Counsel announces second quarter results

MUA GROWS TO $19.3B

TORONTO, Aug. 14, 2014 /CNW/ - Counsel Corporation ("Counsel" or the "Company") (TSX: CXS), a financial services company, today announced financial results for the three months ended June 30, 2014.  All amounts are stated in Canadian dollars unless otherwise noted.

Second Quarter 2014 Highlights

  • Mortgages under administration grew to $19.3 billion.
  • $1.9 billion of mortgages sold in Q2 2014 compared to $1.4 billion in Q1 2014 and $2.5 billion in Q2 2013.
  • $36.1 million of revenue in Q2 2014 compared to $29.8 million in Q1 2014 and $46.4 million in Q2 2013.
  • Pre-tax income from continuing operations increased to $12.3 million in Q2 2014 from $8.9 million in Q1 2014 and $9.5 million in Q2 2013.
  • Diluted earnings per share from continuing operations were $0.06, in line with Q2 2013.

"I am pleased to report our first full quarter as a financial services focused business," said Allan Silber, Chairman and CEO of Counsel Corporation. "We are on track with the implementation and execution of our strategy as evidenced by our solid bottom-line results."

Income before income taxes and discontinued operations for the quarter was $12.3 million, an increase of over 29% from $9.5 million in the same period one year ago.

Net income attributable to shareholders in the second quarter 2014 was $6.2 million, compared with net income of $4.5 million for the same period one year ago reflecting the increase in the fair value of the Company's private equity portfolio. In the second quarter 2014, diluted earnings per share from continuing operations were $0.06 in line from one year ago.

Mr. Silber added "The pace and success of the monetization of our private equity investments will further enhance the Company's financial position and ability to focus on its financial services operations."

Mortgage Lending Business

Counsel carries on its residential mortgage lending business through its wholly owned subsidiary Street Capital (www.streetcapital.ca). The company sources its mortgages solely through a network of independent, high quality mortgage brokers across Canada with whom it has built relationships. The company offers a broad lineup of high ratio and conventional mortgages, predominantly to prime borrowers, and sells the mortgages it underwrites to top-tier financial institutions. Business revenues are almost entirely from the gain on sale of mortgages.

In the second quarter 2014, the business generated $35.8 million in mortgage lending revenues compared to $46.3 million in the same period one year ago. Mortgages sold experienced a decrease as management focused on credit quality over volume.

Operating expenses, consisting of the cost to source and underwrite mortgages sold by Street Capital, totaled $20.7 million in the second quarter 2014, down 30%, compared with $29.5 million recorded in the same period last year.

During the second quarter, Street Capital sold $1.9 billion of mortgages, compared with $2.5 billion recorded in the same period one year ago. The business continued to experience growth in its portfolio of mortgages under administration to $19.3 billion at June 30, 2014 compared to $15.0 billion at June 30, 2013.

Street Capital's bank license application is proceeding in accordance with expectations and management is pleased with the progress to date.

Counsel's Management's Discussion and Analysis and Condensed Consolidated Interim Financial Statements for the three months and six months ended June 30, 2014 will be available on SEDAR (www.sedar.com).

Conference Call

Counsel will host a conference call on Thursday, August 14, 2014 at 5:00 p.m. EDT to discuss its 2014 second quarter financial results. Allan Silber, CEO of Counsel Corporation and Ed Gettings, CEO of Street Capital Financial Corporation will chair the call. To participate in the call, please dial 647-427-7450 or 1-888-231-8191 ten minutes prior to the scheduled start of the call. A taped replay of the conference call will be available until Thursday, September 11, 2014 by calling 416-849-0833 or 1-855-859-2056, reference number 74182840.

About Counsel Corporation (www.counselcorp.com)

Counsel Corporation (TSX: CXS) is a financial services company operating in residential mortgage lending through its wholly owned subsidiary Street Capital Financial Corporation, one of the largest non-bank mortgage lenders in Canada. Founded in 1979 and a public company for more than a quarter century, Counsel's goal is to build consistently profitable, industry-leading financial services companies by investing in great leaders and providing them with the strategic guidance and financial resources they need to succeed.

