Wilmington Announces 2018 Third Quarter Results

TORONTO, Nov. 06, 2018 (GLOBE NEWSWIRE) -- Wilmington Capital Management Inc. (“Wilmington” or the “Corporation”) reported net income attributable to shareholders for the three months ended September 30, 2018 of $0.1 million or $0.01 per share compared to a net loss of $2.0 million or ($0.20) per share for the same period in 2017.  For the nine months ended September 30, 2018, the Corporation generated a net loss attributable to shareholders of $0.4 million or ($0.04) per share compared to net loss of $1.9 million or ($0.18) per share for the same period in 2017.

THIRD QUARTER 2018 HIGHLIGHTS
The financial highlights of the Corporation and those of its associated entities are set out below. Investments in associated entities, where the Corporation is deemed to have significant influence account for the majority of the financial results and are accounted for using the equity method of accounting.  Investments in entities where the Corporation does not have significant influence, are recorded at fair market value and the results of the investees are not recorded by the Corporation. 

Self-storage facilities

• Real Storage Private Trust (41.3% owned – the “Trust”) generated net operating income of $3.3 million for the three months ended September 30, 2018, a 10% increase over the comparable period of 2017.  Rental activity in Western and Eastern Canada increased, helping to improve occupancy levels.  The Trust also reported rental rate increases in its Ontario facilities. 
• In August 2018, the Trust acquired a self-storage facility in Ontario for total consideration of $1.8 million.

Private equity

• Northbridge’s assets under management amounted to approximately $39.5 million; an increase of $0.5 million from June 30, 2018, resulting from improved valuations of the underlying investments in certain funds.
• The most recent energy fund raised in late 2016 amounted to $32.4 million of which approximately $10.0 million remains to be deployed.      

Special Situations

• On November 30, 2017, the Corporation acquired an 18.15% ownership interest in the Maple Leaf Partnerships for $3.5 million.  The Maple Leaf Partnerships own and operate 4 marinas, with over 100 acres of waterfront land, approximately 1,800 boat slips and re-development lands, situated a 1.5-hour drive north of Toronto, Ontario. 
• Maple Leaf Partnerships made a $0.6 million semi-annual distribution to the limited partners (Wilmington’s share - $0.1 million) in June 2018, representing an annual return of 6% of invested capital.
• The Corporation received $39,000 in management fees from the Maple Leaf Partnerships during Q3 2018 ($118,000 for the 9 months ended September 30, 2018).

As at September 30, 2018, Wilmington had assets under management in its operating platforms of approximately $215.1 million ($68.3 million representing Wilmington’s share).

OPERATIONS REVIEW

Self-Storage Facilities
Real Storage Private Trust

The Trust’s revenues increased 10% during the three and nine months ended September 30, 2018, respectively when compared to the same period in 2017.  The increase was primarily due to a 2% increase in rents, contributions from recently acquired properties and increased ancillary revenues.  Funds from operations for the three months ended September 30, 2018 increased 4%, when compared to the same period in 2017 due to improved rental activity in the period.

The Trust remains focused on organic growth and accretive acquisitions of properties located in areas where the Trust is active. 

Private Equity
Northbridge Capital Partners Ltd. (“Northbridge”) and Northbridge Fund 2016 Limited Partnership

The Corporation subscribed for $1.0 million in Northbridge Fund 2016, of which $0.8 million had been funded as at September 30, 2018 and the remaining $0.2 million commitment was subsequently funded.  Northbridge Fund 2016 has approximately $10 million of undeployed capital remaining as at September 30, 2018. 

The Corporation’s expects the Network 2012 Fund maturity date to be extended up to December 31, 2019, with its remaining share of invested capital of $1.0 million to be realized within that timeframe.

Special Situations
Maple Leaf Partnerships

On November 30, 2017, the Corporation acquired an 18.15% interest in Maple Leaf Partnerships for $3.5 million.  The marina portfolio acquired by the Maple Leaf Partnerships is an historically known group of assets to the principals of the Marina Asset Manager, whose executives have a 20-year history of operating and developing marinas.  While well maintained, the operations were not a core asset of the previous owner and the Corporation believes that with renewed focus there is significant upside in these cash generating assets.

For the nine months ended September 30, 2018, the Maple Leaf Partnerships have successfully leased approximately 80% of its marina slips (under previous ownership - 66%).  Maple Leaf Partnerships are also focused on improving its service department performance.

A re-development plan for the Bay Moorings Marina was initiated which calls for the former 344-boat slip marina to be re-developed into a water-front residential community.  The re-zoning application is expected to be approved shortly.   

