Inscape Corporation Announces First Quarter Results.HOLLAND LANDING, Ontario Holland Landing is a village in the town of East Gwillimbury, located in the northern part of the Regional Municipality of York, in south-central Ontario. Its major road is Yonge Street (bypassed by the former Highway 11) and the village has bus service by GO Transit and York -- Madan There are several meanings of the term Madan:
n. The essential, distinctive, and revelatory quality of a thing: "Here is the inscape, the epiphany, the moment of truth." Madison Smartt Bell. (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :INQ INQ Inquiry INQ Inquire INQ Claims Inquiry (insurance) INQ InteQ Corporation ), a leading designer, manufacturer and distributor of office furniture solutions, announced the following financial results for the quarter ended July July: see month. 31, 2004 at the Company's Annual General Meeting, held today at the Exchange Tower, 130 King Street West, Toronto Toronto (tərŏn`tō), city (1998 est pop. 2,400,000), provincial capital, S Ont., Canada, on Lake Ontario. Toronto is the largest city in Canada and since the 1970s has been one of the fastest-changing cities in North America, experiencing , Ontario Ontario, city, United States Ontario, city (1990 pop. 133,179), San Bernardino co., S Calif., near Los Angeles, in a region of vineyards; inc. 1891. :
INSCAPE
Summary of Financial Results
(millions, except EPS and number of shares)
3-Months Ended 3-Months Ended
July 31, 2004 July 31, 2003
(Q1, Fiscal 2005) (Q1, Fiscal 2004) Change
--------------------------------------------------
Revenue $ 21.8 $ 31.8 -31.4%
Gross Margin 5.0 11.3 -55.4%
Selling, General &
Administrative expenses 7.1 8.9 -20.3%
Net Income/(loss) (1.2) 1.8 -167.1%
Earnings Per Share (EPS) $ (0.08) $ 0.12
Weighted average number of
shares (in thousands) 15,097 15,097
Commentary and Outlook "While revenues were in line with the guidance provided last month, I am disappointed with our revenues this quarter", said Madan Bhayana, Executive Chairman. "I am conducting a review of all our business strategies and the structure required for their implementation. While this review will be comprehensive in scope, it will be conducted with the utmost of urgency. As you know, we have also initiated the search for a new President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. and expect to conclude this by the end of our third quarter. On a more positive note, I am pleased that despite the reduction in revenues from the level achieved in the fourth quarter, our cost reduction initiatives allowed us to contain the loss to a level similar to the fourth quarter." The Business and Institutional Furniture Manufacturer's Association ("BIFMA BIFMA Business and Institutional Furniture Manufacturer's Association ") anticipates that shipments in the third calendar quarter of 2004 will be 6.4% higher than the same quarter of 2003 and 9.1% higher than the second calendar quarter of 2004. Although these projections indicate that a recovery in the contract office furniture industry is underway, the unexpected drop in incoming Incoming is a 3-D shooter developed by Rage Software and published by Interplay. The PC version was released in late 1998, and the Dreamcast version, a launch title for the console, was released in 1998 in Japan and in 1999 in the rest of the world. orders for July 2004 questions the robustness of this recovery. Based on current order input levels, Inscape anticipates that second quarter revenues may show some improvement over the first quarter of fiscal 2005, however given the short lead times that the Company operates under, it is possible that revenues may come in closer to the first quarter. A sustainable resumption RESUMPTION. To reassume; to promise again; as, the resumption of payment of specie by the banks is general. It also signifies to take things back; as the government has resumed the possession of all the lands which have not been paid for according to the requisitions of the law, and the in growth may take Inscape longer than what the BIFMA forecasts would suggest and will depend on the nature and extent of changes that occur as a result of the comprehensive review of the Company's business strategies. Operating Performance Revenues in the first quarter of fiscal 2005 were 31.4% lower than the same quarter of last year. The Company experienced a reduction in both day-to-day day-to-day adj. 1. Occurring on a routine or daily basis: the day-to-day movements of the stock market. 2. business as well as large project business. Gross margin as a percentage of revenue for the first quarter declined from 35.4% in fiscal 2004 to 23.0% in fiscal 2005. Gross margin was negatively impacted by the effect of the weaker U.S. dollar, unfavourable overhead absorption resulting from the lower level of revenue and to a lesser extent, an increase in the cost of steel. These factors more than offset the benefits of the cost reduction initiatives implemented by the Company over the past year. Subsequent to the end of the first quarter, the Company has implemented a 5% increase in list prices and this should have a favourable impact on gross margin later in the fiscal year. Selling, general and administrative ("S,G&A") expenses during the first quarter of fiscal 2005 were considerably lower than the first quarter of fiscal 2004, even though previous year S,G&A expenses reflected the benefit of hedging gains. This reduction is primarily a result of the cost reduction initiatives implemented by the Company and due to lower levels of variable S,G&A expenses. Net income for the first quarter of fiscal 2005, was lower than the comparable quarter of the previous year by $3.0 million. This decline was primarily due to lower gross margins as described above. Despite the loss incurred during the quarter, Inscape was still able to generate positive cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses , prior to changes in non-cash operating working capital. Inscape's balance sheet with no debt and cash balances of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $18.6 million remains extremely strong. Quarterly Dividend Owing to owing to prep. Because of; on account of: I couldn't attend, owing to illness. owing to prep → debido a, por causa de the Company's strong cash position, simultaneous with the announcement of the Company's quarterly results, the Board of Directors declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. an 11 cent dividend payable on September September: see month. 