SOURCE: Clairvest Group Inc.

Clairvest Group Inc.

June 24, 2015 17:39 ET

Clairvest Reports Fiscal 2015 Fourth Quarter and Year-End Results

TORONTO, ON--(Marketwired - June 24, 2015) - Clairvest Group Inc. (TSX: CVG) today reported results for the quarter and year ended March 31, 2015. (All figures are in Canadian dollars unless otherwise stated)

Highlights

  • March 31, 2015 book value was $447.7 million or $29.58 per share versus $28.33 per share at December 31, 2014 and $26.39 per share at March 31, 2014, an increase of $3.19 per share over the last twelve months
  • Net income for the quarter was $19.0 million or $1.25 per share; Net income for the year was $52.0 million or $3.43 per share
  • At March 31, 2015, cash, cash equivalents and temporary investments of $188.1 million, presented on a Non-IFRS basis, represented 42.0% of the March 31, 2015 book value, or $12.43 per share
  • At March 31, 2015, Clairvest and the CEP Funds had $835.4 million of capital available for future acquisitions
  • Clairvest and its managed funds acquired majority ownership stake in Discovery Air Inc. ("Discovery Air") in March 2015, a special aviation services business operating across Canada and in selected locations internationally
  • Clairvest and Clairvest Equity Partners V ("CEP V") made a US$25.6 million investment in Winters Bros. Waste Systems of Long Island Holdings, LLC ("Winters Bros. Long Island") in March 2015
  • Subsequent to quarter end, Clairvest and Clairvest Equity Partners III ("CEP III") announced an agreement for the sale of Casino New Brunswick
  • Subsequent to quarter end, Clairvest declared an annual ordinary dividend of $1.5 million, or $0.10 per share, and a special dividend of $2.9 million, or $0.1958 per share, both payable on July 24, 2015

Clairvest's book value was $447.7 million or $29.58 per share at March 31, 2015, compared with $428.7 million or $28.33 per share at December 31, 2014. The increase in book value per share for the quarter was attributable to net income for the quarter of $19.0 million, or $1.25 per share. For the year ended March 31, 2015, net income was $52.0 million or $3.43 per share. Book value at March 31, 2014, as prepared under IFRS, was $26.39 per share.

At March 31, 2015, Clairvest had $835.4 million of capital available for future acquisitions through treasury funds, credit facilities, access to funds at its controlled acquisition entities and uncalled capital in various Clairvest Equity Partnerships (the "CEP Funds").

During the quarter ended March 31, 2015, Clairvest and its co-investors in Discovery Air, including its managed funds (collectively the "Discovery Air Investor Group"), acquired 46,267,443 common shares of Discovery Air for a total cost of $10.2 million, bringing ownership interest in Discovery Air to 75.5% on a fully diluted basis. The Discovery Air Investor Group also owned $97.3 million in accrued value of convertible debentures issued by Discovery Air immediately after the common share acquisition. Upon the completion of the common share acquisition, Discovery Air made a $5.0 million partial repayment towards the convertible debentures. Subsequent to quarter end, the Discovery Air Investor Group purchased an additional 4,427,709 common shares increasing ownership percentage to 80.9% on a fully diluted basis. Clairvest's portion of the investment was made by CEP IV Co-Investment Limited Partnership ("CEP IV Co-Invest"), the amount of which was $3.3 million for 14,812,673 common shares of Discovery Air during the quarter and $0.4 million for 1,455,500 common shares subsequent to quarter end, increasing its ownership in Discovery Air to 25.9% on a fully diluted basis. CEP IV Co-Invest's receipt of the partial repayment on the convertible debentures was $1.6 million such that at March 31, 2015, the accrued value of convertible debentures held by CEP IV Co-Invest was $28.5 million.

Also during the quarter ended March 31, 2015, Clairvest and CEP V made a US$25.6 million investment in Winters Bros. Long Island, which provides commercial, industrial, residential waste collection services and operates an extensive network of transfer and recycling facilities across Long Island, New York. Clairvest's portion of the investment was made by CEP V Co-Investment Limited Partnership ("CEP V Co-invest") and was US$7.7 million for a 14.0% ownership interest on a fully diluted basis.

"During the quarter, we launched Clairvest's fifth fund with an investment in the waste management space. This is our fifth deal in the industry and the third time we are partnering with the same management team. We are demonstrating our successful approach to partnership and the value we bring to our investee companies. Our goal is to create partnerships with management shareholders and realize value by assisting in the development of businesses that will become strategically significant," said Ken Rotman, Co-CEO of Clairvest.

Subsequent to quarter ended March 31, 2015, Clairvest and CEP III announced an agreement for the sale of Casino New Brunswick for a total sale price of approximately $95 million. Clairvest holds its investment in Casino New Brunswick through CEP III Co-Investment Limited Partnership ("CEP III Co-Invest"). Subject to regulatory approvals, CEP III Co-Invest and CEP III are expected to receive gross proceeds of approximately $55 million, 25% of which, or approximately $14 million would be realized by CEP III Co-Invest, compared to the March 31, 2015 carrying value of $8.3 million. Should the transaction close on anticipated terms in the fall of 2015, Clairvest is also expected to record additional net carried interest from CEP III of approximately $1.7 million such that on an after-tax basis, Clairvest's book value per share is expected to increase by approximately 35 cents from the March 31, 2015 book value per share of $29.58 as a result of this transaction.

