CLEARLINK Capital Corporation
TSX : CNK

CLEARLINK Capital Corporation

July 27, 2005 16:11 ET

CLEARLINK'TM' Announces 1st Quarter Fiscal 2006 Results and Other Shareholder Matters

MISSISSAUGA, ONTARIO--(CCNMatthews - July 27, 2005) - CLEARLINK Capital Corporation (TSX:CNK) today reported results of operations for the first quarter ended June 30, 2005. CLEARLINK's performance reflects stable operations with a resumption of profits in the quarter at a level constrained by technology markets and issues specific to the Corporation.

Net income for the quarter ended June 30, 2005 was $1.5 million or $0.17 per share, the same level of net income and per share earnings as was earned in the corresponding quarter last year. All per share values are fully diluted. The year-over-year reduction in leasing margins was offset by increases in investment income and expense reductions.

Overall, lease margins declined to $3.0 million in the quarter from $3.6 million in the corresponding quarter in Fiscal 2005. On a year-over-year basis, the owned lease portfolio declined on average by approximately 28% to $206 million at June 30, 2005. Portfolio run-off continues to significantly exceed new business volumes. Residual realizations remained strong, generating a realization rate of 151% on $2.7 million of residuals processed. This compares with a 146% realization rate on $3.1 million of residual expiries in the equivalent quarter last year.

Investment income was $1.0 million, an increase from last year's value of $627,000, as cash and marketable securities grew to approximately $64.7million.

Expense levels in the quarter totaled $2.5 million, down from $2.8 million in expenses incurred in the same quarter last year and reflects the impact of historic infrastructure reductions in response to declining activities.

The Corporation's Shareholders Rights Plan has been re-instituted and will be presented for confirmation at the Corporation's annual meeting of shareholders.

The Corporation is also announcing that it will pay a dividend of $0.10 per share, payable October 14, 2005 to the shareholders of record as of September 30, 2005. Issuer bid activity in the quarter was low with 17,400 shares repurchased for cancellation at an average price of $10. Fully diluted net book value per share at June 30, 2005 was $12.60.

The substantial amount of time and focus on litigation matters with resulting negative publicity, together with worsening economics in its technology leasing area has resulted in a substantial erosion of the Corporation's prospects in its traditional core business.

As a result, the Corporation has decided to concentrate on developing the equipment trading division, managing the residual book of business and writing only selected business with existing customers. The Corporation will address its growing excess disposable capital by way of new investments in financial services or shareholder value initiatives.

CLEARLINK Capital Corporation is a provider of innovative financial solutions in technology and equipment leasing, and equipment trading. Based in Mississauga, Ontario, CLEARLINK operates throughout North America and Europe.

CLEARLINK™ is a trademark of CLEARLINK Capital Corporation.



CLEARLINK CAPITAL CORPORATION
Consolidated Balance Sheets
(in thousands of dollars)
---------------------------------------------------------------------

June 30, March 31,
2005 2005
ASSETS (Unaudited) (Audited)
----------- ---------

CASH $21,881 $22,206

MARKETABLE SECURITIES 42,834 41,731

LEASES 205,762 243,111

EQUIPMENT HELD FOR LEASING OR SALE 3,191 3,319

RECEIVABLES, NET OF ALLOWANCES 19,038 18,054

LONG-TERM TAXES RECOVERABLE 14,000 14,000

CAPITAL ASSETS 1,365 1,600

----------- ---------
$308,071 $344,021
----------- ---------
----------- ---------

LIABILITIES

DEBT $110,397 $147,419

ACCOUNTS PAYABLE AND ACCRUED CHARGES 69,966 70,125

FUTURE INCOME TAX LIABILITIES 16,286 15,731

----------- ---------

196,649 233,275
----------- ---------

SHAREHOLDERS' EQUITY

SHARE CAPITAL 48,003 48,098

FOREIGN CURRENCY TRANSLATION ADJUSTMENT (1,956) (2,207)

