Circa Reports Sales and Operating results for the Fourth Quarter and Fiscal
Year Ended December 31, 2009
CALGARY, March 19 /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 fourth quarter and year ended December 31, 2009.
Summary of fourth quarter operating results:
- Consolidated sales of $6.4 million, representing a 21.6% decrease
compared to Q4 2008 sales of $8.2 million
- Adjusted EBITDA of $0.6 million for the quarter compared to ($0.4
million) for Q4 2008 (see below for explanation and calculation of
Adjusted EBITDA)
- Net loss of $0.2 million or $0.02 per share in the fourth quarter of
2009 as compared to a loss of $1.6 million or $0.17 per share in Q4
2008. The net loss includes a valuation allowance of $0.2 million
recorded in Q4 2009 on the Company's future tax asset -- in the
fourth quarter of 2008, the Company recorded an after tax impairment
charge of $1.8 million
- Cash flow from operations in Q4 2009 of $0.5 million compared to cash
from operations in Q4 2008 of ($0.1 million)
Summary of fiscal year operating results:
- Consolidated sales of $26.3 million, representing a 23.6% decrease
compared to 2008 sales of $34.4 million
- Adjusted EBITDA of $1.2 million, compared to ($0.3 million) for the
2008 fiscal year
- Net loss of $1.2 million or $0.13 per share in 2009 as compared to a
loss of $1.9 million or $0.20 per share for the 2008 fiscal year. The
net loss includes a valuation allowance of $0.2 million recorded in
2009 on the Company's future tax asset -- in 2008, the Company
recorded an after tax impairment charge of $1.8 million
- Cash flow from operations in 2009 of $0.5 million compared to cash
from operations in Q4 2008 of ($1.5 million)
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:
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(unaudited) (unaudited) (unaudited) (unaudited)
Quarter Quarter Year Year
ended ended ended ended
Dec 31, 2009 Dec 31, 2008 Dec 31, 2009 Dec 31, 2008
$ $ $ $
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Net loss and
comprehensive loss (161) (1,648) (1,231) (1,916)
Provision for (recovery
of) income taxes 447 (904) 602 (1,117)
Interest 21 43 103 168
Depreciation and
amortization 97 217 432 864
Foreign currency
translation loss (gain) 62 (547) 516 (707)
Non-cash impairment
write down - 2,425 - 2,425
Restructuring costs 158 - 734 -
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624 (414) 1,156 (283)
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Consolidated sales for the fourth quarter of 2009 were $6.4 million -- a $1.8 million or 21.6% decrease over the same period in 2008 -- and continued the trend of weak sales in 2009 as compared to 2008. The decrease resulted from lower sales in both of the Company's business segments (surge protection and Circa Metals) and across all product lines. For the year ended December 31, 2009, consolidated sales of $26.3 million represented a decrease of $8.1 million or 23.5% over 2008. Decreased sales were experienced in both business segments (surge protection and Circa Metals); however, the surge protection business sales saw a sharper decline.
Circa's gross profit, defined as sales less cost of sales, for 2009 increased to $5.8 million from $5.6 million in the prior year, despite the significant decline in sales. The impact of lower sales were more than offset by higher selling prices of products and lower labour, materials and overhead costs. Cost reductions were the result of restructuring efforts, which involved a reduction in the number of employees, negotiated reductions in the cost of certain raw materials, increased reliance upon offshore manufacturing and the consolidation of certain Circa Metals operations.
CIRCA ENTERPRISES INC.
Consolidated Balance Sheets
(000's of Canadian dollars)
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As at December 31 2009 2008
$ $
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ASSETS
Current
Cash 350 520
Accounts receivable 3,588 3,874
Income taxes recoverable 58 176
Inventory 5,842 7,413
Prepaid expenses 295 280
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10,133 12,263
Property, plant and equipment 1,086 1,545
Assets held for sale 105 -
Deferred charges 286 334
Intangible assets 17 5
Future income taxes 782 1,305
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12,409 15,452
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LIABILITIES
Current
Bank indebtedness 3,391 3,930
Accounts payable and accrued liabilities 2,476 3,745
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5,867 7,675
Future income taxes 38 53
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5,905 7,728
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SHAREHOLDERS' EQUITY
Share capital 2,710 2,699
Contributed surplus 2 2
Retained earnings 3,792 5,023
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6,504 7,724
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12,409 15,452
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CIRCA ENTERPRISES INC.
Consolidated Statements of Loss and Comprehensive Loss and Retained
Earnings
(000's of Canadian dollars, except per share amounts)
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Years ended December 31 2009 2008
$ $
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SALES 26,302 34,417
COST OF SALES
Direct costs 20,373 28,334
Depreciation and amortization 168 533
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5,761 5,550
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EXPENSES
Selling, general and administrative 4,720 6,353
Depreciation and amortization 264 331
Restructuring costs 734 -
Interest 103 168
Property, plant and equipment impairment charge - 2,152
Deferred charges impairment charge - 273
Loss on disposal of assets 53 13
Foreign currency translation loss (gain) 516 (707)
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6,390 8,583
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LOSS BEFORE INCOME TAXES (629) (3,033)
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PROVISION FOR (RECOVERY OF) INCOME TAXES
Current 94 245
Future 508 (1,362)
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602 (1,117)
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NET LOSS AND COMPREHENSIVE LOSS (1,231) (1,916)
RETAINED EARNINGS, BEGINNING OF YEAR 5,023 6,939
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RETAINED EARNINGS, END OF YEAR 3,792 5,023
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LOSS PER SHARE
Basic and diluted (0.13) (0.20)
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CIRCA ENTERPRISES INC.
Consolidated Statements of Cash Flows
(000's of Canadian dollars)
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Years ended December 31 2009 2008
$ $
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CASH FLOWS RELATED TO THE FOLLOWING ACTIVITIES:
OPERATING
Net loss (1,231) (1,916)
Adjustments for:
Depreciation and amortization 432 864
Loss on disposal of assets 53 13
Property, plant and equipment impairment charge - 2,152
Deferred charges impairment charge - 273
Stock compensation expense - 2
Future income taxes 508 (1,362)
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(238) 26
Changes in non-cash working capital 715 (1,510)
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477 (1,484)
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FINANCING
Proceeds from issuance of share capital 11 10
(Decrease) increase in bank indebtedness (539) 2,307
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(528) 2,317
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INVESTING
Purchase of property, plant and equipment (47) (453)
Proceeds from sale of property, plant and equipment 6 1
Additions to deferred charges (40) (110)
Additions to intangible assets (14) -
Changes in non-cash working capital (24) 51
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(119) (511)
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NET (DECREASE) INCREASE IN CASH (170) 322
CASH, BEGINNING OF YEAR 520 198
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CASH, END OF YEAR 350 520
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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 audited annual 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
For further information: Mr. Ivan Smith, Interim President and CEO, Circa Enterprises Inc., (403) 258-2011; Mr. Cory Tamagi, VP Finance and CFO, Circa Enterprises Inc., (403) 258-2011, E-Mail: [email protected], Website: www.circaent.com
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