Counsel Announces Third Quarter 2013 Results

MORTGAGE SALES RISE 32%; MUA GROWS TO $16.7B; REVENUES INCREASE 33%; 
CONSOLIDATED EPS DOUBLES 
TORONTO, Nov. 14, 2013 /CNW/ - Counsel Corporation ("Counsel" or the 
"Company") (TSX: CXS), a financial services company, today announced income 
from continuing operations attributable to shareholders of $3.0 million, or 
$0.03 per basic and diluted share, on $38.5 million in revenue in the third 
quarter ended September 30, 2013, compared to $4.0 million, or $0.05 per basic 
and diluted share, on $29.0 million in revenue in the same period of 2012. For 
the nine months ended September 30, 2013, income from continuing operations 
attributable to shareholders was $10.0 million, or $0.11 per basic and diluted 
share, on $110.6 million in revenue compared to $11.4 million, or $0.13 per 
basic and diluted share, on $85.7 million in revenue in the same period of 
2012. Excluding the expense related to the increase in the market value of the 
Company's deferred share units (DSUs), income from continuing operations 
attributable to shareholders was $4.0 million and $11.8 million in the three 
and nine months ended September 30, 2013 respectively, compared to $4.1 
million and $11.6 million in the respective corresponding periods in 2012. All 
amounts are stated in Canadian dollars, unless noted. 
"We're quite pleased with our results in the third quarter. Our core 
residential mortgage lending business, Street Capital, continued to grow 
rapidly, recording $2.3 billion in mortgage sales compared to $1.7 billion in 
Q3 2012," said Allan Silber, Chairman and CEO of Counsel Corporation. "The 
company's mortgage sales have grown significantly year-to-date as well, and 
this strong growth has counteracted the impact of lower spreads in the credit 
market compared to the same period in 2012." 
"Street Capital's mortgages under administration also grew to $16.7 billion, a 
56% increase over the past year," added Mr. Silber. "We are now one of 
Canada's largest non-bank residential mortgage lenders, the result of our 
focus on cultivating a healthy portfolio of mortgages through stringent 
underwriting and robust quality assurance combined with the provision of 
excellent customer service and competitive mortgage products for mortgage 
brokers and borrowers." 
Counsel's revenues are almost entirely generated from its mortgage lending 
business. The year-over-year increase in Counsel's revenue in the third 
quarter of 2013 reflects growth in the volume of mortgages sold by Street 
Capital Financial Corp. ("Street Capital"). 
Counsel's overall net income attributable to shareholders, including 
discontinued operations, increased to $3.6 million, or $0.04 per basic and 
diluted share, in the third quarter of 2013 versus $1.9 million, or $0.02 per 
basic and diluted share, in the third quarter of 2012. The year-over-year 
increase was primarily attributable to $0.6 million in income from the 
Company's discontinued operations attributable to shareholders versus a loss 
of $2.2 million in the third quarter of 2012. For the nine months ended 
September 30, 2013, net income attributable to shareholders was $8.8 million, 
or $0.10 per basic and diluted share, versus $9.3 million, or $0.11 per basic 
and diluted share, in the same period in 2012. The result includes an expense 
of $1.8 million due to the increase in market value of the Company's DSUs in 
the first nine months of 2013, versus an increase of $0.2 million in the nine 
months ended September 30. In June 2011, the Company ceased granting DSUs. In 
November, 2013, the Company and the existing DSU holders agreed to amend the 
DSU Plan to provide for payment in shares rather than cash; therefore, there 
will be no further impact on the statement of operations. 
As part of its focus on financial services, the Company continues to pursue 
its plan to dispose of its non-core businesses, which were classified as 
discontinued operations in the first quarter of 2013, by the end of the first 
quarter of 2014. As part of this process, during and subsequent to the 
quarter, the Company completed the sale of two of its remaining real estate 
properties. 
Mortgage Lending Business 
Counsel carries on its mortgage lending business through its wholly owned 
subsidiary Street Capital (www.streetcapital.ca). The company sources its 
mortgages solely through a network of independent, high quality mortgage 
brokers across Canada with whom it has built relationships. The company offers 
a broad lineup of high ratio and conventional mortgages, predominantly to 
prime borrowers, and sells the mortgages it underwrites to top-tier financial 
institutions. Business revenues are almost entirely from the gain on sale of 
mortgages. 
The business generated $38.3 million and $110.0 million in revenues in the 
three and nine months ended September 30, 2013 compared to $28.9 million and 
$85.0 million in the respective corresponding periods in 2012. The increase in 
both periods was due to growth in the volume of mortgages sold. Operating 
expenses, consisting of the cost to source and underwrite mortgages sold by 
Street Capital, totaled $24.5 million and $71.6 million in the three and nine 
months ended September 30, 2013 compared to $15.7 million and $47.6 million in 
the respective corresponding periods in 2012. The increases reflect the 
increase in mortgages sold and costs incurred to expand Street Capital's share 
of the mortgage broker channel. 
Street Capital sold $2.266 billion and $6.316 billion of mortgages in the 
three and nine months ended September 30, 2013, compared to $1.674 billion and 
$4.385 billion in the respective corresponding periods in 2012. The business 
increased its portfolio of mortgages under administration to $16.7 billion at 
September 30, 2013 compared to $10.7 billion at September 30, 2012 and $15.0 
billion at June 30, 2013. 
Counsel's Management's Discussion and Analysis and Condensed Consolidated 
Interim Financial Statements for the three and nine months ended September 30, 
2013 will be available on SEDAR (www.sedar.com). 
Conference Call
Counsel will host a conference call onFriday, November 15, 2013 at 9:00 a.m. 
ET to discuss its 2013 third quarter financial results.Allan Silber, CEO of 
Counsel Corporation andEd Gettings, CEO of Street Capital Financial 
Corporation, will chair the call. To participate in the call, please dial 
647-427-7450 or 1-888-231-8191 ten minutes prior to the scheduled start of the 
call. A taped replay of the conference call will be available until Monday, 
December 16, 2013 by calling 416-849-0833 or 1-855-859-2056, reference number 
91519205. 
About Counsel Corporation (www.counselcorp.com)
Counsel Corporation (TSX: CXS) is a financial services company operating in 
residential mortgage lending through its wholly owned subsidiary Street 
Capital Financial Corporation, one of the largest non-bank mortgage lenders in 
Canada. Founded in 1979 and a public company for more than a quarter century, 
Counsel's goal is to build consistently profitable, industry-leading financial 
services companies by investing in great leaders and providing them with the 
strategic guidance and financial resources they need to succeed. 
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. 
Condensed Consolidated Interim Statements of Operations 
(in thousands of Canadian Dollars, except per share amounts) 
(Unaudited) 


