Counsel RB Capital Reports 2013 Q1 Operating Results and Updates on Ongoing Corporate Progress

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Counsel RB Capital Reports 2013 Q1 Operating Results and Updates on Ongoing Corporate Progress

WHITE PLAINS, N.Y. & TORONTO--(BUSINESS WIRE)-- Counsel RB Capital Inc. (OTCQB: CRBN) (the "Company"), a leader in distressed and surplus capital asset transactions, today reported financial results for the first quarter ended March 31, 2013 as summarized below.

 

Summary Financial Data
(unaudited)

($ in thousands, except per share amounts)

   

Three months ended
March 31,

2013  2012
Total asset liquidation revenue(1)$1,392$3,034
Earnings of equity accounted asset liquidation investments(2)8021,069
Operating income (loss)(905)799
Net income (loss)(647)390
Earnings (loss) per diluted common share   $(0.02)  $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.

2013 Q1 Summary:

  • The Company's operating loss was approximately $905,000, compared to operating income of $799,000 in the 2012 period.
  • Combined asset liquidation revenue and earnings of equity accounted asset liquidation investments (pre-tax) was approximately $2.2 million, compared to $4.1 million in the prior year period.
  • Patent licensing revenue related to the settlement of a patent infringement lawsuit was $200,000.
  • SG&A expenditures, including expenses paid to related parties, were $2.6 million, versus $1.7 million. The increase primarily reflects higher compensation expense related to Heritage Global Partners (HGP), a leading auction and asset advisory firm that was acquired late in the first quarter of 2012, as well as expenses related to HGP's European expansion.
  • Total operating costs and expenses were relatively flat at $3.3 million, largely due to an approximate $1.2 million decrease in asset liquidation costs, which offset the aforementioned SG&A rise.
  • Net loss for the period was approximately $647,000, or a loss of $0.02 per diluted common share.

Counsel RB Capital Co-CEO Adam Reich stated, "Counsel RB continues to be a leading resource for existing and potential new clients requiring a one-stop solution for a wide array of capital asset solutions. In order to achieve our objectives we have continued to strengthen our organization's core competencies domestically, and we also expanded the Company's operations internationally during the second half of 2012. Looking ahead, we remain focused on further growing Counsel RB's principal and fee-based revenue opportunities."

About Counsel RB Capital (www.counselrb.com)

Counsel RB Capital Inc. (OTCQB: CRBN) is a value-driven, innovative leader in monetizing surplus capital assets. The Company specializes in acquiring turnkey manufacturing facilities, surplus industrial machinery and equipment, industrial inventories, accounts receivable portfolios and related intellectual property. Our subsidiary, Heritage Global Partners, Inc. (www.hgpauction.com), is a global leader in auction, asset advisory and appraisal services.

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.

-financial tables follow-

 

COUNSEL RB CAPITAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
(unaudited)
(in thousands of US dollars, except share and per share amounts)

 
   

Three months ended
March 31,

 

2013

  

2012

Revenue:
Asset liquidation
Asset sales$446$1,850
Commissions and other 946  1,184 
Total asset liquidation revenue1,3923,034
Patent licensing 200  -- 
Total revenue 1,592  3,034 
 
Operating costs and expenses:
Asset liquidation3561,533
Inventory maintenance743
Patent licensing and maintenance15026
Selling, general and administrative2,3941,582
Expenses paid to related parties204157
Depreciation and amortization 121  3 
Total operating costs and expenses 3,299  3,304 
(1,707)(270)
Earnings of equity accounted asset liquidation investments 802  1,069 
Operating income (loss) (905) 799 
Other income (expenses):
Other income--10
Interest expense - total third and related party (95) (59)
Total other income (expenses) (95) (49)
Income (loss) before undernoted(1,000)750
Income tax expense (recovery)(353)313
Earnings (loss) of other equity accounted investments (net of $0 tax) --  (47)
Net income (loss)(647)390
Other comprehensive loss:
Currency translation adjustment (7) -- 
Comprehensive income (loss)$(654)$390 
Weighted average common shares outstanding - basic (in thousands)28,94527,484
Weighted average common shares outstanding - diluted (in thousands)28,94527,844
Earnings (loss) per share - basic$(0.02)$0.01
Earnings (loss) per share - diluted$(0.02)$0.01
 

The notes contained in our Quarterly Report on Form 10-Q are an integral part of these condensed consolidated financial statements.

-balance sheets follow-

 

COUNSEL RB CAPITAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands of US dollars, except share and per share amounts)

  

As of

March 31,
2013

  

As of
December 31,
2012

ASSETS 
Current assets:
Cash and cash equivalents$1,230

 

$

4,

314
Amounts receivable (net of allowance for doubtful accounts of $0; 2012 - $0)1,3151,068
Receivable from a related party2,2242,929
Deposits3341,481
Inventory - equipment510820
Other current assets283312
Income taxes recoverable11970
Deferred income tax assets1,949  1,956 
Total current assets7,96412,950
Non-current assets:
Inventory - real estate6,0786,078
Asset liquidation investments2,9013,618
Investments1,7292,426
Property, plant and equipment, net4952
Intangible assets, net5,1505,263
Goodwill5,3015,301
Deferred income tax assets25,955  25,622 
Total assets$55,127 

 

$

61,

310 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities$3,349

 

$

4,415
Debt payable to third parties6,260  10,883 
Total liabilities9,609  15,298 
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, 2013 and December 31, 2012,
liquidation preference of $592 at March 31, 2013 and December 31, 2012

66
Common stock, $0.01 par value, authorized 300,000,000 shares; issued
and outstanding 28,945,228 shares at March 31, 2013 and December 31, 2012
290290
Additional paid-in capital283,441283,281
Accumulated deficit(238,205)(237,558)
Accumulated other comprehensive loss (14) (7)
Total equity45,518  46,012 
Total liabilities and equity$55,127 

 

$

61,310 
 

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.
Stephen A. Weintraub, 416-866-3058
Executive Vice President, Secretary & CFO
sweintraub@counselrb.com
or
JCIR
Robert Rinderman or Jennifer Neuman
212-835-8500
Investor Relations/Corporate Communications
CRBN@jcir.com

KEYWORDS:   United States  North America  New York

INDUSTRY KEYWORDS:

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