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Inscape Announces Third Quarter Results

Mar 7 2013 12:00AM

Marketwire

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HOLLAND LANDING, ONTARIO -- (Marketwire) -- 03/07/13 -- Inscape (TSX: INQ) today announced financial results for its third quarter ended January 31, 2013.

The third quarter ended with breakeven results on revenue of $19.6 million which was 3.1% lower than revenue in the third quarter of last year. The quarter reflected continued improvement in operational performance. The benefits of which were offset by certain adjustments made in the quarter. On a year-to-date basis improved product mix and operational performance led to gross margin increases to 27.7% from 23.5% last year.

Year-to-date net income was $0.2 million or 1 cent per share, compared to a net loss of $1.3 million or 9 cents per share a year earlier. On a Year-to-date basis gross profit was $1.8 million higher than last year because of a higher gross margin percentage.

"Our focus on an applications approach is beginning to generate results in terms of better gross margins," said Rod Turgeon, President & CEO. "We remain committed to our strategy and to making the investments in distribution and expanded product portfolio necessary for sustained revenue growth."

Year-to-date sales of $58.9 million were 4.1% below the same period of last year. The decrease was the net result of lower furniture sales which were mostly offset by an increase in the movable walls business.

Selling, general and administrative expenses ("SG&A") in the third quarter of fiscal year 2013 were $5.5 million or 28.3% of sales, compared to 25.5% of sales in the same quarter of last year. The increase was largely due to an upward adjustment of $0.28 million in the allowance for doubtful accounts arising from the closing of a distributor.

At the end of the third quarter of fiscal year 2013, the company was debt-free with cash, cash equivalents and short-term investments totalling $20.2 million.

Inscape Corporation Summary of Interim Consolidated Financial Results (Unaudited) (in thousands except EPS) Three Months Ended January 31, 2013 2012 Change----------------------------------------------------------------------------Sales $ 19,585 $ 20,203 -3.1%------------------------------------------------------------------Gross profit 5,632 5,728 -1.7%Selling, general & administrative expenses 5,546 5,155 7.6%Unrealized loss (gain) on foreign exchange 22 (30)Decrease (Increase) in fair value of derivative assets 85 (210)Investment income (99) (113)------------------------------------------------------------------Income before taxes 78 926Income taxes 2 260------------------------------------------------------------------Net income $ 76 $ 666------------------------------------------------------------------------------------------------------------------------------------Basic and diluted earnings per share $ 0.01 $ 0.05Weighted average number of shares (in thousands)for basic EPS calculation 14,373 14,389for diluted EPS calculation 14,375 14,486 Nine Months Ended January 31, 2013 2012 Change----------------------------------------------------------------------------Sales $ 58,862 $ 61,395 -4.1%------------------------------------------------------------------Gross profit 16,276 14,458 12.6%Selling, general & administrative expenses 15,998 16,791 -4.7%Unrealized gain on foreign exchange (2) (429)Decrease in fair value of derivative assets 490 401Investment income (269) (386)------------------------------------------------------------------Income (Loss) before taxes 59 (1,919)Income tax recovery (153) (651)------------------------------------------------------------------Net income (loss) $ 212 $ (1,268)------------------------------------------------------------------------------------------------------------------------------------Basic and diluted earnings per share $ 0.01 $ (0.09)Weighted average number of shares (in thousands)for basic EPS calculation 14,376 14,486for diluted EPS calculation 14,432 14,605



Financial Statements

http://media3.marketwire.com/docs/inqf2013q3.pdf

Third Quarter Call Details

Inscape will host a conference call at 8:30 a.m. on Friday, March 8, 2013 to discuss the Company's quarterly results. To participate, please call 1-800-272-9104. A replay of the conference call will also be available from Friday, March 8, 2013 after 10:30 a.m. until midnight on March 15, 2012. To access the rebroadcast, please dial 1-800-558-5253 (Reservation Number 21648457).

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.



Contacts:
Inscape Corporation
Kent Smallwood CPA, CA
Chief Financial Officer, EVP Corporate Development
905 836 7676
905 836 5037 (FAX)
www.inscapesolutions.com





Source: Marketwire


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