Clarke Inc. reports record third quarter 2007 results



    Delivers best-ever nine-month period performance

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

    HALIFAX, Nov. 6 /CNW/ - Clarke Inc. ("Clarke" or the "Company") today
announced that its 2007 third quarter was its best-ever third quarter -
largely due to the gain on redemption of Versacold units representing
$30.8 million of the $33.7 million in realized securities gains during the
third quarter. The nine-month period ending September 30, 2007 was the best in
the Company's history. Despite the exceptional performance year to date,
Clarke has faced some challenges in its investment portfolio. During the three
months ended September 30, 2007, Clarke had a comprehensive loss of
$9.6 million, due mainly to unrealized losses on the Company's marketable
securities portfolio at September 30, 2007 included in other comprehensive
income (loss) for the period.
    "The solid results turned in by Clarke to date in 2007 reflect the
success that we have had on the investment side of the business and the
turnaround that has occurred in our principal freight subsidiaries," said
George Armoyan, President and CEO of Clarke. "Senior management changes made
during the year have paid dividends. The team is gelling well and I believe
that we are very well equipped to identify and develop additional investment
opportunities, while we work through some of the challenges we face in our
existing investments."

    Financial Highlights

    Highlights of the interim consolidated financial statements reflect the
solid performance of all of Clarke's reportable segments, and particularly
strong results in the Company's investment division.

    
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                        For the        For the        For the        For the
                   three months   three months    nine months    nine months
                         ending         ending         ending         ending
                      September      September      September      September
                       30, 2007       30, 2006       30, 2007       30, 2006
                     $ millions,    $ millions,    $ millions,    $ millions,
                     except per     except per     except per     except per
                  share amounts  share amounts  share amounts  share amounts
    -------------------------------------------------------------------------
    Revenue and
     other income          86.7           55.9          239.0          156.8
    EBITDA(*)              41.1            8.5          106.6           25.0
    Net income             30.1            3.7           70.3           12.7
    Comprehensive
     income (loss)(xx)     (9.6)           3.7           51.0           12.6
    Basic EPS(xxx)         1.07           0.15           2.65           0.49
    Diluted EPS(xxx)       0.64           0.13           1.58           0.43
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (*)   EBITDA is a non-GAAP measure. Please refer to the description of
          EBITDA and the reconciliation of EBITDA to net income, on pages 2
          and 8, respectively, of Management's Discussion and Analysis for
          the three and nine months ended September 30, 2007.
    (xx)  On January 1, 2007, Clarke adopted a new policy for the measurement
          and recognition of financial instruments. Under this new accounting
          policy, comprehensive income (loss) represents net income and net
          unrealized gains and losses on available-for-sale financial
          instruments and certain foreign exchange translation gains and
          losses during the period.
    (xxx) Earnings per share amounts have been adjusted in the table above to
          reflect the two 2-for-1 stock splits, effected by way of stock
          dividends paid on June 29, 2007 and April 6, 2006.
    

    In the third quarter of 2007, for the second consecutive quarter, the
results of Clarke's Investment Segment 2007 substantially surpassed those of
the same period in 2006. EBITDA for the segment increased $31.2 million, from
$4.7 million in 2006 to $35.9 million in 2007. Realized securities gains and
investment income both showed solid growth, with realized securities gains in
this segment of $33.7 million in the third quarter compared to $2.4 million
for the same period last year, with the one-time gain on the redemption of
Versacold units representing $30.8 million of this amount. "While our results
on investments like Versacold illustrate our ability to deliver shareholder
value, we recognize that timing sometimes plays a factor in the achievement of
desired results in investments," said Mr. Armoyan. "The Versacold gain was the
result of long term planning and effort that stretched across several
quarters. Our investment cycle is not predictable, and we do not expect to see
significant investments maturing in every quarter. In every decision we make,
whether in our investment portfolio or in our transportation businesses, our
consistent focus remains on long-term shareholder value."
    EBITDA for the Freight Transportation Segment increased $0.7 million in
the three months ended September 30, 2007, from $3.8 million in the same
quarter last year, to $4.5 million, as Clarke continued to improve its
intermodal business under the leadership of Dean Cull, the Chief Operating
Officer for Freight Transportation Services, who was appointed to that
position in the first quarter of 2007.

