Clarke Inc. Reports 2015 First Quarter Results and Declares Quarterly Dividend

HALIFAX, May 6, 2015 /CNW/ - Clarke Inc. ("Clarke" or the "Company") (TSX: CKI) today announced its results for the three months ended March 31, 2015.

First Quarter Results

In the first quarter, the Company increased book value per share by $0.30 and returned $0.10 per share to shareholders in the form of dividends (a total return of 3.2% per share). The Company spent $6.3 million during the quarter to repurchase its Common Shares, all at a discount to book value. Book value per share at the end of the quarter was $12.87 while our share price was $10.20.

Subsequent to the end of the first quarter, the Company repurchased an additional 2,379,042 Common Shares pursuant to a substantial issuer bid, also at a discount to book value. Adjusting solely for this substantial issuer bid, the Company estimates its pro forma book value per share is $13.28.

Net income for the three months ended March 31, 2015 was $3.6 million compared with net income of $73.0 million for the same period in 2014. The significant net income earned for the three months ended March 31, 2014 was due to the sale of the Company's freight transport business and its interest in Gestion Jerico Inc., which resulted in gains on sale of $71.1 million. During the three months ended March 31, 2015, the Company had unrealized gains on its investments of $3.8 million compared to unrealized gains of $8.0 million for the same period in 2014. The Company had realized gains on its investments of $0.6 million for the three months ended March 31, 2015 compared with realized gains of $1.0 million for the same period in 2014.

Second Quarter Dividend

Clarke also announced today that its Board of Directors declared a quarterly dividend of $0.10 per Common Share payable on July 10, 2015 to shareholders of record at the end of business on June 30, 2015.

Outlook

Michael Rapps, President and CEO, stated: "As a result of our various investment sales in recent years, Clarke eliminated substantially all of its debt and built a significant cash balance. At March 31, 2015 Clarke had $82.5 million of cash on hand (net of all debt) representing 43% of our market capitalization or $4.38 per share as at that date. We continue to seek new investments that can deliver attractive returns in coming years.

We currently see select opportunities in the oil and gas industry where valuations have declined in response to the recent decline in oil and gas prices. Since the beginning of the year, we have deployed approximately $15.0 million to oil and gas investments and we would like this investment level to increase. Investment opportunities outside of the oil and gas industry have been limited in our view due to generally high valuations. We will remain disciplined in deploying our capital as that capital retains option value while it is in our hands.

In addition to seeking new investments, we will continue working with our two major investee companies to maximize their business values. We believe there is significant opportunity for each of Terravest and Holloway to continue acquiring complementary businesses and hotels, respectively, at accretive prices. Each of these companies remains undervalued in our view.

Finally, we continue to view our Common Shares as undervalued. As long as this situation exists, we will continue to repurchase our Common Shares. To that end, since the beginning of 2015, we have repurchased 3,044,372 Common Shares. Since the end of the first quarter of 2014, we have repurchased 4,191,218 Common Shares representing approximately 22% of our outstanding Common Shares at the start of that period. All of these repurchases were completed at a meaningful discount to our book value per share."

Other Information

Further information about Clarke, including Clarke's Interim Condensed Consolidated Financial Statements and Management's Discussion & Analysis for the three months ended March 31, 2015, is available at www.sedar.com and www.clarkeinc.com.

Highlights of the interim condensed consolidated financial statements for the three months ended March 31, 2015 compared to the three months ended March 31, 2014 are as follows:

(in millions, except per share amounts)			March 31, 2015                         $	March 31, 2014                          $
Realized and unrealized gains on investments			4.4	9.0
Interest income			1.1	0.7
Dividend income			0.8	1.5
Revenue and other income*			1.1	4.9
Income from continuing operations			3.6	13.3
Net income attributable to equity holders of the Company			3.6	73.0
Comprehensive income attributable to equity holders of the Company			4.8	69.2
Basic earnings per share ("EPS")
	Income from continuing operations		0.19	0.73
	Net income		0.19	4.01
Diluted EPS
	Income from continuing operations		0.19	0.57
	Net income		0.19	3.03
Total assets			252.7	264.9
Long-term financial liabilities			2.3	35.3
Cash dividends declared per share			0.10	0.20
Book value per share			12.87	11.72

*Revenue and other income includes pension recovery/expense, gains on sale of fixed assets, foreign exchange gains/losses, gains on convertible debenture redemptions and repurchases and service revenue.

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.

Cautionary Statement Regarding Use of Non-IFRS Accounting Measures

This press release makes reference to the Company's book value per share as a measure of the performance of the Company as a whole. Book value per share is measured by dividing shareholders' equity at the date of the statement of financial position by the number of Common Shares outstanding at that date. Clarke's method of determining this amount may differ from other companies' methods and, accordingly, this amount may not be comparable to measures used by other companies. This amount is not a performance measure as defined under IFRS and should not be considered either in isolation of, or as a substitute for, net earnings prepared in accordance with IFRS.

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, commodity market risk, risks associated with investment in derivative instruments and other factors. With respect to the Company's ferry operation, such risks and uncertainties include, among others, weather conditions, safety, claims and insurance, 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]