Wilmington Announces 2014 First Quarter Results
May 13 2014 - 6:21PM
Marketwired Canada
Wilmington Capital Management Inc. ("Wilmington" or the "Corporation")
(TSX:WCM.A)(TSX:WCM.B) reported a net loss attributable to shareholders for the
three months ended March 31, 2014 of $191,000 or ($0.02) per share compared to a
net loss of $57,000 or ($0.01) per share for the same period in 2013.
To view a full copy of the Corporation's unaudited condensed interim financial
results for the period ended March 31, 2014 including the Corporation's
unaudited condensed interim consolidated financial statements and accompanying
Management Discussion and Analysis ("MD&A"), please refer to SEDAR's website at
www.sedar.com.
FIRST QUARTER 2014 FINANCIAL HIGHLIGHTS
During the first quarter 2014, the Corporation completed strategic plans for
each of its three operating platforms - self-storage facilities, private equity
funds and natural gas assets and the focus is centered on building upon the
foundation in and adding scale to each of the operating platforms. The
Corporation achieved the following during the three months ended March 31, 2014:
-- Generated $583,000 in cash flow from operations;
-- Recorded an unrealized gain of $405,000 on investments of Network 2012
Fund;
-- Received a distribution of $75,000 from Real Storage Private Trust
representing the Corporation's share of a 3% per annum distribution on
invested capital which is paid quarterly;
-- Generated an operating netback of $2.22 per mcf from the Shackleton
Partnership 2011 LP; and
-- Brought on stream Northpoint Resources Ltd.'s first horizontal well with
production levels of approximately 2,300 mcf per day.
As at March 31, 2014, Wilmington had assets under management in its operating
platforms of approximately $148.0 million ($56.0 million representing
Wilmington's share).
STRATEGIC PLAN
Wilmington continues to advance its 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.
OPERATIONS REVIEW
Storage Facilities
Real Storage Private Trust ("Trust")
The Trust (42.13% owned) owns 20 self-storage facilities comprising 787,000
square feet of rentable area and one development property. The Trust recorded
significant period over period improvements in 2014 as the facilities in Western
Canada, which were for the most part in the initial lease up stage, achieved
stabilized occupancy levels. During the first quarter of 2014, same store
occupancy levels averaged 82%, compared to 78% in 2013; same store operating
margins improved to 52% in the first quarter of 2014 from 51% in the comparable
quarter of 2013.
During the third quarter 2013, the Trust commenced quarterly distributions to
its unit holders equivalent to 3% per annum on invested capital. For the three
months ended March 31, 2014, the Trust declared a distribution of $178,000
(Corporation's share - $75,000). During 2014, the Trust plans on increasing the
net rentable area of its property portfolio to over 1.0 million square feet.
Private Equity
Network Capital Management Inc. ("NCI") and Network 2012 Fund
NCI (50% owned) has funds under management now totaling approximately $41.5
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. The
Corporation invested $8.0 million of capital in the Network 2012 Fund and has
received cumulative distributions of $716,000 to date. Plans are in place for
NCI to raise an additional fund in 2014, which would represent the 16th fund
raised by NCI since inception.
Natural Gas Assets
Shackleton 2011 Limited Partnership (the "Shackleton Partnership" or the
"Partnership")
The Shackleton Partnership (59% owned) owns a 100% interest in natural gas wells
in Southwestern Saskatchewan. The Shackleton Partnership's natural gas
production volumes amounted to 595 boe per day for the first quarter of 2014.
The weighted average price realized during the first quarter of 2014 was $4.30
per mcf and operating netbacks averaged $2.22 per mcf (realized price of $3.18
per mcf and netbacks of $1.90 per mcf for the comparable period in 2013). Of its
2014 production, approximately 50% has been hedged under fixed price contracts
with an average price of $3.61 per GJ.
Given the improved natural gas pricing environment, the Partnership is focused
on production optimization through well workovers and introducing new
technology.
