Clarke Inc. · TSX:CKI
Clarke — Shareholder Meeting (May 2007)
28 slides from Clarke's shareholder meeting presentation, May 10, 2007
Slide 1: Annual General Meeting May 10, 2007
Seizing opportunities beneath the surface Annual General Meeting May 10, 2007 focus. value. growth.
Slide 2: Agenda
AGENDA Ú Official Business Ú CEO Address: Building Momentum Ú Financial Review Ú Outlook focus. value. growth.
Slide 3: Official Business
OFFICIAL BUSINESS Hugh Smith Chairman of the Board focus. value. growth.
Slide 4: Official Business
Official Business Ú Appointment of Scrutineer and report on attendance and quorum Ú Notice of Meeting and Minutes of last Meeting Ú Receipt of 2006 consolidated financial statements Ú Nominees for election as Director Ú Appointment of Auditors Ú Amendment of Stock Option Plan Ú Other Business focus.
Slide 5: Clarke 2006: Building Momentum
CLARKE 2006: BUILDING MOMENTUM George Armoyan President & CEO focus. value. growth.
Slide 6: Investment Key Engine of Growth
Investment Key Engine of Growth EBITDA from continuing operations 2005 2006 $ millions focus. value. growth.
Slide 7: Our Investment Strategy
Our Investment Strategy Ú Strategic Investments Ú Undervalued or underperforming companies Ú Our involvement at Board level can improve performance ÚOpportunistic Investments Ú Currently undervalued by market Ú Potential for good returns on investment when certain events or trends take place focus.
Slide 8: Investment Portfolio up 276%
Investment Portfolio up 276% Marketable Securities ($ millions) focus. value. growth.
Slide 9: Significant Investment Transactions
Significant Investment Transactions Ú $115 Million Debenture Offering - oversubscribed Ú 6.00% convertible unsecured subordinated debentures due December 2013 Ú Versacold Income Fund Ú Advanced Fiber Technologies Income Fund Ú Warehouse Segment Transactions focus. value. growth.
Slide 10: Increasing Shareholder Liquidity and Value
Increasing Shareholder Liquidity and Value Ú 2-for-1 Stock Split Ú Normal Course Issuer Bids (“NCIBs”): Ú July 2006: purchase for cancellation up to 636,475, or 5%, of issued and outstanding common shares, expiring July, 2007 Ú December 2006: purchase for cancellation up to $7 million, or 10%, in pr
Slide 11: 2006: An Excellent Year
2006: An Excellent Year Ú 33% return on investment, including dividends Ú Outstanding performance in investment division more than compensated for challenges in warehouse and transport segments Ú Solid position going forward, with investment strategy well established and results showing success Ú St
Slide 12: Fiscal 2006 in Review
FISCAL 2006 IN REVIEW Neil Morley Chief Financial Officer focus. value. growth.
Slide 13: Caution Regarding Forward-Looking Statements
Caution Regarding Forward-Looking Statements This presentation may contain forward-looking statements related to expected future events and financial and operating results of Clarke that involve risks and uncertainties. Forward-looking statements, which include the use of words such as “expect”, “an
Slide 14: Annual Highlights ($ Millions)
ANNUAL HIGHLIGHTS ($ MILLIONS) Fiscal Fiscal 2006 2005 REVENUE AND OTHER INCOME $208.2 $201.4 EBITDA $34.9 $26.1 INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY IN $23.4 $13.4 EARNINGS OF LONG-TERM INVESTMENT focus. value. growth.
Slide 15: EBITDA Reconciliation ($ Millions)
EBITDA Reconciliation ($ MILLIONS) Fiscal Fiscal 2006 2005 Income from continuing operations $17.2 $17.6 Provision for income taxes 6.1 3.6 Interest expense 8.2 1.7 Depreciation and amortization 3.4 3.2 EBITDA from continuing operations 34.9 26.1 focus. value. growth.
Slide 16: Per Share Results
Per Share Results Fiscal Fiscal 2006 2005 EPS from continuing operations Basic EPS $ 1.33 $ 1.32 Basic EPS (excluding impact of sale of ATS) $ 1.33 $ 0.98 Diluted EPS $ 1.13 $ 1.31 Diluted EPS (excluding impact of sale of ATS) $ 1.13 $ 0.97 Basic EPS $ 1.33 $ 1.38 Diluted EPS $ 1.13 $ 1.37 Note: fig
Slide 17: Investment Segment: Key to Delivering Value
Investment Segment: Key to Delivering Value Ú Simply stated, our investment strategy is driving our success Ú Portfolio increased by 276% Ú Market value of $179.6 million at end of 2006, vs. $47.7 million at end of 2005 Ú Diversified portfolio - driven by value Ú 68.7% industrials at end of 2006, vs
Slide 18: First Quarter Results
First Quarter Results focus. value. growth.
Slide 19: Significant Transactions
Significant Transactions • Halterm Income Fund • Spectra Premium Industries Inc. • Midlake Oil and Gas Limited • Warehouse segment property • Entertainment One Income Fund focus. value. growth.
Slide 20: Per Share Results
Per Share Results Q1 Q1 2007 2006 Basic EPS $ 0.95 $ 0.44 Diluted EPS $ 0.56 $ 0.36 Weighted-average common shares outstanding 12,686 13,101 (‘000) Weighted-average diluted common shares 26,159 19,007 outstanding (‘000) focus. value. growth.
Slide 21: EBITDA for the 1st Quarter
EBITDA for the 1st Quarter 2006 2007 $ millions focus. value. growth.
Slide 22: EBITDA Reconciliation ($ Millions)
EBITDA Reconciliation ($ MILLIONS) Q1 Q1 2007 2006 Net income $12.1 $5.7 Provision for income taxes 4.3 1.3 Interest expense 3.8 1.9 Depreciation and amortization 0.8 0.8 EBITDA 21.0 9.7 focus. value. growth.
Slide 23: Market Value of Marketable Securities
Market Value of Marketable Securities $ millions focus. value. growth.
Slide 24: Clarke 2007: Outlook
CLARKE 2007: OUTLOOK George Armoyan President & CEO focus. value. growth.
Slide 25: Outlook
Outlook One overriding principle: achieving profitable growth Strong position for success Ú Bottom-line driven, activist, catalyst investor Ú Invest in businesses and become actively involved to improve performance Ú Significant track record capitalizing on turnaround opportunities Ú Chief Operating
Slide 26: 2007 and Beyond
2007 and Beyond Investment business: Ú Deliver incremental shareholder value through strategic and opportunistic investments Ú Strong team, aggressive and relentless in uncovering and delivering value Ú Able to continue making investments that will yield accretive returns Ú Solid balance sheet Ú $11
Slide 27: 2007 and beyond (cont'd)
2007 and beyond (cont’d) Freight Transportation Business: Ú Continue to focus on organic growth: new service initiatives, competitive pricing, customer service improvements Ú Dean Cull, Chief Operating Officer for Transportation Services Ú Explore potential strategic acquisitions to leverage strengt
Slide 28: Thank You
Thank You focus. value. growth.