                       Three months ended   Nine months ended September
                            September 30,                           30,
                         2013        2012      2013                2012
                            $           $         $                   $
                                                                       

Revenues               38,473      28,986   110,605              85,719
                                                                       

Expenses                                                               

  Operating costs      24,520      15,716    71,621              47,626

  Selling, general and  9,049       7,319    24,002              19,634
  administrative
  expense

  Foreign exchange         -         (58)        -                  (5)
  (gain) loss

  Depreciation and        344         325     1,007               1,060
  amortization

  Interest expense        447         557     1,558               1,708
                       34,360      23,859    98,188              70,023
                                                                       

Income before fair      4,113       5,127    12,417              15,696
value adjustments
                                                                       

Fair value adjustments    159          16     4,927               1,187

Income before income    4,272       5,143    17,344              16,883
taxes and discontinued
operations
                                                                       

Income tax provision    1,206       1,269     3,431               4,085
                                                                       

Income from continuing  3,066       3,874    13,913              12,798
operations

Less: Income (loss)        34       (159)     3,959               1,405
attributable to
non-controlling
interest

Income attributable to  3,032       4,033     9,954              11,393
shareholders
                                                                       

Income from               307     (2,718)   (2,492)             (3,141)
discontinued
operations

Less: Income (loss)     (245)       (540)   (1,349)             (1,079)
attributable to
non-controlling
interest

Income (loss)             552     (2,178)   (1,143)             (2,062)
attributable to
shareholders
                                                                       

Net income              3,584       1,855     8,811               9,331
attributable to
shareholders
                                                                       

Basic and diluted net                                                  
income (loss) per
share :

Continuing operations    0.03        0.05      0.11                0.13

Discontinued             0.01      (0.03)    (0.01)              (0.02)
operations
                                                                       

Basic and diluted net    0.04        0.02      0.10                0.11
income per share
                                                                       

Weighted average                                                       
number of common
shares

outstanding (in        96,224      85,783    90,622              85,433
thousands) - basic and
diluted
                                                     

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

Condensed Consolidated Interim Statements of Financial Position

(in thousands of Canadian Dollars)

(Unaudited)
                                           September 30, December 31,
                                                    2013         2012
                                                       $            $

Assets                                                               
     Current assets                                                  
       Cash and cash equivalents                  37,877       12,196
       Marketable securities                         117          109
       Mortgages, accounts and deferred           36,967       26,360
       interest receivable
       Inventory                                      -         6,863
       Prepaid expenses, deposits and              4,216        4,637
       deferred charges
       Investment held for sale                       -         1,851
       Income tax receivable                          -            70
       Assets of discontinued operations          17,058           91
                                                  96,235       52,177
     Non-current assets                                              
       Deferred interest and mortgage             14,559       17,086
       receivable
       Deferred charges                           33,878       24,692
       Investment properties                          -         3,969
       Properties under development                   -         6,739
       Property, plant and equipment               3,141        3,216
       Interests in joint ventures                    -         3,600
       Investment in associates                       -            20
       Portfolio investments                      45,751       53,454
       Intangible assets                           5,718       11,324
       Goodwill                                   24,919       43,837
       Deferred income tax assets                     -        27,438
       Other assets                                   49           64
       Assets of discontinued operations          68,197           - 
                                                                     

Total assets                                     292,447      247,616
                                                                     

Liabilities                                                          
     Current liabilities                                             
       Accounts payable and accrued               65,343       30,395
       liabilities
       Customer deposits                              -           587
       Income taxes payable                           19           19
       Current portion of mortgages and           14,933       24,659
       loans payable
       Contingent consideration                    4,027        2,757
       Liabilities of discontinued                24,943          575
       operations
                                                 109,265       58,992
     Non-current liabilities                                         
       Mortgages and loans payable                 6,623       16,144
       Convertible debentures                         -        11,937
       Contingent consideration                    4,416        9,264
       Deferred income tax liabilities             6,972        3,608
       Derivative liability                           14           27
       Other liabilities                              -           643
       Liabilities of discontinued                   319           - 
       operations

Total liabilities                                127,609      100,615
                                                                     

Shareholders' equity                             164,838      147,001
                                                                     

Total liabilities and shareholders' equity       292,447      247,616
                                                          

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







SOURCE  Counsel Corporation 
Counsel Corporation Stephen Weintraub EVP, Secretary & CFO saw@counselcorp.com 
Tel: (416) 866-3058 
TMX Equicom Tim Foran tforan@tmxequicom.com Tel: (416) 815-0700 ext. 251 
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CO: Counsel Corporation
ST: Ontario
NI: FIN ERN CONF  
-0- Nov/14/2013 23:23 GMT
 
 
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