Clairvest Group Inc.
TSX : CVG

February 13, 2012 17:46 ET

Clairvest Reports Fiscal 2012 Third Quarter Results

TORONTO, ONTARIO--(Marketwire - Feb. 13, 2012) - Clairvest Group Inc. (TSX:CVG) today reported results for the quarter ended December 31, 2011. (All figures are in Canadian dollars unless otherwise stated).

Highlights

  • December 31, 2011 book value was $316.7 million or $20.51 per share versus $19.37 at September 30, 2011. Cash or near cash represented 32.3% of the December 31, 2011 book value, or $6.62 per share
  • Net income for the quarter and for the nine months was $17.6 million or $1.14 per share and $17.1 million or $1.11 per share respectively. Net income for the quarter was primarily the result of net unrealized valuation gains and dividends received during the quarter
  • Rivers Casino, a gaming entertainment complex located in Des Plaines, Illinois, achieved strong performance since its opening, resulting in Clairvest increasing the carrying value of its investment in Rivers Casino by $15.7 million on a pre-tax basis
  • Centaur, a gaming operator which holds various gaming interests including the Hoosier Park Racing & Casino in Anderson, Indiana emerged from Chapter 11 protection and implemented its court-approved Plan of Reorganization. Clairvest exchanged its pre-petition first lien debt of Centaur for cash, new debt and new equity securities of Centaur and realized no gain or loss on the exchange
  • KUBRA, a business process outsourcing company, completed a financing and paid a US$20.0 million dividend to its shareholders. Clairvest and CEP III received US$11.6 million (C$12.0 million) of this dividend against their C$13.0 million original investment
  • Clairvest and CEP IV invested US$9.4 million in Linen King, an Oklahoma based textile rental company that provides commercial laundry services to the healthcare and hospitality industries
  • Subsequent to quarter end, Clairvest and CEP IV committed to invest US$20.0 million in New Meadowlands Racetrack LLC, which operates the Meadowlands horse racing track located in East Rutherford, New Jersey
  • Subject to the approval of the Toronto Stock Exchange, Clairvest's Board of Directors approved a new normal course issuer bid

Clairvest's book value was $316.7 million or $20.51 per share, at December 31, 2011, compared with $19.37 per share at September 30, 2011. The increase in book value per share was attributable to a net income for the quarter primarily the result of pre-tax net unrealized gains on corporate investments of $13.3 million and a $3.0 million dividend from KUBRA Data Transfer Ltd. ("KUBRA"). Clairvest increased the carrying value of its investment in Rivers Casino by $15.7 million as a result of strong performance at Rivers Casino since its opening.

As previously announced, Centaur emerged from Chapter 11 protection and implemented its court-approved Plan of Reorganization. As holders of US$141.0 million in pre-petition first lien debt, Clairvest, Clairvest Equity Partners IV Limited Partnership and Clairvest Equity Partners IV-A Limited Partnership (collectively, "CEP IV"), and co-investors received US$23.0 million in cash, US$59.2 million in new first lien secured notes, US$22.2 million in new second lien secured notes and US$18.5 million in unsecured term loan with stapled warrants which, subject to regulatory approval, are convertible upon exercise into 35.8% of Centaur's Class A units. Clairvest received US$6.4 million in cash, US$16.4 million in new first lien secured notes, US$6.2 million in new second lien secured notes and US$5.1 million in unsecured term loan with stapled warrants which, subject to regulatory approval, are convertible upon exercise into 9.9% of Centaur's Class A units. No gain or loss was realized as a result of the exchange.

During the quarter, KUBRA completed a financing and paid a US$20 million dividend to its shareholders. Clairvest and CEP III received US$2.9 million (C$3.0 million) and US$8.7 million (C$9.0 million) respectively from this dividend against their C$13.0 million original investment.

Also during the quarter, Clairvest and CEP IV invested US$9.4 million in Linen King, LLC ("Linen King"), an Oklahoma based textile rental company that provides commercial laundry services to the healthcare and hospitality industries. Clairvest's portion of the investments is US$2.6 million.

"We are very pleased with the new investments made to date and the continued growth across our portfolio. Virtually all of our investments are exhibiting strong growth, a tribute to their management and their respective market positions," said Ken Rotman Co-Chief Executive Officer and Managing Director of Clairvest.

Subsequent to quarter end, Clairvest and CEP IV committed to invest US$20.0 million in New Meadowlands Racetrack LLC ("Meadowlands"), which operates the Meadowlands horse racing track located in East Rutherford, New Jersey. The investment 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 of February 13, 2012.

Subject to the approval of the Toronto Stock Exchange, Clairvest's Board of Directors has approved a new normal course issuer bid to purchase up to 772,135 common shares on the Toronto Stock Exchange during the 12-month period commencing March 6, 2012.

Summary of Financial Results - Unaudited
Financial Performance Measures Quarters ended December 31 Nine months ended December 31
2011 2010 2011 2010
($000's, except per share amounts) $ $ $ $
Net realized gains (losses) on corporate investments (54 ) ΓöÇ 501 52
Net unrealized gains on corporate investments 13,282 5,290 10,186 6,458
Net income 17,592 4,652 17,068 5,612
Basic net income per share 1.14 0.29 1.11 0.35
Fully diluted net income per share 1.12 0.29 1.09 0.35
Financial Condition Measures December
2011
March
2011
($000's, except per share amounts) $ $
Total assets 334,194 318,860
Total cash, cash equivalents and temporary investments(1) 102,233 138,338
Total corporate investments 177,205 162,177
Total liabilities 17,538 16,458
Book value 316,656 302,402
Book value per share 20.51 19.65
(1) Excludes restricted cash and temporary investments

Clairvest's third quarter fiscal 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 management firm 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.

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