STREET CAPITAL GROUP INC. 
By MORTGAGE SALES RISE 30%; MUA GROWS TO $17.5B; REVENUES INCREASE 24%
TORONTO, ONTARIO, March 31, 2014 - Counsel Corporation ("Counsel" or the "Company") (TSX: CXS), a financial services company, today announced year-end financial results for the twelve-month period ended December 31, 2013. All amounts are stated in Canadian dollars unless otherwise noted. 2013 Financial Highlights
Revenue increased by 24% to $139.0 million from $112.1 million in 2012.
Pre-tax income from continuing operations increased by 42% to $27.6 million from $19.5 million in 2012.
Mortgages under administration increased by 46% to $17.5 billion from $12.0 billion in
2012.
Mortgages sold increased by 30% to $7.8 billion, from $6.0 billion in the previous year.
Fully diluted earnings per share from continuing operations decreased to $0.16, from
$0.18 in 2012.
In the first quarter of 2013, Counsel's Board of Directors approved a plan to dispose of the Company's non-core operating business segments - asset liquidation, case goods and real estate - in order to focus on its financial services business. By the end of the first quarter of 2014, the Company had successfully completed this plan.
Received Canada Mortgage and Housing Corporation approval to be an issuer of National Housing Act mortgage-backed securities ("NHA MBS") and an approved seller under the Canada Mortgage Bond ("CMB") program.
"We are very pleased with our strong results in 2013 which were driven by the exceptional performance of our residential mortgage lending business," said Allan Silber, Chairman and CEO of Counsel Corporation. "We have grown to be one of the market leaders in the residential mortgage lending industry, which we expect will continue to drive positive results in 2014."
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Counsel's revenues are almost entirely generated from its mortgage lending business. The year- over-year increase of Counsel's revenue in 2013 reflects growth in the volume of mortgages sold by Street Capital Financial Corporation ("Street Capital").
Revenue for 2013 was $139.0 million, compared to $112.1 million in 2012. The increase in 2013 was attributable to an increase in mortgages sold. For the fourth quarter of 2013, revenue was
$28.4 million compared to $26.4 million for the same period one year ago. Over the past five years, Street Capital has experienced steady growth in both mortgages originated and sold, which continues to be a primary driver for the business.
Income before income tax and discontinued operations for 2013 was $27.6 million, an increase of over 40% from $19.5 million in 2012. The increase was primarily attributable to growth in mortgage sales throughout the year and an increase in the fair value of the Company's Private Equity portfolio. For the fourth quarter of 2013, income before income tax and discontinued operations was $10.3 million, up 292%, from $2.6 million for the same period in 2012.
Net income attributable to shareholders in 2013 was $9.5 million, compared with $10.0 million for the same period one year ago. In the fourth quarter 2013, net income attributable to shareholders was $655,000 compared with $672,000 for the same period one year ago. In 2013, fully diluted earnings per share from continuing operations was $0.16, down slightly from $0.18 one year ago. For the fourth quarter 2013, fully diluted earnings per share from continuing operations was $0.05, compared with $0.06 in the same period one year ago.
Mortgage Lending Business
Counsel carries on its residential 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 $136.8 million in mortgage lending revenues in 2013 compared to $111.3 million in 2012. The increase 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 $87.0 million in 2013 compared with $65.7 million in 2012. The increase reflects the increase in mortgages sold and costs incurred to expand Street Capital's share of the mortgage broker channel.
Street Capital sold $7.8 billion of mortgages in 2013, compared to $6.0 billion in 2012. The business increased its portfolio of mortgages under administration to $17.5 billion at December
31, 2013 compared to $12.0 billion at December 31, 2012.
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Counsel's Management's Discussion and Analysis and Condensed Consolidated Interim Financial Statements for the twelve months ended December 31, 2013 will be available on SEDAR (www.sedar.com).
Conference Call
Counsel will host a conference call on Monday, March 31, 2014 at 5:00 p.m. EDT to discuss its
2013 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 Wednesday, April 30, 2014 by calling 416-
849-0833 or 1-855-859-2056, reference number 8443184.
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.
