Clarke Inc. Reports Strong Fourth Quarter and Year End 2006 Results as Investment Activities Drive Growth - $0.08 per common share cash dividend declared



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

    HALIFAX, March 5 /CNW/ - Clarke Inc. ("Clarke" or the "Company") today
announced its results for the three months and year ended December 31, 2006,
which reflected the Company's strong performance driven by its strategic and
opportunistic investment strategy.
    Clarke's Board of Directors also announced today an $0.08 per common
share cash dividend payable on March 30, 2007 to shareholders of record at the
end of business on March 16, 2007.
    "Clarke is strongly focused on one overarching goal in all its business
activities: uncovering and creating value for its shareholders. We are proud
that we were able to deliver a shareholder return of 33%, including dividends,
in 2006," said George Armoyan, President and CEO of Clarke. "The strong
results posted by our investment division are building momentum for Clarke -
and are giving us added balance sheet strength to enable further strategic and
opportunistic investments. Our investment team is relentless in pursuing
opportunities for profitable growth - and we continue to seek out investments
that will help us deliver increased value for shareholders."

    

    Financial Highlights

    -------------------------------------------------------------------------
    Millions of Canadian dollars,
     except per share amounts
     in dollars                        Quarter ended              Year ended
                                         December 31,            December 31,
                                   ------------------------------------------
                                    2006        2005        2006        2005
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Revenue and Other Income        52.1        49.1       208.2       201.4
    -------------------------------------------------------------------------
    EBITDA (1)                       9.8         4.0        34.9        26.1
    -------------------------------------------------------------------------
    Income from Continuing
     Operations before
     income taxes and
     equity in earnings of
     long-term investment            6.4         3.5        23.4        13.4
    -------------------------------------------------------------------------
    Net Income                       4.4         3.2        17.2        18.5
    -------------------------------------------------------------------------
    Basic Earnings Per Share (2)    0.35        0.24        1.33        1.38
    -------------------------------------------------------------------------
    Diluted Earnings Per Share (2)  0.28        0.23        1.13        1.37
    -------------------------------------------------------------------------

    (1) EBITDA is a non-GAAP measure. Management uses, and investors and
        other readers may use, EBITDA, among other performance measures, to
        assess the operating performance of our businesses. Reference should
        be made to the description of EBITDA and reconciliation to a GAAP
        measure on page 9 of Management's Discussion & Analysis for the year
        ended December 31, 2006 incorporated by reference herein. EBITDA does
        not have a standardized meaning and is, therefore, unlikely to be
        comparable with similar measures presented by other issuers.

    (2) Earnings per share, on both a basic and diluted basis, has been
        calculated for the comparative periods after adjusting the number of
        outstanding shares to reflect the 2 for 1 stock split effected by way
        of a stock dividend paid on April 6, 2006.
    

    Quarter ended December 31, 2006

    For the 4th quarter, Clarke's basic earnings per share ("EPS") increased
by 45.8% over the result for the same quarter in 2005. Net income increased by
37.5% from the result for the fourth quarter in 2005, driven primarily by the
Company's investment activities.
    Reflecting the growth of Clarke's investment strategy, realized
securities gains before income taxes increased by $1.7 million, from
$0.2 million in 2005 to $1.9 million in 2006. Interest and trust distribution
income increased $3.1 million before income taxes, from $0.7 million in 2005
to $3.8 million in 2006, driven by the larger investment portfolio following
the successful offering of $70.0 million of convertible debentures in December
2005.
    "Over the last two years, Clarke has transformed itself into an activist
catalyst investment company," said Mr. Armoyan, President and CEO of Clarke
Inc. "Our investment activities, focused on both strategic investments in
which we take an activist role in uncovering hidden value, and opportunistic
investments in which evolving market conditions offer potential for desirable
returns, have clearly become a key driver of our overall success."
    The Company had cash and cash equivalents at December 31, 2006 of
$99.9 million, in addition to its marketable securities, which have a carrying
value of $170.3 million. Unrealized market gains on the securities portfolio
were $9.3 million at December 31, 2006, compared to $2.5 million at
December 31, 2005.

    Year ended December 31, 2006

    Basic EPS from continuing operations for the year ended December 31, 2006
was $1.33, compared to a normalized $0.98 for the year ended December 31,
2005, an increase of $0.35 per share, or 35.7%, after adjusting the EPS for
the year ended December 31, 2005 for the $0.34 per share impact of the initial
public offering, and subsequent disposition of ATS Andlauer Transportation
Services Inc..
    EBITDA for the Investment Segment increased by $21.1 million, from
$1.3 million in 2005 to $22.4 million in 2006, reflecting Clarke's use of the
$70.0 million of convertible debentures issued in 2005 to execute its
investment strategy. Both securities gains and investment income grew
substantially during 2006, with realized securities gains in this segment of
$14.8 million compared to $0.6 million in 2005, and investment and other
income of $8.1 million compared to $0.8 million in 2005.

    Outlook for 2007

    For 2007, Clarke anticipates growth in its Investment Segment, through
the accretive value of its strategic investments and continued gains in its
opportunistic investment portfolio. The Company will also continue to build
its investment portfolio - selectively seeking out new opportunities that it
believes will deliver value, and taking the steps it recognizes as key, in
each case, to realizing its return objectives. In its freight transportation
business, Clarke will continue to focus on organic growth through new service
initiatives, competitive pricing, and improvements in customer service. "In
everything we do - in our investments and in our operations - our overriding
objective is to deliver increased shareholder value," said Mr. Armoyan.
    Clarke's Consolidated Financial Statements and Management's Discussion &
Analysis for the year ended December 31, 2006 are available at www.sedar.com.

    About Clarke

    Clarke Inc. is the Halifax-based parent company of a number of
wholly-owned operating companies and divisions, and is an activist catalyst
investor with a diversified portfolio of strategic and opportunistic
investments. Clarke's operating companies are in the transportation services
business. 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.

    Forward-looking Statements

    Certain statements in this news release, particularly in the "Outlook"
section, 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 the Company's control.
Actual results may differ materially from expected results if known or unknown
risks affect the business, or if estimates or assumptions 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 the Company's forward-looking statements.
    %SEDAR: 00009934E




For further information:

For further information: Jan Imeson, Executive Vice President & Chief
Financial Officer, Clarke Inc., (902) 442-3413, Fax: (902) 442-0187


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