Clarke Inc. announces third quarter 2008 results

    TSX: CKI, CKI.DB; CKI.DB.A

         Global economic downturn solidifies consolidation strategy.
                       Credit crisis impacts returns.

    HALIFAX, Nov. 7 /CNW/ - Clarke Inc. ("Clarke" or the "Company") today
announced its results for the quarter ended September 30, 2008. During the
quarter, the Company reported net income of $0.1 million, compared to net
income of $30.1 million in the third quarter of 2007, mainly reflecting fewer
realized gains. Clarke posted other comprehensive loss for the quarter of
$20.8 million, as compared to other comprehensive loss of $39.7 million for
the same period last year. These amounts reflect a decrease in the value of
marketable securities held at September 30, 2008 and 2007.
    In the final quarter of 2007 and to date in 2008, global credit
challenges and economic weakness have created an environment that presents
opportunities to establish core positions in certain companies at historically
discounted price levels. In the third quarter of 2008, Clarke continued to
increase its position in certain of these businesses. The current market
environment has, of course, had a negative effect on the market value of the
underlying portfolio of investments of the Company. Management intends to
continue its efforts to consolidate Clarke's investment holdings into a core
group of businesses and focus efforts on the improvement and growth of these
businesses.

    RESULTS OF OPERATIONS

    Highlights of the interim consolidated financial statements for the three
and nine months ended September 30, 2008 compared to the three and nine months
ended September 30, 2007 are as follows:

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                      Three months  Three months   Nine months   Nine months
                             ended         ended         ended         ended
    (in millions,     September 30, September 30, September 30, September 30,
     except per               2008          2007          2008          2007
     share amounts)              $             $             $             $
    -------------------------------------------------------------------------
    Revenue and other
     income                   76.6          86.7         225.8         233.7
    Net income                 0.1          30.1          10.3          70.3
    Other comprehensive
     loss                    (20.8)        (39.7)        (21.6)        (19.3)
    Basic EPS -
     continuing operations   (0.41)         1.07         (0.14)         2.49
    Diluted EPS -
     continuing operations   (0.41)         0.64         (0.14)         1.50

    As a key component of its overall strategy to pursue strategic
investments, Clarke purchases publicly-traded securities. Accordingly, Clarke
realizes income from the receipt of interest, dividends, income trust
distributions where applicable, and gains and losses on the sale of
investments. In the third quarter of 2008, revenue and other income of $0.4
million in the Investment segment represented a decrease of $34.5 million, or
99%, compared to the three months ended September 30, 2007, largely due to
lower realized gains in the quarter relative to the same period last year.
    Revenue in the Freight Transportation segment increased by $10.7 million,
or 21%, over the comparable quarter in 2007. This is a direct result of this
segment's efforts to gain new business through increased service offerings.
    The Home Décor segment continues to face a challenging consumer market in
the U.S. due to the weak economic environment. The Steel Tanks segment
achieved results that were consistent with plan and similar to those achieved
a year ago. The Steel Tanks segment sells most of its products in the second
half of the year.
    The value of Clarke's marketable securities portfolio increased as a
result of additional investments, though this was in part offset by
mark-to-market adjustments during the first nine months. The $250.9 million
carrying value of the portfolio at September 30, 2008 is an increase of 15%
over the portfolio's December 31, 2007 carrying value of $218.6 million.
    Clarke's investment activity is influenced by timing and market
conditions, its ability to uncover hidden value, and a variety of risks,
including market, investment and economic risks, and therefore there can be no
assurance that investment activities will result in future investment gains.

