CTO Circa Enterprises Inc

CALGARY, March 13, 2019 /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, 2018.

Summary of fourth quarter operating results:

• Q4 2018 consolidated sales of $6.8 million, representing a 20.0% decrease over the Q4 2017 sales of $8.5 million primarily due to timing of large orders at the end of 2017
  
  
• Profit from continuing operations for Q4 2018 of $233,000, or $0.02 per share compared to profit from continuing operations of $379,000, or $0.04 per share for Q4 2017
  
  
• EBITDA of $413,000 for Q4 2018 compared to EBITDA of $952,000 for Q4 2017 (see below for explanation and calculation of EBITDA)
  
  
• Declared a $0.06 per share dividend

Summary of fiscal year operating results:

• Consolidated sales of $29.9 million for the fiscal year ended December 31, 2018, a 6.3% increase over the 2017 sales of $28.2 million
  
  
• Profit from operations for the year of $1,299,000, being $0.13 per share compared to profit from operations of $864,000 or $0.09 per share for the 2017 fiscal year
  
  
• EBITDA of $2.5 million in 2018 compared to EBITDA of $2.2 million for the 2017 fiscal year (see below for explanation and calculation of Adjusted 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:

Consolidated sales for the fourth quarter of 2018 were $6.8 million; a $1.7 million or 20.0% decrease compared to the same quarter in 2017. Sales for the full year increased 6.3%, from $28.2 million in 2017 to $29.9 million in 2018. Sales decreased in the Telecom segment in Q4 2018 compared to Q4 2017. The prior year had unusually high sales in the fourth quarter as the Company was working down a sizeable backlog from the Guardian acquisition. Sales of the Company's surge protection products also saw a decline consistent with the trend from lower demand as the shift away from copper-based technology continued. Sales in the Metals segment were down and represented normalized levels. There were exceptionally high Metals segment sales in Q4 2017 attributable to one-time orders related to hurricane damaged infrastructure in the U.S. and Caribbean. As a result, sale decreased from $5.3 million in Q4 2017 to $4.5 million in Q4 2018.

The Company posted after tax profit of $233,000 in the fourth quarter of 2018 compared to $379,000 in the fourth quarter of 2018. For the full fiscal year, the Company recorded a 50.3% increase in profit to $1,299,000 compared to $864,000 in 2017. This earnings improvement was driven by sales growth and margin improvement, partially offset by a full year of selling, general and administrative costs that the Company absorbed with the facilities, operations, personnel and infrastructure of Guardian Telecom.

Grant Reeves, Circa's President and Chief Executive Officer, stated:
"We are very pleased with our fiscal year performance that consolidated gains from the prior year's acquisition of Guardian Telecom and the continued share growth in our Hydel brand-Metals segment. The Company incurred higher raw material costs in the 4Q, primarily due to steel related tariffs, that impacted profitability which was addressed with a price increase effective January 2019. The Company is well positioned to continue growth through its existing brands and is aggressively expanding our geographic coverage, introducing new products and strengthening our sales team."

CIRCA ENTERPRISES INC.
Consolidated Statement of Comprehensive Income

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.