Slide 1: Clarke Inc. Corporate Presentation
Clarke Inc. Corporate Presentation March 27, 2015
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation 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
Slide 3: Overview of Clarke Inc.
Overview of Clarke Inc. Publicly-traded investment company based in Halifax, Canada $192mn Market Cap $116mn Enterprise Value Trades on Toronto Stock Exchange under the symbol CKI Focused on acquiring undervalued or underperforming businesses with hard assets, working with management to im
Slide 4: Investment Performance
Investment Performance $14.00 Book Value Per Share $12.00 mmm Book Value per share $10.00 —™ Price per share $8.00 $6.00 $4.00 $2.00 - $0.00 — 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 CLARHE
Slide 5: Clarke Inc. 5-Year Stock Chart
Clarke Inc. 5-Year Stock Chart 5
Slide 6: Executive Team
Executive Team GEORGE ARMOYAN – Executive Chairman 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. MICHAEL RAPPS – P
Slide 7: Corporate History and Select Transactions
Corporate History and Select Transactions 2013 • Increased dividend to $0.10/Q 2009 • Haw appointed VP Investments • SIB for $9mn debentures at 75% of • Sold Bonnett’s for $26mn face value • Sold Highkelly for $12mn 2015 2002 2011 • Announced SIB to buy up to • Armoyan • Redeemed $18mn debentures 2m
Slide 8: Clarke Today
Clarke Today Focus on: Increasing the value of current investments Identifying new investment opportunities Returning capital to shareholders through dividends and share repurchases Well positioned for growth with strong balance sheet: $76mn of net cash (net of debt)¹ $89mn marketable
Slide 9: Public Portfolio
Public Portfolio Marketable securities of $89mn Realize income through dividends, interest payments and capital gains Ticker Value ($mn) % of Portfolio Holloway Lodging Corp. (Equity) HLC $41 46% Holloway Lodging Corp. (Debentures) HLC.DB $16 18% TerraVest Capital Inc. TVK $29 33% Energy Securit
Slide 10: Other Assets
Other Assets Other assets worth $105mn Pension surplus of $51mn Private debt investments of $40mn Real estate assets worth $4mn Private equity interests worth $4mn Private company investments of $6mn Non-capital tax loss carry-forwards of $29mn 10
Slide 11: Investment Process
Investment Process Identify Engage with opportunity Management / Board Invest Create value Exit investment Return capital & 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
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 Rati
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 attractive return with a sufficient margin of safety We will continue to identify and invest in undervalued a
Slide 15: Reduction in Debentures Outstanding
Reduction in Debentures Outstanding¹ 15 ¹All remaining Convertible Debentures were Redeemed during the first half of 2014
Slide 16: Reduction in Shares Outstanding
Reduction in Shares Outstanding 16
Slide 17: Capital Structure
Capital Structure Clarke Inc. (TSX: CKI) Shares Outstanding 18,827,647 Share Price $10.22 52-Week Trading Range $8.10 – $12.24 Market Cap $192mn Cash $79mn Total Debt $3mn Enterprise Value $116mn 17
Slide 18: Contact
Contact Clarke Inc. 6009 Quinpool Road, 9th Floor Halifax, Nova Scotia B3K 5J7 www.clarkeinc.com MICHAEL RAPPS – President & CEO (416) 855-1925 ANDREW SNELGROVE – Chief Financial Officer (902) 442-3987 18