Counsel Corporation
TSX : CXS

Counsel Corporation

November 12, 2008 08:00 ET

Counsel Corporation Announces 2008 Third Quarter Results

TORONTO, ONTARIO--(Marketwire - Nov. 12, 2008) - Counsel Corporation (TSX:CXS) today reported its financial results for the three and nine months ended September 30, 2008.

All amounts are stated in Canadian dollars.

For the nine months ended September 30, 2008, the Company had net income of $49.7 million or $1.07 per share, basic and diluted, compared with $8.3 million, or $0.18 per share basic and $0.13 per share diluted, for the nine months ended September 30, 2007. Income from continuing operations was $1.8 million, or $0.04 per share, basic and diluted, for the nine months ended September 30, 2008, compared with $6.7 million, or $0.14 per share basic and $0.10 per share diluted, for the same period in 2007.

For the nine months ended September 30, 2008, the Company's consolidated revenue from continuing operations was $61.1 million, an increase of 67 per cent from $36.7 million in the first nine months of 2007. The increase in revenue was generated by the following Counsel businesses: intellectual property licensing, private equity, and case goods.

The Company had net income of $0.1 million or nil per share, basic and diluted, for the three months ended September 30, 2008, compared with $6.0 million, or $0.13 per share basic and $0.10 per share diluted, for the three months ended September 30, 2007. Income from continuing operations for the period was $0.1 million, or nil per share, basic and diluted, compared with income of $5.1 million, or $0.11 per share, basic and $0.09 per share diluted, in 2007.

For the three months ended September 30, 2008, the Company's consolidated revenue from continuing operations was $20.8 million, an increase of 32 per cent from $15.8 million in the third quarter of 2007. The increase in revenue was generated mainly by intellectual property licensing.

"Throughout the third quarter Counsel continued to implement its three-part strategy, designed to build net asset value in the Company's real estate and private equity core businesses," said Allan Silber, Chairman and CEO of Counsel.

"First, we acquire assets or businesses - where we believe that we are able to add value. Second, we add value through active management, such as changing the business' direction, improving its capital structure or recruiting operating management. Finally, at the appropriate time, we realize on that increased value by selling the asset or otherwise locking in our gains, as we did with the divestiture of CJ Apparel in the second quarter of this year.

"We are pleased with the Company's progress in the year to date and look forward to continuing our momentum through the balance of 2008," he added.

Significant developments in the third quarter of 2008 are:

- In July 2008, the South Korean Patent Office granted Counsel's 91%-owned U.S. public subsidiary, C2 Global Technologies Inc. ("C2"), a South Korean patent that is equivalent to C2's U.S. Patent No. 6,438,124.

- In September 2008, C2 entered into a settlement and license agreement with the remaining three defendants in a patent infringement lawsuit filed on June 15, 2006 by C2 Communications Technologies Inc., a wholly owned subsidiary of C2, against seven U.S. telecommunications companies in the Marshall Division of the United States District Court for the Eastern District of Texas.

The Company's Management's Discussion and Analysis and Financial Statements for the nine months ended September 30, 2008 have been filed and are available on SEDAR (www.sedar.com).

About Counsel Corporation

Counsel Corporation (TSX:CXS) is an international asset management firm that actively partners with businesses to achieve shared success and to unlock value through leveraging our relationships, our access to capital and our strategic market experience. 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
Consolidated Statements of Operations
(in thousands of Cdn Dollars, except per share amounts)
(Unaudited)
Three months Nine months
ended ended
September 30, September 30,
2008 2007 2008 2007
$ $ $ $
----------------- ------------------------
Revenues
Case goods 6,357 8,114 26,248 21,584
Real estate 3,963 7,911 12,701 13,289
Patent licensing 9,972 - 18,130 -
Private equity 327 (348) 3,490 1,313
Interest 221 129 515 459
----------------- ------------------------

20,840 15,806 61,084 36,645
----------------- ------------------------

Expenses (exclusive of
depreciation, amortization and
interest expense shown below)
and other (income)losses
Case goods expense 5,268 6,194 21,630 15,774
Real estate expense 2,385 1,752 7,067 4,616
Patent licensing expense 6,400 - 10,910 -
Selling, general and
administrative expense 2,985 3,039 10,683 7,972
Foreign exchange (gain)loss 1,181 (2,110) 1,279 (5,755)
(Gain)loss on short-term
investments 289 (35) 430 6
Other - (7) (1,044) 303
----------------- ------------------------

18,508 8,833 50,955 22,916
----------------- ------------------------

Income before depreciation,
amortization, interest
expense, income taxes,
non-controlling interest
and discontinued operations 2,332 6,973 10,129 13,729

Depreciation and amortization 1,125 802 3,374 3,031
Interest expense 1,920 1,685 5,652 4,954
----------------- ------------------------
Income (loss) before income
taxes, non-controlling
interest and discontinued
operations (713) 4,486 1,103 5,744

Income tax provision(recovery) (989) (896) (605) (1,199)
Non-controlling interest 228 257 (83) 259
----------------- ------------------------
Income from continuing
operations 48 5,125 1,791 6,684
Income from discontinued
operations 40 864 47,896 1,612
----------------- ------------------------
Net Income 88 5,989 49,687 8,296
----------------- ------------------------
----------------- ------------------------

Basic net income per share:
Continuing operations 0.00 0.11 0.04 0.14
Discontinued operations 0.00 0.02 1.03 0.04
----------------- ------------------------

Basic net income per share 0.00 0.13 1.07 0.18
----------------- ------------------------
----------------- ------------------------
Weighted average number of
common shares outstanding
(in thousands) - basic 46,244 46,492 46,469 46,492

Diluted net income per share:
Continuing operations 0.00 0.09 0.04 0.10
Discontinued operations 0.00 0.01 1.03 0.03
----------------- ------------------------

Diluted net income per share 0.00 0.10 1.07 0.13
----------------- ------------------------
----------------- ------------------------

Weighted average number of
common shares outstanding
(in thousands) - diluted 46,244 59,678 46,469 59,478

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)
September December 31,
2008 2007
$ $
------------------------

Assets

Current assets
Cash and cash equivalents 22,059 6,357
Short-term investments 2,399 977
Accounts receivable (net of allowance for doubtful
accounts of $56; 2007 - $97) 5,684 3,735
Inventories 1,879 1,863
Prepaid expenses and deposits 3,161 4,777
Future income tax asset 344 8,402
Assets of discontinued operations 2,229 2,268
------------------------
37,755 28,379

Long-term assets
Income producing properties, net 96,474 74,624
Properties under development 4,033 919
Property, plant and equipment, net 2,868 3,051
Portfolio investments 10,735 6,548
Intangible assets, net 4,290 3,853
Goodwill 26,212 26,035
Other assets 3,721 2,001
Assets of discontinued operations 3,270 12,665
------------------------

189,358 158,075
------------------------
------------------------

Liabilities

Current liabilities
Accounts payable and accrued liabilities 11,289 10,015
Customer deposits 5,217 7,174
Income taxes payable 114 184
Current portion of mortgages and loans payable 8,893 4,895
Convertible preferred shares 18,801 -
Liabilities of discontinued operations 689 15,543
------------------------
45,003 37,811
Long-term liabilities
Mortgages and loans payable 76,857 66,607
Convertible preferred shares - 16,780
Intangible liabilities 969 1,225
Future income tax liabilities 8,878 7,856
Liabilities of discontinued operations 1,367 34,454
------------------------
133,074 164,733

Non-controlling interest 34,536 19,440
Shareholders' equity (deficiency) 21,748 (26,098)
------------------------

189,358 158,075
------------------------
------------------------

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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