NEW YORK, March 5 /PRNewswire-FirstCall/ -- Clark Holdings Inc. (Amex: GLA; GLA.U; GLA.WS), a non-asset-based provider of mission-critical supply chain solutions, today announced financial results for its fourth quarter and year ended December 29, 2007.
Summarized financial results for the quarter and year ended December 29, 2007 are as follows (dollars in thousands):
(unaudited) 13 Weeks 13 Weeks % Year Year % Ended Ended Change Ended Ended Change December December December December 29, 2007 30, 2006 29, 2007 30, 2006 Gross profit Domestic $5,650 5,447 3.7% 23,137 21,755 6.4% International 1,309 1,602 (18.3%) 5,635 6,869 (18.0%) Consolidated 6,959 7,049 (1.3%) 28,772 28,624 0.5% Pro-forma income from operations before interest and taxes Domestic 1,244 970 28.2% 7,592 6,123 24.0% International (117) 284 (141.2%) 422 1,443 (70.8%) Consolidated $1,127(1) 1,254 (10.1%) 8,014(2) 7,566 5.9% (1) Excludes one-time acquisition related expenses totaling $300,000 and a one-time correction of payroll accrual of $77,000. (2) Excludes one-time acquisition related expenses totaling $609,000, a one-time correction of payroll accrual of $77,000, and a one-time, non-recurring severance expense of $280,000. Fourth Quarter Financial Highlights -- Fourth quarter domestic gross profit increased 3.7% to $5.7 million compared to $5.4 million last year -- Domestic operating income, excluding transaction costs, increased 28.2% to $1.2 million in 4Q07 -- Fourth quarter gross profit margin was stable at 36.6% compared with 36.5% a year ago
"We experienced strong growth in our domestic operations in 2007, with gross profit and EBIT increasing 6.4% and 24.0%, respectively," said Tim Teagan Chief Executive Officer of Clark Holdings. "Our overall performance in the fourth quarter was solid despite the current economic climate and a negative comparison due to our decision to discontinue our international operations and focus resources on expanding our domestic business. In 2008, we expect to build on the robust gross profit and EBIT performance of our domestic business through the execution of an accelerated growth strategy that includes acquisition opportunities as well as numerous organic initiatives such as expanding our geographic footprint and customer base, entering new industry verticals, and creating additional service offerings."
Fourth Quarter Results
The Clark Group reported gross revenues of $19.0 million in the fourth quarter of 2007, compared to gross revenues of $19.3 million in the same period last year. Domestic gross revenue was unchanged while international gross revenue declined as Clark continued to reposition the international business for future growth.
Gross profit margin increased slightly to 36.6% from 36.5% despite the impact of higher fuel costs, as the company was able to capitalize on a softer freight environment. The domestic business continued to drive growth at Clark, with domestic gross profit for the fourth quarter of 2007 up 3.7% to $5.7 million compared to domestic gross profit of $5.4 million in the same period last year. International gross profit for the fourth quarter of 2007 was $1.3 million, an 18.3% decline compared to the same period last year. Total gross revenue declined slightly to $19.0 million from $19.3 million.
Fourth quarter operating income, excluding $300,000 of transaction expenses and $77,000 of a one time correction to a payroll accrual, declined 10.1% to $1.1 million in the fourth quarter of 2007, compared with $1.3 million in the same period last year. Domestic operating income increased 28.2% and offset much of the decline in international operating income in the fourth quarter. Overall corporate margin decreased to 16.2% from 17.8% due to the decline in international gross margin.
2007 Full Year Results
Gross revenues were $75.8 million in 2007, compared to revenues of $76.6 million in the same period last year. Domestic gross revenue increased 2.3% while international gross revenue declined 14.9% due to the closing of the company's UK operations and the subsequent repositioning of the international business.
Full year gross profit for 2007 was $28.8 million, compared to gross profit of $28.6 million in the same period last year. Domestic gross profit for 2007 was $23.1 million, up 6.4% compared to domestic gross profit of $21.8 million in 2006. International gross profit for 2007 was $5.6 million, an 18.0% decline compared to 2006.
Pro-forma EBIT for 2007 was $8.0 million, an increase of 5.9% compared to $7.6 million in 2006. Pro-forma domestic EBIT for 2007 was $7.6 million, up 24.0% compared to $6.1 million in 2006. Clark's domestic margins benefited from a softer overall transportation market and stable shipper demand. Pro- forma international EBIT for 2007 was $0.4 million, a 70.8% decline compared to $1.4 million in 2006.