    Conversion of Debentures

    Holders of the Company's 2012 and 2013 convertible debentures have
continued to convert debentures into Clarke common shares. As of September 30,
2007, $15.2 million in face value of the 2012 convertible debentures, and
$13.0 million in face value of the 2013 convertible debentures have been
converted into common shares. "The conversion of debentures doesn't just
benefit investors by improving liquidity in our common shares," said
Mr. Armoyan, "it also further strengthens the Company's balance sheet, giving
us an even greater ability to implement strategic initiatives to grow value
for our shareholders."

    Shareholders' Equity

    Shareholders' equity decreased $3.1 million during the three months ended
September 30, 2007, due to other comprehensive income (loss) and purchases
under normal course issuer bids being in excess of net income during the
period, and increased $66.2 million for the nine months ended September 30,
2007. The significant increase for the nine months ending September 30, 2007
is the result of strong net income and the conversion of debentures to common
shares in excess of unrealized losses on the marketable securities portfolio,
and purchases under normal course issuer bids during the period.

    Outlook

    In the fourth quarter of 2007, Clarke will continue to employ its
disciplined investment strategy and to be actively involved in contributing to
positive change in its current investments, all with the ultimate goal of
delivering long-term shareholder value.
    With Clarke's strong balance sheet and positive cash position, its
Investment Segment will continue its work to identify opportunities to invest
for future gains. The Company will also take advantage of its solid cash
position to support certain businesses in which it has an existing investment,
where that assistance may help those entities overcome short term challenges,
while providing an opportunity to generate an attractive return for Clarke on
its additional investment. Clarke executives, who serve actively on the boards
of many of its investee companies, will continue to drive improved performance
in those businesses, by seeking to reduce inefficiencies, improve processes
and develop strategic relationships. As the team has developed and faced new
challenges and learning opportunities, Clarke's depth of expertise has
increased, and the Company's ability to add value through board level
involvement has improved. The expertise of Clarke's senior management team
will drive future gains in the Investment Segment.
    Clarke also anticipates continued improvement in its Freight
Transportation Segment under the leadership of that Segment's Chief Operating
Officer, Dean Cull. Mr. Cull has implemented a number of strategies that have
yielded significantly improved results - and that we expect to continue doing
so in the fourth quarter and beyond.
    "Because our approach is focused on delivering the best possible return
to our shareholders, we know that it will logically bring some variability in
the timing of investment results," said Mr. Armoyan. "But we are patient. As
we have consistently said since we began our evolution into an activist and
catalyst investor, we will continue to make our investment decisions
prudently, with the unfailing goal of delivering increased value for our
shareholders. We look forward to building further on our successes in the
quarters to come."
    Clarke's Consolidated Financial Statements and Management's Discussion &
Analysis for the three and nine months ended September 30, 2007, and press
releases, are available at www.sedar.com.

    About Clarke

    Clarke is a Halifax-based activist and catalyst investment company with a
diversified portfolio of strategic and opportunistic investments, including
several wholly-owned subsidiaries operating in the transportation services
industry. From time to time, Clarke also participates in joint ventures when
they offer the opportunity to create shareholder value. Led by George Armoyan
and an entrepreneurial team of professionals focused on uncovering and
creating value, Clarke invests in undervalued businesses and participates
actively where necessary to enhance performance and increase returns. In 2006
alone, Clarke delivered a shareholder return on investment, including
dividends, of 33%. 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, legal and regulatory risks, and
therefore there can be no assurance that investment activities will result in
continuing 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, currency and interest rate fluctuations, customer credit
risk, legal and regulatory risks, insurance costs, adverse weather conditions
and accidents.

    Forward-Looking Statements

    Certain statements 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:

For further information: Neil Morley, Vice President & Chief Financial
Officer, Clarke Inc., (902) 442-3416


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890