Also subsequent to quarter ended March 31, 2015, Clairvest declared an annual ordinary dividend of $0.10 per share and a special dividend of $0.1958 per share, such that in aggregate, the dividends represent 1% of the March 31, 2015 book value. Both dividends will be payable July 24, 2015 to common shareholders of record as of July 8, 2015 and are eligible dividends for Canadian income tax purposes.

The following tables reconcile the financial results reported in accordance with IFRS to Non-IFRS financial results. Non-IFRS financial information is provided to aid investors in better understanding the company's performance.

Summary of Financial Results & Financial Position - Unaudited

     
Financial Results  Quarters ended
March 31 
Year ended
March 31
2015  2014  2015  2014
($'000s, except per share amounts)  $  $  $  $
             
Net realized gains on corporate investments  150  -  31,302  (25)
Net changes in unrealized gains (losses) on corporate investments  18,094  (462)  19,908  27,581
Net investment gains (losses) (non-IFRS)  18,244  (462)  51,210  27,556
IFRS adjustments (1)  (15,610)  3,217  (13,739)  11,371
Net investment gains (IFRS)  2,634  2,755  37,471  38,927
             
Net carried interest income (non-IFRS)  4,273  798  15,786  10,124
IFRS adjustments (1)  4,273  798  15,575  10,124
Net carried interest income (IFRS)  8,546  1,596  31,361  20,248
             
Other income from treasury funds, investee companies and the CEP Funds (non-IFRS)  7,287  7,571  24,318  27,174
IFRS adjustments (1)  14,057  (3,176)  11,177  (10,022)
Other income from treasury funds, investee companies and the CEP Funds (IFRS)  21,344  4,395  35,495  17,152
             
Total expenses, excluding income taxes (non-IFRS)  5,021  5,007  30,231  20,018
IFRS adjustments (1)  5,505  504  18,804  12,461
Total expenses, excluding income taxes (IFRS)  10,526  5,511  49,035  32,479
             
Net income and comprehensive income (Non-IFRS & IFRS)  19,009  2,224  52,005  38,807
Basic and fully diluted net income and comprehensive income per share (non-IFRS and IFRS)  1.25  0.14  3.43  2.56
         
         
Financial Position  March
2015
 
 
March
2014
($000's, except per share amounts)  $  $
       
Total assets (Non-IFRS)  507,017  439,961
IFRS adjustments (1)  24,190  35,501
Total assets (IFRS)  531,207  475,462
       
Total cash, cash equivalents and temporary investments (Non-IFRS)  188,061  115,786
IFRS adjustments (1)  (30,906)  (994)
Total cash, cash equivalents and temporary investments (IFRS)  157,155  114,792
       
Total corporate investments (Non-IFRS)  252,472  241,066
IFRS adjustments (1)  38,949  2,963
Total corporate investments (IFRS)  291,421  244,029
       
Total liabilities (Non-IFRS)  59,323  40,501
IFRS adjustments (1)  24,190  35,501
Total liabilities (IFRS)  83,513  76,002
       
Book value (Non-IFRS & IFRS) (2)  447,694  399,460
Book value per share (Non-IFRS & IFRS)  29.58  26.39

(1) IFRS adjustments: Under IFRS, the Company is required to fair value certain acquisition entities and wholly-owned holding entities instead of recording its share of the assets, liabilities, revenues and expenses of these entities. The Company is also required to recognize as revenue that portion of the carried interest from the CEP Funds which are allocated to the principals and employees of Clairvest through various limited partnerships. In addition, Clairvest is required to record a liability for any entitlements of limited partners of a partnership where the limited partners are not part of the consolidated group of the Company but where the partnership is required to be consolidated by the Company. Accordingly, that portion of the carried interest from the CEP Funds that is allocated to the limited partners of these partnerships ("MIP Partnerships") and the carried interest payable to MIP Partnerships by other partnerships which are consolidated by Clairvest (collectively, the "Management Entitlements") are recorded as an expense and a liability of the Company. The Non-IFRS measures are presented such that the assets, liabilities, revenues and expenses of these acquisition entities and wholly-owned holding entities are included as part of the Company's financial position and operating performance, and the Management Entitlements are on a net basis such that only that portion of the carried interest from the CEP Funds being allocated to Clairvest is reflected in income and as a receivable and the total fair value of corporate investments excludes that portion of partnership interests where Clairvest does not have beneficial ownership. The Company believes the Non-IFRS measures provide investors more insightful information regarding the Company's financial position and operating performance and such information is consistent with Management's evaluation of the business.

(2) Book value is a Non-IFRS measure calculated as the value of total assets less the value of total liabilities. The term book value does not have any standardized meaning according to IFRS and therefore may not be comparable to similar measures presented by other companies. There is no comparable IFRS measure presented in Clairvest's consolidated financial statements and thus no applicable quantitative reconciliation for such non-IFRS financial measure. The Company has calculated book value consistently for many years and believes that book value can provide information useful to its shareholders in understanding its performance, and may assist in the evaluation of its business relative to that of its peers.

Clairvest's annual fiscal 2015 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.

www.clairvest.com

Contact Information

  • Contact Information
    Maria Klyuev
    Director, Investor Relations and Marketing
    Clairvest Group Inc.
    Tel: (416) 925-9270
    Fax: (416) 925-5753
    mariak@clairvest.com