WI Western Investment Company of Canada Limited

The Western Investment Company of Canada Limited (TSXV: WI) (“Western” or the “Corporation”) today reported its financial and operating results for the three and twelve months ended December 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 to the prior period ended December 31, 2022.

Total revenue for the year ended December 31, 2023 increased 48% or $0.6 million to $1.8 million despite one-time items in both 2022 and 2023 that created a $1 million head-wind for the year. These one-time items included a gain on dilution in the fourth quarter of 2022 of $0.8 million, and a loss on debt settlement in the fourth quarter of 2023 of $0.2 million.

Net income for the year ended December 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.

	Year Ended December 31,
$	2023			2022			Change
Income (loss) from equity investments	1,235,241			(613,687	)		1,848,928
Finance income	605,278			601,682			3,596
Gain on disposal and dilution	485			950,638			(950,153	)
Loss on debt settlement	(205,594	)		-			(205,594	)
Management fees	172,500			284,271			(111,771	)
Total Revenue	1,807,910			1,222,904			585,006

“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. 2023 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”) Fortress continued its trajectory of growth by increasing gross written premiums by 26% 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’ 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. 2023 investment income exceeds the prior year by $1.6 million.

The trailing 12-month loss ratio as at December 31, 2023 (incurred losses over earned premium) was 47% (2022 – 41%), 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.

	Year Ended December 31,
$	2023			20222			Change
Insurance revenue	20,535,772			11,499,180			9,036,592
Investment income (loss)	913,309			(704,781	)		1,618,090
Net income (loss)	719,536			(382,702	)		1,102,238
Gross written premiums1	22,406,496			17,719,454			4,687,042

1 Supplementary financial measure – total gross insurance premiums written during the year.2 Prior year numbers have been restated to conform with the new standard, IFRS 17, Insurance Contracts, which was adopted by Fortress on January 1, 2023, with retrospective application.

GlassMasters Autoglass posted another year of record sales and profit for 2023. Sales exceeded that of 2022 by $6 million. EBITDA was up 17%. Growth is occurring at both the retail and warehouse locations and three new locations came online 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% to 21% 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.

OutlookStrong results from all Associate 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”). The Transaction proposes an investment of at least $20 million from companies affiliated with Paul Rivett and the concurrent rights offering is expected to raise up to an additional $30 million. Upon the successful closing of the Transaction, Paul Rivett is to be appointed to President and Chief Executive Officer 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; and
• Continue managing Western’s non-insurance holdings as long-term investments.

For more information about the Transaction you can watch a recording of the webcast that took place on March 27, 2024 here.

Completion of the Transaction (including any rights offering) is subject to the approval of the TSX Venture Exchange (the “Exchange” or “TSXV”), shareholder approval and various other conditions. The Transaction as contemplated constitutes a Change of Business under the policies of the TSXV.

About The Western Investment Company of Canada Limited Western is a unique publicly traded, private equity company founded by a group of successful Western Canadian businesspeople, 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.

For more information on Western, please visit its website at www.winv.ca.

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CONTACT INFORMATION - The Western Investment Company of Canada Limited

Scott Tannas President and Chief Executive Officer (403) 652-2663 stannas@winv.ca

Advisories Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable, disinterested shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Western should be considered highly speculative.

The TSXV has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this news release.

This news release may contain certain forward-looking information and statements, including without limitation, statements pertaining to future results and plans for Western and its associated companies, acquisitions, financings and returns. 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.

More particularly, this document contains statements concerning: the completion of the transactions contemplated by the Definitive Agreement (as defined in the March 22, 2024 news release), including the completion of the Transaction, the appointment of the new CEO and additional directors; the use of proceeds from the Transaction; the future strategy and focus for Western; and future acquisitions and growth opportunities. Readers are cautioned that the foregoing list of factors should not be construed as exhaustive.

The forward-looking statements are based on certain key expectations and assumptions made by Western, including expectations and assumptions concerning the ability of Western to successfully implement its strategic plans and initiatives, the timing of receipt of required shareholder and regulatory approvals (including TSXV approval) and third party consents and the satisfaction of other conditions to the completion of the Transaction.

Although Western believes that the expectations and assumptions on which the forward-looking statements made by Western are based are reasonable, undue reliance should not be placed on the forward-looking statements because no assurance can be provided that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks that required shareholder, TSXV, regulatory and third party approvals and consents are not obtained on terms satisfactory to the parties within the timelines provided for in the Definitive Agreement, or at all, and risks that other conditions to the completion of the Transaction are not satisfied on the timelines set forth in the Definitive Agreement or at all, the ability of management to execute its business strategy, and the impact of general economic conditions in Canada and the United States. A description of additional 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.sedarplus.ca.

The forward-looking statements contained in this news release are made as of the date hereof and Western undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

This news release also contains financial outlook information (“FOFI”) about prospective results of operations and book value, which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth in the above paragraphs. FOFI contained in this news release was made as of the date of this news release to provide information about management's current expectations and plans relating to the future. Readers are cautioned that such information may not be appropriate for any other purpose. Western disclaims any intention or obligation to update or revise any FOFI contained in this news release, whether as a result of new information, future events or otherwise, except as required by applicable law.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The rights issued under any rights offering and underlying Single Voting Shares and the Multiple Voting Shares (as defined in the March 22, 2024 news release) being offered have not been, nor will they be, registered under the 1933 Act or under any U.S. state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the 1933 Act, as amended, and applicable state securities laws.

“Neither the TSX Venture Exchange nor its Regulatory Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.”