Circa Reports Sales and Operating results for the Fourth Quarter and Fiscal Year Ended December 31, 2011

CALGARY, March 13, 2012 /PRNewswire/ - Circa Enterprises Inc. (TSXV: CTO) (the "Company" or "Circa"), a manufacturer of equipment for the telecommunication, electrical utility, and construction industries, reports results of operations for the fourth quarter and year ended December 31, 2011.

Summary of fourth quarter operating results:

  • Consolidated sales of $5.5 million, representing a 19.2% decrease compared to Q4 2010 sales of $6.8 million
  • Loss from continuing operations for the fourth quarter of 2011 of $55,000 compared to profit from continuing operations of $0.2 million for Q4 2010
  • EBITDA and Adjusted EBITDA of $0.1 million for the fourth quarter compared to $0.3 million for Q4 2010 (see below for explanation and calculation of EBITDA and Adjusted EBITDA)

Summary of fiscal year operating results:

  • Consolidated sales of $22.6 million, representing a 12.1% decrease compared to 2010 sales of $25.8 million
  • Loss from continuing operations for the year of $0.1 million or ($0.01) per share in 2011 as compared to profit from continuing operations of $1.2 million or $0.12 per share for the 2010 fiscal year
  • EBITDA of $0.4 million, compared to $2.1 million for the 2010 fiscal year
  • Adjusted EBITDA of $0.5 million for the year compared to $2.1 million for the 2010 fiscal year
  • Working capital of $6.0 million and bank debt of $0.9 million at December 31, 2011

EBITDA is earnings before interest, taxes, depreciation and amortization.  Adjusted EBITDA is earnings before interest, taxes, depreciation and amortization and is adjusted for other non-recurring items and non-cash items. EBITDA and Adjusted EBITDA are a non-IFRS financial measures and do not have any standardized meaning prescribed by International Financial Reporting Standards and, therefore, may not to be comparable to similar measures presented by other issuers.  Management believes that EBITDA and Adjusted EBITDA are useful supplemental measures, which provides an indication of the results generated by Circa's primary business activities prior to consideration of how those activities are financed, amortized or taxed.  Readers are cautioned, however, that EBITDA and Adjusted EBITDA should not be construed as an alternative to comprehensive income (loss) determined in accordance with IFRS as an indicator of the Company's financial performance. EBITDA and Adjusted EBITDA are calculated by the Company as follows:

         
  Year ended
31 Dec 2011
Year ended
31 Dec 2010
Three months
31 Dec 2011
Three months
31 Dec 2010
  $000's $000's $000's $000's
(Loss) profit for the period from continuing operations (78) 1,195 (55) 183
Income taxes 44 464 51 36
Interest 38 88 11 13
Depreciation and amortization 356 388 85 66
EBITDA 360 2,135 92 298
Non-recurring severance charges 147 - - -
Adjusted EBITDA 507 2,135 92 298

Consolidated sales for the fourth quarter of 2011 were $5.5 million -- a $1.3 million or 19.2% decrease over the same period in 2010. The decrease resulted from lower sales in the both the telecom and Circa Metals segments as the Company saw weaker demand from some larger project based work from its customers.  For the year ended December 31, 2011, consolidated sales of $22.6 million represented a decrease of $3.1 million or 12.1% from 2010 sales of $25.8 million.  The overall decline in sales was a result of lower sales in the surge protection segment, due mainly to its sales to a large OEM customer and a decrease in the Circa Metals segment as a result of lower demand from the completion of large projects and intensified offshore competition.

As a result of the lower sales activity, the Company's earnings decreased substantially in the quarter and when compared to the prior year.  The Company posted a loss of $55,000 for the quarter and $78,000 for the year compared to profit of $0.2 million and $1.2 million, respectively.  As noted in the chart above, the Company was able to generate positive EBITDA of $0.4 million and Adjusted EBITDA of $0.5 million for the year ended December 31, 2011.

Ivan Smith, Circa's President and Chief Executive officer, stated:

"The 2011 financial results posted by the Company were disappointing and off from the 2010 results.  This decline hampered the profitability of the Company and is a reflection of the challenges the business faces to grow and retain its customer base in the face of increased competition and a slowly recovering economy.  Our focus towards growing our topline sales will continue and the Company will seek opportunities to grow our customer base and product market in a sustainable and profitable manner.

Despite the decline in profitability, Circa's balance sheet remains strong.  The Company has sound fundamentals and is in a solid financial position to expand its business going forward.

I want to thank Circa's staff across all companies and locations for their continued hard work and dedication in the past year."

CIRCA ENTERPRISES INC.
Consolidated Statements of Comprehensive Income

For the years ended December 31      
    2011 2010
    $000's $000's
       
Revenue   22,643 25,765
Cost of sales   (18,111) (19,870)
Gross profit   4,532 5,895
Selling, general and administrative expenses   (4,527) (4,237)
Operating profit   5 1,658
(Loss) gain on sale of assets   (1) 89
Finance costs   (38) (88)
(Loss) profit before tax   (34) 1,659
Income tax expense   (44) (464)
(Loss) profit for the year from continuing operations attributable to shareholders of the Company   (78) 1,195
Other comprehensive income (loss):      
Exchange differences on translating foreign operations, net of tax   8 (56)
Total comprehensive (loss) income for the year attributable to shareholders of the Company   (70) 1,139
       
(Loss) earnings per share (in $'s)      
Basic and diluted   (0.01) 0.12

Circa Enterprises Inc. is a public company with operations in Alberta, Ontario and Florida. The outstanding common shares of Circa Enterprises Inc. are listed and trade on the TSX Venture Exchange under the trading symbol CTO. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

The Company's annual financial statements and related management's discussion and analysis have been filed with certain securities regulatory authorities in Canada and may be accessed electronically through the SEDAR website at www.sedar.com.

SOURCE Circa Enterprises Inc.




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