Counsel Corporation
TSX : CXS

Counsel Corporation

May 15, 2006 08:30 ET

Counsel Corporation Announces 2006 First Quarter Results

TORONTO, ONTARIO--(CCNMatthews - May 15, 2006) - Counsel Corporation (TSX:CXS) today reported its financial results for the three months ended March 31, 2006. All amounts are stated in Canadian dollars.

For the three months ended March 31, 2006, the Company's consolidated revenue from continuing operations was $12.5 million, an increase of 2% from $12.3 million in the first three months of 2005. The increase in revenue is attributable to an increase in occupancy levels in the Company's long-term care facilities and income producing properties.

The Company had net income of $2.2 million or $0.04 per share, basic and diluted, for the three months ended March 31, 2006, compared with a net loss of $9.7 million, or $0.20 per share, basic and diluted, for the three months ended March 31, 2005. The Company incurred a loss from continuing operations of $3.5 million, or $0.08 per share, basic and diluted, for the three months ended March 31, 2006, compared with a loss of $4.3 million, or $0.09 per share, basic and diluted, for the three months ended March 31, 2005.

Significant developments in 2006 to date are:

- On March 30, 2006, Counsel acquired the Lancaster Mall in Saint John, New Brunswick. Lancaster Mall is an enclosed shopping centre with approximately 199,000 sq. ft. of leasable area, including three free standing pads. The area of the site is approximately 23 acres.

- On May 1, 2006, Counsel acquired McIntyre Centre in Thunder Bay, Ontario. McIntyre Centre is a strip centre with approximately 60,000 sq. ft of leasable area.

- On May 2, 2006, Counsel entered the case goods business with the acquisition of Fleetwood Fine Furniture Inc. Fleetwood is a custom case goods manufacturer which serves the North American hospitality industry, operating from 155,000 sq. ft. leased premises located in the west end of Toronto, Ontario.

"We are very pleased with our new acquisitions and will continue to focus on identifying value creation opportunities in real estate and businesses, like Fleetwood, that are in traditional industries and offer a strong earnings base, steady cash flow and attractive growth prospects. We will also maintain our commitment to maximize the value of C2's patents," said Allan Silber, Chairman and CEO of Counsel.

The Company's Management's Discussion and Analysis and Financial Statements have been filed and are available on SEDAR (www.sedar.com).

About Counsel Corporation

Counsel Corporation (TSX:CXS) is a diversified company focused on the acquisition of businesses in diverse industry sectors and at various stages of their business life cycles. Its goal for acquired businesses is to create value within these businesses and to realize on the value creation at the appropriate time. Counsel currently operates in four specific sectors: long-term care, real estate, patent licensing and custom case goods. For further information, 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
Consolidated Statements of Operations
(in thousands of Cdn Dollars, except per share amounts)
(Unaudited)

Three months ended March 31,
2006 2005
$ $
----------------------------

Revenues
Long-term care 11,935 11,841
Real estate 577 463
Patent licensing - -
----------------------------
12,512 12,304
----------------------------

Operating costs and expenses
Long-term care (exclusive of
depreciation and amortization
shown below) 11,160 11,119
Real estate (exclusive of
depreciation and
amortization shown below) 478 467

Selling, general and administrative 3,003 3,157
Depreciation and amortization 303 276
----------------------------
14,944 15,019
----------------------------

Operating loss before undernoted items (2,432) (2,715)

Gains and other income
Gain on sale of short-term investments 235 643

Impairments and other losses
Write-down of short-term investments (206) -
Write-down of portfolio investments - (790)
----------------------------

Loss before the undernoted (2,403) (2,862)

Interest income 438 105
Interest expense (1,292) (1,331)
----------------------------
Loss before income taxes, non-controlling
interest and discontinued operations (3,257) (4,088)

Income tax provision 254 177
Non-controlling interest 4 13
----------------------------
Income(loss) from continuing operations (3,515) (4,278)

Income(loss) from discontinued operations 5,736 (5,451)
----------------------------
Net income(loss) 2,221 (9,729)
----------------------------
----------------------------
Basic and diluted net income (loss) per
share:
Continuing operations (0.08) (0.09)
Discontinued operations 0.12 (0.11)
----------------------------
Basic and diluted net income (loss) per
share 0.04 (0.20)
----------------------------
----------------------------
Weighted average number of common
shares outstanding (in thousands)
- basic and diluted 47,309 47,797

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



Counsel Corporation
Consolidated Balance Sheets
(in thousands of Cdn Dollars)
(Unaudited)

March 31, December 31,
2006 2005
$ $
----------------------------

Assets

Current assets
Cash and cash equivalents 6,537 15,632
Short-term investments (market value
$17,605; 2005 - $15,819) 16,401 15,414
Accounts receivable (net of allowance
for doubtful accounts of $257;
2005 - $269) 694 1,030
Prepaid expenses and deposits 1,676 917
Assets of discontinued operations 15,883 16,509
----------------------------
41,191 49,502

Long-term assets
Income producing properties 23,233 11,018
Property, plant and equipment, net 14,927 15,123
Portfolio investments 1,277 1,277
Intangible assets, net 63 69
Goodwill 201 201
Other assets 579 342
----------------------------
81,471 77,532
----------------------------
----------------------------

Liabilities

Current liabilities
Accounts payable and accrued liabilities 24,351 25,496
Income tax payable 43 63
Current portion of mortgages and loans
payable 9,013 8,413
Liabilities of discontinued operations 16,251 20,718
----------------------------
49,658 54,690
Long-term liabilities
Mortgages and loans payable 45,950 38,470
Convertible preferred shares 16,752 16,053
Future income tax liabilities 12,425 12,257
Liabilities of discontinued operations - 214
----------------------------
124,785 121,684

Non-controlling interest 1,570 1,496

Shareholders' equity (deficiency) (44,884) (45,648)
----------------------------
81,471 77,532
----------------------------
----------------------------

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



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