Circa Announces Annual and Fourth Quarter Operating Results



    CALGARY, March 27 /CNW/ - Circa Enterprises Inc. (CTO-TSX) (the "Company"
or "Circa"), a manufacturer of equipment for the telecommunication, electrical
utility, and construction industries, reports results of operations for the
three months and year ended December 31, 2006.

    
    2006 highlights consist of the following:
      -  Record consolidated annual sales of $36,789,000, an increase of
         25.2% over the previous record of $29,388,000 reported in 2005
      -  Sales from the metal fabrication business unit of $17,097,000, up
         18.7% from 2005 results
      -  Net earnings of $1,131,000 or $0.12 per share representing a 32.6%
         increase over the prior year
      -  EBITDA of $2,894,000, an increase of 25.4% as compared to the prior
         year
      -  Funds from operations of $2,143,000, up 35.6% from $1,580,000
         reported in 2005
      -  Circa Metals/Hydel completed its move to a new 99,000 sq ft.
         manufacturing facility in Vaughan, Ontario

    Fourth quarter highlights include the following:
      -  Consolidated sales of $7,531,000
      -  Custom metal fabrication sales of $2,032,000, up $1,232,000 over the
         fourth quarter of 2005
      -  Fourth quarter net loss of $174,000 or $0.02 per share
    

    Consolidated sales for the fourth quarter of 2006 were $7,531,000 as
compared to $8,280,000 in the prior year. The fourth quarter included
approximately $229,000 in surge protection modules delivered to a third party
as compared to $1,624,000 delivered in the same period of the prior year. As
expected, sales of this product were reduced in the fourth quarter of 2006 as
Circa delivered significant volumes of surge protection modules to that third
party in the first nine months of 2006, including $3,441,000 in the third
quarter. Excluding the fourth quarter reduction in module sales, 2006 fourth
quarter consolidated sales increased by $646,000, or 9.7% over 2005. This
increase was primarily attributable to higher sales from the Company's custom
metal fabrication business.
    Annual consolidated sales for 2006 were $36,789,000 or 25.2% higher than
2005 due to the increased contribution from the Metals business, as well as
$7,703,000 in module sales related to the supply agreement, and higher other
surge protection product sales in Canada and the United States. In 2006,
Metals business unit sales grew by 18.7% to $17,097,000, including a custom
fabrication sales increase of 67.2% to $5,038,000.
    In the fourth quarter of 2006, Circa incurred a net loss of $174,000 or
$0.02 per share, which included a one-time inventory write-down in the Hydel
business of approximately $360,000. The adjustment arose from a detailed
review of Hydel inventory quantities and related valuation to better reflect
the fluctuation in raw material prices and changed manufacturing processes
arising from the integration of Hydel and the Circa Metals custom fabrication
business.
    Net earnings for the year ended December 31, 2006 were $1,131,000 or
$0.12 per share compared to $853,000 or $0.09 per share for 2005, an increase
of 32.6%. The increase is the result of higher sales in all businesses,
partially offset by lower than anticipated gross profits for the Circa Metals
business unit resulting from the above mentioned inventory adjustment, and the
continued appreciation of the Canadian dollar during the year.
    At December 31, 2006 the Company's working capital was $6,665,000. Circa
also ended 2006 with limited current bank indebtedness of $500,000 and
long-term debt of $953,000, an improvement of $1,638,000 from the September
30, 2006 position.
    During the fourth quarter, the Company successfully concluded its
discussions with a customer regarding modifications to the pricing and supply
provisions of the agreement to supply surge protection modules. Sales to this
customer continue in 2007.

    EBITDA does not have a standardized meaning as prescribed by Canadian
generally accepted accounting principles and may not be comparable to similar
measures provided by other companies. EBITDA is provided to assist investors
in determining the ability of the Company to generate cash from operations and
is calculated from the consolidated statements of earnings as net earnings for
the year plus interest, income taxes, depreciation and amortization.

    The Company uses the term "funds from operations" as opposed to "cash
flow". Funds from operations does not have a standardized meaning as
prescribed by Canadian generally accepted accounting principles, but is
commonly used in industry to describe cash flows from operations before
changes in non-cash working capital.