Northpoint Resources Ltd. ("Northpoint")
On July 30, 2013, the Corporation added to 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. 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, the Corporation
acquired $798,000 of a 10%, $5.0 million debenture issue by Northpoint which
matures on August 1, 2017. Northpoint's achieved oil and natural gas sales
volumes of 1,283 boe per day for the first quarter of 2014 compared to 1,286 boe
per day during Q1 2013. During December 2013, Northpoint drilled its first
horizontal well which is producing approximately 2,300 mcf per day (383 boe per
day). Although the production fell short of original expectations, no
significant rates of decline in production are being experienced. Plans call for
drilling a second well in Q3 or Q4 of 2014.
The weighted average price realized during the first quarter of 2014 was $4.65
per mcf and operating netbacks averaged $1.66 per mcf (realized price of $3.52
per mcf and netbacks of $1.59 per mcf for the comparable period in 2013).
Outlook
The Corporation believes that the foundation for achieving future growth through
its three operating platforms - self-storage, private equity and oil and natural
gas - is 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
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF LOSS
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(unaudited)
For the three months
ended March 31,
(CDN $ Thousands, except per share amounts) 2014 2013
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Revenue
Natural gas sales 1,383 1,275
Royalties (340) (177)
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Natural gas revenue 1,043 1,098
Investment and other income 49 38
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1,092 1,136
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Expenses
Petroleum operations 328 334
General and administrative 300 340
Depletion, depreciation and amortization 342 388
Stock-based compensation 28 46
Foreign exchange (gain) loss (2) 28
Finance costs 67 78
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1,063 1,214
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Income (loss) before share of equity accounted
investments and income taxes 29 (78)
Share of net income from Real Storage Private Trust 85 23
Share of net income (loss) from Network Capital
Management Inc. 5 (22)
Share of net loss from Network 2012 Fund (43) (38)
Share of net loss from Northpoint Resources Ltd. (325) ---
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Loss before income taxes from continuing operations (249) (115)
Income tax benefit (148) (16)
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Net loss from continuing operations (101) (99)
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Income from discontinued operations, net of tax --- 95
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Net loss (101) (4)
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Net loss attributable to:
Owners of the Corporation (191) (57)
Non-controlling interest 90 53
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(101) (4)
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Net loss per share from continuing operations
Basic (0.02) (0.02)
Diluted (0.02) (0.02)
Net loss per share
Basic (0.02) (0.01)
Diluted (0.02) (0.01)
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CONDENSED INTERIM CONSOLIDATED BALANCE SHEET
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(unaudited) (audited)
As at March 31, December 31,
(CDN $ Thousands) 2014 2013
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Assets
Non-current assets
Investment in Real Storage Private Trust 10,089 10,079
Investment in Network Capital Management Inc. 72 67
Investment in Network 2012 Fund 8,703 8,341
Investment in Northpoint Resources Ltd. 1,494 1,819
Northpoint Debenture 798 798
Natural gas property, plant and equipment 16,348 16,597
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37,504 37,701
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Current assets
Loan to Network Capital Management Inc. 25 25
Income tax receivable 483 299
Receivables and other assets 984 1,451
Cash and cash equivalents 1,150 730
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2,642 2,505
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Total assets 40,146 40,206
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Liabilities
Non-current liabilities
Decommissioning liabilities 806 792
Deferred tax liabilities 140 65
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946 857
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Current liabilities
Accounts payable and accrued liabilities 962 991
Revolving Loan Facility 4,800 5,200
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5,762 6,191
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Total liabilities 6,708 7,048
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Equity
Shareholders' equity 29,243 29,053
Non-controlling interest 4,195 4,105
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Total equity 33,438 33,158
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Total liabilities and equity 40,146 40,206
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CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
----------------------------------------------------------------------------
(unaudited)
For the three months
ended March 31,
(CDN $ Thousands) 2014 2013
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Net loss (101) (4)
Items that may subsequently be reclassified to net
loss
Share of other comprehensive income from Network
2012 Fund 405 261
Deferred income taxes on above items 52 34
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Other comprehensive income from continuing operations 353 227
Items that may subsequently be reclassified to net
loss
Other comprehensive income from discontinued
operations, net of tax --- 15
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Total other comprehensive income 353 242
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Comprehensive income 252 238
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Comprehensive income attributable to:
Owners of the Corporation 162 185
Non-controlling interest 90 53
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252 238
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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.
FOR FURTHER INFORMATION PLEASE CONTACT:
Wilmington Capital Management Inc.
Executive Officers
(403) 800-0869
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