Counsel Corporation
TSX : CXS

Counsel Corporation

August 13, 2009 09:00 ET

Counsel Corporation Announces 2009 Second Quarter Results

TORONTO, ONTARIO--(Marketwire - Aug. 13, 2009) - Counsel Corporation ("Counsel" or the "Company") (TSX:CXS) today reported its financial results for the three and six months ended June 30, 2009. All amounts are stated in Canadian dollars, unless noted.

The 2009 second quarter income from continuing operations was $8.3 million, or $0.19 per share basic and $0.16 per share diluted, compared with income of $.0.3 million, or $0.01 per share, basic and diluted, for the three months ended June 30, 2008. Including discontinued operations, the Company had net income of $8.3 million or $0.19 per share basic and $0.16 per share, diluted, for the three months ended June 30, 2009, compared with net income of $0.3 million, or $0.01 per share, basic and diluted, for the three months ended June 30, 2008.

Income from continuing operations was $4.3 million, or $0.10 per share basic and diluted, for the six months ended June 30, 2009, compared with $1.7 million, or $0.04 per share, basic and diluted, for the same six months in 2008. Net income for the six months ended June 30, 2009 was $4.4 million or $0.10 per share basic and diluted, compared with $49.6 million, or $1.06 per share, basic and diluted, in the first half of 2008.

Significant developments in 2009 to date are:

- In February 2009, the Company established Counsel RB Capital LLC ("Counsel RB"), which specializes in the acquisition and disposition of distressed and surplus assets throughout the United States and Canada, including industrial machinery and equipment, real estate, inventories, accounts receivable and distressed debt. In addition to purchasing various types of assets, Counsel RB also arranges traditional asset disposition services such as on-site and webcast auctions, liquidations and negotiated sales.

- In April 2009, Knight's Bridge Capital Partners Inc., a wholly owned subsidiary of Counsel, as part of an investor group, was successful in a bid to acquire Polaroid Corp. for US$87.6 million. Knight's Bridge, through its fund, Knight's Bridge Capital Partners Fund I, and other funds that it manages, invested in excess of 30% of the funds required to close the transaction. Polaroid is one of the world's most iconic brand names, with almost 100% global awareness. Counsel and its partners intend to monetize the strength of that brand name by building a global licensing organization. Polaroid already has a substantial portfolio of innovative and patented technologies that represent both an initial revenue stream and a platform for other new products and product categories.

- In June 2009, C2 Global Technologies Inc., a U.S. public company that is 91%-owned by Counsel, entered into a license agreement for its VoIP patents in the Republic of Korea.

- In July 2009, Counsel successfully completed a private placement of 16,164,471 common shares for $0.75 per share and a new series of convertible preferred shares, for aggregate proceeds of approximately $23.7 million. The proceeds from the private placement were used to redeem all of Counsel's outstanding convertible Series A preferred shares, as well as pay associated costs and fees.

"With the 2008 sale of our long-term care business, our recent $12 million common share offering, which allowed us to redeem $12 million of preferred shares, and over $36 million available for investment through our private equity fund - Knight's Bridge Capital Partners Fund I - our financial position has strengthened significantly," said Allan Silber, Chairman and CEO of Counsel Corporation.

The Company's Management's Discussion and Analysis and Financial Statements for the three and six months ended June 30, 2009 have been filed and are available on SEDAR (www.sedar.com).

About Counsel Corporation

Counsel Corporation (TSX:CXS) is a private equity investor and alternative asset manager that actively partners with businesses to achieve shared success and to unlock value through leveraging its relationships, access to capital and 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 ended Six months ended
June 30, June 30,
2009 2008 2009 2008
$ $ $ $

Revenues
Case goods 4,475 10,582 8,893 19,891
Real estate 4,126 4,887 8,479 8,738
Patent licensing 1,093 1,914 1,093 8,158
Private equity 3,763 2,474 3,764 3,163
Interest 39 92 88 294
----------------------------------------------
13,496 19,949 22,317 40,244
----------------------------------------------

