrative 316 276 655 585
Depletion, depreciation and
amortization 356 402 745 841
Stock compensation 46 41 92 82
Foreign exchange loss 90 21 118 ---
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Operating income (loss) 26 (264) 26 (640)
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Finance costs 88 90 166 184
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Loss before share of equity
accounted investments and income
taxes (62) (354) (140) (824)
Share of net income from Real
Storage Private Trust 44 77 67 47
Share of net (loss) income from
Network Capital Management Inc. (32) 20 (54) (4)
Share of net loss from Network 2012
Fund (39) (103) (77) (103)
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Loss before income taxes from
continuing operations (89) (360) (204) (884)
Income tax (expense) benefit (35) 91 (18) 232
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Net Loss from continuing operations (124) (269) (222) (652)
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Income (loss) from discontinued
operations, net of tax 118 7 212 (8)
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Net Loss (6) (262) (10) (660)
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Net (Loss) income attributable to:
Owners of the Corporation (41) (139) (98) (463)
Non-controlling interest 35 (123) 88 (197)
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(6) (262) (10) (660)
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Net Loss per share from continuing
operations
Basic (0.02) (0.02) (0.04) (0.05)
Diluted (0.02) (0.02) (0.04) (0.05)
Net Loss per share
Basic --- (0.02) (0.01) (0.05)
Diluted --- (0.02) (0.01) (0.05)
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CONSOLIDATED INTERIM BALANCE SHEET
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Unaudited June 30, December 31,
(CDN $ Thousands) 2013 2012
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Assets
Non-current assets
Investment in Real Storage Private Trust 9,873 7,271
Investment in Network Capital Management Inc. 1,658 1,712
Investment in Network 2012 Fund 7,655 7,554
Natural gas property, plant and equipment 17,275 17,840
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36,461 34,377
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Current assets
Income taxes receivable 480 435
Receivables and other assets 837 885
Cash and cash equivalents 3,766 6,601
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5,083 7,921
Assets held for sale 20,135 18,541
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25,218 26,462
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Total assets 61,679 60,839
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Liabilities
Non-current liabilities
Asset retirement obligations 773 750
Deferred tax liabilities 360 259
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1,133 1,009
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Current liabilities
Accounts payable and accrued liabilities 954 1,024
Revolving loan facility 5,700 6,700
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6,654 7,724
Liabilities held for sale 22,945 21,432
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29,599 29,156
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Total liabilities 30,732 30,165
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Equity
Shareholders' equity 27,045 26,860
Non-controlling interest 3,902 3,814
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Total equity 30,947 30,674
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Total liabilities and equity 61,679 60,839
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CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
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Three months ended Six months ended
Unaudited June 30 June 30
(CDN $ Thousands) 2013 2012 2013 2012
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Net Loss (6) (262) (10) (660)
Items that may subsequently be
reclassified to Profit or Loss
Share of other comprehensive (loss)
income from Network 2012 Fund (83) (281) 178 (281)
Future income taxes on above items 11 --- (23) ---
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Other comprehensive (loss) income
from continuing operations (72) (281) 155 (281)
Items that may subsequently be
reclassified to Profit or Loss
Other comprehensive income (loss)
from discontinued operations, net
of tax 22 12 36 (5)
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Total other comprehensive (loss)
income (50) (269) 191 (286)
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Comprehensive (loss) income (56) (531) 181 (946)
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Comprehensive (loss) income
attributable to:
Owners of the Corporation (91) (408) 93 (749)
Non-controlling interest 35 (123) 88 (197)
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(56) (531) 181 (946)
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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.
Contacts: Wilmington Capital Management Inc. Executive Officers
(403) 800-0869
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