Counsel Corporation
TSX : CXS

Counsel Corporation

November 12, 2010 08:30 ET

Counsel Corporation Announces 2010 Third Quarter Results

TORONTO, ONTARIO--(Marketwire - Nov. 12, 2010) - Counsel Corporation ("Counsel" or the "Company") (TSX:CXS) today reported its financial results for the three and nine months ended September 30, 2010. All amounts are stated in Canadian dollars, unless noted.

For the three months ended September 30, 2010, the Company had income from continuing operations attributable to controlling interest of $1.2 million, or $0.02 per share, basic and diluted, compared with a loss of $2.4 million, or $0.04 per share basic and diluted, for the three months ended September 30, 2009. Including discontinued operations, the Company had net income attributable to controlling interest of $0.8 million, or $0.01 per share, basic and diluted, for the three months ended September 30, 2010, compared with net loss of $2.0 million, or $0.03 per share basic and diluted, for the three months ended September 30, 2009.

For the nine months ended September 30, 2010, loss from continuing operations attributable to controlling interest was $2.6 million, or $0.04 per share, basic and diluted, compared with income of $0.9 million, or $0.02 per share, basic and diluted, for the first nine months of 2009. Net loss attributable to controlling interest for the nine months ended September 30, 2010 was $1.5 million or $0.02 per share, basic and diluted, compared with net income of $2.1 million, or $0.04 per share, basic and diluted, in the first nine months of 2009.

Highlights of 2010:



-- In February 2010, Counsel's Case Goods subsidiary Fleetwood Fine
Furniture ("Fleetwood") arranged new equity financing of $2.5 million
from a third party investor for 25% of the outstanding units of
Fleetwood. As a result, Counsel's ownership of Fleetwood has been
reduced from approximately 95% to approximately 71%. The proceeds from
the capital raise have been used to fund the transition of Fleetwood's
manufacturing capacity to Asia, as well as for working capital and
general corporate purposes.

-- In April 2010, the Company sold its 20% ownership interest in six income
producing properties in Brockville, Ontario for proceeds of
approximately $1.4 million.

-- In April 2010, Counsel RB Capital LLC ("Counsel RB"), Counsel's asset
liquidation subsidiary, as part of a consortium, completed the sale of
the former Aleris Aluminum manufacturing facility in Trois-Rivieres,
Quebec for approximately US$25 million. Counsel RB and its partners
purchased the Aleris Aluminum assets in November 2009. Counsel RB's
interest in the transaction has yielded a gain of approximately US$2.1
million after expenses.

-- In June 2010, Knight's Bridge Capital Partners Inc. ("Knight's Bridge")
along with its partners Authentic Brands Group LLC ("ABG") and Leonard
Green & Partners, LP announced a US$250 million equity raise. The equity
capital will be used to fund the growth of ABG's global brand licensing
and management business as ABG looks to acquire and manage iconic
consumer brands in the apparel, sporting goods, action sports, home,
celebrity, entertainment and consumer electronics segment. Knight's
Bridge Capital Partners Fund I has committed to fund US$5 million.

-- In August 2010, the Company engaged an advisor to market a real estate
portfolio that it owns and/or manages. The real estate portfolio
consists of seven income producing properties, of which six are owned by
Counsel.

-- In September 2010, ABG acquired TapouT and Silver Star Casting Company,
two of the biggest apparel names in the mixed martial arts industry.

-- In September 2010, Knight's Bridge along with its partners, completed
the acquisition of The Works Burger Bistro Inc. ("The Works"). The Works
is a chain of full service gourmet hamburger restaurants, with six
stores across the Ottawa region and plans to expand into new regions.


"We are encouraged by the progress made by our operating segments in 2010" said Allan Silber, Chairman and CEO of Counsel Corporation. "In particular, Counsel RB Capital, our asset liquidation business, has greatly exceeded expectations and Knight's Bridge, our private equity operation, has been able to source some promising investments - Authentic Brands Group and The Works."

