Counsel Corporation Reports Strong Year Over Year Increase in Revenues and Net Income

TORONTO, Nov. 14, 2011 /CNW/ - Counsel Corporation ("Counsel" or the "Company") (TSX: CXS), a financial services company, today announced net income attributable to shareholders of $3.1 million, or $0.04 per basic and diluted share, on $26.3 million in revenues for the third quarter ended September 30, 2011. All amounts are stated in Canadian dollars, unless noted.

Q3 2011 Highlights:

• The 2011 third quarter results include the first full quarter for Counsel's subsidiary Street Capital Financial Corporation ("Street Capital"), a leader in the prime residential mortgage lending industry which was acquired by Counsel on May 31.  Street Capital contributed $19.9 million to Counsel's Q3 2011 revenues and $3.5 million to its income from continuing operations. Mortgage originations for the quarter exceeded $1 billion and Street Capital now has over $7 billion of mortgages under administration.
  
  
• Counsel's 76.2%-owned subsidiary, Counsel RB Capital Inc. (OTCBB: CRBN) ("Counsel RB"), a leader in distressed and surplus capital asset transactions, produced a 33% increase in year-over-year third quarter net income. This was its seventh consecutive profitable quarter. Since entering the asset liquidation business in mid-2009, Counsel RB has successfully completed over 60 transactions.
  
  
• In September 2011, Terra Firma Capital Corporation (TSXV: TII), a publicly traded real estate finance company, managed and 21% owned by the Company, completed a non-brokered private placement of convertible unsecured debentures for $10.1 million.  The net proceeds will be used to enhance Terra Firma's liquidity position and fund business activities on an active and growing pipeline of equity and debt deals in the commercial real estate space.  The debentures bear interest of 7% per annum and are convertible at the option of the holders at $0.70 per share.

"The acquisition of Street Capital has provided a major boost to our top and bottom line," said Allan Silber, Chairman and CEO of Counsel. "We now have two strong operating companies, Street Capital and Counsel RB, providing Counsel with consistent earnings that can be augmented by returns from our private equity investments."

Financial Overview

Counsel recorded revenues of $26.3 million in the third quarter of 2011, compared with $3.4 million in the same period in 2010. Street Capital contributed $19.9 million to Counsel's Q3 2011 revenues. For the nine months ended September 30, 2011, Counsel had revenues of $47.5 million, versus $16.9 million in the first nine months of 2010.

The Company had third quarter income from continuing operations attributable to shareholders of $3.1 million, or $0.04 per share, basic and diluted, compared with a loss of $1.8 million, or $0.03 per share, basic and diluted, for the three months ended September 30, 2010. Including discontinued operations, the Company had net income of $3.1 million, or $0.04 per share, basic and diluted, attributable to shareholders for the three months ended September 30, 2011, compared with a net loss of $2.4 million, or $0.04 per share, basic and diluted, for the three months ended September 30, 2010.

For the nine months ended September 30, 2011, income from continuing operations attributable to shareholders was $2.3 million, or $0.03 per share, basic and diluted, compared with a loss of $4.9 million, or $0.08 per share, basic and diluted, for the first nine months of 2010. Net income attributable to shareholders for the nine months ended September 30, 2011 was $2.5 million or $0.03 per share, basic and diluted, compared with net loss of $4.3 million, or $0.07 per share, basic and diluted, in the first nine months of 2010.

The Company's Management's Discussion and Analysis and Financial Statements for the three and nine months ended September 30, 2011 have been filed and are available on SEDAR (www.sedar.com).

About Counsel Corporation

Counsel Corporation (TSX: CXS) is a financial services company that operates through its individually branded businesses in residential mortgage lending, distressed and surplus capital asset transactions, real estate finance and private equity investment. For further information, please visit Counsel's website at www.counselcorp.com.

Forward-Looking Statements

The statements made in this release that are not historical facts contain forward-looking information that involves risks and uncertainties. All statements, other than statements of historical facts, which address Counsel Corporation's expectations, should be considered as forward-looking statements. Such statements are based on knowledge of the environment in which Counsel Corporation currently operates, but because of the factors listed herein, as well as other factors beyond Counsel Corporation's control, actual results may differ materially from the expectations expressed in the forward-looking statements. Important factors that may cause actual results to differ from anticipated results include, but are not limited to, obtaining necessary approvals and other risks detailed from time to time in the Company's securities and other regulatory filings.

