Circa Reports Stronger Sales and Operating results for the Second Quarter Ended June 30, 2018
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.
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) (unaudited) (unaudited) (unaudited)
Six months Six months Three months Three months
30 June 2018 30 June 2017 30 June 2018 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
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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 Six months Three months Three months
ended ended
ended ended
30 Jun 2018 30 Jun 2018
30 Jun 2017 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 2,612 1,693 1,403
expenses
3,450
--- -----
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 779 273 449 223
attributable to shareholders of the
Company
Other comprehensive income
Exchange differences on translating 128 78 56 79
foreign operations, net of tax
------------------------------
Total comprehensive income for the 907 195 505 144
period attributable to shareholders of
the Company
===========
Earnings per share (in $'s)
--------------------------
Basic 0.08 0.03 0.05 0.02
Diluted 0.07 0.03 0.04 0.02
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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.
