CTO Circa Enterprises Inc

CALGARY, Nov. 4, 2014 /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 third quarter ended September 30, 2014 and the declaration of a special cash dividend.

OPERATING RESULTS

Summary of third quarter operating results:

• Q3 2014 consolidated sales of $7.0 million, representing a 1.9% decrease compared to Q3 2013 sales of $7.1 million
• Profit for the period from operations for Q3 2014 of $394,000 compared to profit from continuing operations of $455,000 for Q3 2013
• Earnings per share of $0.04 for Q3 2014 compared to earnings per share of $0.05 in Q3 2013
• EBITDA of $551,000 for Q3 2014 compared to EBITDA of $680,000 for Q3 2013 (see below for explanation and calculation of EBITDA)
• Working capital of $8.3 million, including $1.7 million in cash and no outstanding debt at September 30, 2014

Summary of year-to date operating results:

• Consolidated sales up 23.4% to $21.4 million for the nine months ended September 30, 2014, compared to $17.3 million for the nine months ended September 30, 2013
• Profit for the period from operations for the nine months ended September 30, 2014 of $985,000, compared to profit for the period of $429,000 for the same period in 2013
• EBITDA of $1,527,000 for the nine month period ended September 30, 2014, compared to EBITDA of $793,000 for the same period in 2014

EBITDA is earnings before interest, taxes, depreciation and amortization.  EBITDA is a non-IFRS financial measure and does not have any standardized meaning prescribed by International Financial Reporting Standards and, therefore, may not 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 third quarter of 2014 were $7.0 million, compared to $7.1 million in the same period in 2013. Third quarter revenue growth year over year in Circa Metals of $0.5 million was due to both custom fabrication products and Hydel brand products in Western Canada and Maritimes.  The Telecom segment reported a decline from a year ago of $0.6 million due to less demand from its US customer base and the conclusion of an underlying OEM project.

The revenue decline and product mix for the third quarter resulted in slightly lower gross margins that produced $0.1 million less operating profit million from the same period a year ago. As a result, the Company earned EBITDA of $551,000, compared to EBITDA of $680,000 in the third quarter of 2013.  Total comprehensive income increased by $84,000; from a profit $433,000 in Q3 2013 to $517,000 in Q3 2014.  The large increase in comprehensive income is attributed to exchange differences on the translation of foreign currency.

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

"I am pleased with the improvements in our Metals business as a result of increased revenue and operating effectiveness. Demand for Telecom products declined, as expected, as we satisfied our OEM customer's requirements for an underlying project.  As a result of weak demand for the remaining Telecom products, management is taking steps to enhance profitability. On a consolidated basis the Company posted solid results for the third quarter and first nine months of the year as a result of Telecom OEM demand and the Metals business. Given the strength of our business, we are pleased to declare a special dividend.  We continue to be actively pursuing strategic additions to our portfolio as a means to grow revenue and earnings."

DECLARATION OF SPECIAL DIVIDEND

The Company announced today that its Board of Directors has declared a special cash dividend of $0.05 per share on its common shares payable December 15, 2014 to shareholders of record at the close of business December 2, 2014.  The Dividend is deemed to be an eligible dividend for purposes of the Income Tax Act (Canada).

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.