WCM.B Wilmington Capital Management

Wilmington Capital Management Inc. (“Wilmington” or the “Corporation”) reported a net loss for the three months ended December 31, 2023 of ($0.2) million or ($0.02) per share compared to net income of $0.5 million or $0.04 per share for the same period in 2022. For the year ended December 31, 2023, the Corporation reported net income of $2.3 million or $0.18 per share compared to net income of $2.8 million or $0.23 per share for the same period in 2022.

A summary of the Corporation and the operations of its investees is set out below:

Real EstateSunchaser PartnershipThe success of the 2023 camping season is expected to continue into 2024 as the business continues to offer compelling value and experiences for its customers. With the onset of higher interest rates, owners of RV resorts are adjusting their pricing expectations which are becoming more realistic. The Sunchaser Partnership continues to actively pursue opportunities to expand its footprint in the RV resort business.

Land Held for DevelopmentThe Corporation’s development plan for the Seton project, which consists of a 92,000 sqft self-storage facility, retail complex and a 17 bay car condo project, advanced during the fourth quarter. The tendering process is expected to be completed in the first quarter of 2024.

Maple Leaf PartnershipsAs previously announced, the Corporation sold its investment in its marinas business for $22 million after the determination was made that the embedded value had been substantially realized. The investment culminated in an attractive return for the Corporation over a 6.5 year period. The remaining investment in a re-development property, Champlain Shores, continues to advance with the ongoing sale of homes and homesites. Of the 50 available home sites, 21 sites have been sold. The development is also zoned to accommodate an 88 condominium unit complex.

Private EquityNorthbridge and Energy SecuritiesDuring the fourth quarter, the Corporation monetized its investment in Northbridge along with the wind up of all but one of the funds managed by Northbridge. The wind up resulted in the Corporation receiving cash and energy securities. As at December 31, 2023, the Corporation held $5.3 million in direct holdings in energy securities and $2.3 million in the remaining fund which will be wound up in the first quarter of 2024.

OutlookThe Corporation has a long history of investing in alternative real estate asset sectors which provide shareholders with capital appreciation over the medium to longer term as opposed to current income returns. The Corporation seeks to monetize its investments once the determination is made that the embedded value had been substantially realized. The capital is then recycled into alternative investments capable of attracting superior returns or is returned to shareholders through distributions. In the preceding nine months, the Corporation monetized its investment in the Bow City Partnerships, Northbridge and certain underlying energy funds and more recently in its investment in the marina business.

In keeping with this history and after reassessing opportunities in a changing economic environment, the Corporation has set its sights on simplifying its business and focusing on growth opportunities in the RV business. The Corporation also made a determination that capital should be returned to shareholders out of proceeds from the monetization of its investments and after assessing its ongoing liquidity needs. As a result, the Corporation declared a special dividend of $2.75 per share to shareholders of record on March 18, 2024. Payment of the special dividend will be March 28, 2024.

FINANCIAL RESULTSSTATEMENT OF CONSOLIDATED INCOME AND COMPREHENSIVE INCOME (audited)

For the	Three months ended December 31,		Year ended December 31,
(CDN $ thousands, except per share amounts)	2023	2022	2023	2022
Management fee revenue	193	111	833	489
Distribution income	(18)	433	1,276	1,170
Interest and other income	427	493	1,793	1,377
	602	1,037	3,902	3,036
Expenses
General and administrative	(789)	(716)	(2,120)	(2,013)
Amortization	(6)	(7)	(28)	(28)
Finance costs	(2)	(2)	(7)	(9)
Stock-based compensation	(23)	(56)	(117)	(328)
	(820)	(781)	(2,272)	(2,378)
Fair value adjustments and other activities
Fair value adjustments to investments	397	218	1,577	2,573
Loss on sale of Northbridge	(52)	---	(52)	---
Loss on sale of energy securities	---	---	---	(146)
Equity accounted income (loss)	(116)	28	(122)	174
	229	246	1,403	2,601
Income before income taxes	11	502	3,033	3,259
Current income tax recovery (expense)	294	11	(246)	(76)
Deferred income tax expense	(531)	(47)	(493)	(387)
Provision for income taxes	(237)	(36)	(739)	(463)
Net income (loss)	(226)	466	2,294	2,796
Other comprehensive income
Items that will not be reclassified to net income:
Fair value adjustments to investments	1,471	112	783	3,010
Related income taxes	53	(22)	36	(355)
Other comprehensive income, net of income taxes	1,524	90	819	2,655
Comprehensive income	1,298	556	3,113	5,451
Net income (loss) per share - Basic	(0.02)	0.04	0.18	0.23

CONSOLIDATED BALANCE SHEETS

(audited)	December 31,	December 31,
(CDN $ thousands)	2023	2022
Assets
NON-CURRENT ASSETS
Investment in Maple Leaf Partnerships	22,910	18,637
Investment in Bow City Partnerships	---	3,864
Investment in Sunchaser Partnership	4,700	1,806
Investment in Northbridge	---	404
Investment in Energy Securities	7,584	6,880
Land held for development	6,632	---
Right-of-use asset	64	92
	41,890	31,683
CURRENT ASSETS
Cash	10,664	4,007
Short term securities	17,000	22,000
Amounts receivable and other assets	4,616	13,083
Total assets	74,170	70,773
Liabilities
NON-CURRENT LIABILITIES
Deferred income tax liabilities	1,773	1,316
Lease liabilities	85	116
	1,858	1,432
CURRENT LIABILITIES
Lease liabilities	38	38
Income taxes payable	171	118
Amounts payable and other	800	790
Total liabilities	2,867	2,378
Equity
Shareholders’ equity	51,324	51,179
Contributed surplus	1,132	1,482
Retained earnings	10,364	7,382
Accumulated other comprehensive income	8,483	8,352
Total equity	71,303	68,395
Total liabilities and equity	74,170	70,773

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

STATEMENT REGARDING FORWARD-LOOKING STATEMENTS AND OTHER MEASUREMENTSCertain statements included in this document 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.

Factors and risks that could cause actual results to differ materially from those contemplated or implied by forward-looking statements include but are not limited to: the ability of management of Wilmington and its investee entities to execute its and their business plans; availability of equity and debt financing and refinancing within the equity and capital markets; strategic actions including dispositions; business competition; delays in business operations; the risk of carrying out operations with minimal environmental impact; industry conditions including changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced; operational matters related to investee entities business; incorrect assessments of the value of acquisitions; fluctuations in interest rates; stock market volatility; general economic, market and business conditions; risks associated with existing and potential future law suits and regulatory actions against Wilmington and its investee entities; uncertainties associated with regulatory approvals; uncertainty of government policy changes; uncertainties associated with credit facilities; changes in income tax laws, tax laws; changes in accounting policies and methods used to report financial condition (including uncertainties associated with critical accounting assumptions and estimates); the effect of applying future accounting changes; and other risks, factors and uncertainties described elsewhere in this document or in Wilmington's other 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.