Clarke Inc. · TSX:CKI

Clarke — Shareholder Meeting (May 2015)

23 slides from Clarke's shareholder meeting presentation, May 7, 2015

  1. Slide 1: Clarke Inc. 2015 Annual General Meeting Presentation

    Clarke Inc. 2015 Annual General Meeting Presentation May 7, 2015

  2. 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

  3. Slide 3: Overview of Clarke Inc.

    Overview of Clarke Inc.  Publicly-traded investment company based in Halifax, Canada:  $173mn Market Cap¹  $108mn Enterprise Value¹  Focused on:  Acquiring undervalued or underperforming businesses with hard assets  Working with management to improve operations and capital allocation  Divesti

  4. Slide 4: 2014 Value Creation

    2014 Value Creation  Increased book value per share by 51% from $8.32 to $12.57  BVPS at March 31, 2015 is $12.87  Pro forma BVPS¹ at March 31, 2015 is $13.28  Returned $20.1mn to shareholders  $7.6mn of dividends  $12.5mn of share repurchases in 2014  Between March 31, 2014 –2015 Clarke repu

  5. Slide 5: 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

  6. Slide 6: 2014 Value Creation

    2014 Value Creation 6 ¹Pro-forma BVPS at March 31, 2015 for substantial issuer bid completed on April 7, 2015 is $13.28

  7. Slide 7: Clarke Inc. 5-Year Stock Chart

    Clarke Inc. 5-Year Stock Chart 7

  8. Slide 8: 2014 Highlights

    2014 Highlights  Sold Freight Transport Business – proceeds of $100.5mn  Gain on sale of $66.4mn  Sold Gestion Jerico – proceeds of $24.9mn  Gain on sale of $4.7mn  Sold shares of Sherritt – proceeds of $64.5mn  Gain on sale plus dividends of $17.7mn, and 68% IRR  Sold shares of Supremex – pr

  9. Slide 9: Clarke Today

    Clarke Today $s —( © ) CLARHE

  10. Slide 10: Summary of Clarke's Assets

    Summary of Clarke’s Assets At April 30, 2015 ($mn) Public company equity investments 100.0 Public company debenture investments 12.0 Debt investments 7.5 Real estate holdings 3.5 Private equity funds 2.9 Pension surplus 51.0 Cash 68.0 Private company investments n/a Tax losses n/a Total Assets 244.9

  11. Slide 11: Public Securities Portfolio

    Public Securities Portfolio  Marketable securities of $112mn  Realize income through dividends, interest payments and capital gains Ticker Value ($mn) % of Portfolio Holloway Lodging Corp. (Equity) HLC $49 44% Holloway Lodging Corp. (Debentures) HLC.DB $12 11% Keck Seng Investments KS $5 4% TerraV

  12. Slide 12: Clarke Investment Process

    Clarke Investment Process 12

  13. Slide 13: Certain Fundamental Principles

    Certain Fundamental Principles 1. Invest for the Right Reasons  We do not need to be fully invested  We do not invest to generate management or other fees  We invest when we can make an attractive return with a sufficient margin of safety  We invest counter-cyclically 2. Capital Allocation is Ke

  14. Slide 14: Invest, Create Value, Reinvest

    Identify Engage with opportunity Management / Board Invest Create value Exit investment Return capital & Reinvest Realize value 14

  15. Slide 15: Case Study: Terravest Capital Inc.

    Case Study: 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  De

  16. Slide 16: Case Study: Terravest Capital Inc.

    Case Study: 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 NWP

  17. Slide 17: Case Study: Terravest Capital Inc.

    Case Study: Terravest Capital Inc. 17

  18. Slide 18: Capital Structure

    Capital Structure CLARHE

  19. Slide 19: Reduction in Debentures Outstanding

    Reduction in Debentures Outstanding 19

  20. Slide 20: Reduction in Shares Outstanding

    Reduction in Shares Outstanding 20

  21. Slide 21: Summary

    Summary  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:  $68mn of net cash  $112mn marketable securities  $65mn

  22. Slide 22: Capital Structure

    Capital Structure Clarke Inc. (TSX: CKI) Shares Outstanding 16,448,605 Share Price $10.50 52-Week Trading Range $8.17 – $12.24 Market Cap $173mn Cash $68mn Total Debt $3mn Enterprise Value $108mn 22

  23. Slide 23: Clarke Inc. 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 23

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