    OUTLOOK AND RISK FACTORS ASSOCIATED WITH THE ONGOING GLOBAL CREDIT CRISIS

    Several key metrics indicate that the global economy could be entering a
recessionary period. A prolonged recession would have an adverse effect on the
operations and financial results of several of the businesses in which Clarke
is invested, which could in turn have a material adverse effect on the
financial performance of Clarke.
    In addition, if recently observed unprecedented levels of volatility and
market turmoil continue, the Company's financial results could be materially
impacted. The market value of Clarke's portfolio of marketable securities
declined materially during the third quarter and to date in the fourth quarter
of 2008.
    All of Clarke's publicly traded securities are recorded at fair value on
the balance sheet, except for those that are accounted for using the equity
method. Of the investments that are recorded at fair value on the balance
sheet, some are classified as "available for sale", while others are
classified as "held for trading". Changes in the market value of investments
classified as held for trading are reflected in income for the period, while
changes in the market value of investments classified as available for sale
are reflected in Other Comprehensive Income (Loss). However, where evidence
suggests that the decline in value of an investment classified as available
for sale is other-than-temporary, the Company has taken charges through
ordinary income. To date this year, the Company has taken other-than-temporary
impairment charges totaling $15.7 million. Continuing weakness or a further
deterioration in the Canadian capital markets will require an ongoing
assessment of the Company's investment holdings to determine whether
additional other-than-temporary impairments are necessary.
    Clarke has established credit facilities with commercial lenders, and has
pledged certain of the Company's portfolio of marketable securities as
collateral. Declines in the market value of these securities has had an
adverse effect on the amount of credit available. Further deterioration in the
Canadian capital markets could result in additional reductions in available
liquidity which may restrict the Company's ability to make further
investments.
    Our Freight Transportation segment continues to deliver exceptional
results in spite of the challenges seen in the market. Management has focused
on efficiency improvements and initiatives for organic growth, and expects to
build on its strong overall financial performance to date during the balance
of the year. Management will also review and assess opportunities to
participate in strategic transactions to determine whether value can be
realized or efficiencies can be gained.
    The weakening U.S. consumer market will likely continue to translate into
challenges for several of Clarke's new operating segments in 2008, in
particular the Home Décor and Steel Tanks segments. Clarke is actively working
with these businesses to improve efficiencies, assess strategic alternatives
and position them to best capitalize on any recovery in market conditions.
    Clarke will look to take advantage of any buying opportunities available
in the current market and will continue to invest in a select number of core
businesses that management believes will deliver attractive returns in the
long term. Clarke continues to seek out opportunities to invest alongside
experienced operators and strategic partners in businesses that demonstrate
growth or turnaround potential. Entering the final quarter of 2008, Clarke
remains very active on its shareholders' behalf, utilizing the Company's
investment experience and strategic relationships to build businesses that
will deliver long-term shareholder value.
    Clarke's Consolidated Financial Statements and Management's Discussion &
Analysis for the three and nine months ended September 30, 2008, and news
releases, are available at www.sedar.com and www.clarkeinc.com.

    About Clarke

    Halifax-based Clarke Inc., led by an entrepreneurial team of investment
professionals, is an activist investment company that creates shareholder
value by identifying businesses with the potential for improved performance,
and working actively to uncover the value. Clarke's securities trade on the
Toronto Stock Exchange (CKI, CKI.DB; CKI.DB.A); for more information about
Clarke Inc., please visit our website at www.clarkeinc.com.

    Risks

    Clarke's investment activity is influenced by timing and market
conditions, its ability to uncover hidden value, and a variety of risks,
including market, investment, economic, diversification, interest, foreign
exchange, derivative, dependence on key executives, legal and regulatory
risks, and therefore there can be no assurance that investment activities will
result in investment gains. The transportation business is subject to a number
of risks which can include decreases in demand in times of economic downturn,
increased competition including with respect to pricing, variations in the
cost of fuel, dependence on key personnel, expiry of leases, third party
services, labour relations, currency and interest rate fluctuations, customer
credit risk, legal and regulatory risks, insurance costs, adverse weather
conditions and accidents. Other segments are subject to sales concentration
risk, regulation, commodity markets, environmental, information technology and
safety risk.

    Forward-Looking Statements

    Certain passages in this news release may contain forward-looking
statements about future operations, financial results, objectives and
strategies of the Company. Forward-looking statements are typically identified
by the words "believe", "expect", "anticipate", "intend", "estimate", and
similar expressions. These statements are necessarily based on estimates and
assumptions that are inherently subject to risks and uncertainties, many of
which are beyond Clarke's control.
    Actual results may differ materially from expected results if known or
unknown risks affect the business, or if estimates or assumptions used in the
preparation of the consolidated financial statements and information and
analysis in this news release turn out to be inaccurate. As a result, there
can be no guarantee that any forward-looking statement will materialize.
Management disclaims any intention, and assumes no obligation, to update any
forward-looking statement, even if new information becomes available, as a
result of future events or for any other reason. Readers are urged to consider
these and other such factors carefully, and not place undue emphasis on
Clarke's forward-looking statements.
    %SEDAR: 00009934E

For further information: Blair Cook, Chief Financial Officer, Clarke
Inc., (902) 442-3412