Counsel Corporation Condensed Consolidated Interim Statements of Operations
For the three and nine months ended September 30
(in thousands of Cdn Dollars, except per share amounts)
(Unaudited)

		Three months ended September 30,			Nine months ended September 30,
		2011 $	2010 $		2011 $	2010 $
Revenues		26,271	3,425		47,509	16,893
Expenses (exclusive of depreciation, amortization and interest expense shown below) and other (income) losses
	Operating costs	15,027	1,883		29,010	11,822
	Selling, general and administrative expense	7,646	3,584		16,579	9,613
	Foreign exchange (gain) loss	(3,659)	1,117		(1,960)	(128)
	Depreciation and amortization	260	35		315	124
	Interest expense	827	459		1,717	1,486
	Other	(5)	(165)		(20)	181
		20,096	6,913		45,641	23,098
Income (loss) before fair value adjustments		6,175	(3,488)		1,868	(6,205)
Fair value adjustments		(31)	486		(383)	532
Income (loss) before income taxes and discontinued operations		6,144	(3,002)		1,485	(5,673)
Income tax provision (recovery)		(168)	(540)		(1,576)	(294)
Income (loss) from continuing operations		6,312	(2,462)		3,061	(5,379)
Less: Income (loss) attributable to non-controlling interest		3,182	(693)		755	(478)
Income (loss) attributable to shareholders		3,130	(1,769)		2,306	(4,901)
Income from discontinued operations		16	(1,252)		195	1,049
Less: Income (loss) attributable to non-controlling interest		-	(573)		33	443
Income (loss) attributable to shareholders		16	(679)		162	606
Net income (loss) attributable to shareholders		3,146	(2,448)		2,468	(4,295)
Basic and diluted net income (loss) per share :
	Continuing operations	0.04	(0.03)		0.03	(0.08)
	Discontinued operations	0.00	(0.01)		0.00	0.01
Basic and diluted net income (loss) per share		0.04	(0.04)		0.03	(0.07)
Weighted average number of common shares outstanding (in thousands) - basic and diluted		85,138	61,820		79,075	61,820

The notes contained in the Company's condensed consolidated interim financial statements are an integral part of these condensed consolidated interim financial statements.

Counsel Corporation
Condensed Consolidated Interim Statements of Financial Position
(in thousands of Cdn Dollars)
(Unaudited)

			September 30,		December 31,
			2011 $		2010 $
Assets
	Current assets
		Cash and cash equivalents	18,862		61,897
		Marketable securities	686		333
		Mortgages, accounts and deferred interest receivable	15,341		1,732
		Inventory	4,256		4,564
		Prepaid expenses, deposits and deferred charges	5,407		1,743
		Assets of discontinued operations	221		1,199
			44,773		71,468
	Non-current assets
		Deferred interest receivable	9,819		-
		Deferred charges	12,549		-
		Properties under development	9,546		7,198
		Property, plant and equipment	3,573		2,609
		Interests in joint ventures	483		3,529
		Investment in associates	1,297		1,716
		Portfolio investments	46,262		40,694
		Goodwill	50,290		20,797
		Deferred income tax assets	2,611		2,220
		Other assets	70		194
		Assets of discontinued operations	-		538
Total assets			181,273		150,963
Liabilities
	Current liabilities
		Accounts payable and accrued liabilities	20,856		9,831
		Customer deposits	3,090		2,495
		Income taxes payable	284		218
		Current portion of mortgages and loans payable	6,761		8,902
		Convertible preferred shares	-		11,538
		Liabilities of discontinued operations	625		2,663
			31,616		35,647
	Non-current liabilities
		Mortgages and loans payable	20,523		6,685
		Convertible debenture	11,882		-
		Contingent consideration	10,854		-
		Deferred income tax liabilities	2,425		-
		Other liabilities	2,834		1,794
Total liabilities			80,134		44,126
Shareholders' equity			101,139		106,837
Total liabilities and shareholders' equity			181,273		150,963

The notes contained in the Company's condensed consolidated interim financial statements are an integral part of these condensed consolidated interim financial statements.

 

 

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