Counsel Corporation Announces 1999 Second Quarter Earnings.TORONTO--(BUSINESS WIRE)--Aug. 17, 1999-- Counsel Corporation (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :CXS CXS Coherent X-Ray Scattering / NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CXSN) today reported its financial results for the second quarter of 1999. Counsel's earnings from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the were US$1.9 million or US$0.06 per share, basic and fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. , compared with US$1.4 million or US$0.05 per share in the second quarter of 1998. In the fourth quarter of 1998, due to: (1) the agreement to sell Counsel's 100 percent interest in Stadtlander Drug Co., which closed in January 1999; (2) the pending merger of PharMerica, Inc., 9 percent-owned by Counsel, with Bergen Brunswig Corporation (NYSE NYSE See: New York Stock Exchange :BBC BBC in full British Broadcasting Corp. Publicly financed broadcasting system in Britain. A private company at its founding in 1922, it was replaced by a public corporation under royal charter in 1927. ) which closed in April; and (3) management's decision that its 27 percent interest in American HomePatient Inc. (NASDAQ:AHOM) was no longer a core holding and that it should therefore be divested by the end of 1999; these investments were accounted for as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . As a result, Counsel's financial statements were reclassified to reflect this change in presentation. For the second quarter of 1999, earnings from discontinued operations were US$0.15 per share basic, US$0.14 fully diluted, compared with earnings of US$0.06 per share, basic and fully diluted, in the comparable 1998 period. Consolidated net earnings for the 1999 second quarter were US$1.9 million compared with US$3.2 million a year earlier. Net earnings per share were US$0.21 basic, US$0.20 fully diluted, for the most recent quarter compared with US$0.11, basic and fully diluted, for the 1998 second quarter. Net earnings for the six months ended June 30, 1999 were US$212.7 million or US$7.92 per share basic, US$6.37 fully diluted. This compares with net earnings of US$5.0 million or US$0.17 per share, basic and fully diluted, for the first half of 1998. The 1999 earnings reflect the net gain realized on the sale of Stadtlander Drug Co. and the exchange of Counsel's investment in PharMerica for shares of Bergen Brunswig. Although revenues for the second quarter and first half of 1999 increased approximately 50 percent from the comparable periods in 1998, they were less than in the first quarter of 1999. This decline in revenues resulted from higher than expected inventories of FARO's main products in the wholesaler network at the beginning of 1999. The drawdown Drawdown The peak to trough decline during a specific record period of an investment or fund. It is usually quoted as the percentage between the peak to the trough. Notes: of these inventories to more normal levels during the second quarter negatively impacted FARO's sales for the quarter. Revenues are expected to return to first quarter levels for the balance of the year. Today, Counsel Corporation's main business is the sale of pharmaceutical products through its FARO Pharmaceutical and Sage BioPharma subsidiaries. In the fourth quarter of 1998 FARO acquired the U.S. rights to three branded prescription pharmaceutical products from Glaxo Wellcome Inc. for US$105 million. IMURAN Im·u·ran A trademark for the drug azathioprine. azathioprine Azasan, Immunoprin (UK), Imuran Pharmacologic class: Purine antagonist Therapeutic class: Immunosuppressant (r) is an immunosuppressive Immunosuppressive Any agent that suppresses the immune response of an individual. Mentioned in: Antirheumatic Drugs, Graft-vs.-Host Disease, Immunosuppressant Drugs immunosuppressive 1. pertaining to or inducing immunosuppression. 