Clarke Inc. · TSX:CKI
Clarke — Investor Presentation (March 2014)
19 slides from Clarke's investor presentation, Mar 5, 2014
Slide 1: Clarke Inc. Investor Presentation
Clarke Inc. Investor Presentation March, 2014
Slide 2: Forward-Looking Statements
Forward-Looking Statements This document may contain or refer to certain forward-looking statements relating, but not limited to, Clarke's expectations, intentions, plans and beliefs with respect to Clarke. Often, but not always, forward-looking statements can be identified by the use of words such
Slide 3: Overview of Clarke Inc.
Overview of Clarke Inc. Publicly-traded investment company based in Halifax, Canada $142.7mn Market Cap $134.3mn Enterprise Value Trades on Toronto Stock Exchange (TSX) under the symbols CKI and CKI.DB.A Focused on acquiring undervalued or underperforming businesses with hard assets, working with ma
Slide 4: Clarke Inc. (CKI) 5-Year Stock Chart
Clarke Inc. (CKI) 5-Year Stock Chart 4
Slide 5: Executive Team
Executive Team GEORGE ARMOYAN – President & Chief Executive Officer Entrepreneur with extensive experience in real estate development, mergers and acquisitions and capitalizing on turn-around opportunities over his 32 year career. Mr. Armoyan holds an Executive MBA from Harvard Business School. ANDR
Slide 6: Corporate History and Select Transactions
Corporate History and Select Transactions 2013 • Extended maturity of debentures 5 yrs 2009 • Increased dividend to $0.10/Q SIB for $9.3mn debentures at 75 cents • Haw appointed VP Investments • Sold Bonnett’s for $26.0mn • Sold Highkelly for $12.4mn 2011 2002 • Redeemed $18.3mn debentures Armoyan b
Slide 7: Clarke Today
Clarke Today Focus on: Identifying new investment opportunities Simplifying corporate structure Returning capital to shareholders through regular dividends, share repurchases and opportunistic debt reduction Increasing liquidity and public float Increasing transparency and making financial statement
Slide 8: Public Portfolio
Public Portfolio Marketable securities of $130.5mn Realize income through dividends, interest payments and capital gains Ticker Value ($mn)* % of Portfolio Sherritt International Corporation S $43.9 34% Supremex Inc. SXP $26.2 20% TerraVest Capital Inc. TVK $21.2 16% Royal Host Inc. (Debentures) RYL
Slide 9: Private Company Investments
Private Company Investments Private company investments of $12.0mn La Traverse (100% interest) MV Shamrock (100% interest) Passenger ferry operating in Rivière-du- Container ship operating in the Loup, QC Caribbean 9
Slide 10: Other Assets
Other Assets Other assets worth $87.1mn Private debt investments of $27.9mn Real estate portfolio worth $7.5mn Private equity portfolio worth $3.6mn Pension surplus of $48.1mn Non-capital tax loss carry-forwards of $30.5mn (pro forma for sale of Freight division) 10
Slide 11: Investment Process
Investment Process Identify Engage with opportunity Management / Board Invest Create value Return capital & Exit investment Reinvest Realize value 11
Slide 12: Case Study #1: Highkelly Drilling Ltd.
Case Study #1: Highkelly Drilling Ltd. Clarke acquired 38% of Highkelly for $9mn in January 2012 Highkelly is a private contract drilling company based in Calgary, AB Signed drilling contracts with Progress Energy First drilling rig was delivered to Progress in October 2012 Second drilling rig was d
Slide 13: Case Study #2: Gestion Jerico
Case Study #2: Gestion Jerico Invest Acquired secured debt of Granby Industries LP, a manufacturer of residential tanks Launched take-over bid for Granby at a market value of $1.3mn in January 2008 EBITDA was $490k Create Value Consolidated commercial and residential tank industry Rationalized cost
Slide 14: Clarke Going Forward
Clarke Going Forward 1. Focus on Creating Shareholder Value We do not need to be fully invested We do not invest to generate management or director fees We invest when we can make an acceptable return with a sufficient margin of safety We will continue to identify and invest in undervalued and under
Slide 15: Reduction in Debentures Outstanding
Reduction in Debentures Outstanding 15
Slide 16: Reduction in Shares Outstanding
Reduction in Shares Outstanding 16
Slide 17: Investment Performance
Investment Performance * Book value estimated as Q4 2013 BV plus estimated realized gains on sale of Freight Transport Business. 17
Slide 18: Capital Structure
Capital Structure Clarke Inc. (TSX: CKI) Shares Outstanding 18,530,934 Share Price $7.70 52-Week Trading Range $4.25 – $8.40 Market Cap $142.7mn Cash $46.5mn Debentures $34.5mn Total Debt* $38.1mn Enterprise Value $134.3mn * $3.6mn (10%) is non-recourse debt 18
Slide 19: Contact
Contact Clarke Inc. 6009 Quinpool Road, 9th Floor Halifax, Nova Scotia B3K 5J7 www.clarkeinc.com DUSTIN HAW – Vice President, Investments (416) 855-1928 MICHAEL RAPPS – Director (416) 855-1925 ANDREW SNELGROVE – Chief Financial Officer (902) 442-3987 KIM LANGILLE – Vice President, Taxation (902) 442