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 TannasPresident and Chief Executive OfficerThe Western
Investment Company of Canada Limited(403)
652-2663stannas@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.
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