STREET CAPITAL GROUP INC.
$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
Counsel Corporation, 1 Toronto Street, Suite 700, P.O. Box 3 Toronto, Ontario M5C 2V6
Voice 416-866-3000 Fax: 416-866-3061 www.counselcorp.com
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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 o f 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).
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.
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
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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 Jennifer Wood
EVP, Secretary & CFO jwood@tmxequicom.comsaw@counselcorp.comTel: (416) 815-0700 ext. 226
Tel: (416) 866-3058
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COUNSEL CORPORATION |
Three months ended September 30, Nine months ended September 30,
2014 2013 2014 2013
$ $ $ $ Revenues 42,336 38,473108,234 110,605
Expenses
Operati ng cos ts 25,197 24,520 61,599 71,621
Sel l i ng, general and admi ni s trati ve expens e 8,959 9,049 25,852 24,002
Forei gn exchange (gai n) l os s (45) - (389) - Depreci ati on and amorti zati on 331 344 947 1,007
Interes t expens e 270 447 979 1,558
34,712 34,36088,988 98,188
Income before fair value adjustments 7,624 4,113 19,246 12,417
Fai r val ue adj us tments 8,028 159 17,547 4,927
Income before income taxes and discontinued operations 15,652 4,272 36,793 17,344
Income tax provi s i on 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 i ncome (l os s ) attri butabl e to non-control l i ng i nteres t 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 :
Conti nui ng operati ons 0.08 0.03 0.21 0.11
Di s conti nued operati ons 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.
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COUNSEL CORPORATION CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION AS AT SEPTEMBER 30, 2014 AND DECEMBER 31, 2013 (In thousands of Canadian dollars) (Unaudited)Assets
Current assets
September 30, December 31,
2014 2013
$ $
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 .
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