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Clarke Inc. Reports 2012 Positive Year End Results and Quarterly Dividend Declaration

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HALIFAX, March 19, 2013 /CNW/ - Clarke Inc. ("Clarke" or the "Company") (TSX: CKI CKI.DB.A) today announced its results for the year ended December 31, 2012.

RESULTS OF OPERATIONS

Highlights of the consolidated financial statements for the three months and year ended December 31, 2012 compared to the three months and year ended December 31, 2011 are as follows:

 
(in millions, except per share amounts) Three
months ended
December 31,
2012
$
Three
months ended
December 31,
2011
$
Year ended
December 31,
2012
$
Year ended
December 31,
2011
$
Revenue and other income 54.1  72.3 233.5 205.9
Net income (loss) attributable to equity holders of the Company (3.0) 16.4 1.7 (2.6)
Other comprehensive loss (0.3) (0.1) (0.4) -
Comprehensive income (loss) attributable to equity holders of the Company (3.3) 16.3  1.3  (2.6) 
Basic EPS - continuing operations (0.20) 0.78  0.08  (0.47)

Net income attributable to equity holders of the Company for the year ended December 31, 2012 was $1.7 million compared with a net loss of $2.6 million in 2011. During the year ended December 31, 2012, the Company had unrealized losses on its marketable securities of $4.7 million compared to unrealized losses of $10.2 million in 2011. The Company had realized losses on its marketable securities of $2.8 million for the year ended December 31, 2012, compared to realized losses of $8.3 million in 2011.

The Commercial Tanks & Home Heating segment continued to deliver strong sales volumes due in part to incremental sales associated with businesses acquired in the last two years which resulted in increased earnings in this segment. This segment generated EBITDA of $8.5 million for the year ended December 31, 2012 compared to $5.8 million in 2011.  The Freight Transportation segment delivered reasonable results despite challenging market conditions and due to efficiencies introduced over the last two years was able to generate meaningful earnings in this segment. EBITDA before intercompany dividend revenue for the Freight Transportation segment for the year ended December 31, 2012 was $14.0 million compared to $15.2 million in 2011.

During the year ended December 31, 2012, the Company had equity in losses of associates of $3.4 million compared to losses of $0.9 million in 2011. The losses in 2012 mainly consist of impairments taken on petroleum and natural gas properties in associate Midlake Oil & Gas Limited.

Basic earnings per share ("EPS") from continuing operations for the year ended December 31, 2012 was $0.08, compared to basic loss per share of $0.47 for the year ended December 31, 2011, an increase of $0.55 per share. Book value per share at December 31, 2012 was $5.30, in line with book value per share of $5.31 on December 31, 2011. Book value per share reflects dividends in the amount of $0.12 per share that were paid during 2012.

Clarke's Board of Directors also announced today a quarterly dividend of $0.06 per common share payable on April 15, 2013 to shareholders of record at the end of business on March 28, 2013. The Board of Directors believes that the payment of a dividend is a useful way to return capital to shareholders and that this level of dividend will continue to allow Clarke to pursue its current business plan and invest in attractive growth opportunities.

QUARTER ENDED DECEMBER 31, 2012

Fourth quarter revenue and other income decreased as a result of a decrease in the value of our portfolio of publicly-traded securities.  Realized/unrealized losses on marketable securities for the fourth quarter of 2012 were $7.8 million compared to gains of $11.9 million for the same period in 2011. This decrease was offset by increased revenue generated in both the Freight Transportation and Commercial Tanks & Home Heating segments. Higher revenue in the Freight Transportation segment is due primarily to an increased focus on revenue growth in that segment and the acquisition of refrigeration transportation assets acquired late in the fourth quarter of 2011. Higher revenues in the Commercial Tanks & Home Heating segment are due to incremental sales associated with two businesses acquired in 2011. The Company incurred a loss from continuing operations of $2.9 million in the fourth quarter of 2012 compared to generating income of $16.1 in the same period in the prior year. This was driven largely by the decrease in the value of the portfolio of publicly-traded securities and equity in losses of associates of $1.8 million.

Net income from discontinued operations for both years consists of the results of Butterfly Holdings LP (formerly Countdown LP), which was entirely divested during 2011 with the final contingent payment earned in the fourth quarter of 2012.

The value of our portfolio of publicly-traded securities decreased in the fourth quarter of 2012 compared to an increase in the fourth quarter for 2011, leading to comprehensive loss attributable to equity holders of the Company of $3.3 million for the fourth quarter of 2012 compared to comprehensive income of $16.3 million for the same period in 2011.

For the three months ended December 31, 2012, Clarke's basic loss per share from continuing operations was $0.20, compared to EPS of $0.78 for the same quarter in 2011. This was reflective of the results of operations for each quarter.

OUTLOOK

The Commercial Tanks & Home Heating segment delivered strong financial performance in 2012 and we expect this strong performance to continue in 2013. The 2012 results for the Freight Transportation segment were reasonable despite challenging market conditions and the Company believes we will meet or exceed the 2012 results in 2013.

The Company believes that its publicly-traded securities continue to be undervalued by the public markets. The Company has purchased additional shares of those issuers where the undervaluation is most pronounced and will continue to do so as market conditions permit. The Company also intends to become more active in the governance and management of those issuers where the undervaluation is most pronounced with a view to unlocking the value we believe exists. Subsequent to the year ended December 31, 2012, the company disposed of two publicly-traded securities at significantly higher prices than those paid for the securities.

During the year the Company continued to return capital to shareholders. The Company repurchased 370,402 shares during the year at an average price of $4.21 per share. Additionally, the Company reinstated a quarterly dividend of $0.06 per share in the third quarter. The Company will continue to repurchase its shares depending on market prices and the Board of Directors will consider the merits of increasing the Company's dividend in coming quarters.

Further information about Clarke, including Clarke's Consolidated Financial Statements and Management's Discussion & Analysis for the year ended December 31, 2012, is available at www.sedar.com and www.clarkeinc.com.

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; CKI.DB.A); 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", or "believes", or equivalents or variations, including negative 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 price of securities held by the Company, changes in these securities holdings, changes to the Company's hedging practices, currency fluctuations, requirements for additional capital, changes to government regulations and the timing and possible outcome of pending litigation. 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.

With respect to the Company's Investment segment, such risks and uncertainties include, without limitation, the Company's investment strategy, legal and regulatory risks, general market risk, potential lack of diversification in the Company's investments, reliance on certain key executives, interest rates and foreign currency fluctuations and other factors.  With respect to the Company's Freight Transportation segment, such risks and uncertainties include, without limitation, competition, expiry of certain leases, labour relations, the use of third party service providers, dependence on certain personnel, fuel costs, weather conditions, customer relationships, claims, litigation and insurance, government regulation of the transport industry and other factors. With respect to the Company's Commercial Tanks & Home Heating segment, such risks and uncertainties include, without limitation, the costs of housing and major consumer products, energy costs, alternative energy sources, steel costs, product liability claims, foreign exchange risk, and other factors. Other general risks and uncertainties include, without limitation, environmental considerations, use of information technology and information systems, safety issues, concentration of sales among a small number of customers, the seasonality of business cycles for certain segments, commodity market risk, risks associated with investment in derivative instruments 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.



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