Circa Reports Sales and Operating Results for the Fourth Quarter and Fiscal Year Ended December 31, 2021
Calgary, Alberta–(Newsfile Corp. – March 10, 2022) – Circa Enterprises Inc. (TSXV: CTO) (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, 2021.
Summary of fourth quarter operating results:
- Q4 2021 sales of $9.9 million, an increase of $2.1 million or 27.7% from Q4 2020 sales of $7.8 million
- Net income and comprehensive income of $743,000 for Q4 2021, being $0.07 per share compared to net income and comprehensive income of $302,000 for Q4 2020, or $0.03 per share
- Q4 2021 EBITDA of $1.7 million, an increase of $0.8 million compared to Q4 2020 EBITDA of $0.9 million (see below for explanation and calculation of EBITDA)
- Q4 2021 EBITDAaL of $1.3 million, an increase of $0.6 million compared to EBITDAaL of $0.7 million for Q4 2020 (see below for explanation and calculation of EBITDAaL)
Summary of fiscal year operating results:
- Sales of $36.5 million for the fiscal year ended December 31, 2021, an increase of 20.0% compared to sales of $30.4 million for the fiscal year ended December 31, 2020
- Net income and comprehensive income for the fiscal year ended December 31, 2021 of $2.0 million, being $0.19 per share compared to net income and comprehensive income of $1.7 million, or $0.17 per share for the same period in 2020
- EBITDA of $5.1 million for 2021 compared to EBITDA of $4.1 million for 2020
- EBITDAaL of $3.9 million for 2021 compared to EBITDAaL of $3.2 million for 2020
EBITDA is earnings before interest, taxes, depreciation and amortization. EBITDAaL is earnings before interest, taxes, depreciation and amortization, adjusted for cash lease payments and therefore comparative EBITDA prior to the adoption of IFRS 16. EBITDA and EBITDAaL 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 EBITDAaL 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 EBITDAaL 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 EBITDAaL are calculated by the Company as follows:
| Year ended 31 Dec 2021 |
Year ended 31 Dec 2020 |
Three months 31 Dec 2021 |
Three months 31 Dec 2020 |
|||
| Unaudited | $000’s | $000’s | $000’s | $000’s | ||
| Profit for the period from operations | 1,953 | 1,673 | 743 | 302 | ||
| Income taxes | 634 | 625 | 251 | 158 | ||
| Interest | 258 | 120 | 74 | 31 | ||
| Depreciation and amortization | 2,228 | 1,710 | 588 | 442 | ||
| EBITDA | 5,073 | 4,128 | 1,656 | 933 | ||
| Cash lease payments | (1,179) | (962) | (336) | (238) | ||
| EBITDAaL | 3,894 | 3,166 | 1,320 | 695 |
Sales for Q4 2021 were $9.9 million — a $2.1 million or 27.7% increase compared to Q4 2020 on higher activity in both operating segments.
Metals segment sales increased $0.8 million to $6.1 million in Q4 2021, compared to $5.3 million in Q4 2020 due mainly to strong demand for Hydel metering products across Canada as well as higher custom metal sales.
Sales in the Telecom segment were up at $3.9 million in Q4 2021 compared to $2.5 million in the same quarter in 2020. The Guardian product line sales improved on higher run-rate business and was offset by lower international sales. Sales of surge protection products decreased in Q4 2021 when compared to Q4 2020 while the cable and connectivity line sales increased from higher activity in the local Calgary economy as pandemic-related restrictions eased and activity in the oil and gas sector improved. The Telecom segment sales also improved with the addition of the Westronic line which was acquired in May 2021.
Circa recorded higher selling, general and administrative expenses of $2.4 million in Q4 2021 compared to $1.9 million Q4 2020. The increase was mainly due to the acquisition of the Westronic business as noted above. The Company also recorded higher sales commissions in the Metals segment and increased non-cash amortization, relating to the Westronic acquisition.
The Company posted net income and comprehensive income of $743,000 in the fourth quarter of 2021 compared to $302,000 in the same quarter of 2020 as a result of the strong sales and operating margins.
Cory Tamagi, Circa’s President and Chief Executive Officer, stated:
“The results posted throughout 2021 are a continuation of the prior year’s trends, with excellent sales growth in the Metals segment and more modest Telecom activity from pandemic-related restrictions and delayed project work.
Circa posted after-tax earnings of $2.0 million or $0.19 per share on sales of $36.5 million for the year ended December 31, 2021. The strong earnings were largely due to the growth in demand of new electrical metering products, increased market share in the Metals segment, as well as the addition of the Westronic business which was acquired in the May 2021.
The Company is expecting to see continued strong demand for its products, but is facing supply chain challenges in all lines, particularly from overseas suppliers. Unusually long lead times, shortages of materials, as well as increased material and shipping cost across all product lines continues to limit production and order fulfillment. Our team is continually managing these issues with our customers and suppliers and we have invested in inventory in order to meet the demand.
I would like to thank our employees for allowing Circa to achieve these strong results over the past year in a difficult operating and economic environment. Our team continues to rise to the challenges.”
CIRCA ENTERPRISES INC.
Consolidated Statements of Income and Comprehensive Income
| For the years ended December 31 | 2021 | 2020 |
| $000’s | $000’s | |
| Sales | 36,485 | 30,395 |
| Freight | 752 | 730 |
| Net sales | 35,733 | 29,665 |
| Cost of sales | 23,769 | 20,253 |
| Gross profit | 11,964 | 9,412 |
| Selling, general and administrative expenses | 9,239 | 7,568 |
| Operating profit | 2,725 | 1,844 |
| Other income | 120 | 574 |
| Interest expense | (258) | (120) |
| Profit before tax | 2,587 | 2,298 |
| Income tax expense | 634 | 625 |
| Net income and comprehensive income | 1,953 | 1,673 |
| Earnings per share (in $’s) | ||
| Basic | 0.19 | 0.17 |
| Diluted | 0.18 | 0.16 |
Circa Enterprises Inc. is a public company with operations in Alberta and Ontario. 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.
Contact:
Mr. Cory Tamagi
President and CEO
Circa Enterprises Inc.
(403) 258-2011
Mrs. Angela Hulshof
VP Finance and CFO
Circa Enterprises Inc.
(403) 258-2011
E-Mail: investor@circaent.com
Website: www.circaent.com
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