Circa Reports Sales and Operating results for the Second Quarter Ended June 30, 2015

CALGARY, Aug. 6, 2015 /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, 2015.

Summary of second quarter operating results:

• Q2 2015 consolidated sales of $7.2 million, representing a 1.8% increase compared to Q2 2014 sales of $7.1 million
• Profit for the period from continuing operations for Q2 2015 of $178,000 compared to profit from continuing operations of $316,000 for Q2 2014
• Earnings per share of $0.02 for Q2 2015 compared to earnings per share of $0.03 in Q2 2014
• EBITDA of $306,000 for Q2 2015 compared to EBITDA of $346,000 for Q2 2014 (see below for explanation and calculation of EBITDA)
• Adjusted EBITDA of $546,000 for Q2 2015, compared to Adjusted EBITDA of $460,000 for Q2 2015 (see below for explanation and calculation of Adjusted EBITDA).
• Working capital of $8.5 million, including $1.0 million in cash and no outstanding debt at June 30, 2015

Summary of year-to date operating results:

• Consolidated sales of $12.3 million for the six months ended June 30, 2015, compared to sales of $14.4 million for the six months ended June 30, 2014
• Profit for the period from operations for the six months ended June 30, 2015 of $171,000, compared to profit for the period from operations of $591,000 for the same period in 2014
• EBITDA of $346,000 for the six month period ended June 30, 2015, compared to EBITDA of $976,000 for the same period in 2014
• Adjusted EBITDA of $704,000 for the six month period ended June 30, 2015 compared to Adjusted EBITDA of $999,000 for the six months ended June 30, 2014
  

EBITDA is earnings before interest, taxes, depreciation and amortization.  Adjusted EBITDA is earnings before interest, taxes, depreciation and amortization and is adjusted for exchange differences on the translation of foreign currency before tax. EBITDA and Adjusted EBITDA are a non-IFRS financial measures and do 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 and Adjusted EBITDA are useful supplemental measures, 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 and Adjusted 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 and Adjusted EBITDA are calculated by the Company as follows:

	(unaudited) Six months 30 June 2015	(unaudited) Six months 30 June 2014	(unaudited) Three months 30 June 2015	(unaudited) Three months 30 June 2014
	$000's	$000's	$000's	$000's
Profit for the period from operations	171	591	178	316
Income taxes	63	281	72	144
Interest	-	1	-	-
Depreciation and amortization	112	103	56	52
EBITDA	346	976	306	512
Other Comprehensive Income: Exchange differences on translating foreign operations, before tax	358	23	240	(52)
Adjusted EBITDA	704	999	546	460

Consolidated sales for the second quarter of 2015 were $7.2 million -- a  1.1% increase over the same period in 2014. The increase in sales is from the Metals segment, which saw a 7.5% increase in sales over the same period in 2014, due to an increase in orders of its Hydel branded products.  Telecom division sales were lower, although the strong U.S. dollar boosted top line sales to U.S. customers.

The Company's after tax profit of $178,000 compared to after tax profit of $316,000 in the second quarter of 2014, was due to exchange rate losses.  The weaker Canadian dollar negatively impacted the costs of purchased inventory from overseas suppliers and a less favourable product mix hampered profitability.  Total comprehensive income of $148,000 in Q2 2015 increased by $240,000; from a loss of $92,000 in Q2 2014.  The large increase in Other Comprehensive Income is attributable to currency exchange on the translation of the Company's U.S subsidiary.

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

"Circa is pleased to report strong demand for our products in the second quarter as sales initiatives improved sequentially over the first quarter. Our operating profit improved on greater revenue as expected, but was negatively impacted by rising costs for our U.S. dollar denominated purchases as the Canadian dollar weakened. On an Adjusted EBITDA basis that includes Other Comprehensive Income before tax, the Company earned $546,000, a 19% improvement over last year's second quarter."

CIRCA ENTERPRISES INC.
Consolidated Statements of Comprehensive Income
Unaudited
	Six months ended 30 June 2015	Six months ended 30 June 2014	Three months ended 30 June 2015	Three months  ended 30 June 2014
	$000's	$000's	$000's	$000's
Sales	12,290	14,384	7,185	7,058
Cost of sales	(9,701)	(11,177)	(5,724)	(5,426)
Gross profit	2,589	3,207	1,461	1,632
Selling, general and administrative expenses	(2,355)	(2,338)	(1,211)	(1,172)
Operating profit	234	869	250	460
Other income	-	4	-	-
Finance costs	-	(1)	-	-
Profit before tax	234	872	250	460
Income tax expense	(63)	(281)	(72)	(144)
Profit for the period from operations attributable to shareholders of the Company	171	591	178	316
Other comprehensive income:
Exchange differences on translating foreign operations, net of tax	404	25	148	(92)
Total comprehensive income for the period attributable to shareholders of the Company	575	616	326	224
Earnings per share (in $'s)
Basic and diluted	0.02	0.06	0.02	0.03

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.

Mr. Grant Reeves, President and CEO, Circa Enterprises Inc., [phone]; Mr. Cory Tamagi, VP Finance and CFO, Circa Enterprises Inc., [phone], E-Mail: [email protected], Website: www.circaent.com