Wilmington Announces 2012 Third Quarter Results

Marketwired

TORONTO, ONTARIO--(Marketwire - Nov 13, 2012) - 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  
   
Unaudited Three months ended September 30     Nine months ended September 30  
(Thousands of Canadian Dollars, except per share amounts)   2012       2011     2012     2011  
                               
Income                              
Natural gas sales $ 1,031     $ ---     $ 3,095     $ ---  
Royalties   (191 )     ---       (553 )     ---  
Natural gas revenue   840       ---       2,542       ---  
                               
Income from investment property   293       288       887       866  
Investment and other income   86       72       221       223  
Foreign exchange gain   36       ---       42       ---  
    1,255       360       3,692       1,099  
                               
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  
    1,385       412       4,635       1,170  
                               
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 )     ---  
Income (loss) before income taxes   (56 )     (27 )     (929 )     23,281  
Income tax expense (benefit)   (45 )     8       (258 )     3,075  
Net income (loss) $ (11 )   $ (35 )   $ (671 )   $ 20,206  
                               
Net income (loss) attributable to:                              
  Owners of the Corporation $ (123 )   $ (35 )   $ (586 )   $ 20,206  
  Non-controlling interest $ 112     $ ---     $ (85 )   $ ---  
  $ (11 )   $ (35 )   $ (671 )   $ 20,206  
                               
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  
                               
CONSOLIDATED BALANCE SHEET
Unaudited
(Thousands of Canadian Dollars)
September 30,
2012
  December 31,
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
    50,270     47,355
Current assets          
Loan to Network Capital Management Inc.   ---     50
Receivables and other assets   1,095     923
Cash and cash equivalents   9,647     18,688
    10,742     19,661
Total assets $ 61,012   $ 67,016
           
           
Liabilities          
Non-current liabilities          
Secured debt $ ---   $ 19,403
Loan payable   ---     1,615
Asset retirement obligations   740     708
Deferred tax liabilities   212     ---
    952     21,726
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
    28,310     12,647
Total liabilities   29,262     34,373
           
Equity          
Shareholders'' equity   27,637     28,445
Non-controlling interest   4,113     4,198
           
Total liabilities and equity $ 61,012   $ 67,016
           
           
           
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
 
Unaudited Three months ended September 30     Nine months ended September 30  
(Thousands of Canadian Dollars) 2012     2011       2012     2011  
                       
Net income (loss) $ (11 )   $ (35 )   $ (671 )   $ 20,206  
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  
Other comprehensive income (loss)   (75 )     66       (361 )     (20,099 )
Comprehensive income (loss) $ (86 )   $ 31     $ (1,032 )   $ 107  
                               
Comprehensive income (loss) attributable to:                              
  Owners of the Corporation $ (198 )   $ 31     $ (947 )   $ 107  
  Non-controlling interest   112       ---       (85 )     ---  
  $ (86 )   $ 31     $ (1,032 )   $ 107  
                               

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.

Contact:
Wilmington Capital Management Inc.
(403) 800-0869

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