Counsel Corporation
TSX : CXS

Counsel Corporation

March 30, 2006 19:11 ET

Counsel Corporation Announces 2005 Fiscal Year Results

TORONTO, ONTARIO--(CCNMatthews - March 30, 2006) - Counsel Corporation (TSX:CXS) today reported its financial results for the year ended December 31, 2005. All amounts are stated in Canadian dollars.

Highlights of 2005:

- The Company determined that the benefits of continued listing of its common stock in the United States did not justify the cost of maintaining its registration, and, in February 2005, Counsel terminated its common stock registration in the United States.

- On May 19, 2005, the Company's 92%-owned subsidiary, C2 Global Technologies Inc. (OTCBB:COBT; formerly Acceris Communications Inc.) entered into an agreement to dispose of its telecommunications business. This transaction was completed on September 30, 2005 and resulted in a net gain of $7.6 million. C2 will now focus its efforts on the licensing of its intellectual property.

- During the third quarter of 2005, C2 was awarded patents in VoIP technology from the People's Republic of China and in Canada. The patents correspond to C2's U.S. Patent No. 6,243,373. C2 also received a Notice of Allowance in Canada with respect to a patent application that corresponds to its U.S. Patent No. 6,438,124.

- On July 19, 2005, the Company entered into an agreement to sell seven income producing properties, including thirteen acres of vacant land. This transaction was completed on September 30, 2005 and resulted in a net gain of $11.6 million, before provision for income taxes. In conjunction with the sale, the Company entered into a three year property management contract with the purchaser for seven properties.

- The Company adopted Canadian dollar reporting on a retroactive basis commencing in the third quarter of 2005, given the changes in the composition of its assets and the deregistration of its common shares in the United States.

For the year ended December 31, 2005, the Company's consolidated revenue from continuing operations was $49.2 million, a decrease of 4.5% from $51.5 million in 2004. The decrease in revenue is attributable to a reduction in occupancy levels in the Company's long-term care facilities.

The Company incurred a loss from continuing operations of $3.8 million, or $0.09 per share, basic and diluted, for the year ended December 31, 2005, compared with income of $5.6 million, or $0.11 per share, basic and diluted, for the year ended December 31, 2004. Including discontinued operations, the Company's net loss was $2.0 million or $0.05 per share, basic and diluted, for the year ended December 31, 2005, compared with a net loss of $8.5 million, or $0.18 per share, basic and diluted, for the year ended December 31, 2004.

"Counsel will continue to focus on value creation opportunities in real estate and on maximizing the value of C2's patents. In addition, Counsel will continue to pursue non-real estate investment opportunities," said Allan Silber, Chairman and CEO of Counsel.

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 three specific sectors: long-term care, real estate, and patent licensing. 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)

Year ended December 31,
2005 2004
$ $
--------------------
Revised(1)

Revenues
Long-term care 47,233 49,287
Real estate 1,936 1,465
Patent licensing - 719
--------------------
49,169 51,471
--------------------

Operating costs and expenses
Long-term care (exclusive of depreciation
and amortization shown below) 44,133 46,032
Real estate (exclusive of depreciation and
amortization shown below) 1,606 1,528
Selling, general and administrative 9,918 15,555
Depreciation and amortization 1,179 1,041
--------------------

56,836 64,156
--------------------

Operating loss before undernoted items (7,667) (12,685)

Gains and other income
Gain on sale of short-term investments 643 1,960
Other 1,315 -

Impairments and other losses
Write-down of short-term investments (113) (701)
Write-down of portfolio investments (1,446) (3,625)
Other (44) (3,451)
--------------------

Loss before the undernoted (7,312) (18,502)

Interest income 372 566
Interest expense (5,502) (5,277)
--------------------
Loss before income taxes, non-controlling
interest and discontinued operations (12,442) (23,213)

Income tax provision (recovery) (8,628) (28,910)
Non-controlling interest 13 89
--------------------
Income (loss) from continuing operations (3,827) 5,608

Income (loss) from discontinued operations 1,859 (14,112)
--------------------

Net Income (loss) (1,968) (8,504)
--------------------
--------------------

Basic and diluted net income (loss) per share:
Continuing operations (0.09) 0.11
Discontinued operations 0.04 (0.29)
--------------------

Basic and diluted net income (loss) per share (0.05) (0.18)
--------------------
--------------------

Weighted average number of common shares
outstanding (in thousands) - basic and diluted 47,789 48,312

(1) Prior year has been revised to reflect: (a) the Company's
adoption of AcG-15, "Consolidation of Variable Interest
Entities"; (b) discontinued operations treatment for the sale of
certain real estate assets and the telecommunications business;
and (c) the change in reporting currency, whereby the Company
adopted Canadian dollar reporting.

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



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

December 31, December 31,
2005 2004
$ $
---------------------------
Revised(1)

Assets

Current assets
Cash and cash equivalents 15,632 7,293
Short-term investments (market value
$15,819; 2004 - $4,863) 15,414 4,521
Accounts receivable (net of allowance
for doubtful accounts of
$298; 2004 - $206) 1,030 758
Prepaid expenses and deposits 917 856
Assets of discontinued operations 16,509 20,173
------------------------
49,502 33,601

Long-term assets
Income producing properties 11,018 7,160
Properties under development - 2,566
Property, plant and equipment, net 15,123 15,945
Portfolio investments 1,277 2,776
Intangible assets, net 69 103
Goodwill 201 201
Other assets 342 710
Assets of discontinued operations - 74,610
------------------------

77,532 137,672
------------------------
------------------------

Liabilities

Current liabilities
Accounts payable and accrued liabilities 25,496 19,879
Income tax payable 63 533
Current portion of mortgages and
loans payable 8,413 7,706
Liabilities of discontinued operations 20,718 44,473
------------------------
54,690 72,591
Long-term liabilities
Mortgages and loans payable 38,470 41,931
Convertible preferred shares 16,053 14,802
Future income tax liabilities 12,257 17,762
Liabilities of discontinued operations 214 33,910
------------------------
121,684 180,996

Non-controlling interest 1,496 1,475

Shareholders' equity (deficiency) (45,648) (44,799)
------------------------

77,532 137,672
------------------------
------------------------

(1) Prior year has been revised to reflect: (a) the Company's
adoption of AcG-15, "Consolidation of Variable Interest
Entities"; (b) discontinued operations treatment for the sale of
certain real estate assets and the telecommunications business;
and (c) the change in reporting currency, whereby the Company
adopted Canadian dollar reporting.

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


Contact Information

  • Counsel Corporation
    Stephen Weintraub
    Executive Vice President, Secretary & CFO
    (416) 866-3058