Clarke Inc. Reports Q1 2009 Results



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

    HALIFAX, May 14 /CNW/ - Clarke Inc. ("Clarke" or the "Company") today
announced its results for the three months ended March 31, 2009. In the first
quarter of 2009, the Company reported a net loss of $10.1 million, compared to
net loss of $2.1 million for the same period in 2008. The main reason for the
decline was the non-cash, other-than-temporary impairment charge of $12.9
million, before taxes, taken on Clarke's portfolio of marketable securities
and long-term investments as a result of the continued decline in global
equity markets. Clarke posted a comprehensive loss for the first quarter of
2009 of $24.4 million, as compared to comprehensive loss of $9.8 million for
the first quarter of 2008.
    In 2008 and into the first quarter of 2009, extremely volatile capital
markets have had a significant impact on equity prices in Canada. This has
resulted in a decline in the market value of Clarke's portfolio of marketable
securities. As the global recession has intensified, the negative impact has
also spread through Clarke's operating segments, as competition for limited
volumes has increased across industries. Despite the many challenges faced
during the quarter, Clarke has continued to work closely with management in
place at its core businesses, achieving cost savings and executing strategic
transactions that improve the future prospects of these businesses.

    RESULTS OF OPERATIONS

    Highlights of the consolidated financial statements for the three months
ended March 31, 2009 compared to the three months ended March 31, 2008 are as
follows:

    
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                              For the three    For the three
                                               months ended     months ended
                                             March 31, 2009   March 31, 2008
    (in millions, except per share amounts)               $                $
    -------------------------------------------------------------------------
    Revenue and other income                           46.5             62.8
    Net loss                                          (10.1)            (2.1)
    Other comprehensive loss                          (14.3)            (7.7)
    Comprehensive loss                                (24.4)            (9.8)
    Basic EPS - continuing operations                 (0.48)           (0.10)
    Diluted EPS - continuing operations               (0.48)           (0.10)
    

    QUARTER ENDED MARCH 31, 2009

    Revenue and other income decreased by $16.3 million, or 26% for the three
months ended March 31, 2009 compared to the same period last year. The
decrease is mainly due to the results of the Home & Garden segment, which were
included in the first quarter of 2008, being excluded in the first quarter of
2009. This investment was accounted for under the equity method beginning in
the second quarter of 2008 and reclassified to the Investment segment. The
results for the first quarter were reclassified to the Other segment for the
year ended December 31, 2008, and were excluded in the current period.
Excluding the results of the Home and Garden segment, revenue and other income
decreased by $1.6 million.
    The other comprehensive losses of $14.3 million for the three months
ended March 31, 2009 and $7.7 million for the three months ended March 31,
2008 were mainly due to unrealized losses on our portfolio of marketable
securities, as markets began to decline in early 2008.
    Basic EPS from continuing operations for the three months ended March 31,
2009 was a loss of $0.48, compared to a loss of $0.10 per share for the same
period in 2008, a decrease of $0.38 per share.

    OUTLOOK

    Clarke's operating businesses and investment portfolio have been
adversely affected by turmoil in the financial markets and a general slowdown
in the economy. While there have been signs of recovery in some areas, many
industry sectors have not yet stabilized to a point where accurate forecasts
or related commentary specifying future results are possible.
    The market value of Clarke's portfolio of marketable securities continued
to decline in the first quarter of 2009, as we took further non-cash,
other-than-temporary impairment charges on many of our investments based
largely on the significance of the decline in fair value. Further such charges
are possible if the market continues to experience significant declines.
    The Investment segment continues to generate positive cash flow through
distributions received from investments. However, opportunities to crystallize
significant proceeds from the sale of investments are expected to be limited
in 2009. Our strategy is to position the portfolio for a recovery and act on
opportunities to realize value as they arise.
    The results of the Steel Tanks segment have begun to justify management's
optimistic outlook for this segment in the latter half of 2008. As a result of
strategic initiatives undertaken in 2008, profitability within this segment
has improved. Management has implemented cost saving initiatives, acquired
additional volumes, renegotiated certain input costs, and diversified the
product portfolio to increase future stability and profitability.
    Clarke will continue to seek out investment opportunities within its
current portfolio of holdings that, in management's view, will deliver
attractive returns in the long term and, where possible, will invest alongside
experienced operators and strategic partners in businesses that demonstrate
growth or turnaround potential. As 2009 unfolds, Clarke remains very active on
its shareholders' behalf, utilizing the Company's investment experience and
strategic relationships to build businesses that are expected to deliver
long-term shareholder value.
    Further information about Clarke, including Clarke's Consolidated
Financial Statements and Management's Discussion & Analysis for the year ended
December 31, 2008, is available at www.sedar.com and www.clarkeinc.com.

    About Clarke

    Halifax-based Clarke Inc. invests in undervalued businesses and
participates actively where necessary to enhance performance and increase
return. 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.

    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 Steel
Tanks segment, such risks and uncertainties include, without limitation, the
costs of housing and major consumer products, energy costs, alternative energy
sources, 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 actual actions, events or results or cause actions, events or
results not to be 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.
    %SEDAR: 00009934E




For further information:

For further information: Ian Wilkie, Chief Financial Officer, Clarke
Inc., (902) 442-3990


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