2. agent approved to prevent transplant rejection transplant rejection Graft rejection, organ rejection, tissue rejection Immunology The constellation of host immune responses evoked when an allograft tissue is transplanted into a recipient; rejection phenomena may be minimized by optimal matching of MHC antigens and to treat moderate to severe rheumatoid arthritis rheumatoid arthritis Chronic, progressive autoimmune disease causing connective-tissue inflammation, mostly in synovial joints. It can occur at any age, is more common in women, and has an unpredictable course. . It is also used to treat inflammatory bowel disease inflammatory bowel disease n. Abbr. IBD Any of several incurable and debilitating diseases of the gastrointestinal tract characterized by inflammation and obstruction of parts of the intestine. . ZYLOPRIM Zy·lo·prim A trademark for the drug allopurinol. allopurinol Apo-Allopurinol (CA), Caplenol (UK), Cosuric (UK), Rimapurinol (UK), Zyloprim Pharmacologic class: Xanthine oxidase inhibitor (r) is approved for gout gout, condition that manifests itself as recurrent attacks of acute arthritis, which may become chronic and deforming. It results from deposits of uric acid crystals in connective tissue or joints. and as an adjunctive ad·junct n. 1. Something attached to another in a dependent or subordinate position. See Synonyms at appendage. 2. A person associated with another in a subordinate or auxiliary capacity. 3. treatment for patients undergoing certain types of immunotherapy Immunotherapy The treatment of cancer by improving the ability of a tumor-bearing individual (the host) to reject the tumor immunologically. There are molecules on the surface of tumor cells, and perhaps in their interior, that are recognized as different from . TRANDATE(r) is approved for hypertension hypertension or high blood pressure, elevated blood pressure resulting from an increase in the amount of blood pumped by the heart or from increased resistance to the flow of blood through the small arterial blood vessels (arterioles). in two forms, tablets and injectable in·ject·a·ble adj. Capable of being injected. Used of a drug. n. A drug or medicine that can be injected. . FARO will receive the TRANDATE(r) injectable form in late 1999. Since the end of 1998, FARO has expended ex·pend tr.v. ex·pend·ed, ex·pend·ing, ex·pends 1. To lay out; spend: expending tax revenues on government operations. See Synonyms at spend. 2. significant effort in making sure it could handle the product acquisitions, installing information management and computer systems to support the anticipated rapid growth for the next few years, and augmenting and training its sales force. In addition, the offices of FARO and Sage were relocated re·lo·cate v. re·lo·cat·ed, re·lo·cat·ing, re·lo·cates v.tr. To move to or establish in a new place: relocated the business. v.intr. to New Jersey. Allan Silber, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Counsel, said, "We are very pleased with the results of our activities so far in 1999. Counsel was able to follow through on its strategy of creating value in its operating businesses and realizing on that value as we did with our investments in Stadtlander and PharMerica. FARO, Sage and the acquisition of the Glaxo Wellcome drugs are another example of that strategy. We are putting the pieces in place to create a major presence in the very exciting area of emerging pharmaceuticals and will be focusing our efforts to have FARO/Sage become one of the leading companies in that sector. We are also extremely excited about the depth of our financial resources, which will enable us to create value in new platform companies." This release involves forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. with respect to business plans, acquisition prospects, development of relationships with third parties and other plans and expectations on the part of the Company. The accuracy of these statements involve a number of risks and uncertainties, including but not limited to the availability of acquisition prospects and financing for such prospects, changing economic and market conditions that would impact such prospects or financing related thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. , changes in governmental reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. regulations and laws which could impair im·pair tr.v. im·paired, im·pair·ing, im·pairs To cause to diminish, as in strength, value, or quality: an injury that impaired my hearing; a severe storm impairing communications. or hinder hin·der 1 v. hin·dered, hin·der·ing, hin·ders v.tr. 1. To be or get in the way of. 2. To obstruct or delay the progress of. v.intr. the entering into strategic alliances of preferred provider agreements, as well as other risk factors detailed in the securities filings of Counsel Corporation (TSE:CXS / NASDAQ:CXSN) to which recipients of this release are referred for additional information concerning the Company and its prospects. (Tables follow.)
