Circa Reports Sales and Operating results for the Second Quarter Ended June 30, 2015

CALGARY, Aug. 6, 2015 /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 second quarter ended June 30, 2015.

Summary of second quarter operating results:

  • Q2 2015 consolidated sales of $7.2 million, representing a 1.8% increase compared to Q2 2014 sales of $7.1 million
  • Profit for the period from continuing operations for Q2 2015 of $178,000 compared to profit from continuing operations of $316,000 for Q2 2014
  • Earnings per share of $0.02 for Q2 2015 compared to earnings per share of $0.03 in Q2 2014
  • EBITDA of $306,000 for Q2 2015 compared to EBITDA of $346,000 for Q2 2014 (see below for explanation and calculation of EBITDA)
  • Adjusted EBITDA of $546,000 for Q2 2015, compared to Adjusted EBITDA of $460,000 for Q2 2015 (see below for explanation and calculation of Adjusted EBITDA).
  • Working capital of $8.5 million, including $1.0 million in cash and no outstanding debt at June 30, 2015

 

Summary of year-to date operating results:

  • Consolidated sales of $12.3 million for the six months ended June 30, 2015, compared to sales of $14.4 million for the six months ended June 30, 2014
  • Profit for the period from operations for the six months ended June 30, 2015 of $171,000, compared to profit for the period from operations of $591,000 for the same period in 2014
  • EBITDA of $346,000 for the six month period ended June 30, 2015, compared to EBITDA of $976,000 for the same period in 2014
  • Adjusted EBITDA of $704,000 for the six month period ended June 30, 2015 compared to Adjusted EBITDA of $999,000 for the six months ended June 30, 2014

 

EBITDA is earnings before interest, taxes, depreciation and amortization.  Adjusted EBITDA is earnings before interest, taxes, depreciation and amortization and is adjusted for exchange differences on the translation of foreign currency before tax. 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 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)
Six months

30 June 2015

(unaudited)
Six months

30 June 2014

(unaudited)
Three months

30 June 2015

(unaudited)
Three months

30 June 2014


$000's

$000's

$000's

$000's

Profit for the period from operations

171

591

178

316

Income taxes

63

281

72

144

Interest

-

1

-

-

Depreciation and amortization

112

103

56

52

EBITDA

346

976

306

512

Other Comprehensive Income:
Exchange differences on translating foreign operations, before tax

358

23

240

(52)

Adjusted EBITDA

704

999

546

460

 

Consolidated sales for the second quarter of 2015 were $7.2 million -- a  1.1% increase over the same period in 2014. The increase in sales is from the Metals segment, which saw a 7.5% increase in sales over the same period in 2014, due to an increase in orders of its Hydel branded products.  Telecom division sales were lower, although the strong U.S. dollar boosted top line sales to U.S. customers.

The Company's after tax profit of $178,000 compared to after tax profit of $316,000 in the second quarter of 2014, was due to exchange rate losses.  The weaker Canadian dollar negatively impacted the costs of purchased inventory from overseas suppliers and a less favourable product mix hampered profitability.  Total comprehensive income of $148,000 in Q2 2015 increased by $240,000; from a loss of $92,000 in Q2 2014.  The large increase in Other Comprehensive Income is attributable to currency exchange on the translation of the Company's U.S subsidiary.

Grant Reeves, Circa's President and Chief Executive Officer, stated:

"Circa is pleased to report strong demand for our products in the second quarter as sales initiatives improved sequentially over the first quarter. Our operating profit improved on greater revenue as expected, but was negatively impacted by rising costs for our U.S. dollar denominated purchases as the Canadian dollar weakened. On an Adjusted EBITDA basis that includes Other Comprehensive Income before tax, the Company earned $546,000, a 19% improvement over last year's second quarter."


CIRCA ENTERPRISES INC.





Consolidated Statements of Comprehensive Income










Unaudited






Six months

ended

30 June 2015

Six months

ended

30 June 2014

Three months

ended

30 June 2015

Three months

 ended

30 June 2014


$000's

$000's

$000's

$000's






Sales

12,290

14,384

7,185

7,058

Cost of sales

(9,701)

(11,177)

(5,724)

(5,426)

Gross profit

2,589

3,207

1,461

1,632

Selling, general and administrative expenses

(2,355)

(2,338)

(1,211)

(1,172)

Operating profit

234

869

250

460

Other income

-

4

-

-

Finance costs

-

(1)

-

-

Profit before tax

234

872

250

460

Income tax expense

(63)

(281)

(72)

(144)

Profit for the period from operations attributable to shareholders of the Company

171

591

178

316

Other comprehensive income:





Exchange differences on translating foreign operations, net of tax

404

25

148

(92)

Total comprehensive income for the period attributable to shareholders of the Company

575

616

326

224






Earnings per share (in $'s)





Basic and diluted

0.02

0.06

0.02

0.03

 

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 quarterly 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. Grant Reeves, 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

RELATED LINKS
http://www.circatel.com

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