Clairvest Group Inc.
TSX : CVG

June 26, 2012 17:40 ET

Clairvest Reports Fiscal 2012 Fourth Quarter and Year-End Results

TORONTO, ONTARIO--(Marketwire - June 26, 2012) - Clairvest Group Inc. (TSX:CVG) today reported results for the quarter and year ended March 31, 2012. (All figures are in Canadian dollars unless otherwise stated)

Highlights

  • March 31, 2012 book value was $316.4 million or $20.93 per share versus $20.51 per share at December 31, 2011 and $19.65 per share at March 31, 2011, an increase of $1.28 per share over the last twelve months
  • Net income for the quarter and for the year was $5.3 million or $0.35 per share and $22.4 million or $1.46 per share respectively
  • Clairvest and CEP IV committed to invest US$20.0 million in New Meadowlands Racetrack LLC, which operates the Meadowlands, North America's premier standardbred horse racing track located in East Rutherford, New Jersey
  • Clairvest purchased and cancelled 324,600 common shares under its normal course issuer bids for $5.6 million or $17.18 per share, a 18% discount to book value per share at March 31, 2012
  • Subsequent to quarter end, Clairvest reached a court-approved settlement with certain parties with respect to a $10 million loan advanced during fiscal 2006 and 2007 and written off during fiscal 2007
  • Subsequent to quarter end, Clairvest declared an annual ordinary dividend of $1.5 million, or $0.10 per share, and a special dividend of $1.7 million, or $0.1093 per share

Clairvest's book value was $316.4 million or $20.93 per share, at March 31, 2012, compared with $20.51 per share at December 31, 2011 and $19.65 per share at March 31, 2011. The increase in book value per share was attributable to net income and the purchase and cancellation of Clairvest common shares during the quarter. Net income for the quarter was $5.3 million, or $0.35 per share, and the purchase and cancellation of Clairvest common shares during the fourth quarter added another $0.07 to book value per share. Net income for the year was $22.4 million or $1.46 per share.

As previously announced, Clairvest, Clairvest Equity Partners IV Limited Partnership and Clairvest Equity Partners IV-A Limited Partnership (collectively, "CEP IV") committed to invest US$20.0 million in New Meadowlands Racetrack LLC ("Meadowlands"), which operates the Meadowlands, North America's premier standardbred horse racing track located in East Rutherford, New Jersey. The investment in Meadowlands will be made by way of debt. The commitment also grants Clairvest and CEP IV warrants as well as future co-investment rights. Clairvest's portion of the commitment is US$5.4 million, none of which has been funded as at June 26, 2012.

"Fiscal 2012 was another strong year for Clairvest. Despite market volatility and an uncertain economic environment, our portfolio companies continued to perform and grow," said Jeff Parr, Co-Chief Executive Officer and Managing Director of Clairvest. "We remain focused on value creation and strategic deployment of our investors' capital. The addition of three new investments and the strength of our existing portfolio during this fiscal year reaffirm our strategy and we feel confident that together with the management of our investee companies, we will continue to grow our investment portfolio and generate value for our shareholders and limited partners."

During the quarter, Clairvest purchased and cancelled 324,600 common shares under its normal course issuer bids for a total purchase cost of $5.6 million or $17.18 per share. The purchase represented an 18% discount to book value at March 31, 2012. As at June 26, 2012, Clairvest had purchased and cancelled a total of 6,595,049 common and non-voting shares over the last nine years.

Subsequent to quarter end, Clairvest reached a court-approved settlement with certain parties with respect to a $10 million loan advanced in two tranches of $5 million in each of December 2005 and May 2006. On July 21, 2006, Clairvest had announced that the loan amount may not be recovered. The loan, which was made from Clairvest's treasury funds, was in default and the collateral arrangements for the loan were mishandled. The loan was written off and Clairvest recorded a realized loss in its financial statements for the year ended March 31, 2007. Clairvest took legal action against several parties to recover the funds and has reached a settlement with certain of these parties resulting in a settlement by these parties to Clairvest of approximately $7.75 million, or approximately 77.5% of the original loan value without taking into account litigation and other costs incurred in the recovery process, substantially all of which have been incurred and recorded as charges against income as of March 31, 2012. The funds recovered will be recorded into income when received. Clairvest continues to seek additional recoveries against parties that are not part of this settlement.

Also subsequent to quarter end, Clairvest declared an annual ordinary dividend of $0.10 per share and a special dividend of $0.1093 per share, such that in aggregate, the dividends represent 1% of the March 31, 2012 book value. Both dividends will be payable July 26, 2012 to common shareholders of record as of July 9, 2012 and are eligible dividends for Canadian income tax purposes.

Summary of Financial Results - Unaudited

Financial Performance Measures Quarters ended
March 31
Year ended
March 31
2012 2011 2012 2011
($000's, except per share amounts) $ $ $ $
Net realized gains on corporate investments 44 4,269 545 3,861
Net changes in unrealized gains on corporate investments 6,404 9,331 16,590 16,249
Net income 5,348 13,952 22,416 19,564
Basic net income per share 0.35 0.88 1.46 1.23
Fully diluted net income per share 0.34 0.86 1.43 1.20
Financial Condition Measures - March 31 2012 2011
($000's, except per share amounts) $ $
Total assets 338,424 318,860
Total cash, cash equivalents and temporary investments(1) 97,553 138,338
Total corporate investments 187,876 162,177
Total liabilities 21,997 16,458
Book value 316,427 302,402
Book value per share 20.93 19.65
(1) Excludes restricted cash and temporary investments

Clairvest's annual 2012 financial statements and MD&A are available on the SEDAR website at www.sedar.com and on the Clairvest website at www.clairvest.com.

About Clairvest

Clairvest Group Inc. is a private equity investor which invests its own capital, and that of third parties through the Clairvest Equity Partners ("CEP") limited partnerships, in businesses that have the potential to generate superior returns. In addition to providing financing, Clairvest contributes strategic expertise and execution ability to support the growth and development of its investee partners. Clairvest realizes value through investment returns and the eventual disposition of its investments.

Forward-looking Statements

This news release contains forward-looking statements with respect to Clairvest Group Inc., its subsidiaries, its CEP limited partnerships and their investments. These statements are based on current expectations and are subject to known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Clairvest, its subsidiaries, its CEP limited partnerships and their investments to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include general and economic business conditions and regulatory risks. Clairvest is under no obligation to update any forward-looking statements contained herein should material facts change due to new information, future events or otherwise.

Contact Information