Circa Reports Operating Results for the Second Quarter and Six Months Ended June 30, 2008



    CALGARY, Aug. 6 /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
second quarter and six months ended June 30, 2008.

    
    Summary of second quarter operating results:
    -   Consolidated sales of $8.8 million, representing a 7.5% increase
        over the second quarter of 2007
    -   Net loss of $0.2 million or $0.02 per share as compared to a loss of
        $0.3 million or $0.04 per share in the second quarter of 2007

    Summary of year-to-date operating results:
    -   Consolidated sales of $17.5 million, representing a 9.5% increase
        over 2007
    -   Net loss of $0.1 million or $0.01 per share as compared to a loss of
        $0.5 million or $0.06 per share for the first six months of 2007
    

    Consolidated sales for the second quarter of 2008 were $8.8 million, a
$0.6 million or 7.5% increase over the same period in 2007, and represent the
highest quarterly sales since the third quarter of 2006. This increase is
primarily attributed to a $1.2 million improvement in surge protection
business unit sales, particularly third party supply agreement sales. Overall,
sales to the U.S. market continue to exceed expectations, despite adverse
economic conditions. On a year-to-date basis, consolidated sales of
$17.5 million represent an increase of $1.5 million or 9.5% over the first six
months of 2007.
    Circa's gross profit was lower than 2007 and reflects, amongst other
things, the negative effect of the appreciated Canadian dollar and higher raw
material costs, partially offset by improved margins on products supplied to
the Canadian electrical industry by the Hydel Enterprises business.
    Circa reported a second quarter net loss of $0.2 million, an improvement
over the $0.3 million loss reported in the prior period. The improvement from
2007 reflects increased third party supply sales and a foreign currency
translation gain, partially offset by lower than expected gross profits. The
six-month results reflect favorably when compared to 2007 with the net loss of
$0.1 million, as compared to a net loss of $0.5 million in 2007.
    At June 30, 2008 the Company's working capital was $4.9 million,
including $0.3 million in cash. Circa ended the quarter with $3.1 million in
current bank indebtedness, including $0.4 million representing the
December 2007 repayment of the outstanding current balance owing on the term
loan facility. As a result, Circa has no outstanding long-term debt.
    Circa's President and Chief Executive Officer, Rick Schmidt stated:
    "Consolidated sales for the second quarter exceeded 2007 results. This
continues the trend experienced in the first quarter of 2008, and reflects the
success of determined marketing and sales efforts to overcome market and
economic challenges. While second quarter earnings were lower than the first
quarter, financial results for 2008 to date are generally consistent with our
expectations, and initiatives are currently underway with an aim to improving
gross profits, while maintaining sales increases."


    
    CIRCA ENTERPRISES INC.
    Consolidated Statements of Operations and Retained Earnings
    (Unaudited)
    (Amounts expressed in thousands of Canadian dollars,
    except per share amounts)
    -------------------------------------------------------------------------
                                      Three      Three       Six         Six
                                     months     months     months     months
                                      ended      ended      ended      ended
                                    June 30,   June 30,   June 30,   June 30,
                                       2008       2007       2008       2007
                                          $          $          $          $
    -------------------------------------------------------------------------

    SALES                             8,805      8,194     17,480     15,958

    COST OF SALES
      Direct costs                    7,318      6,452     14,172     12,528
      Depreciation and amortization     132        137        265        282
    -------------------------------------------------------------------------
                                      1,355      1,605      3,043      3,148

    EXPENSES
      General and administrative        831        891      1,688      1,844
      Marketing and selling             624        601      1,241      1,219
      Engineering                       108         56        196        130
      Depreciation and amortization      84         85        171        236
      Interest - current                 42         31         79         40
      Interest on long-term debt          -          5          -         18
      Foreign currency translation
       (gain) loss                     (106)       218       (141)       200
    -------------------------------------------------------------------------
                                      1,583      2,166      3,234      3,687
    -------------------------------------------------------------------------
    LOSS BEFORE INCOME TAXES           (228)      (282)      (191)      (539)


    PROVISION FOR INCOME TAXES
      Current                            80        191        143        217
      Future                           (151)      (140)      (252)      (233)
    -------------------------------------------------------------------------
                                        (71)        51       (109)       (16)
    -------------------------------------------------------------------------
    NET LOSS                           (157)      (333)       (82)      (523)

    RETAINED EARNINGS,
     BEGINNING OF PERIOD              7,014      8,385      6,939      8,575
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    RETAINED EARNINGS, END OF PERIOD  6,857      8,052      6,857      8,052
    -------------------------------------------------------------------------
    LOSS PER SHARE
      Basic and diluted               (0.02)     (0.04)     (0.01)     (0.06)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


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

                                                             June   December
                                                               30,        31,
                                                             2008       2007
                                                                $          $
    -------------------------------------------------------------------------
    ASSETS
    Current
      Cash                                                    307        198
      Accounts receivable                                   4,215      2,880
      Income taxes recoverable                                108        480
      Inventory                                             7,367      6,426
      Prepaid expenses                                        409        371
    -------------------------------------------------------------------------
                                                           12,406     10,355
    Property, plant and equipment                           3,835      3,964
    Deferred charges                                          642        652
    Intangible assets                                           6          8
    Future income taxes                                       184         80
    -------------------------------------------------------------------------
                                                           17,073     15,059
    -------------------------------------------------------------------------
    LIABILITIES
    Current
      Bank indebtedness                                     3,117      1,623
      Accounts payable and accrued liabilities              4,362      3,618
    -------------------------------------------------------------------------
                                                            7,479      5,241
    Future income taxes                                        42        190
    -------------------------------------------------------------------------
                                                            7,521      5,431
    -------------------------------------------------------------------------
    SHAREHOLDERS' EQUITY
      Share capital                                         2,695      2,689
      Retained earnings                                     6,857      6,939
    -------------------------------------------------------------------------
                                                            9,552      9,628
    -------------------------------------------------------------------------
                                                           17,073     15,059
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    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: Contact: 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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