Clarke Inc. Reports Record Year End 2007 Results as Investment Activities Drive Growth and Transportation Segment Recovers - Fourth Quarter Loss of $6.3 million due to market conditions - $0.04 per common share cash dividend declared



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

    HALIFAX, Feb. 28 /CNW/ - Clarke Inc. ("Clarke" or the "Company") today
announced its results for the three months and year ended December 31, 2007,
the latter being the best-ever one-year performance in Clarke's history. The
Company's fourth quarter results reflect the decline in the stock market
during the period.
    Clarke's Board of Directors also announced today a $0.04 per common share
cash dividend payable on March 31, 2008 to shareholders of record at the end
of business on March 17, 2008.
    Management is proud to have delivered in 2007 the best one-year
performance Clarke has ever seen. The Company was able to successfully realize
gains on investments made during the year and in prior periods. The results
delivered in the fourth quarter of 2007 reflect the more challenging market
conditions faced by Clarke and the businesses in which it was invested during
the period.
    Clarke's investment strategy includes an ongoing evaluation of the
market, and continuous adjustments to align its activities with market
realities. When conditions permit, Clarke will realize on those investments
that have matured where appropriate value can be obtained. During challenging
periods in the market, Clarke will look to invest at attractive prices and
will work with its investee businesses to improve results and increase the
value of Clarke's investment. While this pattern may lead to quarters in which
the Company's Investment Segment does not deliver large overall gains, the
Company believes it will promote long-term value creation for Clarke
shareholders.

    Financial Highlights

    
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                        For the        For the        For the        For the
                   three months   three months           year           year
                          ended          ended          ended          ended
                       December       December       December       December
                       31, 2007       31, 2006       31, 2007       31, 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          62.8           52.3          296.5          203.6
    EBITDA(*)              (1.3)           9.2          100.0           35.1
    Net income (loss)      (6.3)           4.4           64.0           17.2
    Comprehensive
     income (loss) (xx)   (10.8)           4.5           40.3           17.2
    Basic EPS(xxx)        (0.22)          0.17           2.36           0.67
    Diluted EPS(xxx)      (0.22)          0.11           1.48           0.57
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (*)   EBITDA is a non-GAAP measure. Please refer to the description of
          EBITDA and the reconciliation of EBITDA to net income, on pages
          1 and 8, respectively, of Management's Discussion and Analysis for
          the year ended December 31, 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.
    

    Quarter ended December 31, 2007

    Revenue and other income increased $10.5 million, or 20.0%, compared to
the same quarter last year, with the increase mainly coming from realized
securities gains and transportation revenue. Transportation revenue increased
by $5.6 million compared with the same quarter of the prior year, due to
significant improvements in Clarke's intermodal business.
    Although the Company realized securities gains of $5.2 million in the
quarter, compared to $1.8 million in the same quarter of the prior year, and
the Freight Transportation Segment earnings before income taxes increased
$1.6 million, non-cash items including permanent impairment writedowns on
significantly influenced investments of $4.8 million, losses in equity of
significantly influenced investments of $4.7 million, and a pension expense of
$2.6 million contributed to a $6.3 million loss during the three months ended
December 31, 2007.

    Year ended December 31, 2007

    Basic earnings per share ("EPS") for the year ended December 31, 2007 was
$2.36, compared to $0.67 for the year ended December 31, 2006 (EPS has been
calculated for the comparative period in 2006 after adjusting the number of
outstanding shares to reflect a two-for-one stock split effected by way of a
stock dividend paid in June, 2007), an increase of $1.69 per share, driven by
the increase in earnings in the Investment Segment and improvement in the
Freight Transportation Segment.
    The results of Clarke's Investment Segment in 2007 dramatically surpassed
those of 2006, largely due to a one-time gain on the redemption of Versacold
units in August 2007. EBITDA for the segment increased $65.9 million, from
$22.4 million in 2006 to $88.3 million in 2007. Realized securities gains grew
substantially during the year, with realized securities gains in this segment
of $84.9 million compared to $14.9 million in 2006. Investment and other
income in this segment increased by $4.5 million in 2007 compared to 2006,
with the increase in trust distribution income largely offsetting the
unrealized losses on held for trading securities.
    EBITDA for the Freight Transportation Segment increased $5.6 million in
2007, from $8.7 million in 2006 to $14.3 million, as Clarke achieved
significant improvements in its intermodal business. The results for 2006 had
been negatively impacted by a lock-out of dock workers at Clarke's Toronto
terminal during January and February of 2006.

    Outlook

    In the year ahead, Clarke will continue to seize opportunities to invest
where it sees the potential for long term growth. In addition, given market
realities, the Company will devote a great deal of attention to improving the
businesses in which it is currently invested, to put them in the best possible
position to succeed when market conditions improve. These efforts will include
refinancings, operational refinements and, where appropriate, privatizations.
In 2008, Clarke's involvement with its portfolio investments will become
deeper than it has been in the past.
    Some of the companies in which Clarke is currently invested are
experiencing various challenges. But while their share and unit prices are
currently under pressure, contributing to the unrealized losses reported in
Clarke's results, management is committed to working towards solutions that
can provide long-term value creation.
    Management expects the Freight Transportation Segment to continue to
perform well in 2008, under the leadership of Chief Operating Officer Dean
Cull. This segment's impressive 2007 performance is a strong indication of the
benefits of Mr. Cull's leadership, even in a year in which the transportation
industry was negatively impacted by labour disruptions in rail services.
    Clarke has a flexible business model that allows it to react to diverse
opportunities. The Company has a solid balance sheet, and is in a good
position to invest in the opportunities for future growth that come with a
temporary economic downturn. Our investment team bench-strength, experience
and expertise continue to grow. And most importantly, our strategy remains
focused on building value for our shareholders in the long-term. Together,
these factors give us confidence in our abilities and in our strategy; our
entrepreneurial team is enthusiastic about taking on the opportunities that
lie ahead.
    Clarke's Consolidated Financial Statements and Management's Discussion &
Analysis for the year ended December 31, 2007 are available at www.sedar.com.

    About Clarke

    Halifax-based Clarke Inc., led by an entrepreneurial team of investment
professionals, is an activist and catalyst 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, legal and regulatory risks, and
therefore there can be no assurance that investment activities will result in
continuing investment gains.

    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, Fax: (902) 442-0187


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