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.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30
(In thousands of Canadian dollars, except per share data) (Unaudited)

  Three months ended June 30   Six months ended June 30
  2014
$
2013
$
  2014
$
2013
$
Revenues          
  Operating revenue 36,062 46,440   61,773 72,132
  Other - -   4,125 -
  36,062 46,440   65,898 72,132
Expenses          
  Operating costs 20,748 29,464   36,402 47,101
  Selling, general and administrative expense 8,782 9,463   16,893 14,953
  Foreign exchange 9 -   (344) -
  Depreciation and amortization 322 330   616 663
  Interest expense 344 540   709 1,111
  30,205 39,797   54,276 63,828
           
Income before fair value adjustments 5,857 6,643   11,622 8,304
           
Fair value adjustments 6,420 2,901   9,519 4,768
Income before income taxes and discontinued operations 12,277 9,544   21,141 13,072
           
Income tax provision 2,125 1,767   3,572 2,225
           
Income from continuing operations 10,152 7,777   17,569 10,847
           
Income (loss) from discontinued operations 169 (1,468)   (11,613) (2,800)
           
Net income 10,321 6,309   5,956 8,047
           
Net income attributable to non-controlling interest 4,082 1,823   6,143 2,820
           
Net income attributable to shareholders 6,239 4,486   (187) 5,227
           
Basic and diluted net income (loss) per share:          
  Continuing operations 0.06 0.06   0.13 0.08
  Discontinued operations 0.00 (0.01)   (0.13) (0.02)
           
Basic and diluted net income (loss) per share 0.06 0.05   0.00 0.06
           
Weighted average number of common shares
outstanding (in thousands) - basic and diluted
99,071 90,621   99,067 88,249

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


CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION 
AS AT JUNE 30, 2014 AND DECEMBER 31, 2013
(In thousands of Canadian dollars) (Unaudited)

  June 30, December 31,
  2014
$
2013
$
Assets    
  Current assets    
    Cash and cash equivalents 19,282 17,580
    Marketable securities 427 410
    Mortgages, loans, accounts and deferred interest receivable 39,320 22,004
    Prepaid expenses, deposits and deferred charges 6,212 4,655
    Assets of discontinued operations 860 18,415
  66,101 63,064
Non-current assets    
    Deferred interest and mortgages receivable 22,358 19,403
    Mortgages receivable - securitized financing 10,961 -
    Deferred charges and other assets 38,766 35,557
    Property, plant and equipment 4,023 3,079
    Portfolio investments 61,868 53,220
    Intangible assets 5,348 5,594
    Goodwill 24,919 24,919
    Assets of discontinued operations 471 53,367
Total assets 234,815 258,203
     
Liabilities    
  Current liabilities    
    Accounts payable and accrued liabilities 46,518 29,458
    Income taxes payable 2 4
    Current portion of mortgages and loans payable 20,476 14,025
    Contingent consideration 2,600 4,027
    Liabilities of discontinued operations 983 20,550
  70,579 68,064
  Non-current liabilities    
    Mortgages and loans payable - 6,703
    Securitization liabilities 10,981 -
    Contingent consideration 2,163 4,543
    Deferred income tax liabilities 12,806 9,349
    Derivative liability - 9
    Liabilities of discontinued operations 150 318
Total liabilities 96,679 88,986
     
Equity    
    Share capital 203,719 203,333
    Share based compensation 12,389 12,202
    Foreign currency translation 273 2,392
    Contributed surplus 50,215 50,215
    Retained earnings (deficit) (168,738) (152,035)
    Shareholders' equity 97,858 116,107
     
Non-controlling interest 40,278 53,110
     
Total Equity 138,136 169,217
     
Total liabilities and equity 234,815 258,203

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

 

 

SOURCE: Counsel Corporation

For further information:


Counsel Corporation  
Stephen Weintraub 
EVP, Secretary & CFO 
saw@counselcorp.com 
Tel: (416) 866-3058

TMX Equicom
Renée Lam
rlam@tmxequicom.com
Tel: (416) 815-0700 ext. 258

Profil de l'entreprise

Counsel Corporation

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