Circa Reports Sales and Operating results for the First Quarter Ended March
31, 2010

CALGARY, May 18 /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 first quarter ended March 31, 2010.

    
    Summary of first quarter operating results:

    -   Consolidated sales of $5.3 million, representing a 12.4% decrease
        compared to Q1 2009 sales of $6.0 million
    -   Net income of $0.1 million or $0.01 per share in the first quarter of
        2010 as compared to a loss of $0.6 million or $0.07 per share in
        Q1 2009
    -   Adjusted EBITDA of $0.2 million for the quarter compared to
        ($0.7 million) for Q1 2009 (see below for explanation and calculation
        of Adjusted EBITDA)
    

Adjusted EBITDA is earnings before interest, taxes, depreciation and amortization and is adjusted for other non-recurring items and non-cash items, including asset impairment charges and restructuring costs. Adjusted EBITDA is a non-GAAP financial measure and does not have any standardized meaning prescribed by Canadian generally accepted accounting principles and is, therefore, unlikely to be comparable to similar measures presented by other issuers. Management believes that EBITDA is a useful supplemental measure, 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 should not be construed as an alternative to net earnings (loss) determined in accordance with GAAP as an indicator of the Company's financial performance. Adjusted EBITDA is calculated by the Company as follows:

    
    -------------------------------------------------------------------------
                                                    (unaudited)   (unaudited)
                                                       Quarter       Quarter
                                                         ended         ended
                                                      March 31,     March 31,
                                                          2010          2009
                                                             $             $
    -------------------------------------------------------------------------
    Net earnings (loss) and comprehensive
     earnings (loss)                                        72          (647)
    Provision for (recovery of) income taxes                66          (233)
    Interest                                                18            30
    Depreciation and amortization                           95           106
    Foreign currency translation loss (gain)               (35)          (41)
    Restructuring costs                                      -            58
    -------------------------------------------------------------------------
                                                           216          (727)
    -------------------------------------------------------------------------
    

Circa's consolidated sales in the first quarter of 2010 were $5.3 million - a $0.7 million or 12.4% decrease over the same period in 2009 - the decline in sales continued the trend experienced throughout 2009. The decrease was the result of lower sales in the Circa Metals business as there was a notable decline in the custom metals sales in the quarter compared to the prior year. The surge protection remained consistent in the quarter compared to the prior year.

The Company's gross profit, defined as sales less cost of sales, increased in the first quarter of 2010 to $1.2 million from $0.7 million in the prior year, despite the decline in sales. The impact of lower sales was more than offset by higher selling prices of products and lower labour, materials and overhead costs. The cost reductions were the result of the Company's 2009 restructuring efforts, which involved streamlining operations, reductions in the cost of certain raw materials, moving product manufacturing offshore and the consolidating operations. The Company was able to achieve positive earnings from operations during the quarter as a result of these restructuring changes and net earnings improved from a loss of $0.6 million in Q1 2009 to net earnings of $0.1 million. The Company was able to boost Adjusted EBITDA by $0.9 million, from $(0.7 million) in Q1 2009 to $0.2 million in Q1 2010.

Circa's President and Chief Executive Officer, Ivan Smith stated: "While consolidated sales for the quarter ended March 31, 2010 are lower than those achieved in the first quarter of 2009, the Company's profits are up. The Company has benefitted from a reduction in its cost structure and is hopeful that it can increase its sales and see a benefit from a rebound in the economy."

    
    CIRCA ENTERPRISES INC.
    Consolidated Balance Sheets
    (000's of Canadian dollars)
    Unaudited