    
    CIRCA ENTERPRISES INC.
    Consolidated Statements of Earnings and Retained Earnings
    (Amounts expressed in thousands of Canadian dollars, except per share
    amounts)

    Years ended December 31, 2006 and 2005
                                                             2006       2005
                                                                $          $
    -------------------------------------------------------------------------
    SALES                                                  36,789     29,388

    COST OF SALES
      Direct costs                                         27,837     21,508
      Depreciation and amortization                           512        324
    -------------------------------------------------------------------------
                                                            8,440      7,556
    INTEREST AND OTHER INCOME                                  68        113
    -------------------------------------------------------------------------
                                                            8,508      7,669
    -------------------------------------------------------------------------

    EXPENSES
      General and administrative                            3,402      3,098
      Marketing and selling                                 2,246      1,905
      Engineering                                             328        239
      Depreciation and amortization                           431        331
      Interest - current                                       56         30
      Interest on long-term debt                               73        106
    -------------------------------------------------------------------------
                                                            6,536      5,709
    -------------------------------------------------------------------------
    EARNINGS BEFORE OTHER ITEMS                             1,972      1,960

    Retirement related costs                                    -        264
    Foreign currency translation loss                         150        179
    -------------------------------------------------------------------------
    EARNINGS BEFORE INCOME TAXES                            1,822      1,517
    -------------------------------------------------------------------------
    PROVISION FOR INCOME TAXES
      Current                                                 587        536
      Future                                                  104        128
    -------------------------------------------------------------------------
                                                              691        664
    -------------------------------------------------------------------------
    NET EARNINGS                                            1,131        853

    RETAINED EARNINGS, BEGINNING OF YEAR                    7,444      6,591

    RETAINED EARNINGS, END OF YEAR                          8,575      7,444
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    EARNINGS PER SHARE
    Basic and diluted                                        0.12       0.09

    EBITDA                                                  2,894      2,308
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    CIRCA ENTERPRISES INC.
    Consolidated Balance Sheets
    (Amounts expressed in thousands of Canadian dollars)

    December 31, 2006 and 2005

                                                             2006       2005
                                                                $          $
    -------------------------------------------------------------------------
    ASSETS
    Current
      Cash                                                    146      1,271
      Marketable securities                                     -        105
      Accounts receivable                                   4,070      3,395
      Income taxes recoverable                                  -        361
      Inventory                                             6,426      6,610
      Prepaid expenses                                        330        248
    -------------------------------------------------------------------------
                                                           10,972     11,990
    Property, plant and equipment                           4,389      3,120
    Deferred charges                                          722        406
    Intangible assets and goodwill                            304        310
    Future income taxes                                         -         31
    -------------------------------------------------------------------------
                                                           16,387     15,857
    -------------------------------------------------------------------------

    LIABILITIES
    Current
      Bank indebtedness                                       500          -
      Accounts payable and accrued liabilities              3,145      3,808
      Income taxes payable                                     70          -
      Current portion of long-term debt                       592        559
    -------------------------------------------------------------------------
                                                            4,307      4,367
    Long-term debt                                            361        953
    Deferred gain                                              18         81
    Future income taxes                                       437        364
    -------------------------------------------------------------------------
                                                            5,123      5,765
    -------------------------------------------------------------------------

    SHAREHOLDERS' EQUITY
      Share capital                                         2,689      2,648
      Retained earnings                                     8,575      7,444
    -------------------------------------------------------------------------
                                                           11,264     10,092
    -------------------------------------------------------------------------
                                                           16,387     15,857
    -------------------------------------------------------------------------
    

    Circa Enterprises Inc. is a public company with offices in Alberta,
Ontario and Florida, trading on the Toronto Stock Exchange under the ticker
symbol CTO. The Toronto Stock Exchange has neither approved nor disapproved
the information contained herein.

    %SEDAR: 00002951E




For further information:

For further information: Mr. Rick Schmidt, President and CEO, Circa
Enterprises Inc., (403) 258-2011; Mr. Graham Reid, VP Finance and CFO, Circa
Enterprises Inc., (403) 258-2011, E-Mail: investor@circaent.com, Website:
www.circatel.com


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