Inscape Announces Second Quarter Results
December 12 2013 - 5:11PM
Marketwired
Inscape Announces Second Quarter Results
HOLLAND LANDING, ONTARIO--(Marketwired - Dec 12, 2013) - Inscape
(TSX:INQ) today announced its second quarter financial results
ended October 31, 2013.
The second quarter
of fiscal year 2014 had a net loss of $0.3 million or 2 cents per
share, compared to a breakeven result in the same quarter of last
year. The quarterly results included $0.4 million decrease in the
fair value of outstanding currency hedge contracts, which may not
reflect the actual financial results of those contracts when they
are settled in the future. The quarter would have a breakeven
result with the exclusion of the fair value adjustments. The first
six months of fiscal year 2014 had a net loss of $1.6 million or 11
cents per share, which included a decrease of $1.1 million in the
fair value of outstanding hedge contracts. The same period of last
year had a net income of $0.1 million or 1 cent per share. The
current year's financial results with the exclusion of the currency
hedge contract's fair value adjustments would be a net loss of $0.9
million, compared to last year's adjusted net income of $0.4
million.
Net income or loss
with the exclusion of these unrealized items is a non-GAAP measure,
which does not have any standardized meaning prescribed by GAAP and
is therefore unlikely to be comparable to similar measures
presented by other issuers.
"We had some
impressive sales with high profile clients during this period, and
benefited from sales that were 11.8% higher and operating costs
that were 6.5% lower than the first quarter. However, some large
projects with higher discounts negatively impacted profitability,"
said Rod Turgeon, President & CEO. "We are very encouraged by
the market response to our Inscape Bench, which has crystalized our
application approach. We continue to have a solid foundation in
place: excellent products, a strong balance sheet, and an
established strategy."
Sales of $19.3
million in the second quarter of fiscal 2014 increased 6.1% from
$18.2 million in the same quarter of last year due to higher
volumes in both the furniture and the walls segments. For the first
half of the current fiscal year, sales of $36.6 million were 6.8%
lower than the same period of last year. While the walls business
showed a strong year-over-year growth during the first six months
of this fiscal year, the year-to-date furniture sales were
adversely impacted by low volume during the first quarter of the
year.
Gross margin
percentage of the second quarter of fiscal year 2014 was 25.5%, a
decrease of 3.2 percentage points from 28.7% of the same quarter of
the previous year. The reduced gross margin percentage was mainly
due to lower net prices, partially offset by favorable overhead
absorption and production costs. Year-to-date gross margin
percentage was 24.9%, compared to 27% for the same period of last
year. The decrease in gross margin percentage was caused by lower
net prices, unfavourable overhead absorption, partially offset by
decrease in production costs.
Selling, general and
administrative expenses ("SG&A") in the second quarter of
fiscal year 2014 were 26.2% of sales, compared to 27.9% in the same
quarter of last year. SG&A in terms of dollars spent was at the
same level as last year at $5.1 million. Although the current
quarter's sales were higher than the same quarter of last year,
variable selling expenses were $0.2 million less than the previous
year because certain large projects were subject to lower
commission rates. The lower variable selling expenses were offset
by a minor increase in overhead expenses in the current quarter.
Year-to-date SG&A was 28.7% of sales, compared to 26.7% for the
same period of last year. The total dollar amount of SG&A at
$10.5 million was comparable to the amount incurred in last year.
Variable selling expense was $0.3 million less than last year due
to lower sales volume and commission rate for certain projects. The
savings were offset by $0.2 million unrealized decrease in the fair
value of interest-rate-sensitive short- term investments and a
small increase in other overhead expenses.
At the end of the
second quarter of fiscal year 2014, the Company was debt-free with
cash and cash equivalents at $6.4 million and liquid short-term
investments at $13.3 million.
In addition,
Chairman of the Board Madan Bhayana announces that Rod Turgeon is
stepping down from his position on the board, effective December
31, 2013 and appoints Brian Mirsky to the board. Mr. Mirsky is an
experienced Consumer Packaged Goods executive and CEO of
FreshChange Foods Group, a company that invests in food companies
across North America. Mr. Mirsky holds an MBA in Marketing from the
Schulich School of Management in Toronto and an undergraduate
degree in Economics from the University of Toronto.
