HIGH RIVER, Alberta, April 24, 2018 (GLOBE NEWSWIRE) --
The Western Investment Company of Canada Limited (“Western”) (TSXV:WI) confirms it has filed on SEDAR the December 31, 2017 Financial Statements and MD&A and 2017 Annual Information Form.
In a Letter to Shareholders, Western’s CEO, Scott Tannas wrote:
Dear Fellow Shareholder,
I’m writing today to provide some highlights to the 2017 results and also to report on our activities and goals for 2018.
2017 Financial Results
In 2017, our 50.1 % interest in GlassMasters provided us with investment income of $507,726. We also earned $34,787 from our interest Golden Health Care (4 months only). This income, together with management fee revenue and interest on our cash reserves allowed us to cover our normalized operating costs at Western and left us a small surplus profit of $68,734. We call this surplus NPIO, and the significance of this measurement is explained in our MD&A.
We incurred one-time costs of $503,131 relating to legal, consulting and due diligence expenses for the Golden Health Care and Ocean Sales transactions. We write these costs off upfront which gives us a tax loss we can use as our operations and taxable earnings ramp up in future years. So, once these costs are applied, our formal audited financial statements record a net loss for the year of $434,396. In 2018, we will have an additional “lump sum” one-time costs related to the Foothills Creamery transaction.
2017 Business Activities
GlassMasters: Miles Palmer and his ~100 team members delivered a solid year of growth with sales up 5% and gross profit up 9% over 2016. The strong results allowed them to pay down $1.1 million of acquisition debt. They also invested significant resources toward new store openings for 2018. Last month, GlassMasters opened its first store in Saskatoon, Saskatchewan and later this spring will open a new location in Airdrie, Alberta.
Golden Health Care: We were pleased to conclude a partnership with Golden Health Care in September, which included 30% ownership investments in their seniors’ homes in Estevan, Prince Albert and the Regina suburb of Emerald Park. Golden CEO Heather Haupstein and her team had a very busy year which included organic growth and the opening of a new facility in the Saskatoon suburb of Warman. The contribution by Golden to Western’s bottom line was very modest in 2017, and will grow in 2018, but will still be anemic when compared against the size of our initial equity investment. However, our heavy equity contribution at the outset of our investment will allow us to borrow in the future for new construction and additions to existing facilities which will lead to higher income in 2020 and beyond.
2018 Activities and Goals
All our portfolio companies have aggressive goals for sales, profit and expansion in 2018.
GlassMasters: After a very long and snowy winter, the windshield repair and replacement season is finally underway. The late start will present capacity challenges for what is expected to be a record year of demand, and a compressed season. The operation is fully staffed and carrying a larger than normal inventory of glass to maximize the throughput.
Golden Health Care: 2018 opened with our three owned facilities fully occupied and with long waiting lists. Planning for new construction and additions to existing facilities in 2019 is underway.
Ocean Sales Group: The 2018 exhibition calendar is at a similar level to 2017, with an anticipated growth in sales coming as a result of stronger consumer spending in Eastern Canada and the U.S.A. In addition, Ocean has launched a pilot sales program in California, Oregon and Washington with a leading global retailer modelled on a similar successful partnership in Canada.
Foothills Creamery: Our investment in Foothills closed February 28, and in addition to its strong and steady butter business, production of ice cream inventory for the high demand summer season is in full swing. A hot summer is ideal for ice cream sales and the Farmer’s Almanac weather prediction for 2018 provides much to look forward to. In the meantime, Foothills CEO Don Bayrack has invited me to personally conduct “quality control product testing”, and I intend to visit the production line soon and often!
Our overall Strategic Goals at Western for 2018 involve activities to achieve the following goals:
- A strong improvement in our share price over YE 2017
- Incorporation of our “Pattison Principles and Rockefeller Habits” governance and planning model at all our portfolio companies
- Identifying an Insurance / Financial Services foundational investment and raising capital in support of a transaction
We will be working hard to achieve these goals in addition to realizing a strong 2018 financial result for our Company.
Financial Outlook for 2018
Based on the budgets developed by our portfolio companies and including Western’s budgeted operating costs, we have a goal to achieve Net Income (NPIO) of $2 million in 2018. This equates to roughly 7 cents per share of earnings. We anticipate expensing roughly $0.25 million of one-time costs related to the Foothills transaction. If all goes as planned, our 2018 Unadjusted Net income goal is $1.75 million, or 6 cents per share. Of course, we don’t expect the year to be without surprises, both positive and negative, but we and our partners feel these numbers -while a stretch- are attainable. We’ll report and if necessary adjust and explain differences to our financial goals as the year goes on.
Future Acquisition Capital
As I foreshadowed in my December 22nd letter to shareholders, our capital is now fully deployed. We continue to seek acquisition opportunities but we will only transact when the appropriate conditions for both financing and acquisition are present. Our stock price, while recently improved, is still undervalued. So, in order to make these conditions happen we will continue to tell our story to new investors. We also humbly ask existing shareholders to help us find “new friends” and also, if possible add to our current positions.
Our Website (www.winv.ca)
In the next few weeks we will launch a new and improved format that will allow us to better tell our story and interact with shareholders and other interested parties.
On behalf of our portfolio companies, Stacey, Shafeen and our Board, I’d like to thank you for your continuing support as we build Western. We have made great strides in just two short years. I look forward to reporting on the exciting times ahead.
Sincerely,
Scott Tannas
President and Chief Executive Officer
The Western Investment Company of Canada Limited
(403) 652-2663
stannas@winv.ca
Not for distribution to United States news wire services or dissemination in the United States.
Advisory
This news release may contain certain forward-looking information and statements, including without limitation, statements pertaining to regulatory approvals. Statements containing the words: 'believes', 'intends', 'expects', 'plans', 'seeks' and 'anticipates' and any other words of similar meaning are forward-looking. All statements included herein involve various risks and uncertainties because they relate to future events and circumstances beyond Western's control. There can be no assurance that such information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information.
A description of assumptions used to develop such forward-looking information and a description of risk factors that may cause actual results to differ materially from forward-looking information can be found in Western's disclosure documents on the SEDAR website at www.sedar.com. Any forward-looking statements are made as of the date of this news release and Western does not undertake to update any forward-looking information except in accordance with applicable securities laws.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.