For further information, please contact:
Stephen Weintraub Renée Lam
EVP, Secretary & CFO rlam@tmxequicom.com saw@counselcorp.comTel: (416) 815-0700 ext. 258
Tel: (416) 866-3058
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COUNSEL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31
(In thousands of Canadian dollars, except per share data)
2013 2012
$ $
Revenues
Operating revenue
Other
Expenses
Operating costs
Sei l i ng, genera l a nd admi nistrative expense
Foreign exchange
Depreciation and amortization l nterest expense
Other
lncome before fair value adjustments
Fa i r va l ue a dj ustments
lncome before income taxes and discontinued operations lncometax provision (recovery]
lncome from continuing operations
In come (loss] from discontinued operations
Net income
Net i n come attri buta ble to non-contrali i ng i nterest
N et income attributable t o shareholders
Basic n et income (loss) per share : Continuing operations Discontinued operations
Basic net income per share
Weighted average number of common shares outstanding (in thousands)- basic
Diluted net income (loss) per share: Continuing operations Discontinued operations
Diluted net income (loss) per share
Weighted average number of common shares outstanding (in thousands)- diluted
137,627 112,111
1,372 3
138,999 112,114
87,028 65,731
30,902 27,290
105 44
1,334 1,394
1,942 2,270
214
121,097 96,729
17,902 15,385
9,740 4,122
27,642 19,507
5,728 (946)
21,914 20,453 (8,649) (9,996)
13,265 10,457
3,799 454
9,466 10,003
0.16 0.19 (0.06) (0.07)
0.10 0.12
92,705 85,525
0.16 0.18 (0.06) (0.07)
0.10 0.11
92,705 96,608
The accompanying notes in the Company's audited consolidated financial statements are an integrai part ofthese consolidated financial statements.
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COUNSEL CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS AT DECEMBER 31,2013 ANO 2012
(In thousands of Canadian dollars)
December 31,
2013
December 31,
2012
Assets
Current assets
$ $
Cash and cash equ1valents | 17,580 | 12,196 |
Marketabl e secur1b es | 410 | 109 |
Mortgages, accounts an d deferred 1 nterest rece1va bi e | 22,004 | 26,360 |
l nventory | 6,863 | |
Prepa1d expenses, depos1ts and deferred charges | 4,655 | 4,637 |
l nvestment held for sal e | 1,851 | |
l ncome ta x rece1 va bi e | 70 | |
Assets of d1 sconti nued opera b ons | 18,415 | 91 |
63,064 | 52,177 |
Non·current assets
Deferred 1 nterest a n d mortgages rece1 va bi e 19,403 17,086
Deferred charges 35,508 24,692
l nvestment properb es 3,969
Properb es under deve l opment 6,739
Property, plantand equ1pment 3,079 3,216
l nterests 1 n J 01 ntventures 3,600
l nvestment 1 n a ssoc1 a tes 20
Portfol1o 1nvestrnents 53,220 53,454
l nta ng1 bi e a ssets 5,594 11,324
Goodw1ll 24,919 43,837
Deferred 1 ncome tax assets 27,438
Other assets 49 64
Assets of d1 sconti nued opera b ons 53,367
Total assets 258,203 247,616
Liabilities
Current liabilities
Accounts payabl e an d accrued l1 a b1l1 bes 29,458 30,395
Customer depos1ts 587
l ncome ta x es paya bi e 4 19
Current porb o n of mortga ges an d l oa ns payabl e 14,025 24,659
Conti ngent cons1 d era bo n 4,027 2,757
L1 a b1l1 bes of d1 sconb nued operati ons 20,550 575
68,064 58,992
Non·current liabilities
Mortgages an d loans payable 6,703 16,144
Converti bi e debentures 11,937
Conti ngent cons1 d era bo n 4,543 9,264
Deferred 1 ncome tax l1 ab1l1 bes 9,349 3,608
Der1va bve l1 ab1l1 ty 27
Other l1abillt1es 643
L1 a b1l1 bes of d1 sconb nued operati ons 318
Totalliabilities 88,986 100,615
Equity
Share cap1tal 203,333 188,349
Share based compensabon 12,202 8,627
Fore1 gn currency tra n si ab o n 2,392 498
Contn buted surplus 50,215 49,579
Accumulated other comprehens1ve 1ncome 75
Reta1ned earn1ngs (def1c1t) (152,035) (161,576) Shareholders' equ1ty 116,107 85,552
Non-controlli ng 1 nterest 53,110 61,449
Total equity 169,217 147,001
Totalliabilities and equity 258,203 247,616
The notes contained in the Company's audited consolidated financial statements are an integrai part of these statements.
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