Inscape Corporation |
|
Summary of Consolidated Financial Results |
|
(Unaudited) (in thousands except EPS) |
|
|
|
|
|
Three Months Ended October 31, |
|
|
|
|
|
2013 |
|
|
2012 |
|
Change |
|
|
|
Sales |
$ |
19,323 |
|
$ |
18,210 |
|
6.1 |
% |
Gross profit |
|
4,922 |
|
|
5,229 |
|
-5.9 |
% |
Selling, general & administrative expenses |
|
5,072 |
|
|
5,088 |
|
-0.3 |
% |
Unrealized (gain) loss on foreign exchange |
|
(99 |
) |
|
18 |
|
|
|
Decrease in fair value of derivatives |
|
370 |
|
|
228 |
|
|
|
Investment income |
|
(91 |
) |
|
(71 |
) |
|
|
Loss before taxes |
|
(330 |
) |
|
(34 |
) |
|
|
Income taxes |
|
(74 |
) |
|
(94 |
) |
|
|
Net (loss ) income |
$ |
(256 |
) |
$ |
60 |
|
|
|
|
|
Basic earnings per share |
$ |
(0.02 |
) |
$ |
- |
|
|
|
|
|
Weighted average number of shares (in thousands) |
|
|
|
|
|
|
|
|
for basic EPS calculation |
|
14,373 |
|
|
14,376 |
|
|
|
for diluted EPS calculation |
|
14,381 |
|
|
14,471 |
|
|
|
|
|
|
|
Six Months Ended October 31, |
|
|
|
|
|
2013 |
|
|
2012 |
|
Change |
|
|
|
Sales |
$ |
36,611 |
|
$ |
39,277 |
|
-6.8 |
% |
Gross profit |
|
9,134 |
|
|
10,618 |
|
-14.0 |
% |
Selling, general & administrative expenses |
|
10,499 |
|
|
10,473 |
|
0.2 |
% |
Unrealized gain on foreign exchange |
|
(88 |
) |
|
(24 |
) |
|
|
Decrease in fair value of derivatives |
|
1,120 |
|
|
405 |
|
|
|
Investment income |
|
(190 |
) |
|
(191 |
) |
|
|
Loss before taxes |
|
(2,207 |
) |
|
(45 |
) |
|
|
Income taxes |
|
(568 |
) |
|
(161 |
) |
|
|
Net (loss) income |
$ |
(1,639 |
) |
$ |
116 |
|
|
|
|
|
Basic and diluted earnings per share |
$ |
(0.11 |
) |
$ |
0.01 |
|
|
|
|
|
Weighted average number of shares (in thousands) |
|
|
|
|
|
|
|
|
for basic EPS calculation |
|
14,373 |
|
|
14,377 |
|
|
|
for diluted EPS calculation |
|
14,381 |
|
|
14,434 |
|
|
|
Financial
Statements
http://media3.marketwire.com/docs/917575.pdf.
Second Quarter Call
Details
Inscape will host a
conference call at 8:30 a.m. on Friday, December 13, 2013 to
discuss the Company's quarterly results. To participate, please
call 1-800-743-4304. A replay of the conference call will also be
available from Friday, December 13, 2013 after 10:30 a.m. until
midnight on December 20, 2013. To access the rebroadcast, please
dial 1-800-558-5253 (Reservation Number 21688314).
Forward-looking
Statements
Certain of the above
statements are forward-looking statements that involve risks and
uncertainties. Actual results could differ materially as a result
of many factors including, but not limited to, further changes in
market conditions and changes or delays in anticipated product
demand. In addition, future results may also differ materially as a
result of many factors, including: fluctuations in the Company's
operating results due to product demand arising from competitive
and general economic and business conditions in North America;
length of sales cycles; significant fluctuations in international
exchange rates, particularly the U.S. dollar exchange rate;
restrictions in access to the U.S. market; changes in the Company's
markets, including technology changes and competitive new product
introductions; pricing pressures; dependence on key personnel; and
other factors set forth in the Company's Ontario Securities
Commission reports and filings.
ABOUT INSCAPE
Inscape makes smart
workspaces. For over a century, we have collaborated with our
clients to provide customized solutions based on their individual
needs. Our meticulously engineered system, storage and wall
products provide unparalleled flexibility to create unique
applications at a lower cost of ownership. Easy reconfiguration and
seamless integration with other products means our smart
applications will work today and tomorrow. And they look
fabulous.
For more
information, visit www.inscapesolutions.com.
Inscape CorporationRod TurgeonPresident and Chief Executive
Officer905 836 7676905 836 5037www.inscapesolutions.com
INSCAPE (TSX:INQ)
Historical Stock Chart
From Jun 2024 to Jul 2024
INSCAPE (TSX:INQ)
Historical Stock Chart
From Jul 2023 to Jul 2024