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.

 

 

SOURCE Counsel Corporation

For further information:

Counsel Corporation
Stephen Weintraub EVP, Secretary & CFO
saw@counselcorp.com
Tel: (416) 866-3058
The Equicom Group
Tim Foran
tforan@equicomgroup.com
Tel: (416) 815-0700 ext. 251

 


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