Circa Announces Operating Results for the Fourth Quarter and Year Ended December 31, 2007



    CALGARY, March 18 /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
fourth quarter and year ended December 31, 2007.

    Summary of fourth quarter operating results:

    
    -   Consolidated sales of $7.1 million
    -   Cash flow from operations of $0.9 million
    -   Goodwill write down of $0.3 million or $0.03 per share
    -   Net loss of $0.7 million or $0.08 per share

    2007 operating results:

    -   Consolidated sales of $31.5 million
    -   Foreign currency related loss of $1 million, or $0.11 per share
    -   Net loss of $1.6 million or $0.17 per share
    -   Cash flow from operations of $0.4 million
    -   Working capital of $5.1 million
    

    Consolidated sales for the fourth quarter of 2007 were $7.1 million as
compared to sales in the fourth quarter of 2006 of $7.5 million. The decrease
was primarily the result of lower sales of Circa's surge protection business
to the U.S. market when translated to Canadian dollars and lower sales from
Circa Metals business unit, offset by an increase in sales from the U.S.
market third party supply agreement.
    On an annual basis, consolidated sales were $31.5 million compared to
$36.8 million in the prior year. This reduction was largely due to foreign
currency issues as well as a weaker U.S. market, driven by the downturn in the
housing and related construction sectors. While Circa had anticipated lower
sales of surge protection products to the U.S. market, the magnitude of the
appreciation of the Canadian dollar exceeded expectations thus further
reducing sales.
    Circa's gross profit was lower than 2006 mainly due to lower sales of the
relatively higher margin surge protection products, as well as somewhat
reduced margins in the Circa Metals business.
    Circa Metals is based in Ontario, and faced local market weakness in
2007, as did many companies in the region. The Company annually tests its
recorded goodwill for impairment and, in 2007, recorded a one-time goodwill
impairment charge of $0.3 million related to its investment in Circa Metals.
    Circa's fourth quarter net loss of $0.7 million reflects the foreign
currency translation loss and the resulting lower tax recovery as discussed
above, a reduction in earnings contribution from the surge protection
business, and lower sales in the Circa Metals business. For 2007, Circa
recorded a consolidated net loss of $1.6 million or $0.17 per share.
Management estimates that the foreign currency component of this loss was
approximately $1 million, or $0.11 per share.
    At December 31, 2007 the Company's working capital was $5.1 million,
including $0.2 million in cash. Circa ended the quarter with $1.6 million in
current bank indebtedness, an improvement of $0.7 million over the
September 30, 2007 balance. Included in current bank indebtedness is
$0.4 million representing the December 2007 repayment of the outstanding
current balance owing on the term loan facility, which provided increased
financial flexibility. As a result, Circa has no outstanding long-term debt.
    Circa's President and Chief Executive Officer, Rick Schmidt stated:
    "The Canadian manufacturing sector faces significant challenges,
primarily from a strong Canadian dollar and a weak economy in its major U.S.
sales market. Circa is committed to overcoming these challenges and to return
to its history of generating earnings and returns to shareholders."

    
    CIRCA ENTERPRISES INC.

    Consolidated Statements of Operations and Retained Earnings
    (Amounts expressed in thousands of Canadian dollars,
    except per share amounts)

    Years ended December 31, 2007 and 2006
                                                             2007       2006
                                                                $          $
    -------------------------------------------------------------------------

    SALES                                                  31,486     36,789

    COST OF SALES
      Direct costs                                         25,356     27,837
      Depreciation and amortization                           550        512
    -------------------------------------------------------------------------
                                                            5,580      8,440
    -------------------------------------------------------------------------

    EXPENSES
      General and administrative                            3,441      3,334
      Marketing and selling                                 2,400      2,246
      Engineering                                             212        328
      Depreciation and amortization                           404        431
      Interest - current                                      102         56
      Interest on long-term debt                               34         73
      Goodwill impairment charge                              292          -
      Foreign currency translation loss                       498        150
    -------------------------------------------------------------------------
                                                            7,383      6,618
    -------------------------------------------------------------------------
    (LOSS) EARNINGS BEFORE INCOME TAXES                    (1,803)     1,822
    -------------------------------------------------------------------------
    PROVISION FOR INCOME TAXES
      Current                                                 160        587
      Future                                                 (327)       104
    -------------------------------------------------------------------------
                                                             (167)       691
    -------------------------------------------------------------------------
    NET (LOSS) EARNINGS                                    (1,636)     1,131

    RETAINED EARNINGS, BEGINNING OF YEAR                    8,575      7,444

    -------------------------------------------------------------------------
    RETAINED EARNINGS, END OF YEAR                          6,939      8,575
    -------------------------------------------------------------------------
    (LOSS) EARNINGS PER SHARE
       Basic and diluted                                    (0.17)      0.12
    -------------------------------------------------------------------------



    CIRCA ENTERPRISES INC.

    Consolidated Balance Sheets
    (Amounts expressed in thousands of Canadian dollars)

    December 31, 2007 and 2006
                                                             2007       2006
                                                                $          $
    -------------------------------------------------------------------------
    ASSETS
    Current
      Cash                                                    198        146
      Accounts receivable                                   2,880      4,070
      Income taxes recoverable                                480          -
      Inventory                                             6,426      6,426
      Prepaid expenses                                        371        330
    -------------------------------------------------------------------------
                                                           10,355     10,972
    Property, plant and equipment                           3,964      4,389
    Deferred charges                                          652        722
    Intangible assets and goodwill                              8        304
    Future income taxes                                        80          -
    -------------------------------------------------------------------------
                                                           15,059     16,387
    -------------------------------------------------------------------------

    LIABILITIES
    Current
      Bank indebtedness                                     1,623        500
      Accounts payable and accrued liabilities              3,618      3,145
      Income taxes payable                                      -         70
      Current portion of long-term debt                         -        592
    -------------------------------------------------------------------------
                                                            5,241      4,307
    Long-term debt                                              -        361
    Deferred gain                                               -         18
    Future income taxes                                       190        437
    -------------------------------------------------------------------------
                                                            5,431      5,123
    -------------------------------------------------------------------------
    SHAREHOLDERS' EQUITY
      Share capital                                         2,689      2,689
      Retained earnings                                     6,939      8,575
    -------------------------------------------------------------------------
                                                            9,628     11,264
    -------------------------------------------------------------------------
                                                           15,059     16,387
    -------------------------------------------------------------------------
    

    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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