Counsel Announces 2014 Third Quarter Results

9-month Income from Continuing Operations $31.1 Million vs. $13.9 Million in 2013

9-month EPS from Continuing Operations $0.21 vs. $0.11 in 2013

TORONTO, Nov. 14, 2014 /CNW/ - Counsel Corporation ("Counsel" or the "Company") (TSX: CXS), a financial services company, today announced financial results for the three and nine months ended September 30, 2014.  All amounts are stated in Canadian dollars unless otherwise noted.

Third Quarter 2014 Highlights

• $42.3 million of revenue in Q3 2014 compared to $36.1 million in Q2 2014 and $38.5 million in Q3 2013, a 17% increase quarter over quarter and 10% year over year.
• Pre-tax income from continuing operations increased to $15.7 million in Q3 2014 from $12.3 million in Q2 2014 and $4.3 million in Q3 2013, representing growth of 28% quarter over quarter and 266% year over year.
• Diluted earnings per share from continuing operations were $0.08, 33% higher than Q2 2014 EPS of $0.06, and more than double Q3 2013 results of $0.03 per share.
• $2.3 billion of mortgages sold in Q3 2014 compared to $1.9 billion in Q2 2014 and $2.3 billion in Q3 2013, a 21% increase quarter over quarter and consistent year over year.
• Mortgages under administration grew to $20.4 billion from $19.3 billion at June 30, 2014 and $16.7 billion at September 30, 2013.

"We are extremely pleased with our results in the third quarter.  These results reflect our strong mortgage market share, our solid top line and healthy margins," stated Allan Silber, Chairman and CEO of Counsel Corporation. "These factors, combined with value creation in our private equity portfolio, have resulted in significant improvements to our operating income and earnings."

Net income attributable to shareholders in the third quarter 2014 was $8.2 million, compared with net income of $3.6 million for the same period one year ago reflecting the increase in margins on mortgages sold and the success in the  creation of value in the Company's private equity portfolio.

Mr. Silber added, "Our strategy of focusing the Company solely on financial services continues to progress well.  Looking ahead, we expect our strong market position and disciplined approach to lending to drive further positive results.  In addition, Street Capital's bank licensing application is proceeding well and in accordance with expectations."

Mortgage Lending Business

Counsel carries on its residential mortgage lending business through its wholly owned subsidiary Street Capital Financial Corporation (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.

In the third quarter 2014, the business generated $42.3 million in mortgage lending revenues compared to $38.5 million in the same period one year ago. The company's share of  the mortgage broker market improved over the quarter to 9.1% from 8.8%.

Operating expenses, consisting of the cost to source mortgages sold by Street Capital, totaled $25.2 million in the third quarter of 2014, up slightly by 3%, compared with $24.5 million recorded in the same period last year.

Counsel's Management's Discussion and Analysis and Condensed Consolidated Interim Financial Statements for the three and nine months ended September 30, 2014 will be available on SEDAR (www.sedar.com).

Conference Call
Counsel will host a conference call on Friday, November 14, 2014 at 10 a.m. ET to discuss its 2014 third quarter financial results. Allan Silber, CEO of Counsel Corporation and Ed 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 Sunday, December 14, 2014 by calling 416-849-0833 or 1-855-859-2056, reference number 26702400.

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.

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
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30
(In thousands of Canadian dollars, except per share data) (Unaudited)

		Three months ended September 30,				Nine months ended September 30,
		2014	2013			2014	2013
		$	$			$	$
Revenues		42,336	38,473			108,234	110,605
Expenses
	Operating costs	25,197	24,520			61,599	71,621
	Selling, general and administrative expense	8,959	9,049			25,852	24,002
	Foreign exchange (gain) loss	(45)	-			(389)	-
	Depreciation and amortization	331	344			947	1,007
	Interest expense	270	447			979	1,558
		34,712	34,360			88,988	98,188
Income before fair value adjustments		7,624	4,113			19,246	12,417
Fair value adjustments		8,028	159			17,547	4,927
Income before income taxes and discontinued operations		15,652	4,272			36,793	17,344
Income tax provision		2,073	1,206			5,645	3,431
Income from continuing operations		13,579	3,066			31,148	13,913
Income (loss) from discontinued operations		11	307			(11,602)	(2,492)
Net income		13,590	3,373			19,546	11,421
Net income (loss) attributable to non-controlling interest		5,378	(211)			11,521	2,610
Net income attributable to shareholders		8,212	3,584			8,025	8,811
Basic and diluted  net income (loss) per share :
	Continuing operations	0.08	0.03			0.21	0.11
	Discontinued operations	0.00	0.01			(0.13)	(0.01)
Basic and diluted net income per share		0.08	0.04			0.08	0.10
Weighted average number of common shares
outstanding (in thousands) - basic and diluted		99,083	96,224			99,072	90,622

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   
AS AT SEPTEMBER 30, 2014 AND DECEMBER 31, 2013
(In thousands of Canadian dollars) (Unaudited)

				September 30,			December 31,
				2014			2013
				$			$
Assets
Current assets
Cash and cash equivalents				17,298			17,580
Marketable securities				418			410
Mortgages, loans, accounts and deferred interest receivable				42,684			22,004
Prepaid expenses, deposits and deferred charges				6,593			4,655
Assets of discontinued operations				862			18,415
				67,855			63,064
Non-current assets
Deferred interest and mortgage receivable				23,985			19,403
Mortgages receivable - securitized financing				10,897			-
Deferred charges and other assets				41,291			35,557
Property, plant and equipment				4,197			3,079
Portfolio investments				46,936			53,220
Intangible assets				5,225			5,594
Goodwill				24,919			24,919
Assets of discontinued operations				482			53,367
Total assets				225,787			258,203
Liabilities
Current liabilities
Accounts payable and accrued liabilities				39,104			29,458
Income taxes payable				2			4
Current portion of mortgages and loans payable				19,714			14,025
Contingent consideration				2,600			4,027
Liabilities of discontinued operations				985			20,550
				62,405			68,064
Non-current liabilities
Mortgages and loans payable				-			6,703
Securitization liabilities				10,917			-
Contingent consideration				2,235			4,543
Deferred income tax liabilities				14,880			9,349
Derivative liability				-			9
Liabilities of discontinued operations				150			318
Total liabilities				90,587			88,986
Equity				135,200			169,217
Total liabilities and equity				225,787			258,203

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, [email protected], Tel: [phone]; TMX Equicom, Jennifer Wood, [email protected], Tel: [phone] ext. 226