Date: June 22, 2010
Source: Clairvest Group, Inc.
Canadian investment firm Clairvest Group Inc. (Toronto, ON) reported fourth quarter earnings that were down from last year. Net income for the fourth quarter was C$1.9 million or C$0.11 per share, compared to C$3.8 million or C$0.23 per share for the year-ago quarter. The company has made some plays in the waste management sector. In March of this year, Clairvest Group and its equity partners made a US$35.3 million investment in Hudson Valley Waste Holding Inc., a regional solid-waste company doing business in the northeastern US. This follows its very successful investment in 2006 of US$15.7 million for a 36% share of Winters Brothers, a Long-Island, NY waste management firm which it later sold to IESI, now IESI-BFC, Ltd., for US$51.7 Million in September 2007.
PRESS RELEASE:
2010-06-22 20:31 ET - News Release
Clairvest Group Inc. has released results for the quarter and year ended March 31, 2010.
Highlights:
March 31, 2010, book value of $292.3-million or $18.32 per share versus $18.20 at Dec. 31, 2009, and $17.89 at March 31, 2009. Cash or near cash represents 52 per cent of the March 31, 2010, book value, or $9.54 per share;
Net income for the quarter and for the year was $1.9-million (12 cents per share) and $8.5-million (53 cents per share), respectively;
Clairvest Equity Partners IV received additional commitments bringing it to $312-million, or 78 per cent, of the $400-million target;
Clairvest and Clairvest Equity Partners III invested a combined $35.3-million (U.S.) in Hudson Valley Waste Holding Inc.;
Casino Marina del Sol was impacted by the Chilean earthquake. Insurance claims and repairs are under way with a reopening expected by September, 2010;
Subsequent to quarter-end, Clairvest closed on a new 10-year, $75-million, committed credit facility;
Subsequent to quarter-end, Clairvest, Clairvest Equity Partners IV and CEP IV co-investors closed on a combined $72-million (U.S.) investment to build a casino in Des Plaines, Ill.;
Subsequent to quarter-end, Clairvest declared an annual dividend of $1.6-million, or 10 cents per share.
Clairvest's book value increased to $292.3-million, or $18.32 per share, compared with $18.20 per share at Dec. 31, 2009, and $17.95 at March 31, 2009. The increase in book value per share was attributable to net income for the quarter of $1.9-million, or 12 cents per share. Net income for the year was $8.5-million, or 53 cents per share.
During the quarter, Clairvest continued marketing for its new private equity vehicle, Clairvest Equity Partners IV LP (CEP IV). The amount of capital committed to date is $312-million, $100-million of which was provided by Clairvest. Commitments to the new private equity investment pool are limited by a cap of $500-million, and Clairvest has the right to increase its commitment to $125-million prior to the end of the fundraising period.
As previously announced, Clairvest and Clairvest Equity Partners III LP (CEP III) invested a combined $35.3-million (U.S.) ($36.9-million) for a 33.3-per-cent ownership in Hudson Valley Waste Holding. Hudson Valley is a regional solid-waste company which collects, processes and recycles nonhazardous solid waste in the northeastern United States. Clairvest's portion of the investment was $8.2-million (U.S.) ($9.2-million) for an 8.3-per-cent ownership in Hudson Valley unless certain return thresholds are met, at which point Clairvest's ownership interest would be reduced to 6.2 per cent.
Also as previously announced, Casino Marina del Sol, a joint investment by Clairvest and CEP III, was impacted by an earthquake which occurred in Chile on Feb. 27, 2010. Casino del Sol had purchased insurance for property damage and for business interruption of up to 12 months. Casino del Sol is preparing its insurance claims and is making the necessary repairs to the property and expects the casino to reopen by September, 2010.
Also as previously announced, subsequent to quarter-end, Clairvest, Clairvest Equity Partners IV LP (CEP IV) and CEP IV co-investors, through various acquisition entities, invested a combined $72-million (U.S.) for an ultimate 40-per-cent ownership in Midwest Gaming Holdings LLC to build a casino and amenities in Des Plaines, Ill. In addition to this investment, Clairvest, CEP IV and CEP IV co-investors advanced an additional $15.8-million (U.S.) loan to Midwest Gaming to bridge the raising of equity from minority investors as required by the Illinois legislature. The loan will be repaid as minority investors are approved by the Illinois Gaming Board with final repayments expected prior to August, 2011. The project is expected to open by late summer 2011, and will be financed by $295-million (U.S.) of total debt and $180-million (U.S.) of equity. The initial phase of the project will include 1,150 slot machines, 30 gaming tables and food and beverage amenities in a 147,000-square-foot facility and a 1,500-space parking garage. The project is located approximately one mile from O'Hare International Airport and 16 miles southwest of downtown Chicago, the third largest city by population in the United States. Clairvest's portion of the combined investments was $11.7-million (U.S.) ($11.7-million) for an ultimate 6-per-cent ownership in Midwest Gaming.
"In a challenging environment, the closing of promising investments in Hudson Valley and Midwest Gaming reaffirms our belief in Clairvest's domain-based origination strategy," said Jeff Parr, co-chief executive officer and managing director of Clairvest Group. "We are observing positive effects from the recovery across all investments, and our team, in partnership with the management of investee companies, is fully prepared to take advantage of new opportunities that arise, for the benefit of our investors and limited partners."
Also subsequent to quarter-end, Clairvest closed on a new 10-year, $75-million, committed credit facility. The credit facility is not expected to be drawn in the next fiscal year and enhances Clairvest's available liquidity.
Clairvest filed a new normal course issuer bid enabling it to make market purchases of up to 797,678 of its common shares in the 12-month period commencing March 6, 2010. No purchases have been made under this bid to June 22, 2010. As at June 22, 2010, Clairvest had repurchased a total of 5,709,578 common and non-voting shares over the last seven years.
Subsequent to quarter-end, Clairvest declared an annual dividend of 10 cents per share, which will be payable July 26, 2010, to common shareholders of record as of July 9, 2010. This is an eligible dividend for Canadian income tax purposes.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands of dollars)
Quarter ended Year ended
March 31, March 31,
2010 2009 2010 2009
Net corporate investment gains
(losses)
Net realized gains (losses) on
corporate investments $ - $ (99,325) $ 153 $ (70,876)
Net unrealized gains (losses)
on corporate investments 1,153 812 7,880 (2,518)
------- ------- ------- -------
1,153 (98,513) 8,033 (73,394)
------- ------- ------- -------
Other income
Distributions and interest
income 2,606 3,030 14,459 11,586
Dividend income 47 103,646 194 105,193
Management fees 257 259 1,027 1,152
Advisory and other fees 413 221 1,033 896
------- ------- ------- -------
3,323 107,156 16,713 118,827
------- ------- ------- -------
Expenses
Administration and other
expenses (3,615) (2,326) (18,077) (12,528)
Finance and foreign exchange
(expense) recovery 29 (1,379) 947 (1,787)
------- ------- ------- -------
(3,586) (3,705) (17,130) (14,315)
------- ------- ------- -------
Income before income taxes 890 4,938 7,616 31,118
Income tax (expense) recovery 985 (1,116) 881 (5,030)
------- ------- ------- -------
Net income $ 1,875 $ 3,822 $ 8,497 $ 26,088
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