The Company's Management's Discussion and Analysis and Financial Statements for the three and nine months ended September 30, 2010 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 Nine months ended
September 30, September 30,
2010 2009 2010 2009
$ $ $ $
-------------------- --------------------

Revenues 7,267 6,611 29,148 19,654
-------------------- --------------------


Expenses (exclusive of
depreciation, amortization and
interest expense shown below)
and other (income) losses
Operating costs 6,430 5,418 23,567 18,032
Selling, general and
administrative expense 3,601 3,344 9,700 11,119
Foreign exchange (gain) loss (44) 183 (193) (2,275)
(Gain) loss on short-term
investments (17) (485) (63) (1,336)
Restructuring costs 524 - 854 -
Other (172) 61 (56) 2,138
-------------------- --------------------
10,322 8,521 33,809 27,678
-------------------- --------------------

Income (loss) before
depreciation, amortization,
interest expense,
income taxes, and discontinued
operations (3,055) (1,910) (4,661) (8,024)

Depreciation and amortization 35 139 124 533
Interest expense 459 562 1,486 1,876
-------------------- --------------------
Income (loss) before income taxes
and discontinued operations (3,549) (2,611) (6,271) (10,433)

Income tax provision (recovery) (3,918) 60 (3,588) (8,097)
-------------------- --------------------
Income (loss) from continuing
operations 369 (2,671) (2,683) (2,336)

Income (loss) from discontinued
operations (126) 834 2,048 2,095
-------------------- --------------------

Net income (loss) 243 (1,837) (635) (241)
------------------------------------------

Net income (loss) attributable to
non-controlling interest
Continuing operations (853) (234) (91) (3,272)
Discontinued operations 295 366 932 970
-------------------- --------------------
(558) 132 841 (2,302)
-------------------- --------------------

Net income (loss) attributable to
controlling interest 801 (1,969) (1,476) 2,061
-------------------- --------------------
-------------------- --------------------

Basic and diluted net income
(loss) per share:
Continuing operations 0.02 (0.04) (0.04) 0.02
Discontinued operations (0.01) 0.01 0.02 0.02
-------------------- --------------------

Basic and diluted net income
(loss) per share 0.01 (0.03) (0.02) 0.04
-------------------- --------------------
-------------------- --------------------

Weighted average number of
common shares outstanding
(in thousands) - basic and
diluted 61,820 57,023 61,820 48,889

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 30, December 31,
2010 2009
$ $
------------------------------

Assets

Current assets
Cash and cash equivalents 1,912 8,048
Short-term investments 299 1,519
Accounts receivable (net of allowance for
doubtful accounts of $22; 2009 - $129) 2,483 5,303
Inventories 5,279 6,734
Prepaid expenses and deposits 1,168 2,428
Future income tax assets 3,670 766
Assets of discontinued operations 3,999 1,125
------------------------------
18,810 25,923

Long-term assets
Income producing properties, net - 100,721
Properties under development 7,600 6,800
Property, plant and equipment, net 1,773 2,042
Portfolio investments 35,450 28,737
Intangible assets, net - 3,033
Goodwill 26,306 26,058
Tenant related costs and other assets 210 5,951
Assets of discontinued operations 96,865 -
------------------------------

187,014 199,265
------------------------------
------------------------------

Liabilities

Current liabilities
Accounts payable and accrued liabilities 8,158 13,480
Customer deposits 2,299 4,911
Income taxes payable 155 44
Future income tax liabilities - 58
Current portion of mortgages and loans
payable 8,643 16,876
Convertible preferred shares 11,538 11,538
Liabilities of discontinued operations 25,068 273
------------------------------
55,861 47,180
Long-term liabilities
Mortgages and loans payable 7,021 81,809
Intangible liabilities - 571
Future income tax liabilities 68 1,405
Liabilities of discontinued operations 55,472 -
------------------------------
118,422 130,965

Shareholders' equity 68,592 68,300
------------------------------


187,014 199,265
------------------------------
------------------------------

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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