News Feed Item

Inscape Announces Fourth Quarter and Annual Results

HOLLAND LANDING, ONTARIO -- (Marketwired) -- 06/26/14 -- Inscape (TSX:INQ) today announced its fourth quarter and fiscal year 2014 annual financial results ended April 30, 2014.

Fiscal year 2014 was a challenging year for the Company. The fourth quarter of fiscal year 2014 had a net loss of $1.5 million or 10 cents per share. The same quarter of last year had a net loss of $1.4 million or 10 cents per share. On an annual basis, the fiscal year ended with a net loss of $7.1 million or 49 cents per share, compared to a net loss of $1.3 million or 9 cents per share in fiscal year 2013. The current year's loss included $2.8 million decrease in the fair value of outstanding hedge contracts as the U.S. spot exchange rate at the end of the year was higher than the average strike price of the hedges. Fiscal year 2014's operating loss before taxes was $6.1 million, compared with an operating loss of $1.6 million a year ago due to an 11.7% decline in sales.

The sales decline from fiscal 2013 to fiscal 2014 was the key driver of the Company's losses and is attributable to several factors: disruption to distribution channels partially caused by the bankruptcy of a major dealer; stagnation in US Government budget approvals; delayed key product launches, as well as significant concentration of resources on the launch of new products for fiscal 2015.

Although resolving these issues will take some time, management is cautiously optimistic about the plans in place to address them. A reinvigorated sales force focusing on key markets across North America, improved brand messaging and training programs, and a back-to-basics approach to communicating our brand to dealers demonstrate management's focus on distribution channels. The US Government has approved budgets for office spaces this year. A focus on sales efforts has begun paying off with an increase in opportunities, and the new product introductions which received five Best of NeoCon Awards (4 Gold and 1 Silver) in the June 2014 trade show. Inscape won the most awards of any manufacturers at NeoCon this year.

"We have a strong financial position and our foundation remains strong," said Jim Stelter, CEO. "Our outlook continues to improve as we actively engage our markets, intensify our marketing efforts, and make more people aware of how we can provide great solutions for them."

Sales in the fourth quarter of fiscal year 2014 at $15.2 million were 5.4% lower than the $16 million for same quarter of the previous year. The annual sales of $66.2 million fell 11.7% from last year's sales of $74.9 million. The drop in the year-over-year sales was mainly caused by a decline in the volume of the office furniture projects by 13.1%, while the moveable wall segment had a 3.9% decrease from last year.

The fourth quarter's gross profit as a percentage of sales was 21.1%, a decrease of 1.4 percentage points from the 22.5% of the same quarter a year ago. The decrease in gross profit percentage was mainly caused by lower realized selling prices, partially offset by lower overheads and better margin on services. The annual gross profit as a percentage of sales decreased 4.2 percentage points from last year's 26.5% to the current year's 22.3%. The reduced gross margin percentage was attributable to lower realized selling prices and decrease in volume, partially offset by lower overheads and variable production costs.

Selling, general and administrative expenses ("SG&A") in the fourth quarter were 35.7% of sales, compared to 33.6% in the same quarter of last year. In terms of dollar amounts, SG&A expense during the current quarter was comparable to the same quarter of last year. SG&A for the year was 31.6% of sales versus 28.6% of last year. The dollar spent was $0.5 million lower than last year. The lower SG&A was attributable to $0.2 million variable selling expenses due to reduced sales volume, $0.3 million lower provision for doubtful accounts accrued in last year relating to the bankruptcy of a dealer, $0.4 million overheads. The lower SG&A was partially offset by a $0.3 write off of a product licence fee during the year.

During the fourth quarter, the Company booked a valuation allowance relating to deferred tax assets accrued during the first three quarters of fiscal 2014. Due to the continued losses in the fourth quarter and the effects of lower accounting income in the previous two years, management deemed it appropriate to charge a valuation allowance for these assets. This adjustment is a non-cash charge to the results and the Company has 20 years in which the assets can be realized against future income, at which point the valuation allowance can be reversed.