The Corporation owns 33.3% interest in Marina Asset Manager, which has entered into an asset management agreement with the Maple Leaf Partnerships.  The Marina Asset Manager is responsible for oversight of the operations of and strategic planning for the Maple Leaf Partnerships.  The Corporation has received $118,000 in management fees during the nine months ended September 30, 2018.

OUTLOOK
The Corporation’s focus remains on growing its two core businesses, the self-storage business and the private equity platform as well as seeking out additional opportunities where assets are undervalued.  The Corporation is pleased with the turnaround achieved in the first operating year since its acquisition of the marina portfolio in Ontario and looks forward to realizing superior returns from this investment as well as the self-storage and private equity platforms. 

FINANCIAL RESULTS

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

		For the three months ended September 30,				For the nine months ended September 30,
(CDN $ Thousands, except per share amounts) (unaudited)		2018		2017		2018		2017
Revenues		70		37		287		80
Share of net income (loss) from equity accounted investees:
	Real Storage Private Trust	270		290		454		714
	Northbridge Capital Partners Ltd.	5		(5	)	7		(47	)
	Network 2012 Limited Partners	(5	)	(9	)	(405	)	(26	)
	Marina Asset Manager Inc.	---		---		(11	)	---
Expenses
	General and administrative	(194	)	(173	)	(633	)	(624	)
	Gain on ownership dilution in Real Storage Private Trust	19		---		19		---
	Stock-based compensation	(60	)	(23	)	(204	)	(69	)
Income (loss) from continuing operations before income tax		105		117		(486	)	28
Income tax recovery (expense)		(11	)	33		87		30
Net income (loss) from continuing operations		94		150		(399	)	58
Net loss from discontinued operations, net of tax		---		(3,390	)	---		(3,167	)
Net income (loss)		94		(3,240	)	(399	)	(3,109	)
Net income (loss) from continuing operations attributable to:
Owners of the Corporation		94		150		(399	)	58
Non-controlling interest		---		---		---		---
		94		150		(399	)	58
Net loss from discontinued operations attributable to:
Owners of the Corporation		---		(2,007	)	---		(1,872	)
Non-controlling interest		---		(1,383	)	---		(1,295	)
		---		(3,390	)	---		(3,167	)
Net income (loss) per share from continuing operations:
Basic		0.01		0.02		(0.04	)	0.01
Diluted		0.01		0.02		(0.04	)	0.01

CONSOLIDATED BALANCE SHEETS

		(unaudited)	(audited)
As at		September 30,	December 31,
(CDN $ Thousands)		2018	2017
Assets
NON-CURRENT ASSETS
Investment in Real Storage Private Trust		13,890	13,884
Investment in Northbridge Capital Partners Ltd.		240	233
Investment in Northbridge Fund 2016 Limited Partnership		807	600
Investment in Network 2012 Limited Partnership		1,026	1,304
Investment in Maple Leaf Partnerships		3,530	3,530
Deferred income tax assets		659	623
		20,152	20,174
CURRENT ASSETS
Accounts receivables and other assets		1,547	1,637
Cash		1,873	1,642
		3,420	3,279
Total assets		23,572	23,453
Liabilities
CURRENT LIABILITIES
Accounts payable and accrued liabilities		606	633
Total liabilities		606	633
Equity
Shareholders’ equity		22,966	22,820
Total equity		22,966	22,820
Total liabilities and equity		23,572	23,453

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

	For the three months ended September 30,				For the nine months ended September 30,
(CDN $ Thousands) (unaudited)	2018		2017		2018		2017
Net income (loss)	94		(3,240	)	(399	)	(3,109	)
Items that may be reclassified to net income (loss)
Share of other comprehensive income (loss) from equity accounted investees	---		(13	)	387		(83	)
Change in fair value of Northbridge Fund 2016	(14	)	---		7		---
Deferred income tax recovery (expense)	2		(3	)	(53	)	1
Other comprehensive income (loss)	(12	)	(16	)	341		(82	)
Comprehensive income (loss)	82		(3,256	)	(58	)	(3,191	)
Comprehensive income (loss) attributable to:
Owners of the Corporation	82		(1,873	)	(58	)	(1,896	)
Non-controlling interest	---		(1,383	)	---		(1,295	)
	82		(3,256	)	(58	)	(3,191	)

* * * * *

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. 

Executive Officers of the Corporation will be available at 403-705-8038
to answer any questions on the Corporation’s financial results.