Counsel Corporation
TSX : CXS

Counsel Corporation

March 28, 2007 15:56 ET

Counsel Corporation Announces 2006 Fiscal Year Results

TORONTO, ONTARIO--(CCNMatthews - March 28, 2007) - Counsel Corporation (TSX:CXS) today reported its financial results for the year ended December 31, 2006. All amounts are stated in Canadian dollars.

Highlights of 2006:

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

- On May 1, 2006, Counsel, along with a group of investors, acquired McIntyre Centre in Thunder Bay, Ontario. McIntyre Centre is a strip centre with approximately 60,000 sq. ft. of leaseable 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 156,000 sq. ft. leased premises located in the west end of Toronto, Ontario.

- On May 31, 2006, Counsel, along with a group of investors, acquired Kingspoint Plaza in Brampton, Ontario. Kingspoint Plaza is a 165,000 sq. ft. strip plaza on a 17 acre site that includes a gas station and two land leased pads.

- On June 15, 2006, C2 Communications Technologies Inc., a wholly owned subsidiary of C2 Global Technologies Inc.("C2") (OTCBB:COBT), which is a 93%-owned subsidiary of Counsel, filed a patent infringement lawsuit against AT&T, Inc., Verizon Communications, Inc., Qwest Communications International, Inc., Bellsouth Corporation, Sprint Nextel Corporation, Global Crossing Limited, and Level 3 Communications, Inc. The complaint was filed in the Marshall Division of the United States District Court for the Eastern District of Texas and alleges that the defendants' services and systems utilizing Voice over Internet Protocol ("VoIP") infringe C2's U.S. Patent No. 6,243,373, entitled "Method and Apparatus for Implementing a Computer Network/Internet Telephone System". The complaint seeks an injunction, monetary damages and costs.

- During the second half of 2006, C2 was awarded patents in VoIP technology from the Hong Kong Special Administrative Region and in Canada. The patents correspond to C2's U.S. Patent No. 6,243,373 and No. 6,438,124, respectively. C2 also was advised by the European Patent Office that it intends to grant C2 a European patent that is equivalent to C2's U.S. Patent No. 6,243,373.

- In December 2006, Counsel completed the sale of Imperial Square, a 60,000 sq. ft. income producing property in Guelph, Ontario for approximately $14.5 million.

- In December 2006, Counsel acquired a 28% equity interest in Apparel Holdings Group, a New York based company, which is a leader in the design, manufacture, marketing and distribution of women's, men's, junior and kids' apparel under the Caribbean Joe®, Havana Jack's Cafe®, Jamaica Bay®, Periscope® and Cupid's Cup® trademarks and other private labels. The company will operate as CJ Apparel Group.

For the year ended December 31, 2006, the Company's consolidated revenue from continuing operations was $79.8 million, an increase of 67% from $47.9 million in 2005. The increase in revenue is attributable to the acquisition of Fleetwood Fine Furniture and three income producing properties in the first half of 2006 as well as increased occupancy levels in the Company's long-term care facilities.

The Company incurred a loss from continuing operations of $4.0 million, or $0.09 per share, basic and diluted, for the year ended December 31, 2006, compared with a loss of $3.9 million, or $0.09 per share, basic and diluted, for the year ended December 31, 2005. Including discontinued operations, the Company had net income of $4.1 million or $0.09 per share, basic and diluted, for the year ended December 31, 2006, compared with a net loss of $2.0 million, or $0.05 per share, basic and diluted, for the year ended December 31, 2005.

"We are extremely pleased with the progress made in building Counsel during 2006 and look forward to even greater success in 2007," said Allan Silber, Chairman and CEO of Counsel.

The Company's Management's Discussion and Analysis and Financial Statements for the year ended December 31, 2006 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, case goods, 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,
2006 2005
$ $
-------------------------
Revenues
Long-term care 52,698 47,233
Case goods 21,751 -
Real estate 5,312 631
Patent licensing - -
-------------------------
79,761 47,864
-------------------------

Operating costs and expenses
Long-term care (exclusive of depreciation
and amortization shown below) 48,704 44,133
Case goods (exclusive of depreciation
and amortization shown below) 15,212 -
Real estate (exclusive of depreciation and
amortization shown below) 2,948 1,162
Selling, general and administrative 10,920 9,918
Depreciation and amortization 3,299 918
-------------------------

81,083 56,131
-------------------------

Operating loss before undernoted items (1,322) (8,267)

Other income and losses
Gain on sale of short-term investments,
net of write-downs 490 530
Write-down of portfolio investments - (1,446)
Other 767 1,271
-------------------------

Loss before the undernoted (65) (7,912)

Interest income 1,639 372
Interest expense (7,598) (4,997)
-------------------------
Loss before income taxes, non-controlling
interest and discontinued operations (6,024) (12,537)

Income tax provision(recovery) (2,603) (8,672)
Non-controlling interest 539 -
-------------------------
Loss from continuing operations (3,960) (3,865)

Income from discontinued operations 8,084 1,897
-------------------------

Net income(loss) 4,124 (1,968)
-------------------------
-------------------------

Basic and diluted net income(loss) per share:
Continuing operations (0.09) (0.09)
Discontinued operations 0.18 0.04
-------------------------

Basic and diluted net income(loss) per share 0.09 (0.05)
-------------------------
-------------------------

Weighted average number of common shares
outstanding (in thousands) - basic and diluted 47,060 47,789

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,
2006 2005
$ $
-------------------------

Assets

Current assets
Cash and cash equivalents 7,164 15,541
Short-term investments 5,718 15,414
Accounts receivable (net of allowance
for doubtful accounts of $280; 2005 - $189) 5,989 907
Inventories 1,473 -
Prepaid expenses and deposits 1,541 911
Assets of discontinued operations 13,323 16,782
-------------------------
35,208 49,555

Long-term assets
Income producing properties, net 41,499 -
Property, plant and equipment, net 16,245 15,123
Portfolio investments 5,355 1,277
Intangible assets, net 2,918 69
Goodwill 24,555 201
Other assets 905 289
Assets of discontinued operations - 11,018
-------------------------

126,685 77,532
-------------------------
-------------------------

Liabilities

Current liabilities
Accounts payable and accrued liabilities 23,852 23,733
Customer deposits 1,756 -
Income taxes payable 159 63
Future income tax liabilities 240 -
Current portion of mortgages and loans payable 7,378 3,540
Liabilities of discontinued operations 13,848 27,354
-------------------------
47,233 54,690

Long-term liabilities
Mortgages and loans payable 80,402 38,470
Convertible preferred shares 18,192 16,053
Intangible liabilities 1,053 -
Future income tax liabilities 11,071 12,257
Liabilities of discontinued operations - 1,710
-------------------------
157,951 123,180

Non-controlling interest 11,645 -

Shareholders' equity (deficiency) (42,911) (45,648)
-------------------------

126,685 77,532
-------------------------
-------------------------

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
    Website: www.couselcorp.com