Science & Technology
Science and Technology
Science and Technology 
Tue, May 17, 2011
Mon, May 16, 2011
Counsel RB Capital Reports 2011 First Quarter Results
WHITE PLAINS, N.Y. & TORONTO--([ BUSINESS WIRE ])--Counsel RB Capital Inc. (OTCBB: CRBN) (the aCompanya), a leader in distressed capital asset transactions, today reported financial results for the first quarter ended March 31, 2011 as summarized below.
"Counsel RB Capitala™s diversified transaction pipeline continued to expand during the first quarter"
| Summary Financial Data (unaudited) | ||||||
| ($ in thousands, except per share amounts) | Three Months Ended March 31, | |||||
| 2011 | 2010 | |||||
| Asset liquidation revenue (1) | $ | 734 | $ | 2,233 | ||
| Earnings of equity accounted asset liquidation investments (2) | 1,560 | 437 | ||||
| Operating income (loss) | (340) | 498 | ||||
| Net income | 189 | 379 | ||||
| Net income per common share | $ | 0.01 | $ | 0.01 | ||
(1) | Represents revenue generated from activities where Counsel RB acted in a principal capacity or had majority interest in a transaction. | |
(2) | Represents equity income from activities where Counsel RB acted as a member of a syndicate in a transaction. |
Counsel RB is a value-driven, innovative leader in distressed capital asset transactions with a growing presence in the North American asset liquidation sector. The Company specializes in the acquisition of turnkey manufacturing facilities, surplus industrial machinery and equipment, industrial inventories, accounts receivable portfolios and related intellectual property. Since its inception in Q2 2009, Counsel RB has successfully completed 43 transactions. Counsel RB conducts its asset liquidation operations both independently and through partnerships with other leading distressed capital asset companies.
In the first quarter of 2011, Counsel RB incurred inventory maintenance expense of $1.2 million compared with $0.001 million in the first quarter of 2010. The inventory maintenance expense in the 2011 period relates to costs incurred in connection with the Companya™s acquisition of the Fraser Paper mill in Gorham, NH, which was purchased by CRBN in the 2010 fourth quarter but was not sold until the 2011 second quarter (May 13). Exclusive of these one-time costs, which included maintaining the property in move-in condition for the eventual buyer, operating income was $0.8 million in the first quarter of 2011, an increase of 66.7% over first quarter 2010 operating income of $0.5 million. Counsel RB will record asset liquidation revenue and income related to this transaction in the period ended June 30, 2011.
First Quarter 2011 Highlights:
- Participated in and/or initiated 11 distressed capital asset transactions as a principal or member of a syndicate; and,
- On March 15, the Company completed a 1 million share private placement at an issuance price of $1.83 per share. Proceeds from the private placement are being deployed to fund additional distressed capital asset transactions and to expand and diversify the Companya™s capabilities to offer complementary services in the distressed capital asset sector.
Counsel RB Capitala™s Chairman and President Allan Silber commented, aCounsel RB continued to make noteworthy progress during the 2011 first quarter as we expanded our capabilities in the distressed capital assets solutions space. Our strategic plan is to build a diversified and scalable full-service organization for clients seeking capital asset solutions by leveraging the relationships and industry expertise of Counsel RBa™s Co-CEOs, Adam and Jonathan Reich, former practicing bankruptcy attorneys.a
aCounsel RB Capitala™s diversified transaction pipeline continued to expand during the first quarter,a stated Co-CEO Jonathan Reich, aIt is important to note that our first quarter financial results were impaired by the timing of the closing of the Fraser Paper mill transaction, which was completed in mid-May. We are delighted that this agreement turned out favorably for the town of Gorham, NH and the valued employees of Fraser Paper, who are keeping their jobs as the planta™s new buyer is re-opening the facility.
aWe expect the favorable impact from the Fraser Paper mill sale to significantly enhance CRBNa™s second quarter results for the period ended June 30. In 2010, our first full year of operations, we generated net income of $4.8 million and the Company is on pace to exceed this level in 2011.a
About Counsel RB Capital ([ www.counselrb.com ])
Counsel RB Capital Inc. (CRBN) is a value-driven, innovative leader in distressed capital assets transactions. The Company focuses on identifying, acquiring and monetizing distressed and surplus capital assets. It specializes in acquiring turnkey manufacturing facilities, surplus industrial machinery and equipment, industrial inventories, accounts receivable portfolios and related intellectual property.
