Clairvest Reports Fiscal 2013 Third Quarter Results

Clairvest Group Inc. (TSX:CVG) today reported results for the third quarter ended December 31, 2012. (All figures are in Canadian dollars unless otherwise stated)

Highlights

 --  December 31, 2012 book value was $339.0 million or $22.41 per share 
 
versus $21.86 per share at September 30, 2012. Non-restricted cash or 
 
near cash represented 35.5% of the December 31, 2012 book value, or 
 
$7.95 per share  
 
--  Net income for the quarter and for the nine months was $8.4 million or 
 
$0.55 per share and $25.7 million or $1.70 per share respectively  
 
--  Rivers Casino, a gaming entertainment complex located in Des Plaines, 
 
Illinois, completed a financing and paid a distribution to its owners. 
 
Clairvest, CEP IV and CEP IV-A received a combined US$39.3 million from 
 
this distribution against their US$37.4 million original investment  
 
--  Subsequent to quarter end, Clairvest and CEP III realized a combined $81 
 
million through the sale of PEER 1, a global online IT infrastructure 
 
provider  
 
--  Subsequent to quarter end, Clairvest, CEP IV and CEP IV-A invested a 
 
combined $39.5 million in CRS, an equipment rental company based in 
 
Ontario, Canada  
 
--  Subsequent to quarter end, Centaur Gaming, which owns and operates the 
 
Hoosier Park Racing & Casino in Indianapolis, Indiana, received all 
 
necessary regulatory approvals to proceed with its acquisition of 
 
Indiana Grand Casino and Indiana Downs racetrack  
 
--  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 $339.0 million or $22.41 per share at December 31, 2012, compared with $21.86 per share at September 30, 2012. The increase in book value per share was attributable to net income for the quarter of $8.4 million, or $0.55 per share. During the quarter, Clairvest recorded $6.4 million in pre-tax net unrealized gains and $4.7 million in pre-tax distributions, interest, dividends and fees from its corporate investment portfolio.

During the quarter, Rivers Casino completed a financing and paid a distribution to its owners. Clairvest, Clairvest Equity Partners IV Limited Partnership ("CEP IV") and Clairvest Equity Partners IV-A Limited Partnership CEP IV-A ("CEP IV-A") received US$10.5 million, US$24.8 million and US$4.0 million respectively from this distribution. Rivers Casino commenced operations in July 2011, and to December 31, 2012 it has made pre-tax distributions totaling 1.5 times invested capital to its owners.

As previously announced, during the quarter ended December 31, 2012, Clairvest entered into an agreement to tender all of the common shares of PEER 1 Network Enterprises Inc. ("PEER 1") held by Clairvest and Clairvest Equity Partners III Limited Partnership ("CEP III") to a takeover bid made by Cogeco Cable Inc. at a price of $3.85 in cash per share. Subsequent to quarter end the takeover bid was completed. On the initial combined investment of $25.2 million, Clairvest and CEP III generated a pre-tax return of 3.2 times invested capital, or a 40% IRR, over the life of this investment. Consistent with its ownership percentage, on closing Clairvest realized $19.9 million on a $6.3 million investment for a $13.6 million gain, $13.5 million of which had been recognized in income to December 31, 2012.

Also as previously announced, subsequent to quarter end, Clairvest, CEP IV and CEP IV-A invested a combined $39.5 million for a 51.9% ownership interest in CRS Contractors Rental Supply Limited Partnership ("CRS"), a leading provider of construction equipment rental and related merchandise across 21 locations in Ontario, Canada. Clairvest's portion of the investment was $10.6 million for a 13.9% ownership interest in CRS.

"We are realizing the rewards of our focused domain approach and the team's discipline in sourcing best in class companies that are led by superior management teams. The financial return achieved on our sale of PEER 1 is a tribute to our partners' efforts and our team's focus on the growing IT infrastructure industry. In addition, Clairvest's active domain research in the rental services domain resulted in a new exciting opportunity that builds on our current interest in the equipment rental sector," said Ken Rotman, Co-Chief Executive Officer and Managing Director of Clairvest.

Also as previously announced, subsequent to quarter end, Centaur Gaming received all necessary regulatory approvals to proceed with its acquisition of Indiana Grand Casino and Indiana Downs racetrack. The closing of this acquisition is subject to review of the final financing terms.

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 756,204 common shares on the Toronto Stock Exchange during the 12-month period commencing March 6, 2013.

Summary of Financial Results - Unaudited

 
 

 
 

 
Financial Performance Measures              Quarters ended Nine months ended 
 
December 31       December 31 
 
 

 
2012    2011     2012     2011 
 
 

 
($000's, except per share amounts)               $       $        $        $ 
 
 

 
 

 
Net realized gains (losses) on corporate                                     
 
investments                                     -     (54)     (14)     501 
 
 

 
Net changes in unrealized gains on                                           
 
corporate investments                       6,449  13,282   13,870   10,186 
 
 

 
Net income                                   8,419  17,592   25,675   17,068 
 
 

 
Basic net income per share                    0.55    1.14     1.70     1.11 
 
 

 
Fully diluted net income per share            0.55    1.12     1.67     1.09 
 
 

 
 

 

 
 

 
 

 
Financial Condition Measures                              December     March 
 
2012      2012 
 
 

 
($000's, except per share amounts)                               $         $ 
 
 

 
 

 
Total assets                                               364,042   338,424 
 
 

 
Total cash, cash equivalents and temporary                                   
 
investments(1)                                            120,312    97,553 
 
 

 
Total corporate investments                                193,424   187,876 
 
 

 
Total liabilities                                           25,050    21,997 
 
 

 
Book value                                                 338,992   316,427 
 
 

 
Book value per share                                         22.41     20.93 
 
 

 
 

 
(1)  Excludes restricted cash and temporary investments                      
 

 
 

Clairvest's third quarter fiscal 2013 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.

Contacts:

Clairvest Group Inc.

Maria Klyuev

Director, Investor Relations and Marketing

(416) 925-9270

(416) 925-5753 (FAX)

mariak@clairvest.com

www.clairvest.com