    -------------------------------------------------------------------------
    As at                                             March 31,  December 31,
                                                          2010          2009
                                                             $             $
    -------------------------------------------------------------------------
    ASSETS
    Current
      Cash                                                 312           350
      Accounts receivable                                2,941         3,588
      Income taxes recoverable                              32            58
      Inventory                                          6,086         5,842
      Prepaid expenses                                     284           295
    -------------------------------------------------------------------------
                                                         9,655        10,133
    Property, plant and equipment                        1,026         1,086
    Assets held for sale                                   105           105
    Deferred charges                                       265           286
    Intangible assets                                       20            17
    Future income taxes                                    755           782
    -------------------------------------------------------------------------
                                                        11,826        12,409
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES
    Current
      Bank indebtedness                                  3,123         3,391
      Accounts payable and accrued liabilities           2,097         2,476
    -------------------------------------------------------------------------
                                                         5,220         5,867
    Future income taxes                                     30            38
    -------------------------------------------------------------------------
                                                         5,250         5,905
    -------------------------------------------------------------------------
    SHAREHOLDERS' EQUITY
      Share capital                                      2,710         2,710
      Contributed surplus                                    2             2
      Retained earnings                                  3,864         3,792
    -------------------------------------------------------------------------
                                                         6,576         6,504
    -------------------------------------------------------------------------
                                                        11,826        12,409
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    CIRCA ENTERPRISES INC.
    Consolidated Statements Operations and Retained Earnings
    (000's of Canadian dollars, except per share amounts)
    Unaudited

    -------------------------------------------------------------------------
                                                  Three months  Three months
                                                         ended         ended
                                                      March 31,     March 31,
                                                          2010          2009
                                                             $             $
    -------------------------------------------------------------------------

    SALES                                                5,271         6,019
    COST OF SALES
      Direct costs                                       4,082         5,236
      Depreciation and amortization                         38            45
    -------------------------------------------------------------------------
                                                         1,151           738
    -------------------------------------------------------------------------
    EXPENSES
      Selling, general and administrative                  973         1,510
      Depreciation and amortization                         57            61
      Restructuring costs                                    -            58
      Interest                                              18            30
      Foreign currency translation gain                    (35)          (41)
    -------------------------------------------------------------------------
                                                         1,013         1,618
    -------------------------------------------------------------------------
    EARNINGS (LOSS) BEFORE INCOME TAXES                    138          (880)
    -------------------------------------------------------------------------
    PROVISION FOR (RECOVERY OF) INCOME TAXES
      Current                                               47            40
      Future                                                19          (273)
    -------------------------------------------------------------------------
                                                            66          (233)
    -------------------------------------------------------------------------
    NET EARNINGS (LOSS) AND COMPREHENSIVE
     EARNINGS (LOSS)                                        72          (647)
    RETAINED EARNINGS, BEGINNING OF PERIOD               3,792         5,023
    -------------------------------------------------------------------------
    RETAINED EARNINGS, END OF PERIOD                     3,864         4,376
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    EARNINGS (LOSS) PER SHARE
    Basic and diluted                                     0.01         (0.07)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    CIRCA ENTERPRISES INC.
    Consolidated Statements of Cash Flows
    (000's of Canadian dollars)
    Unaudited

    -------------------------------------------------------------------------
                                                  Three months  Three months
                                                         ended         ended
                                                      March 31,     March 31,
                                                          2010          2009
                                                             $             $
    -------------------------------------------------------------------------

    CASH FLOWS RELATED TO THE FOLLOWING ACTIVITIES:
    OPERATING
      Net earnings                                          72          (647)
      Adjustments for:
        Depreciation and amortization                       95           106
        Loss on disposal of assets                           -            (2)
        Future income taxes                                 19          (273)
    -------------------------------------------------------------------------
                                                           186          (816)
    Changes in non-cash working capital                     47           720
    -------------------------------------------------------------------------
                                                           233           (96)
    -------------------------------------------------------------------------
    FINANCING
      (Decrease) increase in bank indebtedness            (268)          115
    -------------------------------------------------------------------------

    INVESTING
      Purchase of property, plant and equipment            (14)          (25)
      Proceeds from sale of property, plant
       and equipment                                         -             6
      Additions to deferred charges                          -           (32)
      Additions to intangible assets                        (3)           (5)
      Changes in non-cash working capital                   14           (22)
    -------------------------------------------------------------------------
                                                            (3)          (78)
    -------------------------------------------------------------------------
    NET DECREASE IN CASH                                   (38)          (59)
    CASH, BEGINNING OF PERIOD                              350           255
    -------------------------------------------------------------------------
    CASH, END OF PERIOD                                    312           196
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

Circa Enterprises Inc. is a public company with offices 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 and the Company's website at www.circaent.com.

%SEDAR: 00002951E

SOURCE Circa Enterprises Inc.

For further information: 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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