Clarke Inc. Reports 2014 Third Quarter Results and Declares Quarterly Dividend

HALIFAX, Nov. 5, 2014 /CNW/ - Clarke Inc. ("Clarke" or the "Company") (TSX: CKI) today announced its results for the three and nine months ended September 30, 2014.

The following were certain key events during the third quarter:

• The Company's investment portfolio increased in value by $13.2 million (excluding purchases and sales) and is included in net gains on investments.
• The Company sold the remainder of its investment in Sherritt International Corporation ("Sherritt") at $4.75 per share. In total, our Sherritt investment generated a profit of $17.5 million for the nine months ended September 30, 2014 and an IRR of 68%. Clarke no longer has any investment in Sherritt.
• Holloway Lodging Corporation ("Holloway") acquired all of the outstanding shares of Royal Host Inc. ("Royal Host"). As a shareholder of Royal Host, Clarke received cash of $6.1 million and 610,977 Holloway shares on closing of the acquisition. Following the completion of this transaction, Clarke acquired an additional 6,263,839 shares of Holloway and now owns approximately 36% of Holloway's outstanding shares.
• Clarke was added to the S&P/TSX SmallCap Index.

For the three and nine months ended September 30, 2014, Clarke generated net income attributable to equity holders of $16.4 million or $0.83 per share and $109.3 million or $5.66 per share, respectively. This compared to net income attributable to equity holders of $21.5 million or $1.30 per share and $31.8 million or $1.92 per share for the same periods in the prior year.

Clarke's book value at the end of the third quarter was $12.99 per share. The Company grew book value per share by $4.67 in the first nine months of the year while also returning $0.40 per share to shareholders in the form of dividends.  In addition, the Company spent $9.8 million during the first nine months of the year repurchasing shares, all at a discount to book value.

Michael Rapps, Clarke's President and CEO, stated: "Despite weakness in the equity markets in recent months, Clarke continued to generate solid investment results through the third quarter. In particular, Clarke's book value per share increased 7% in the third quarter and 56% year-to-date." Mr. Rapps added: "While many investors may be worried by the recent selloff in stock prices, we welcome the volatility as it provides us with opportunities to acquire securities at cheaper prices. We currently have approximately $40 million of cash on hand in addition to availability under our credit facilities and remain ready to deploy that cash in a disciplined manner. Until then, we will continue to assist our portfolio companies with growing their businesses and repurchasing our own shares at prices below book value."

Clarke also announced today that its Board of Directors declared a fourth quarter dividend of $0.10 per share payable on January 13, 2015 to shareholders of record at the end of business on December 31, 2014.

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, 2014, is available at www.sedar.com and www.clarkeinc.com.

RESULTS OF OPERATIONS
(in millions, except per share amounts)		Three months  ended  September 30,  2014  $	Three months  ended  September 30,  2013  $	Nine months  ended  September 30,  2014  $	Nine months  ended  September 30,  2013  $
Realized and unrealized gains on investments		13.2	16.5	38.7	24.5
Dividend income		1.8	1.5	5.6	4.0
Revenue and other income*		5.6	6.1	16.7	9.2
Income from continuing operations		16.4	17.4	49.6	21.8
Income from discontinued operations attributable to equity holders of the Company**		-	4.1	59.7	10.0
Net income attributable to equity holders of the Company		16.4	21.5	109.3	31.8
Comprehensive income attributable to equity holders of the Company		17.4	23.1	106.3	35.7
Basic earnings per share ("EPS")
	Income from continuing operations	0.83	1.05	2.57	1.32
	Income from discontinued operations	-	0.25	3.09	0.60
	Net income	0.83	1.30	5.66	1.92
Diluted EPS
	Income from continuing operations	0.83	0.73	2.09	0.96
	Income from discontinued operations	-	0.16	2.46	0.40
	Net income	0.83	0.89	4.55	1.36
Total assets		271.1	297.0	271.1	297.0
Cash dividends declared per share		0.10	0.10	0.40	0.24
Book value per share		12.99	7.07	12.99	7.07

*Revenue and other income includes pension recovery/expense, interest income, gains on sale of fixed assets, foreign exchange gains/losses, gains on convertible debenture redemptions and repurchases and revenue from the Transportation segment.
**Income from discontinued operations includes the results and the gain on sale of the Freight Transport Business and Jerico.

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); 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", "believes", or equivalents or 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 or expected performance of the Company's investee companies, the future price and value of securities held by the Company, changes in these securities holdings, changes to the Company's hedging practices, currency fluctuations and requirements for additional capital. 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. Such risks and uncertainties include, among others, the Company's investment strategy, legal and regulatory risks, general market risk, potential lack of diversification in the Company's investments, interest rates, foreign currency fluctuations, the sale of Company investments, the fact that dividends from investee companies are not guaranteed, reliance on key executives, use of information technology and information systems, commodity market risk, risks associated with investment in derivative instruments and other factors. With respect to the Company's Transportation segment, such risks and uncertainties include, among others, competition, seasonality and weather conditions, safety, claims and insurance, government regulation of the transportation industry, reliance on major customers, labour relations, 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.

Michael Rapps, President and CEO, at [phone] or Andrew Snelgrove, CFO, at [phone].