Clarke Inc. Reports 2021 Second Quarter Results

HALIFAX, NS, Aug. 9, 2021 /CNW/ - Clarke Inc. ("Clarke" or the "Company") (TSX: CKI) (TSX: CKI.DB) today announced its results for the three and six months ended June 30, 2021.

Second Quarter Results

Net income for the three and six months ended June 30, 2021 was $3.1 million and $7.1 million, respectively compared to net income of $6.9 million and a net loss of $46.2 million for the same periods in 2020. During the three and six months ended June 30, 2021, the Company had unrealized gains on its investments of $5.9 million and $3.9 million, respectively, compared to unrealized gains of $12.9 million and unrealized losses of $52.1 million for the same periods in 2020. The Company had realized gains on its investments of nil and $10.2 million for the three and six months ended June 30, 2021 compared to nil and $29.0 million for the same periods in 2020.

During the second quarter of 2021, the Company's book value per common share increased by $1.29, or 10.6%. The increase can primarily be ascribed to (i) an increase in the after-tax value of our pension plan surplus of $5.1 million, or $0.34 per common share, (ii) unrealized gains on our marketable securities of $5.9 million, or $0.39 per common share, (iii) an increase in the after-tax value of certain property and equipment upon revaluation of $10.0 million, or $0.67 per common share, offset by (iv) losses in our operating businesses and other corporate overhead in an amount of $3.1 million, or $0.20 per common share. Our book value per common share at the end of the second quarter was $13.50 while our common share price was $8.40.

COVID-19

The COVID-19 pandemic continues to have an adverse effect on the Company's operating business, particularly its hotels, driven by the decline in both leisure and business travel. The impact of COVID-19 on the ferry business has been significantly reduced from the same period in 2020 but operations remain below normal operating levels. The ferry operations are expected to remain somewhat subdued in 2021 compared to historic operating levels.

Regardless of the subdued revenues, the Company's efforts to significantly reduce costs and the positive impact of several government subsidies have allowed us to maintain operations and we expect to generate positive cash flow from these businesses in the year.

Additional commentary on our second quarter results can be found in our Management's Discussion & Analysis for the three and six months ended June 30, 2021.

Other Information

Further information about Clarke, including Clarke's Interim Condensed Consolidated Financial Statements and Management's Discussion & Analysis for the three and six months ended June 30, 2021, is available at www.sedar.com and www.clarkeinc.com.

Highlights of the interim condensed consolidated financial statements for the three and six months ended June 30, 2021 compared to the three and six months ended June 30, 2020 are as follows:

(in millions, except per share amounts)		Three months ended June 30, 2021	Three months ended  June 30, 2020	Six months ended June 30, 2021	Six months ended  June 30, 2020
		$	$	$	$
Hotel and management services		6.0	3.8	11.7	17.6
Provision of services		1.5	0.6	1.6	0.8
Investment and other income (loss)*		5.9	13.1	14.3	(41.4)
Net income (loss)		3.1	6.9	7.1	(46.2)
Comprehensive income (loss)		18.0	4.4	32.7	(50.4)
Basic earnings (loss) per share ("EPS")		0.21	0.43	0.48	(2.85)
Diluted EPS		0.20	0.38	0.44	(2.85)
Total assets		372.2	286.3	372.2	286.3
Long-term financial liabilities		136.0	98.7	136.0	98.7
Book value per share		13.50	8.41	13.50	8.41

*Investment and other income (loss) include unrealized/realized gains/losses on investments, hotel revaluations presented in the statement of earnings, interest income, pension expense/recovery, insurance proceeds, gains/losses on disposal of assets, and foreign exchange gains/losses.

About Clarke

Halifax-based Clarke invests in a variety of private and publicly-traded businesses and participates actively where necessary to enhance the performance of such businesses and increase its return. Clarke's securities trade on the Toronto Stock Exchange (CKI, CKI.DB); for more information about Clarke Inc., please visit our website at www.clarkeinc.com.

Cautionary Statement Regarding Use of Non-IFRS Accounting Measures

This press release 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 date of the statement of financial position by the number of Common Shares outstanding at that date. Clarke's method of determining this amount may differ from other companies' methods and, accordingly, this amount may not be comparable to measures used by other companies. This amount is not a performance measure as defined under IFRS and should not be considered either in isolation of, or as a substitute for, net earnings prepared in accordance with IFRS.

Note on Forward-Looking Statements and Risks

This press release 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 of words such as "plans", "expects", "does not expect", "is expected", "budgets", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", "believes", or equivalents or variations of such words and phrases, or state that certain actions, events or results, "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved. Forward-looking statements include, without limitation, those with respect to the future or expected performance of the Company's investee companies, the future price and value of securities held by the Company, changes in these securities holdings, the future price of oil, changes to the Company's hedging practices, currency fluctuations and requirements for additional capital. Forward-looking statements rely on certain underlying assumptions that, if not realized, can result in such forward-looking statements not being achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of the Company to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others, the Company's investment strategy, legal and regulatory risks, general market risk, potential lack of diversification in the Company's investments, interest rates, foreign currency fluctuations, the sale of Company investments, the fact that dividends from investee companies are not guaranteed, reliance on key executives, commodity market risk, risks associated with investment in derivative instruments and other factors. With respect to the Company's investment in hotel and ferry operations, such risks and uncertainties include, among others, weather conditions, safety, claims and insurance, uninsured losses, changes in levels of business and commercial travel and tourism, increases in the supply of accommodations in local markets, the recurring need for renovation and improvement of hotel properties, labour relations, and other factors.

Although the Company has attempted to identify important factors that could cause actions, events or results not to be as estimated or intended, there can be no assurance that forward-looking statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Other than as required by applicable Canadian securities laws, the Company does not update or revise any such forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events. Accordingly, readers should not place undue reliance on forward-looking statements.

SOURCE Clarke Inc.

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