COUNSEL CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands of US$)
June 30 June 30
1999 1998
(unaudited) (unaudited)
-------- --------
ASSETS
Current assets
Cash and cash equivalents $ 62,542 $ 3,793
Short term investments 7,724 3,170
Amounts receivable 7,934 4,879
Income taxes recoverable - 3,246
Inventory 4,793 -
Mortgages and other advances 818 174
Other assets 2,512 3,706
Deferred income taxes 853 1,151
Discontinued assets - 181,207
-------- --------
87,176 201,326
Mortgages and other advances 4,481 4,480
Other assets 13,553 6,603
Long term care facilities 25,080 25,960
Portfolio investments 209,174 -
Product acquisition costs 106,246 -
Discontinued assets 16,913 147,581
-------- --------
$ 462,623 $ 385,950
-------- --------
-------- --------
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities
Bank indebtedness $ - $ 1,000
Accounts payable and accrued
charges 23,246 6,938
Dividends payable 26,357 -
Income taxes payable 5,506 -
Deferred revenue 1,371 1,155
Mortgages and loans payable 3,859 834
Discontinued liabilities 43 158,847
-------- --------
60,382 168,774
Deferred revenue 1,902 3,674
Mortgages and loans payable 20,135 20,487
Other long term debt 84,658 44,658
Deferred income taxes 1,486 1,553
-------- --------
168,563 239,146
Minority interest 4,368 706
Shareholders' equity 289,692 146,098
-------- --------
$462,623 $385,950
-------- --------
COUNSEL CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands of US$)
For the Three Months For the Six Months
Ended June 30 Ended June 30
(unaudited) (unaudited)
1999 1998 1999 1998
-------------------- --------------------
Revenues (Note 2) $ 18,861 $ 12,984 $ 37,835 $ 24,640
-------------------- --------------------
-------------------- --------------------
Earnings
From operating
businesses
Pharmaceutical
products $ 3,076 $ - $ 8,825 $ -
Clinical laboratory - 70 - 432
Long term care 247 240 545 509
Realization of value in
operating businesses 1,398 149 1,931 711
Interest and other
income 1,736 2,283 3,093 2,800
-------------------- --------------------
Earnings before
undernoted expenses 6,457 2,742 14,394 4,452
Corporate 1,083 494 2,990 1,264
Interest 2,016 630 4,598 1,290
Amortization 1,685 260 3,309 518
-------------------- --------------------
Earnings before income
taxes and minority
interest 1,673 1,358 3,497 1,380
Income tax (recovery) 161 (104) 904 (460)
Minority interest (344) 13 (252) 107
-------------------- --------------------
Earnings from continuing
operations 1,856 1,449 2,845 1,733
Earnings from
discontinued pharmacy
services operations
after tax - 855 209,809 1,579
Earnings from discontinued
home health care operations
after tax - 885 - 1,656
-------------------- --------------------
Net earnings $ 1,856 $ 3,189 $ 212,654 $ 4,968
-------------------- --------------------
-------------------- --------------------
Earnings per common share
Earnings from continuing
operations $ 1,856 $ 1,449 $ 2,845 $ 1,733
Interest on equity
component of debentures
payable (153) (95) (300) (192)
-------------------- --------------------
Earnings from continuing
operations applicable to
common shares 1,703 1,354 2,545 1,541
Earnings from discontinued
operations after tax - 1,740 209,809 3,235
-------------------- --------------------
Net earnings applicable to
common shares $ 1,703 $ 3,094 $ 212,354 $ 4,776
-------------------- --------------------
-------------------- --------------------
Per common share -basic
Earnings from continuing
operations $ 0.06 $ 0.05 $ 0.09 $ 0.06
Earnings from discontinued
operations 0.15 0.06 7.83 0.11
-------------------- --------------------
Net earnings $ 0.21 $ 0.11 $ 7.92 $ 0.17
-------------------- --------------------
-------------------- --------------------
Per common share -
fully diluted
Earnings from continuing
operations $ 0.06 $ 0.05 $ 0.09 $ 0.06
Earnings from discontinued
operations 0.14 0.06 6.28 0.11
-------------------- --------------------
Net earnings $ 0.20 $ 0.11 $ 6.37 $ 0.17
-------------------- --------------------
-------------------- --------------------
Weighted average
number of common
shares outstanding 26,789 27,970 26,789 27,970
-------------------- --------------------
COUNSEL CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge Six months ended June 30, 1999 (unaudited) 1. Accounting for investments Consolidated subsidiaries The consolidated financial statements include the accounts of Counsel Corporation (" the Company ") and all companies in which it has voting control. The results of operations of companies acquired during the period are included from the date of acquisition. The Company's principal operating subsidiaries An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. comprising continuing operations and its respective voting interest Voting interest in business and accounting is a percentage of voting stock owned. This notion is different from economic interest that refers to a percentage of all the equity issued, including preferred stock, warrants, and so on. in each subsidiary as at June 30, 1999 and 1998 are as follows:
1999 1998
FARO Pharmaceuticals Inc. 75.8 percent -
Sage BioPharma Inc. 61 percent -
U. S. Laboratory Corp. - 50.1 percent
2. Revenues (in thousands of US$)
For the Three Months For The Six Months
Ended June 30 Ended June 30
1999 1998 1999 1998
Pharmaceutical products $7,612 $ - $ 17,458 $ -
Clinical laboratory - 3,058 6,292
Long term care 7,755 7,643 15,525 15,548
Realization of value 1,758 - 1,758 -
Interest and other income 1,736 2,283 3,094 2,800
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$ 18,861 $ 12,984 $ 37,835 $ 24,640
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