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 the Company's expectations, should be considered as forward-looking statements. Such statements are based on knowledge of the environment in which the Company currently operates, but because of the factors listed herein, as well as other factors beyond the Company'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.
COUNSEL RB CAPITAL INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (unaudited) | ||||||||
| ||||||||
(in thousands, except per share amounts) | ||||||||
| Three months ended March 31, | ||||||||
| 2011 | 2010 | |||||||
| Revenue: | ||||||||
| Asset liquidation | $ | 734 | $ | 2,233 | ||||
Operating costs and expenses: | ||||||||
| Asset liquidation | 439 | 1,538 | ||||||
| Inventory maintenance | 1,170 | 1 | ||||||
| Patent licensing | 57 | 7 | ||||||
| Selling, general and administrative | 839 | 515 | ||||||
| Expenses paid to related parties | 129 | 111 | ||||||
| Total operating costs and expenses | 2,634 | 2,172 | ||||||
| (1,900 | ) | 61 | ||||||
| Earnings of equity accounted asset liquidation investments | 1,560 | 437 | ||||||
| Operating income (loss) | (340 | ) | 498 | |||||
| Other income (expense): | ||||||||
| Interest expense a" third party | (84 | ) | (101 | ) | ||||
| Interest expense a" related party | -- | (29 | ) | |||||
| Total other income (expense) | (84 | ) | (130 | ) | ||||
| Income (loss) from continuing operations before the undernoted | (424 | ) | 368 | |||||
| Income tax expense (recovery) | (598 | ) | 67 | |||||
| Earnings of other equity accounted investments (net of $0 tax) | 15 | 78 | ||||||
| Net income and comprehensive income | 189 | 379 | ||||||
| Net and comprehensive income attributable to non-controlling interest | -- | (156 | ) | |||||
| Net and comprehensive income attributable to controlling interest | $ | 189 | $ | 223 | ||||
| Weighted average common shares outstanding: | 26,149 | 22,718 | ||||||
| Weighted average preferred shares outstanding | 1 | 1 | ||||||
| Net income per share: | ||||||||
| Common shares | $ | 0.01 | $ | 0.01 | ||||
| Preferred shares | $ | 0.29 | $ | 0.39 | ||||
The notes contained in our Quarterly Report on Form 10-Q are an integral part of these condensed consolidated financial statements.
COUNSEL RB CAPITAL INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) | ||||||||
(in thousands, except share and per share amounts) | ||||||||
As of March 31, | As of December 31, | |||||||
| 2011 | 2010 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 2,109 | $ | 2,608 | ||||
Amounts receivable (net of allowance for doubtful accounts of $146; 2010 - $168) | 686 | 203 | ||||||
| Receivable from a related party | 129 | 392 | ||||||
| Deposits | 765 | 771 | ||||||
| Inventory a" equipment | 4,626 | 2,594 | ||||||
| Other current assets | 129 | 63 | ||||||
| Deferred income tax | 2,791 | 2,228 | ||||||
| Total current assets | 11,235 | 8,859 | ||||||
| Other Assets: | ||||||||
| Inventory a" real estate | 1,573 | 1,573 | ||||||
| Asset liquidation investments | 2,567 | 3,548 | ||||||
| Investments | 2,741 | 2,706 | ||||||
| Total Assets | $ | 18,116 | $ | 16,686 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ | 1,098 | $ | 2,555 | ||||
| Income taxes payable | 88 | 198 | ||||||
| Debt payable | 5,472 | 4,485 | ||||||
| Total Liabilities | 6,658 | 7,238 | ||||||
| Commitments and contingencies | ||||||||
| Equity: | ||||||||
Preferred stock, $10.00 par value, authorized 10,000,000 shares; issued and outstanding 592 Class N shares at March 31, 2011 and December 31, 2010, liquidation preference of $592 at March 31, 2011 and December 31, 2010 | 6 | 6 | ||||||
Common stock, $0.01 par value, authorized 300,000,000 shares; issued and outstanding 26,960,080 shares at March 31, 2011 and 25,960,080 at December 31, 2010 | 269 | 259 | ||||||
| Additional paid-in capital | 277,452 | 275,641 | ||||||
| Accumulated deficit | (266,269 | ) | (266,458 | ) | ||||
| Total Equity | 11,458 | 9,448 | ||||||
| Total Liabilities and Equity | $ | 18,116 | $ | 16,686 | ||||
The notes contained in our Quarterly Report on Form 10-Q are an integral part of these condensed consolidated financial statements.