Counsel Corporation Announces 2003 Year End Results.Business Editors TORONTO--(BUSINESS WIRE)--April 16, 2004 Counsel Corporation (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) (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :CXS CXS Coherent X-Ray Scattering ) today reported its financial results for the year ended December December: see month. 31, 2003. All amounts are stated in US dollars. Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: revenues increased 57% in 2003 to $143.7 million from $91.4 million in 2002 due primarily to the inclusion of a full year's operations of (i) its Enterprise voice and data service business acquired in the fourth quarter of 2002, and, (ii) the real estate business that commenced operations in the third quarter of 2002. The Company incurred a loss 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 of $21.6 million, or $0.94 per share, basic and 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. in 2003, compared with a loss of $10.0 million, or $0.59 per share in 2002. Including discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. , the Company incurred a net loss of $22.3 million or $0.96 per share, basic and diluted, for the year ended December 31, 2003, compared with a loss of $28.9 million or $1.44 per share for the year ended December 31, 2002. Highlights of the fourth quarter: -- Repaid $40.9 million of convertible debentures Convertible Debenture Any type of debenture that can be converted into some other security. Notes: For example, a convertible bond can be converted into stock. via share payment option -- Issued $15 million of convertible preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. -- Rebranded communications business as Acceris Communications Inc., including new websites and new trading symbol Trading symbol See: Ticker symbol -- Completed the successful integration of acquired communications networks The transmission channels interconnecting all client and server stations as well as all supporting hardware and software. , infrastructure and product lines -- Entered the market for local dial tone services -- Acquired additional VoIP patent to create foundational VoIP patent portfolio "While we may have not realized our financial goals in 2003, a number of key achievements have considerably strengthened the foundation of both our communications and real estate businesses," commented Allan Allan can refer to:
Contraction of we have. we've have implemented and the strategies that we have in place will position us for further growth and enhanced shareholder returns." About Counsel Corporation Counsel Corporation (TSX: CXS / NASDAQ:CXSN) is a diversified company diversified company A company engaged in varied business operations not directly related to one another. A diversified company is less likely to suffer either a collapse or a spectacular gain in earnings compared with a firm concentrating its operations in a focused on acquiring and building businesses using its financial and operational expertise in two specific sectors: communications and real estate. Counsel's communications platform is focused on building upon its existing communications investments, Acceris Communications Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). : ACRS ACRS See: Accelerated cost recovery system ACRS See Accelerated Cost Recovery System (ACRS). ), through organic growth and by acquiring additional customer revenues. Counsel's real estate platform has a focused strategy of investing in and developing income producing commercial properties, primarily retail shopping centers shopping center, a concentration of retail, service, and entertainment enterprises designed to serve the surrounding region. The modern shopping center differs from its antecedents—bazaars and marketplaces—in that the shops are usually amalgamated into . For further information, visit Counsel's website at www.counselcorp.com. 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. The statements made in this release that are not historical facts contain forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. 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 they currently operate, but because of the factors herein listed, as well as other factors beyond their 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 reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. filings.
Counsel Corporation
Consolidated Statements of Operations
For the years ended December 31
(in thousands of US Dollars, except per share amounts)
2003 2002 2001
$ $ $
Revenues
Telecommunication services 133,748 85,252 49,289
Communication technology licensing 2,164 2,837 4,730
Income producing properties 7,799 3,343 11
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143,711 91,432 54,030
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Operating costs and expenses
Telecommunication costs (exclusive of
depreciation and amortization shown
below) 86,006 50,936 35,546
Income producing properties
(exclusive of depreciation and
amortization shown below) 3,872 1,448 -
Selling, general and administrative 61,408 45,737 44,350
Research and development - 1,399 2,162
Provision for doubtful accounts 5,438 5,999 839
Depreciation and amortization 9,854 7,115 8,849
-----------------------------
166,578 112,634 91,746
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Operating loss before undernoted items (22,867) (21,202) (37,716)
Gains and other income
Gain on sale of short-term investments 5,218 28,067 42,760
Other 3,657 782 1,746
Impairments and other losses
Write-down of short-term investments (139) (4,011) (1,957)
Write-down of portfolio investments (650) (640) (19,340)
Other (1,025) (722) (5,582)
-----------------------------
Earnings (loss) before the undernoted (15,806) 2,274 (20,089)
Interest income 620 401 2,645
Interest expense (3,501) (3,002) (2,517)
-----------------------------
Loss before income taxes and discounted
operations (18,687) (327) (19,961)
Provision for income taxes (2,937) (9,655) (19,901)
Non-controlling interest - - 1,538
-----------------------------
Loss from continuing operations (21,624) (9,982) (38,324)
Loss from discontinued operations (636) (18,949) (23,889)
-----------------------------
Net loss (22,260) (28,931) (62,213)
-----------------------------
-----------------------------
Basic and diluted net loss per share:
Continuing operations (0.94) (0.59) (1.80)
Discontinued operations (0.02) (0.85) (1.04)
-----------------------------
-----------------------------
Basic and diluted net loss per share (0.96) (1.44) (2.84)
-----------------------------
-----------------------------
Weighted average number of common shares
outstanding (in thousands) - Basic and
diluted 25,596 22,195 23,030
-----------------------------
-----------------------------
Counsel Corporation
Consolidated Balance Sheets
As at December 31
(in thousands of US Dollars)
2003 2002
$ $
-----------------
Assets
Current assets
Cash and cash equivalents 16,996 9,004
Short-term investments 2,381 3,071
Accounts receivable (net of allowance for
doubtful accounts of $1,900; 2002 - $1,704) 18,719 17,357
Loans receivable 2,773 702
Income taxes recoverable - 3,329
Future income tax assets - 274
Prepaid expenses and deposits 2,863 4,619
Assets of discontinued operations 2,315 2,239
-----------------
46,047 40,595
Long-term assets
Income producing properties 42,225 34,919
Properties under development 7,600 3,063
Loans receivable 3,894 5,871
Portfolio investments 4,745 4,420
Property, plant and equipment, net 7,787 12,657
Intangible assets, net 8,546 9,318
Goodwill 947 -
Assets of discontinued operations 20,902 21,598
Other assets 896 2,273
-----------------
143,589 134,714
-----------------
-----------------
Liabilities
Current liabilities
Revolving credit facility 12,127 9,086
Accounts payable and accrued liabilities 33,404 28,617
Unearned revenue 4,011 958
Current portion of mortgages and loans payable 4,377 3,630
Current portion of capital leases 2,715 2,714
Convertible debentures payable - 2,515
Future income tax 1,110 -
Income tax payable 524 -
Liabilities of discontinued operations 9,712 6,693
-----------------
67,980 54,213
Long-term liabilities
Mortgages and loans payable 24,057 22,529
Capital leases 1,631 4,146
Convertible preferred shares 11,200 -
Future income tax 37,934 36,550
Liabilities of discontinued operations 13,871 12,392
-----------------
156,673 129,830
Non-controlling interest 1,066 -
Shareholders' equity (deficit) (14,150) 4,884
-----------------
143,589 134,714
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