2008 Outlook
Clark Holdings expects 2008 EPS to be within the range of $0.32 to $0.42 per diluted share. The guidance is based on our economic assumption for 2008 GDP growth in the range of -1% to +2% for 2008, continued market share gains in the domestic market and some improvement in international results by the third quarter. The outlook assumes lower operating margins in 2008 from public company costs and investments in various growth initiatives. The company expects its effective tax rate to be approximately 40% in 2008.
Warrant Repurchase Program
The Board of Directors announced that it has established a warrant repurchase program and authorized a maximum of $3 million for the purchase of Clark Holdings warrants. Repurchases will be made from time to time in the open market and through privately negotiated transactions, subject to market conditions. No minimum number of warrants to be repurchased has been fixed. There is no timeframe to complete the repurchase program and it is expected that warrant repurchases will be paid using existing and future cash generated by operations.
About Clark
Over its 30-year history, Clark has built a position as the leading independent provider of value-added distribution, transportation management, and international air and ocean freight forwarding services to the print media industry.
This press release may contain certain forward-looking statements including statements with regard to the future performance of Clark Holdings. Words such as "believes," "expects," "projects," and "future" or similar expressions are intended to identify forward-looking statements. These forward-looking statements inherently involve certain risks and uncertainties that are detailed in Clark Holdings' filings with the Securities and Exchange Commission. Clark Holdings undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
CLARK HOLDINGS INC. CONSOLIDATED BALANCE SHEETS UNAUDITED (In Thousands) December 29 December 30, 2007 2006 ASSETS (Unaudited) CURRENT ASSETS: Cash $1,472 $4,075 Accounts receivable 6,362 6,229 Other receivables 358 106 Prepaid expenses 947 952 Current assets of discontinued operations 437 784 Total current assets 9,576 12,146 PROPERTY AND EQUIPMENT, net of accumulated depreciation 1,413 1,705 Goodwill 10,871 10,871 Other Assets 11 46 Total assets $21,871 $24,768 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $6,785 $7,246 Accrued expenses and other payables 1,442 2,098 Current liabilities of discontinued operations 126 556 Total current liabilities 8,353 9,900 Commitments and Contingencies STOCKHOLDERS' EQUITY Voting common stock par value $1, 2,500 shares authorized, 910 shares issued at December 31, 2007 and December 31, 2006, respectively 1 1 Non-voting common stock par value $1, 22,500 shares authorized, 8,190 shares issued at December 31, 2007 and December 31, 2006, respectively 8 8 Additional paid in capital 1,041 1,041 Retained earnings 12,468 13,818 Total stockholders' equity 13,518 14,868 Total liabilities and stockholders' equity $21,871 $24,768 CLARK HOLDINGS INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (In Thousands) 13 Weeks 13 Weeks 52 Weeks 52 Weeks Ended Ended Ended Ended December December December December 29, 2007 30, 2006 29 2007 30, 2006 GROSS REVENUES $19,012 $19,332 $75,804 $76,603 FREIGHT EXPENSE $(12,053) $(12,283) $(47,032) $(47,979) Gross Profit 6,959 7,049 28,772 28,624 SELLING, OPERATING AND ADMINISTRATIVE EXPENSES $(6,209) $(5,795) $(21,724) $(21,058) Income from operations 750 1,254 7,048 7,566 INTEREST INCOME 9 34 32 71 INTEREST EXPENSE (1) (4) (38) (30) Income before income taxes 758 1,284 7,042 7,607 INCOME TAX EXPENSE (48) (135) (48) (135) INCOME FROM CONTINUING OPERATIONS 710 1,149 6,994 7,472 LOSS FROM DISCONTINUED OPERATIONS (2) (128) (2,044) (435) NET INCOME $708 $1,021 $4,950 $7,037 Pro Forma Reconciliation Income From Operations 750 1,254 7,048 7,566 Plus one-time acquisition expenses-3rd & 4th quarters 300 609 Plus one-time correction of payroll accrual 77 77 Plus one-time non recurring severance expense-1st quarter - 280 Adjusted Income from continuing operations before interest & taxes--Consolidated 1,127 1,254 8,014 7,566