RETAINED EARNINGS 65,375 64,855
----------- ---------

111,422 110,746
----------- ---------

$308,071 $344,021
----------- ---------
----------- ---------


CLEARLINK CAPITAL CORPORATION
Consolidated Statements of Operations and Retained Earnings
(in thousands of dollars except per share data)
---------------------------------------------------------------------

Three Months Three Months
Ended Ended
June 30, June 30,
2005 2004
(Unaudited) (Unaudited)
------------ ------------

REVENUE
LEASING $14,283 $23,755
EQUIPMENT TRADING 8,643 8,114
INVESTMENT 1,022 627
------------ ------------

23,948 32,496
------------ ------------

EXPENSES
LEASING - AMORTIZATION AND OTHER COSTS 9,696 16,740
INTEREST 1,634 3,375
EQUIPMENT TRADING 7,918 7,304
------------ ------------
19,248 27,419
------------ ------------

GROSS MARGIN 4,700 5,077

SELLING, GENERAL AND ADMINISTRATION 2,516 2,844
------------ ------------

NET INCOME FROM OPERATIONS 2,184 2,233

PROVISION FOR INCOME TAXES 699 737
------------ ------------

NET INCOME FOR THE PERIOD $1,485 $1,496

RETAINED EARNINGS, BEGINNING OF PERIOD 64,855 76,144

DIVIDENDS (886) (897)

PREMIUM ON CANCELATION OF SHARES (79) -
------------ ------------
RETAINED EARNINGS, END OF PERIOD $65,375 $76,743
------------ ------------
------------ ------------

EARNINGS PER COMMON SHARE
BASIC $0.17 $0.17
-------------------------
-------------------------
FULLY DILUTED $0.17 $0.17
------------ ------------
------------ ------------
SHARES OUTSTANDING
BASIC 8,858,793 8,957,960
------------ ------------
------------ ------------
FULLY DILUTED 8,858,793 8,962,135
------------ ------------


CLEARLINK CAPITAL CORPORATION
Consolidated Statements of Cash Flows
(in thousands of dollars)
---------------------------------------------------------------------

Three Months Three Months
Ended Ended
June 30, June 30,
2005 2004
(Unaudited) (Unaudited)
------------ ------------

NET INFLOW (OUTFLOW) OF CASH RELATED
TO THE FOLLOWING ACTIVITIES

OPERATING
NET INCOME FOR THE PERIOD $1,485 $1,496
ITEMS NOT AFFECTING CASH
AMORTIZATION OF LEASING AND OTHER ASSETS 3,976 6,255
GAIN ON SALE OF LEASING ASSETS (997) (936)
INTEREST ACCRUED AND OTHER ITEMS RELATED
TO MARKETABLE SECURITIES 318 317
FUTURE INCOME TAX EXPENSE 523 359
------------ ------------
5,305 7,491

NET INCREASE IN EQUIPMENT HELD
FOR LEASING OR SALE, RECEIVABLES, ACCOUNTS
PAYABLE AND ACCRUED CHARGES (1,871) (5,407)
------------ ------------
3,434 2,084
------------ ------------

FINANCING
INCREASE IN DEBT 7,031 12,412
REPAYMENT OF DEBT (44,704) (36,504)
(REPURCHASE) ISSUE OF SHARES, NET (174) 163
------------ ------------
(37,847) (23,929)
------------ ------------

INVESTING
ADDITIONS AND INVESTMENTS IN LEASES (18,509) (21,863)
REDUCTIONS AND DISPOSALS OF LEASES 53,992 42,518
ADDITIONS TO MARKETABLE SECURITIES, NET (1,421) (3,312)
ADDITIONS TO OTHER ASSETS, NET (87) (39)
------------ ------------
33,975 17,304
------------ ------------

EFFECT OF EXCHANGE RATE CHANGES 113 370
------------ ------------

NET CASH OUTFLOW (325) (4,171)

CASH, BEGINNING OF PERIOD 22,206 20,636
------------ ------------

CASH, END OF PERIOD $21,881 $16,465
------------ ------------
------------ ------------

SUPPLEMENTAL CASH FLOW DATA:
CASH PAID DURING THE YEAR FOR:
INTEREST $1,845 $3,520
INCOME TAXES $76 $147


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