Yahoo Finance
Filing
Feb. 25, 2019
2018 Q3 Data
Price: $1.20 Shares:10m, Cap: $12m
1.Business Information
(1) History
The company was founded by at 1985 and IPOed at 1988. Ivan Smith is among the original founder.
In the beginning, the company's major business is the surge protection product for telecom equipment. This is still its major business today. It was growing quite well in the 1990s and reached $24m in sales and close to $2m in profit by the year 2000.
At 2002, it started a new metal fabrication facility in Ontario. In 2003 Ivan sold his 20% share of the company to Jerry Zucker, a billionaire business person who is famous for taking over HBC company of Canada. Jerry acquired 46% of the company in total and installed two of his person on the board: Robert Johnston and Brice Sweatt. Ivan stepped down from the CEO role but remained on the board. Rick Schmidt who is the previous CFO took the new CEO role.
During the decade of the 2000s, the company's revenue continued growing but up and down a bit. It was profitable until 2007 and 2008, it suffered some losses.
At 2009, Ivan resumed the CEO role and did a restructuring of the company. Revenue down from $30m level to middle $20m level but became profitable again since 2010.
At 2013, Ivan resigned again from the CEO role again and Grant Reeves who is from Jerry's company took over as the new CEO. Later in 2015, Ivan quit the director role as well. I guess he left the company.
At July 2017, the company acquired Guardian Telecom for $3.5m. Guardian is also a telecom equipment maker, has around $5 to $6m in annual revenue. After one year of the acquisition, the acquisition seems worked pretty well.
(2) Major business.
1) Surge protection: This is its original business which is located in Calgary. Currently counts on around 40% of total sales.
2) Metal fabrication: 60% of sales.
(3) Debt and Credit Facility.
As of Q3 2018, there is $1m in debt.
(4) Employee numbers
(5) Industry comparison.
(6) Major events
2. Management
(1) Key person
Ivan Smith: He did a quite good job grow the company and later turn the company around in a difficult time.
Grant Reeves: He is the current CEO since 2013. Overall, the company managed well since then.
(2) Insider ownership
Jerry Zucker bought over 40% of the company at around 2004 and passed it to his wife after he dies. Now the shares are under his wife's name Anita Zucker. She is also a very active business person who was involved in HBC's management. However, she doesn't seem to involved with Circa. Maybe the company is too small for her.
Grant Reeves: Very few shares.
3. Financial data.
4. Valuation
(1) Currently, the company was traded less than 10 P/E. Just for the first 3Q, it generated around $1.4m in real income.
(2) The company paid a 5c dividend for several years and this year, it increased to 6c.
5. Risk
(1) It revenue relies on the telecom industry.
(2) The management owns very few shares although the Zucker family holds lots of shares.
6. Conclusion
The company is quite profitable through the years and the new acquisition worked well. Current price is quite cheap if it can remain current profitability.
7.Links
