Circa reports sales and operating results for the first quarter ended March 31, 2011

CALGARY, May 19 /CNW/ - 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 first quarter ended March 31, 2011.

Summary of first quarter operating results:

  • Consolidated sales of $5.6 million, representing a 6.3% increase compared to Q1 2010 sales of $5.3 million
  • Profit from continuing operations for the first quarter of 2011 of $76,000 as compared to $65,000 for Q1 2010
  • EBITDA of $0.2 million for the quarter compared to $0.2 million for Q1 2010 (see below for explanation and calculation of EBITDA)
  • Adjusted EBITDA of $0.3 million for the quarter compared to $0.2 million for Q1 2010 (see below for explanation and calculation of Adjusted EBITDA)

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:

     
  (unaudited)
Three months ended
31 March 2011
(unaudited)
Three months ended
31 March 2010
  $000's $000's
Profit for the period from continuing operations 76 65
Income taxes 33 42
Interest 6 18
Depreciation and amortization 95 112
EBITDA 210 237
Non-recurring severance charge 118 -
Adjusted EBITDA 328 237

Circa's consolidated sales in the first quarter of 2011 were $5.6 million -- a $0.3 million or 6.3% increase over the same period in 2010 -- the improvement in sales was a result of an increase in the Circa Metals segment and was partially offset by a decrease in the surge protection segment. The increase in Circa Metals was the result of strong demand and an intensified sales effort combined with increased efficiency and capacity in Circa Metals and the ability to take on more orders from its large customers. The decline in the surge protection business was due to lower orders from the segment's largest customer and was compounded by the strengthening of the Canadian dollar, relative to the U.S. dollar when compared to the prior year.

The Company's gross profit, defined as sales less cost of sales, increased along with sales in the first quarter of 2011 to $1.4 million from $1.2 million in the prior year. Gross profit as a percent of sales improved slightly as higher sales tend to generate higher margins due to the impact of fixed costs within business. Operating profit decreased slightly compared to the prior year as the Company recorded higher selling, general and administrative expenses as the Company put more resources towards expanding its markets and boosting sales.  In addition, the Company recorded a large severance pay out in the quarter that was recorded in selling, general and administrative expenses.

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

"Circa is continuing its path towards achieving sustainable profits and consistent financial results. The Company has begun to focus more resources on top line revenue growth while continuing to improve and refine its operations. Management is confident in the fundamentals of the business and the ability of its people to continue to deliver quality products, remain competitive and generate solid financial results to its shareholders."

CIRCA ENTERPRISES INC.

Consolidated statement of comprehensive income

       
    (unaudited)
Three months
ended
31 March 2011
(unaudited)
Three months
ended
31 March 2010
    $000's $000's
       
Revenue   5,607 5,271
Cost of sales   (4,235) (4,090)
Gross profit   1,372 1,181
Selling, general and administrative expenses   (1,257) (1,056)
Operating profit   115 125
Finance costs   (6) (18)
Profit before tax   109 107
Income tax expense   (33) (42)
Profit for the period from continuing operations attributable to owners of the Company   76 65
Other comprehensive income:      
Exchange differences on translating foreign operations, net of tax   (70) 9
Total comprehensive income for the period attributable to owners of the Company   6 74
       
Earnings per share (in $'s)      
Basic and diluted   0.01 0.01

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 first quarter 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.

For further information:

Mr. Ivan Smith                                 
President and CEO                            
Circa Enterprises Inc.                       
(403) 258-2011                          
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mr. Cory Tamagi
VP Finance and CFO
Circa Enterprises Inc.
(403) 258-2011
                                       

E-Mail:  investor@circaent.com
Website:  www.circaent.com

 


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