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Circa Reports Stronger Sales and Operating results for the Second Quarter Ended June 30, 2018

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Circa Reports Stronger Sales and Operating results for the Second Quarter Ended June 30, 2018

Canada NewsWire

CALGARY, Aug. 9, 2018 /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, 2018.

Circa Enterprises Inc. (CNW Group/Circa Enterprises Inc.)

Summary of second quarter operating results:

  • Q2 2018 consolidated sales of $7.6 million, representing a 14.0% increase over the Q2 2017 sales of $6.6 million
  • Profit for the period from continuing operations for Q2 2018 of $449,000, or $0.05 per share compared to profit from continuing operations of $223,000, or $0.02 per share for Q2 2017
  • EBITDA of $755,000 for Q2 2018 compared to EBITDA of $384,000 for Q2 2017 (see below for explanation and calculation of EBITDA)
  • Working capital of $7.8 million

Summary of year-to date operating results:

  • Consolidated sales of $14.9 million for the six months ended June 30, 2018, an increase of 23% compared to sales of $12.1 million for the six months ended June 30, 2017
  • Profit for the period from operations for the six months ended June 30, 2018 of $779,000, being $0.08 per share compared to profit for the period from operations of $273,000, or $0.03 per share for the same period in 2017
  • EBITDA of $1.4 million for the six months ended June 30, 2018 compared to EBITDA of $462,000 for the six months ended June 30, 2017 (see below for explanation and calculation of EBITDA)

EBITDA is earnings before interest, taxes, depreciation and amortization. EBITDA is a non-IFRS financial measures and does 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 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 comprehensive income determined in accordance with IFRS as an indicator of the Company's financial performance. EBITDA is calculated by the Company as follows:







(unaudited)
Six months

30 June 2018

(unaudited)
Six months

30 June 2017

(unaudited)
Three months

30 June 2018

(unaudited)
Three months

30 June 2017


$000's

$000's

$000's

$000's

Profit for the period from operations

779

273

449

223

Income taxes

196

79

106

106

Interest

45

-

23

-

Depreciation and amortization

411

110

177

55

EBITDA

1,431

462

755

384

 

Circa's consolidated sales in the second quarter of 2018 were $7.6 million -- a $1.0 million or 14.0% increase over the second quarter in 2017. Telecom segment sales increased $0.6 million overall as the Company recorded $0.9 million of sales from the Guardian Telecom product line (which was acquired in the third quarter of 2017) plus growth from the cable and connectivity products of $0.1 million on stronger OEM wiring harness activity, offset by a decline in lightening and surge protection products for copper-based infrastructure systems. Sales in the Circa Metals segment were up $0.3 million on strong OEM custom sales activity and market share gains for Hydel branded sales in the quarter, compared to the same period in 2018.

As a result of the strong second quarter sales, the Company posted after tax profit of $449,000 in the second quarter of 2018 compared to profit of $223,000 in the second quarter of the previous year. This earnings improvement was primarily due to revenue growth from the Guardian acquisition, increased sales in Metals and improved gross margins from the completed integration of the Guardian acquisition and as fixed costs are spread over greater sales volume. Selling, general and administrative expenses increased in the Telecom segment as the Company absorbed the sales and administrative expenses of the Guardian Telecom business, including a non-cash amortization charge associated with the acquisition. The Company relaunched its Guardian Telecom brand with a new website and other promotional materials in the quarter to support its revenue growth.

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

"The Company is pleased to report another strong quarter with both operating divisions achieving growth on the top line and bottom line. Since the acquisition of Guardian Telecom a year ago, we have strengthened our Telecom division with a solid product line that has been accretive to earnings and that can drive future growth. We recently relaunched the Guardian Telecom brand with a modern new logo and website to bolster our image and support our sales initiatives. At our Metal's division, Hydel branded sales are growing and gaining market share, with revenues up 11% year-to-date from a combination of new markets in the west, new meter socket products and new sales channels."


CIRCA ENTERPRISES INC.





Condensed Consolidated Statement of Comprehensive Income










Unaudited






Six months
ended

30 Jun 2018

Six months

 ended

30 Jun 2017

Three months
ended

30 Jun 2018

Three months

 ended

30 Jun 2017


$000's

$000's

$000's

$000's






Sales

14,858

12,117

7,560

6,632

Freight

368

329

182

178

Net sales

14,490

11,788

7,378

6,454

Cost of sales

10,011

8,824

5,097

4,722

Gross profit

4,479

2,964

2,281

1,732

Selling, general and administrative
expenses

 

3,450

2,612

1,693

1,403

Operating profit

1,029

352

588

329

Loss on disposal of assets

9

-

10

-

Finance costs

45

-

23

-

Profit before tax

975

352

555

329

Income tax expense

196

79

106

106

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

779

273

449

223

Other comprehensive income





Exchange differences on translating
foreign operations, net of tax

128

78

56

79

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

907

195

505

144






Earnings per share (in $'s)





Basic

0.08

0.03

0.05

0.02

Diluted

0.07

0.03

0.04

0.02

 

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.

View original content with multimedia: http://www.newswire.ca/en/releases/archive/August2018/09/c4696.html

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