Circa Reports Sales and Operating results for the Fourth Quarter and Fiscal Year Ended December 31, 2012 and common shares issued under the Share Acquisition Plan

CALGARY, March 20, 2013 /CNW/ - Circa Enterprises Inc. (CTO-TSXV) (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, 2012 and the issuance of common shares under the Share Acquisition Plan.

OPERATING RESULTS

Summary of fourth quarter operating results:

  • Consolidated sales of $5.4 million in Q4 2012, representing a 1.8% decrease compared to Q4 2011 sales of $5.5 million
  • Profit from operations for the fourth quarter of 2012 of $174,000 compared to loss from operations of $55,000 for Q4 2011
  • EBITDA and Adjusted EBITDA of $100,000 for the fourth quarter of 2012 compared to $92,000 for Q4 2011 (see below for explanation and calculation of EBITDA and Adjusted EBITDA)
  • The Company declared and paid a cash dividend of $0.5 million or $0.05 per share

Summary of fiscal year operating results:

  • Consolidated sales of $22.6 million, consistent with 2011 sales of $22.6 million
  • Profit from operations for the year of $0.6 million or $0.06 per share in 2012 as compared to loss from operations of $0.1 million or ($0.01) per share for the 2011 fiscal year
  • EBITDA of $903,000 in 2012, compared to $360,000 million for the 2011 fiscal year
  • Adjusted EBITDA of $956,000 for the year compared to $507,000 for the 2011 fiscal year
  • Working capital of $6.1 million and bank debt of $0.3 million at December 31, 2012

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 provide 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 2012
Year ended
31 Dec 2011
Three months
31 Dec 2012
Three months
31 Dec 2011
  $000's $000's $000's $000's
Profit (loss) for the period from operations 553 (78) 174 (55)
Income taxes 82 44 (135) 51
Interest 15 38 1 11
Depreciation and amortization 253 356 60 85
EBITDA 903 360 100 92
Non-recurring severance charges 53 147 - -
Adjusted EBITDA 956 507 100 92

Consolidated sales for the fourth quarter of 2012 were $5.4 million -- a $57,000 or 1.8% decrease over the same period in 2011. The decrease resulted from lower sales in the telecom segment as the Company saw weaker demand from its sales of surge protection equipment.  For the year ended December 31, 2012, consolidated sales of $22.6 million were recorded, virtually unchanged from the 2011 sales when the Company also recorded consolidated sales of $22.6 million.

Despite consistent sales, the Company's earnings increased substantially in the quarter and when compared to the prior year.  The Company posted a profit of $174,000 for the quarter and $0.6 million for the year compared to loss of $55,000 and $78,000, respectively.  As noted in the chart above, the Company was able to generate positive EBITDA of $0.9 million and Adjusted EBITDA of $1.0 million for the year ended December 31, 2012.

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

"The 2012 financial results posted by the Company were an improvement over the 2011 results.  Sales remained consistent over the prior year despite the loss of some of the larger, project based revenue as the Company was able replace this business by increasing sales to existing customers and broadening the Company's geographical sales in certain markets.

Circa generated higher margins on these sales through improved labour productivity in its operations.  This had the effect of improving gross profits which flowed through to the bottom line and, ultimately, to the shareholders through a special dividend in the fourth quarter of 2012.

The focus for 2013 will be to continue to grow sales through our distribution networks and internal sales group.  In addition, the Company will seek opportunities to expand its product offering and customer base in 2013.

Circa has a strong balance sheet and solid working capital.  The Company's business segments are well positioned to benefit from an increase in economic activity and in a solid financial position to expand its business going forward."

CIRCA ENTERPRISES INC.
Consolidated Statements of Comprehensive Income

For the years ended December 31

       
    2012 2011
    $000's $000's
       
Revenue   22,636 22,643
Cost of sales   (17,529) (18,111)
Gross profit   5,107 4,532
Selling, general and administrative expenses   (4,462) (4,527)
Operating profit   645 5
Gain (loss) on sale of assets   5 (1)
Finance costs   (15) (38)
Profit (loss) before tax   635 (34)
Income tax expense   (82) (44)
Profit (loss) for the year from operations attributable to shareholders of the Company   553 (78)
Other comprehensive income (loss):      
Exchange differences on translating foreign operations, net of tax   (30) 8
Total comprehensive income (loss) for the year attributable to shareholders of the Company   523 (70)
       
(Loss) earnings per share (in $'s)      
Basic and diluted   0.06 (0.01)

COMMON SHARES ISSUED UNDER ACQUISITION PLAN

On March 20, 2013 the Company issued an aggregate of 12,500 common shares to a director pursuant to the Company's Share Acquisition Plan at a deemed price of $0.40 per share in lieu of the cash annual retainer otherwise payable to the director.

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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