Clarke Inc. Reports Record 2014 First Quarter Results and Significant Increase in Book Value per Share

HALIFAX, May 5, 2014 /CNW/ - Clarke Inc. ("Clarke" or the "Company") (TSX: CKI; CKI.DB.A) today announced its results for the three months ended March 31, 2014.

Clarke generated net income attributable to equity holders of $73.0 million or $4.01 per share in the first quarter compared to $3.1 million or $0.19 per share for the same period in the prior year. This represents the highest net income generated in a quarter in the Company's history. This was driven by:

  • Gain on the sale of the Company's truckload, less-than-truckload and freight logistics businesses (the "Freight Transport Business") of $66.4 million;
  • Realized and unrealized gains on marketable securities of $9.0 million compared to $3.8 million for the same period in the prior year; and
  • Gain on the sale of the Company's interest in Gestion Jerico Inc. ("Jerico") of $4.7 million.

Clarke's book value at the end of the first quarter was $11.72 per share compared to $5.42 for the same period in the prior year.  The Company grew book value per share by $3.40 in the first quarter while also returning $0.20 per share to shareholders in the form of dividends.  In addition, the Company spent $0.8 million during the quarter repurchasing shares, all at a discount to book value.

During the quarter, the Company redeemed $12.0 million principal amount of its 2018 convertible debentures (the "Debentures") using cash on hand. Subsequent to the end of the quarter, the Company completed a second redemption of $12.0 million principal amount of Debentures and announced that it was redeeming all remaining Debentures on May 22, 2014.  

George Armoyan, Clarke's President and CEO, stated: "This was an exceptional quarter for us. We completed the sale of our Freight Transport Business and Jerico. This has helped to unlock a lot of the value that was always present in Clarke but which the public markets often had difficulty recognizing." Mr. Armoyan added: "We have also laid the foundation for future growth in our book value per share with our significant investment in Sherritt International Corporation, which increased in value during the quarter and especially subsequent to quarter end. As we have demonstrated in recent years, we are committed to maximizing the value of our investments and compounding that value over time."

Further information about Clarke, including Clarke's Interim Condensed Consolidated Financial Statements and Management's Discussion & Analysis for the three months ended March 31, 2014, is available at www.sedar.com and www.clarkeinc.com.


RESULTS OF OPERATIONS

 

 

(in millions, except per share amounts)

  Three months ended

     March 31, 2014

$

Three months ended

March 31, 2013

$

Realized and unrealized gains on marketable securities

9.0

3.8

Dividend income

1.5

1.3

Revenue and other income *

5.5

1.0

Income from continuing operations

13.3

0.8

Income from discontinued operations attributable to equity holders of the Company**

 

59.7

 

2.3

Net income attributable to equity holders of the Company

73.0

3.1

Comprehensive income attributable to equity holders of the Company

69.2

5.4

Basic earnings per share ("EPS")



Income from continuing operations

0.73

0.05

Income from discontinued operations

3.28

0.14

Net income

4.01

0.19

Diluted EPS



Income from continuing operations

0.57

0.05

Income discontinued operations

2.46

0.14

Net income

3.03

0.19

Total assets

264.9

225.0

Cash dividends declared per share

0.20

0.06

Book value per share

11.72

5.42

*Revenue and other income includes pension recovery/expense, interest income, gains/losses on sale of fixed assets, foreign exchange gains/losses, gains/losses on Debenture repurchases and revenue from the Transportation segment.
**Income from discontinued operations includes the results and the gain on sale of the Freight Transport Business and Jerico.

CORPORATE PRESENTATION

Clarke has today released its updated corporate presentation which can be found on its website at www.clarkeinc.com.

About Clarke

Halifax-based Clarke invests in a variety of private and publicly-traded businesses and participates actively where necessary to enhance the performance of such businesses and increase its return. Clarke's securities trade on the Toronto Stock Exchange (CKI; CKI.DB.A); for more information about Clarke Inc., please visit our website at www.clarkeinc.com.

Note on Forward-Looking Statements and Risks

This press release may contain or refer to certain forward-looking statements relating, but not limited, to the Company's expectations, intentions, plans and beliefs with respect to the Company. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "does not expect", "is expected", "budget", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", "believes", or equivalents or variations of such words and phrases, or state that certain actions, events or results, "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved. Forward-looking statements include, without limitation, those with respect to the future or expected performance of the Company's investee companies, the future price and value of securities held by the Company, changes in these securities holdings, changes to the Company's hedging practices, currency fluctuations and requirements for additional capital. Forward-looking statements rely on certain underlying assumptions that, if not realized, can result in such forward-looking statements not being achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of the Company to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others, the Company's investment strategy, legal and regulatory risks, general market risk, potential lack of diversification in the Company's investments, interest rates, foreign currency fluctuations, the sale of Company investments, the fact that dividends from investee companies are not guaranteed, reliance on key executives, use of information technology and information systems, commodity market risk, risks associated with investment in derivative instruments and other factors. With respect to the Company's Transportation segment, such risks and uncertainties include, among others, competition, seasonality and weather conditions, safety, claims and insurance, government regulation of the transportation industry, reliance on major customers, labour relations, and other factors.

Although the Company has attempted to identify important factors that could cause actions, events or results not to be as estimated or intended, there can be no assurance that forward-looking statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Other than as required by applicable Canadian securities laws, the Company does not update or revise any such forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events. Accordingly, readers should not place undue reliance on forward-looking statements.

SOURCE: Clarke Inc.

For further information: Andrew Snelgrove, Chief Financial Officer, Clarke Inc., Telephone: (902) 442-3987

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