An anonymous director reports

WILMINGTON ANNOUNCES THIRD QUARTER 2023 RESULTS

Wilmington Capital Management Inc. had a net income for the three months ended Sept. 30, 2023, of $2.4-million or 19 cents per share, compared with a net income of $300,000 or three cents per share for the same period in 2022. For the nine months ended Sept. 30, 2023, the corporation had a net income of $2.5-million or 20 cents per share, compared with a net income of $2.3-million or 19 cents per share for the same period in 2022.

Operations review -- for the quarter ended Sept. 30, 2023

As at Sept. 30, 2023, Wilmington had assets under management in its operating platforms of approximately $402-million ($100-million representing Wilmington's share). A summary of the corporation and the operations of its investees is set out below.

Marinas

Maple Leaf partnerships

The Maple Leaf partnerships now own 21 marinas with over 8,800 boat slips and dry rack slips, all within two hours driving time from Toronto, Ont. Boat sales showed signs of slowing late in the third quarter and management is looking to reduce inventory levels, which are somewhat elevated. Rental income and parts and service income remained steady through to the end of the 2023 boating season.

Closing of lot sales continues at Champlain Shores (formerly Bay Moorings). Proceeds from lot sales were used to repay $3.5-million of the outstanding revolving loan facility with the corporation. Borrowings under the revolving and non-revolving loan facilities at the end of the quarter amounted to $4.8-million.

Real estate

Land held for development

The corporation's development plan for the Seton project will comprise three phases, being a 96,000-square-foot self-storage facility, a retail area and a 17-bay-car condo project. A development permit application has been filed and once approved a tender process will be initiated.

Sunchaser partnership

The Sunchaser partnership continued to experience strong seasonal demand during the third quarter. Seasonal rental rates remain healthy and the 150-site expansion of one of the existing RV (recreational vehicle) resorts was substantially completed and leased up for the 2024 season.

Bow City partnership

On Aug. 9, 2023, the corporation sold its 19.72-per-cent interest in the Bow City partnerships at its fair market value for total consideration of $3.9-million. The corporation determined that a majority of the development upside in the Bow City partnerships had been realized and the proceeds realized on the sale were better redeployed in new opportunities.

Private equity

Northbridge, Northbridge Fund 2016, Northbridge Fund 2021 SP No. 1 and Northbridge Fund 2022 SP No. 2 and Northbridge Fund SP No. 4

Subsequent to Sept. 30, 2023, the shareholders of Northbridge agreed in principle to support the wind up the funds managed by Northbridge as proposed by the general partners of the funds. The aggregate proceeds are expected to be approximately $8.3-million, comprising cash and direct holdings in energy securities.

Outlook

Wilmington has had a long history of successfully recycling its capital for reinvestment in alternative asset classes capable of creating value for its shareholders. In the nine months ended Sept. 30, 2023, Wilmington monetized the value embedded in its Bow City investment and deployed capital by continuing its acquisition strategy of consolidating the ownership of first-class marinas located in the Muskoka/Georgian Bay region, all located within two hours drive north of Toronto, Ont., and acquiring the Seton self-storage development lands. Wilmington is also in the process of monetizing its investment in Northbridge and the underlying energy funds.

The strategy of monetizing the value embedded in its investments and subsequently recycling the capital into new opportunities has, to date, met with considerable success. Looking forward, a significant portion of the corporation's liquidity has been earmarked for the Seton development and to some extent to acquisitions that may arise in its marina and RV resort platforms. The corporation will continue to examine ways to maximize value for its shareholders through reinvestment of capital and, where appropriate, unlocking the embedded value created to date within existing investments.

Exception from Multilateral Instrument 61-101

As certain limited partner purchasers of the corporation's interests in the Bow City partnerships are related parties of the corporation (within the meaning of MI 61-101 -- Protection of Minority Security Holders in Special Transactions), the transaction is considered a related party transaction under MI 61-101. The corporation is relying on exemptions from the formal valuation and minority approval requirements of MI 61-101 that would otherwise apply in respect of the transaction, pursuant to Section 5.5(a) and Section 5.7(a) (Fair Market Value Not More Than 25 per cent of Market Capitalization) of MI 61-101.

We seek Safe Harbor.