Slide 1: Clarke Inc. Corporate Presentation
Clarke Inc. Corporate Presentation August 26, 2015
Slide 2: Forward-Looking Statements
Forward-Looking Statements CAUTIONARY STATEMENT REGARDING USE OF NON-IFRS ACCOUNTING MEASURES This presentation 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 da
Slide 3: Overview of Clarke Inc.
Overview of Clarke Inc. Publicly-traded investment company based in Halifax, Canada $185mn Market Cap $129mn Enterprise Value Trades on Toronto Stock Exchange under the symbol CKI Focused on: Acquiring undervalued or underperforming businesses with hard assets Working with management t
Slide 4: Executive Team
Executive Team MICHAEL RAPPS – President & Chief Executive Officer As a Director of Clarke since 2012, Mr. Rapps has been involved in many of Clarke's investments in recent years. Mr. Rapps recently acted as Managing Director of a private investment company focused on undervalued and distressed
Slide 5: Investment Performance
Investment Performance 5 ¹Price per share as at August 26, 2015
Slide 6: Clarke Inc. 5-Year Stock Chart
Clarke Inc. 5-Year Stock Chart 6
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 • Completed two SIB’s to • Armoyan • Redeemed $18mn debentures repurc
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: $56mn of net cash $115mn marketable securities $
Slide 9: Summary of Clarke's Assets
Summary of Clarke’s Assets Value ($mn) % of Portfolio Public company equity investments $103 43% Public company debenture investments $12 5% Debt investments $3 1% Real estate holdings $4 1% Private equity funds $3 1% Pension Surplus $54 23% Cash $59 25% TOTAL¹ $237 100% 9 ¹The Company has non-capit
Slide 10: Public Portfolio
Public Portfolio Marketable securities of $115mn Realize income through dividends, interest payments and capital gains Ticker Value ($mn) % of Portfolio Energy Securities Portfolio $21 18% Holloway Lodging Corp. (Equity) HLC $45 39% Holloway Lodging Corp. (Debentures) HLC.DB $11 10% Keck Seng In
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: Gestion Jerico
Case Study #1: 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 13: Case Study #2: Terravest Capital Inc.
Case Study #2: Terravest Capital Inc. Terravest was a broken income trust with a disparate collection of underperforming portfolio companies Clarke acquired 20% of the equity and joined the Board of Directors Sold four underperforming portfolio businesses Stylus, Don Park, Ezee-On and Beco
Slide 14: Case Study #2: Terravest Capital Inc.
Case Study #2: Terravest Capital Inc. Acquired Gestion Jerico for $54mn Tank and pressure vessel fabrication Acquisition multiple of 4.7x EBITDA Cross-selling synergies available and countercyclical with existing businesses Raised $20mn of equity to pursue further opportunities Acquired
Slide 15: Case Study #2: Terravest Capital Inc.
Case Study #2: Terravest Capital Inc. 15
Slide 16: Case Study #3: Highkelly Drilling Ltd.
Case Study #3: 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 17: 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 18: Reduction in Debentures Outstanding
Reduction in Debentures Outstanding 18
Slide 19: Reduction in Shares Outstanding
Reduction in Shares Outstanding 19
Slide 20: Capital Structure
Capital Structure Clarke Inc. (TSX: CKI) Shares Outstanding 15,626,175 Share Price $11.85 52-Week Trading Range $9.10 – $12.30 Market Cap $185mn Cash $59mn Total Debt $3mn Enterprise Value $129mn 20
Slide 21: 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 21