At the end of the fiscal year 2014, the company was debt-free with cash and cash equivalents totaling $18.9 million.

                           Inscape Corporation                              
                Summary of Consolidated Financial Results                   
         (Unaudited) (in thousands of Canadian dollars except EPS)          
                                                   Three Months             
                                                  Ended April 30,           
                                                     2014      2013   Change
------------------------------------------------------------------- --------
Sales                                           $ 15,171  $ 16,038     -5.4%
Gross profit                                       3,203     3,614    -11.4%
Selling, general & administrative expenses         5,423     5,390      0.6%
Unrealized loss (gain) on foreign exchange           151       (93)         
(Increase) Decrease in fair value of                                        
 derivatives                                      (1,777)      499          
Investment income                                    (88)     (100)         
Loss before taxes                                   (506)   (2,082)         
Income taxes                                         945      (642)         
Net loss                                        $ (1,451) $ (1,440)         
Basic earnings per share                        $  (0.10) $  (0.10)         
Weighted average number of shares (in                                       
for basic EPS calculation                         14,373    14,373          
for diluted EPS calculation                       14,380    14,383          
                                                   Twelve Months            
                                                 Ended April 30,            
                                                    2014      2013    Change
------------------------------------------------------------------- --------
Sales                                           $ 66,155  $ 74,900    -11.7%
Gross profit                                      14,742    19,852    -25.7%
Selling, general & administrative expenses        20,890    21,413     -2.4%
Unrealized gain on foreign exchange                 (389)      (95)         
Decrease in fair value of derivatives              2,825       989          
Investment income                                   (374)     (394)         
Loss before taxes                                 (8,210)   (2,061)         
Income taxes                                      (1,118)     (805)         
Net loss                                        $ (7,092) $ (1,256)         
Basic and diluted earnings per share            $  (0.49) $  (0.09)         
Weighted average number of shares (in                                       
for basic EPS calculation                         14,373    14,375          
for diluted EPS calculation                       14,380    14,452          

Financial Statements


Fourth Quarter Call Details

Inscape will host a conference call at 8:30 a.m. on Friday, June 27, 2014 to discuss the company's quarterly and annual results. To participate, please call 1-800-381-7839. A replay of the conference call will also be available from June 27, 2014 after 10:30 a.m. until midnight on July 4, 2014. To access the rebroadcast, please dial 1-800-558-5253 (Reservation Number 21718745).

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.


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 Corporation
Matthew Posno
Chief Financial Officer
905 836 7676
905 836 5037 (FAX)

