Clarke Inc. Reports Refinancing of Credit Facilities and 2025 Second Quarter Results

HALIFAX, NS, Aug. 8, 2025 /CNW/ - Clarke Inc. ("Clarke" or the "Company") (TSX: CKI) today announced its results for the three and six months ended June 30, 2025.

Refinancing of Credit Facilities

The Company completed the refinancing of its Talisman development construction financing during the quarter. This resulted in a new $250.0 million facility consisting of a $115.0 million term loan—partially used to repay the existing $85.0 million construction loan from the development's first phase, and a $135.0 million construction facility to fund the development's second phase. Previously, the Company had financed the construction of phase two through its cashflow from operations and existing revolving credit facilities. This refinancing allowed the Company to pay down its revolving credit facilities, increase its liquidity, and fully repay its $30.0 million, unsecured credit facility, which was due to a related party.

"With this $250 million facility now in place, we've secured the funding needed to support both the stabilization of phase one and to complete the build-out of phase two", said Tom Casey, Chief Financial Officer of Clarke Inc. "Tenant, lender, and stakeholder response to our development has been overwhelmingly positive, and we're very pleased with the outcome. The facility's competitive pricing and flexible terms speak to the quality of the asset, the strength of our balance sheet, and our track record of execution. We want to thank the Toronto RBC Real Estate Markets team for their support and for executing a smooth transaction."

Also, during the quarter, the Company refinanced an investment property in St. John's, NL. This marked a milestone in our financing strategy, as we were able to secure the loan using residential loan terms rather than hospitality terms after the conversion of the property. The repurposing of the property not only enhanced the asset's results but also led to a meaningful capitalization rate compression and a substantial improvement in financing terms. "This financing is a strong validation of this strategy," said Casey. "We appreciate the CIBC Real Estate Finance Division team for their support of our conversion strategy and for facilitating an efficient, well-executed transaction."

Second Quarter Results¹

The Company's net loss for the three and six months ended June 30, 2025, was $0.1 million and $2.4 million, respectively, compared to net income of $1.8 million and $4.2 million for the same periods in 2024. The net loss in the quarter was primarily attributable to certain interest outlays expensed in the current period, compared to a portion in the prior period that had been capitalized due to ongoing construction.  The net loss for the six-month period was primarily attributable to a pension expense resulting from past service costs following a pension plan amendment, as well as higher interest and a reduced deferred income tax recovery. Hotel and rental revenue increased primarily due to the operations of the first phase of the Talisman, which did not have occupancy until June 1, 2024.  

The other comprehensive loss of $1.3 million during the quarter is a result of remeasurement losses in the Company's pension plans because of an increase to the discount rate. Remeasurement gains in the first quarter of 2025 more than offset these second quarter losses, resulting in net other comprehensive income of $4.0 million for the six-month period.  Other comprehensive losses in each of the respective 2024 periods were driven by remeasurements losses on the Company's pension plans. 

During the second quarter of 2025, the Company's book value per common share decreased by $0.15, or 0.7%. The Company had a net loss of $0.1 million during the quarter which included hotel net operating income of $5.3 million, or $0.38 per common share, offset by depreciation and amortization of $2.9 million, or $0.21 per common share and interest and accretion of $3.2 million, or $0.23 per common share. The Company also recorded remeasurement losses on its pension surplus of $1.3 million, or $0.10 per common share in other comprehensive income. The Company's book value per common share at the end of the quarter was $19.91, while the common share price was $26.13.

Additional commentary on our first quarter results can be found in our Management's Discussion & Analysis for the three and six months ended June 30, 2025.

Other Information

Highlights of the interim condensed consolidated financial statements for the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024 are as follows:

(in millions, except per share amounts)	Three months  ended  June 30, 2025  $	Three months  ended  June 30, 2024  $	Six months  ended  June 30, 2025  $	Six months  ended  June 30, 2024  $
Hotel and rental revenue	17.7	15.1	35.4	29.7
Provision of services revenue	1.9	2.3	2.1	2.5
Other income (loss)	0.3	(0.2)	(1.8)	0.9
Net income (loss)	(0.1)	1.8	(2.4)	4.2
Other comprehensive income (loss)	(1.3)	(0.9)	4.0	(2.8)
Comprehensive income (loss)	(1.4)	0.9	1.6	1.4
Basic and diluted earnings (loss) per share	(0.01)	0.13	(0.18)	0.30
Total assets	577.0	423.7	577.0	423.7
Total liabilities	305.2	191.7	305.2	191.7
Long-term financial liabilities	170.7	134.3	170.7	134.3
Book value per share	19.91	16.63	19.91	16.63

About Clarke

Clarke is a real estate company with holdings across real estate sectors – primarily residential, furnished suites and hospitality. Clarke's common shares (CKI) trade on the Toronto Stock Exchange. Further information about Clarke, including Clarke's Interim Condensed Consolidated Financial Statements and Management's Discussion & Analysis for the three and six months ended June 30, 2025, is available on SEDAR+ at www.sedarplus.ca and www.clarkeinc.com.

Cautionary Statement Regarding Use of Non-IFRS Accounting Measures and Ratios

This press release makes reference to "book value per share" and "net operating income".  Book value per share and net operating income are not financial measures or ratios calculated and presented in accordance with International Financial Reporting Standards ("IFRS") and should not be considered in isolation or as a substitute to any financial measures or ratios of performance calculated and presented in accordance with IFRS. These non-IFRS financial measures and ratios are presented in this press release because management of Clarke believes that such measures and ratios enhance the user's understanding of our historical and current financial performance.

Book value per share is measured by dividing shareholders' equity of the Company at the date of the statement of financial position by the number of common shares outstanding at that date.  Net operating income is defined as revenue less expenses. Net operating income measures operating results before interest, depreciation, amortization, and income taxes.  Clarke's method of determining these amounts may differ from other companies' methods and, accordingly, these amounts may not be comparable to measures used by other companies.

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", "budgets", "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 underlying assets, changes in the property 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 assets, the expectation that the Company's redeployment of capital from its asset dispositions, renovations and repurposes will be accretive to the Company's shareholders, the anticipated timing for completion of the second phase of the Talisman residential redevelopment, reliance on key executives and other factors.  The real estate industry is subject to various risks that could impact our financial performance and asset values. These risks include fluctuations in property values, changes in market demand, interest rate volatility, and broader economic conditions such as inflation, employment levels, and consumer confidence. Tourism levels, economic activity and changing competition in our markets can have a significant impact on the underlying results of our assets. Competition from new developments and alternative accommodation options could affect occupancy rates and rental pricing. Regulatory and legislative changes, including zoning laws, rent control measures and environmental policies, may impose additional costs or restrictions on operations. Additionally, unforeseen capital expenditures, rising maintenance costs, and disruptions in supply chains may impact profitability. Our ability to successfully acquire, develop, and manage real estate assets depends on effective risk mitigation strategies, financial flexibility, and market adaptability. With respect to the ferry operations, such risks and uncertainties include, among others, weather conditions, safety, claims and insurance, uninsured losses, changes in levels of business and commercial travel and tourism 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.

_____________________________________

¹ Book value per share and net operating income are non-IFRS measures and ratios. Refer to the "Cautionary Statement Regarding Use of Non-IFRS Accounting Measures and Ratios" section of this press release and our June 30, 2025 MD&A for more information.

SOURCE Clarke Inc.

For further information, please contact George Armoyan, President and Chief Executive Officer, at [phone] or Tom Casey, Chief Financial Officer, at [phone]