Mr. Scott Tannas reports

WESTERN INVESTMENT COMPANY REPORTS STRONG FINANCIAL RESULTS FOR 2023 AND PROVIDES ROBUST OUTLOOK FOR 2024

The Western Investment Company of Canada Ltd. has released its financial and operating results for the three and 12 months ended Dec. 31, 2023. The audited financial statements, management's discussion and analysis, and annual information form have been filed on SEDAR+. Unless otherwise indicated, financial figures are expressed in Canadian dollars and comparisons are with the prior period ended Dec. 31, 2022.

Total revenue for the year ended Dec. 31, 2023, increased 48 per cent or $600,000 to $1.8-million despite one-time items in both 2022 and 2023 that created a $1-million headwind for the year. These one-time items included a gain on dilution in the fourth quarter of 2022 of $800,000 and a loss on debt settlement in the fourth quarter of 2023 of $200,000.

Net income for the year ended Dec. 31, 2023, increased to $201,967, compared with a net loss of $215,376 in 2022. The recovery and growth seen within Western's portfolio of companies (associates) are the result of operational improvements that drove significant gains in gross margins and sales at many of the associates.

"There is a collective sense of growth and momentum at Western today. Beyond our proposed transaction with Paul Rivett to transform Western into a property and casualty insurance and investment holding company, our portfolio companies are all performing very well," said Scott Tannas, president and chief executive officer of Western. "I want to thank the teams at our associate companies for their ongoing focus, commitment and operational discipline that drove these solid results. Two thousand twenty-three marks the year that our associates were able to shake free from the market malaise created by COVID, reap the benefits of an improving business environment and deliver our best results in four years. As we shift Western's focus to insurance, we are taking care to protect and enhance the other businesses in our portfolio. We spent considerable blood, sweat and tears navigating these businesses through the intense difficulties of COVID, and we have no intention of squandering that effort. We will continue our good stewardship of these outstanding companies."

2023 portfolio company report

Fortress Insurance Company

Fortress continued its trajectory of growth by increasing gross written premiums by 26 per cent to $22.4-million in 2023. Over the year, Fortress increased its capacity on all its products and added liability and transportation insurance products to its lineup. Fortress's underwriting business is now consistently profitable and net income is nearly $1-million above the comparative year. Fortress expects to see continued growth in written premiums throughout the coming year with a focus on diversification of both product lines and geography. During the year, Fortress had strong growth in Alberta and built momentum in Ontario, Manitoba and Saskatchewan. Steady but controlled growth is expected to continue through 2024.

Results were also boosted this year by gains in their investment portfolio. Two thousand twenty-three investment income exceeds the prior year by $1.6-million.

The trailing-12-month loss ratio as at Dec. 31, 2023 (incurred losses over earned premium), was 47 per cent (2022 -- 41 per cent), an impressive result and testament to its lean cost structure and focused execution. The ratio is also indicative of the quality business Fortress has developed.

GlassMasters Autoglass posted another year of record sales and profit for 2023. Sales exceeded that of 2022 by $6-million. EBITDA (earnings before interest, taxes, depreciation and amortization) was up 17 per cent. Growth is occurring at both the retail and warehouse locations, and three new locations came on line in 2023. The company has plans for further expansion in 2024.

Foothills Creamery returned to profit in 2023. Gross margins jumped considerably in 2023 from 13 per cent to 21 per cent translating into a $3.7-million improvement in EBITDA. The company achieved this with an improved pricing strategy that more readily incorporates inflation and a focus on higher margin products. Foothills has a strong level of inventory on hand and is ready to meet high demand heading into the summer months of 2024.

Golden Health Care has made modest improvements in occupancy leading to a profitable 2023. Golden provides a steady, but modest return to shareholders. Growth in market value of the Golden homes is where Western will earn its return on this investment.

Outlook

Strong results from all associates in 2023, coupled with an improving business environment, lead to a positive outlook for 2024. That said, the tremendous growth in gross written premiums at Fortress is expected to moderate somewhat as it navigates its entry into the Ontario marketplace.

Western also intends to transform itself into an insurance and investment holding company through a proposed transaction previously announced on March 22, 2024. The transaction proposes an investment of at least $20-million from companies affiliated with Mr. Rivett and the concurrent rights offering is expected to raise up to an additional $30-million. Upon the successful closing of the transaction, Mr. Rivett is to be appointed to president and CEO of Western with the following initial priorities:

• Grow the Fortress platform to $100-million per annum in written premiums by 2028 through a combination of prudent organic growth and accretive acquisitions;
• Continue managing Western's non-insurance holdings as long-term investments.

Completion of the transaction (including any rights offering) is subject to the approval of the TSX Venture Exchange, shareholder approval and various other conditions. The transaction as contemplated constitutes a change of business under the policies of the TSX-V.

About The Western Investment Company of Canada Ltd.

Western is a unique publicly traded, private equity company founded by a group of successful Western Canadian business people, and dedicated to building and maintaining ownership in successful Western Canadian companies, and helping them to grow. Western's shares are traded on the exchange under the symbol WI.

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