Clarke Inc. Reports Strong 2013 Third Quarter Results and Quarterly Dividend Declaration

HALIFAX, Nov. 8, 2013 /CNW/ - Clarke Inc. ("Clarke" or the "Company") (TSX: CKI CKI.DB.A) today announced its results for the three and nine months ended September 30, 2013.

RESULTS OF OPERATIONS

Highlights of the interim condensed consolidated financial statements for the three and nine months ended September 30, 2013 compared to the three and nine months ended September 30, 2012 are as follows:

 
  Three months
ended
  September 30,
2013
$
Three months
ended
September 30,
2012
$
  Nine months
 ended
September 30,
2013
$
Nine months
ended
September 30,
2012
$
Revenue and other income 87.5 71.4 208.7 179.4
Income from continuing operations and net income attributable to equity holders of the Company 21.5 11.5 31.8 3.6
Comprehensive income attributable to equity holders of the Company 23.1 12.3 35.7 6.2
Basic earnings per share ("EPS") (in dollars)        
  Income from continuing operations and net income 1.30 0.69 1.92 0.21
Total assets 297.0 239.2 297.0 239.2
Cash dividends declared per share
(in dollars)
0.10 0.06 0.24 0.06
Book value per share (in dollars) 7.07 5.44 7.07 5.44

For the three and nine months ended September 30, 2013, the Company generated  net income attributable to equity holders of the Company of $21.5 million and $31.8 million or $1.30 and $1.92 per share compared with net income of $11.5 million and $3.6 million or $0.69 and $0.21 per share in the corresponding periods in 2012.

During the three and nine months ended September 30, 2013, the Investment segment had realized and unrealized gains on its marketable securities of $15.1 million and $22.7 million, compared to realized and unrealized gains of $8.2 million and $0.3 million for the same periods in 2012. The Company also generated dividend revenue of $1.5 million and $4.0 million for the three and nine months ended September 30, 2013, compared with dividend revenue of $0.7 million and $2.3 million for the same period in 2012. This increase is attributable to the purchase of additional dividend paying securities and the introduction of dividends by various investee companies.

The Freight Transportation segment generated EBITDA of $5.7 million and $11.5 million for the three and nine months ended September 30, 2013, compared to $5.6 million and $10.5 million for the same periods in 2012.  The improved results in this segment year over year are attributable to higher margin revenue in several business lines, reduced operating costs, the turnaround of the refrigeration transportation business and a decrease in accidents and claims.

During the quarter, an entity in the Commercial Tanks & Home Heating segment acquired 90% of Pro-Par Group ("Pro-Par"), a Sherbrooke, Quebec based company with operations in Quebec and Ontario with over 80 employees. Pro-Par is an established and recognized leader in the manufacturing of storage tanks, dispensers and transport units for the Canadian propane industry. Pro-Par's management will continue to own the remaining 10% of the company.

The Commercial Tanks & Home Heating segment generated EBITDA of $3.0 million and $5.8 million for the three and nine months ended September 30, 2013 compared to $2.5 million and $6.1 million for the same periods in 2012. The year to date decrease is mainly due to strong earnings achieved at the start of 2012 by the commercial tanks division. Results in this division were not repeated to this extent in early 2013 as fluctuations in revenues are expected. However, the Company believes that results for this segment will improve during the remainder of the year due in part to the Pro-Par acquisition.

Clarke's Board of Directors also announced a quarterly dividend of $0.10 per Common Share payable on December 13, 2013 to shareholders of record at the end of business on November 29, 2013.

Subsequent to the end of the quarter, Clarke completed the sale of its shares of Bonnett's Energy Corp., receiving approximately $25.9 million on the sale. Clarke also announced, on October 31, 2013 that it had entered into an agreement for the sale of its shares in its truckload, less-than-truckload and freight logistics businesses to Transforce Inc. ("Transforce") and expects to receive proceeds of approximately $94.0 million on completion of this transaction (consisting of $88.0 million for the business and $6.0 million as a working capital adjustment). Please refer to our press release dated October 31, 2013 for additional details of this transaction.

Also subsequent to the end of the quarter, Clarke disposed of the majority of its shares of Vitran Corporation Inc. ("Vitran") for proceeds of US$8.2 million and entered into a lock-up agreement with Transforce for the remainder of its shares of Vitran in the event Transforce commences an offer to acquire all of Vitran prior to a certain date.

Further information about Clarke, including Clarke's Interim Condensed Consolidated Financial Statements and Management's Discussion & Analysis for the three and nine months ended September 30, 2013, is available at www.sedar.com and 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", or "believes", or equivalents or variations, including negative 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 price of securities held by the Company, changes in these securities holdings, changes to the Company's hedging practices, currency fluctuations, requirements for additional capital, changes to government regulations and the timing and possible outcome of pending litigation. 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.

With respect to the Company's Investment segment, such risks and uncertainties include, without limitation, the Company's investment strategy, legal and regulatory risks, general market risk, potential lack of diversification in the Company's investments, reliance on certain key executives, interest rates and foreign currency fluctuations and other factors.  With respect to the Company's Freight Transportation segment, such risks and uncertainties include, without limitation, competition, expiry of certain leases, labour relations, the use of third party service providers, dependence on certain personnel, fuel costs, weather conditions, customer relationships, claims, litigation and insurance, government regulation of the transport industry and other factors. With respect to the Company's Commercial Tanks & Home Heating segment, such risks and uncertainties include, without limitation, the costs of housing and major consumer products, energy costs, alternative energy sources, steel costs, product liability claims, foreign exchange risk, and other factors. Other general risks and uncertainties include, without limitation, environmental considerations, use of information technology and information systems, safety issues, concentration of sales among a small number of customers, the seasonality of business cycles for certain segments, commodity market risk, risks associated with investment in derivative instruments 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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