Expenses (exclusive of
depreciation, amortization
and interest expense shown
below) and other
(income)losses
Case goods expense 4,366 8,815 8,275 16,362
Real estate expense 2,222 2,685 4,580 4,682
Patent licensing expense 674 1,316 675 4,510
Private equity expense 3,079 - 3,079 -
Selling, general and
administrative expense 5,135 4,036 7,775 7,698
Foreign exchange
(gain)loss (3,922) (279) (2,458) 98
(Gain)loss on short-term
investments (693) 95 (851) 141
Other 2,259 13 2,077 (1,044)
----------------------------------------------

13,120 16,681 23,152 32,447
----------------------------------------------

Income(loss) before
depreciation, amortization,
interest expense, income
taxes, non-controlling
interest and discontinued
operations 376 3,268 (835) 7,797

Depreciation and
amortization 1,060 1,133 2,189 2,249
Interest expense 1,509 1,910 3,170 3,732
----------------------------------------------
Income(loss) before income
taxes, non-controlling
interest and discontinued
operations (2,193) 225 (6,194) 1,816

Income tax
provision(recovery) (8,165) 345 (8,154) 384
Non-controlling interest (2,333) (451) (2,369) (311)
----------------------------------------------
Income from continuing
operations 8,305 331 4,329 1,743

Income(loss) from
discontinued operations 21 (29) 120 47,856
----------------------------------------------

Net Income 8,326 302 4,449 49,599
----------------------------------------------
----------------------------------------------

Basic net income per share:
Continuing operations 0.19 0.01 0.10 0.04
Discontinued operations 0.00 0.00 0.00 1.02
----------------------------------------------

Basic net income per share 0.19 0.01 0.10 1.06
----------------------------------------------
----------------------------------------------

Weighted average number of
common shares outstanding
(in thousands) - basic 44,755 46,514 44,755 46,888

Diluted net income per share:
Continuing operations 0.16 0.01 0.10 0.04
Discontinued operations 0.00 0.00 0.00 1.02
----------------------------------------------

Diluted net income per share 0.16 0.01 0.10 1.06
----------------------------------------------
----------------------------------------------

Weighted average number
of common shares
outstanding (in
thousands) - diluted 57,000 46,514 44,755 46,888

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)

June 30, December 31,
2009 2008
$ $
-----------------------------

Assets

Current assets
Cash and cash equivalents 5,796 16,813
Short-term investments 2,883 2,879
Accounts receivable (net of allowance
for doubtful accounts of $62; 2008 - $23) 4,290 5,001
Inventories 5,790 1,847
Prepaid expenses and deposits 2,218 1,872
Future income tax assets 12 1,084
Assets of discontinued operations 1,163 1,887
-----------------------------
22,152 31,383

Long-term assets
Income producing properties, net 97,802 98,733
Properties under development 4,117 3,559
Property, plant and equipment, net 2,690 2,797
Portfolio investments 32,113 11,385
Intangible assets, net 3,384 3,789
Goodwill 26,078 26,090
Tenant related costs and other assets 5,074 4,380
Future income tax asset 1,185 -
Assets of discontinued operations - 1,000
-----------------------------

194,595 183,116
-----------------------------
-----------------------------

Liabilities

Current liabilities
Accounts payable and accrued liabilities 9,850 13,811
Customer deposits 5,570 3,342
Income taxes payable 36 282
Future income tax liabilities 60 179
Current portion of mortgages
and loans payable 11,099 8,706
Convertible preferred shares 23,076 22,032
Liabilities of discontinued operations 318 237
-----------------------------
50,009 48,589
Long-term liabilities
Mortgages and loans payable 74,455 74,934
Intangible liabilities 720 858
Future income tax liabilities 1,433 10,076
Liabilities of discontinued operations - 73
-----------------------------
126,617 134,530

Non-controlling interest 52,317 34,190

Shareholders' equity 15,661 14,396
-----------------------------

194,595 183,116
-----------------------------
-----------------------------

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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