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Successful transition from traditional IT to cloud computing requires three key ingredients: an IT architecture that allows companies to extend their internal best practices to the cloud, a cost point that allows economies of scale, and automated processes that manage risk exposure and maintain regulatory compliance with industry regulations (FFIEC, PCI-DSS, HIPAA, FISMA). The unique combination of VMware, the IBM Cloud, and Cloud Raxak, a 2016 Gartner Cool Vendor in IT Automation, provides a co...
SYS-CON Events announced today that Numerex Corp, a leading provider of managed enterprise solutions enabling the Internet of Things (IoT), will exhibit at the 19th International Cloud Expo | @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Numerex Corp. (NASDAQ:NMRX) is a leading provider of managed enterprise solutions enabling the Internet of Things (IoT). The Company's solutions produce new revenue streams or create operating...
SYS-CON Events announced today that MathFreeOn will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. MathFreeOn is Software as a Service (SaaS) used in Engineering and Math education. Write scripts and solve math problems online. MathFreeOn provides online courses for beginners or amateurs who have difficulties in writing scripts. In accordance with various mathematical topics, there are more tha...
The best way to leverage your Cloud Expo presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering Cloud Expo and @ThingsExpo will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at Cloud Expo. Product announcements during our show provide your company with the most reach through our targeted audiences.
@ThingsExpo has been named the Top 5 Most Influential Internet of Things Brand by Onalytica in the ‘The Internet of Things Landscape 2015: Top 100 Individuals and Brands.' Onalytica analyzed Twitter conversations around the #IoT debate to uncover the most influential brands and individuals driving the conversation. Onalytica captured data from 56,224 users. The PageRank based methodology they use to extract influencers on a particular topic (tweets mentioning #InternetofThings or #IoT in this ...
Traditional on-premises data centers have long been the domain of modern data platforms like Apache Hadoop, meaning companies who build their business on public cloud were challenged to run Big Data processing and analytics at scale. But recent advancements in Hadoop performance, security, and most importantly cloud-native integrations, are giving organizations the ability to truly gain value from all their data. In his session at 19th Cloud Expo, David Tishgart, Director of Product Marketing ...
The Internet of Things will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform and how we integrate our thinking to solve complicated problems. In his session at 19th Cloud Expo, Craig Sproule, CEO of Metavine, will demonstrate how to move beyond today's coding paradigm ...
Although it has gained significant traction in the consumer space, IoT is still in the early stages of adoption in enterprises environments. However, many companies are working on initiatives like Industry 4.0 that includes IoT as one of the key disruptive technologies expected to reshape businesses of tomorrow. The key challenges will be availability, robustness and reliability of networks that connect devices in a business environment. Software Defined Wide Area Network (SD-WAN) is expected to...
SYS-CON Events announced today that StarNet Communications will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. StarNet Communications’ FastX is the industry first cloud-based remote X Windows emulator. Using standard Web browsers (FireFox, Chrome, Safari, etc.) users from around the world gain highly secure access to applications and data hosted on Linux-based servers in a central data center. ...
OnProcess Technology has announced it will be a featured speaker at @ThingsExpo, taking place November 1 - 3, 2016, in Santa Clara, California. Dan Gettens, OnProcess’ Chief Analytics Officer, will discuss how Internet of Things (IoT) data can be leveraged to predict product failures, improve uptime and slash costly inventory stock. @ThingsExpo is an annual gathering of IoT and cloud developers, practitioners and thought-leaders who exchange ideas and insights on topics ranging from Big Data in...
Developing software for the Internet of Things (IoT) comes with its own set of challenges. Security, privacy, and unified standards are a few key issues. In addition, each IoT product is comprised of (at least) three separate application components: the software embedded in the device, the back-end service, and the mobile application for the end user’s controls. Each component is developed by a different team, using different technologies and practices, and deployed to a different stack/target –...
Virgil consists of an open-source encryption library, which implements Cryptographic Message Syntax (CMS) and Elliptic Curve Integrated Encryption Scheme (ECIES) (including RSA schema), a Key Management API, and a cloud-based Key Management Service (Virgil Keys). The Virgil Keys Service consists of a public key service and a private key escrow service. 

SYS-CON Events announced today that CDS Global Cloud, an Infrastructure as a Service provider, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. CDS Global Cloud is an IaaS (Infrastructure as a Service) provider specializing in solutions for e-commerce, internet gaming, online education and other internet applications. With a growing number of data centers and network points around the world, ...
Big Data has been changing the world. IoT fuels the further transformation recently. How are Big Data and IoT related? In his session at @BigDataExpo, Tony Shan, a renowned visionary and thought leader, will explore the interplay of Big Data and IoT. He will anatomize Big Data and IoT separately in terms of what, which, why, where, when, who, how and how much. He will then analyze the relationship between IoT and Big Data, specifically the drilldown of how the 4Vs of Big Data (Volume, Variety,...
SYS-CON Events announced today that Tintri Inc., a leading producer of VM-aware storage (VAS) for virtualization and cloud environments, will present at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Tintri VM-aware storage is the simplest for virtualized applications and cloud. Organizations including GE, Toyota, United Healthcare, NASA and 6 of the Fortune 15 have said “No to LUNs.” With Tintri they manag...