29, 2004 to all shareholders of record as of September 23, 2004. The Company's dividend policy is being reviewed and is dependant upon Adj. 1. dependant upon - determined by conditions or circumstances that follow; "arms sales contingent on the approval of congress" contingent on, contingent upon, dependant on, dependent on, dependent upon, depending on, contingent a turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. of the industry and the Company's financial performance. Conference Call Inscape will host a conference call at 8:30 a.m. on Tuesday Tuesday: see week. , September 14, 2004, to discuss the Company's first quarter results and to provide additional outlook on the second quarter of fiscal 2005. To participate, please call 1-800-377-5794. A replay of the conference call will also be available from Tuesday, September 14, 2004 after 10:15 a.m. until midnight on Tuesday, September 21, 2004. To access the rebroadcast, please dial 1-800-558-5253. (Reservation Number 21205750). Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Certain of the above statements are forward-looking statements that involve risks and uncertainties. Actual results, particularly those achieved during the remainder of the fiscal year, 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 during the remainder of the fiscal year. 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 North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. ; length of sales cycles; significant fluctuations in international exchange rates, particularly the U.S.$ 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 The Ontario Securities Commission (OSC) is a regulatory agency which administers and enforces securities legislation in the Canadian province of Ontario. The OSC is an Ontario Crown corporation which reports to the Ontario legislature through the Minister of Finance. reports and filings. About INSCAPE Inscape Corporation is a leading designer, manufacturer and distributor of high quality office furniture headquartered in Holland Landing, Ontario, Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of . The Company offers a wide array of highly innovative and integrated product solutions that effectively and efficiently landscape modern office interiors, including moveable walls, systems, storage products, seating and ergonomic ergonomic - Concerning ergonomics or exhibitting good ergonimics. work tools. Company operations are based across two manufacturing facilities totalling approximately 485,000 square feet. Visit Inscape at www.inscapesolutions.com.
Consolidated Statements of Cash Flows
Unaudited (all amounts in thousands of dollars)
Three months ended July 31
2004 2003
---------------------------------------------------------------------
Net inflow (outflow) of cash related
to the following activities:
OPERATING
Net income (loss) ($1,186) $1,767
Items not affecting cash:
Amortization 1,782 1,901
Future income taxes (86) 144
Deferred expenses and other expense 1 322
Stock based compensation 18 -
Gain on sale of capital assets (37) -
---------------------------
492 4,134
Changes in non-cash operating working
capital items (3,633) (6,291)
---------------------------
(3,141) (2,157)
---------------------------
FINANCING
Dividends paid (1,661) (1,661)
---------------------------
(1,661) (1,661)
---------------------------
INVESTING
Additions to capital assets (822) (860)
Proceeds from sale of capital assets 37 -
---------------------------
(785) (860)
---------------------------
Net cash outflow (5,587) (4,678)
Cash and cash equivalents,
beginning of period 24,174 25,066
---------------------------
Cash and cash equivalents, end of period $18,587 $20,388
---------------------------
---------------------------
SUPPLEMENTAL INFORMATION
Interest paid - -
Income taxes paid $321 $1,833
Consolidated Statements of Income and Retained Earnings
Unaudited (all amounts in thousands of dollars,
except per share amounts)
Three months ended July 31,
2004 2003
---------------------------------------------------------------------
(As restated -
Note 2)
Sales $21,823 $31,809
Cost of goods sold 16,806 20,555
---------------------------
Gross margin 5,017 11,254
Expenses
Selling, general and administrative 7,127 8,941
Net interest income (158) (229)
---------------------------
6,969 8,712
---------------------------
Income (loss) before taxes (1,952) 2,542
Income taxes (766) 775
---------------------------
Net income (loss) ($1,186) $1,767
Retained earnings, beginning of period
As originally stated
Impact of changes in accounting policies: $23,592 $29,987
Asset retirement obligations (Note 2) (72) 137
---------------------------
Retained earnings as restated $23,520 $30,124
Stock options (Note 2) (103) -
Dividends (Note 4) (1,661) (1,661)
---------------------------
Retained earnings, end of period $20,570 $30,230
---------------------------
---------------------------
Basic and diluted earnings (loss)
per share (Note 4) ($0.08) $0.12
Consolidated Balance Sheets
Unaudited (all amounts in thousands of dollars)
July 31, 2004 April 30, 2004
---------------------------------------------------------------------
(As restated -
Note 2)
Assets
Current
Cash and cash equivalents $18,587 $24,174
Accounts receivable 11,979 10,763
Inventory 7,158 6,884
Prepaid expenses 1,197 946
Income taxes receivable 2,806 2,004
---------------------------
41,727 44,771
Capital assets 46,427 47,387
Other assets (Note 3) 4,747 4,745
Future income tax asset 3,994 3,927
---------------------------
$96,895 $100,830
---------------------------
---------------------------
Liabilities
Current
Accounts payable and accrued liabilities $11,876 $12,767
Income taxes payable 920 1,119
---------------------------
12,796 13,886
Asset retirement obligation (Note 2) 328 325
Future income tax liability 6,021 6,040
---------------------------
19,145 20,251
Shareholders' Equity
Share capital (Note 4) 57,059 57,059
Contributed surplus (Note 2) 121 -
Retained earnings 20,570 23,520
---------------------------
$96,895 $100,830
---------------------------
---------------------------
Notes to the Interim Consolidated Financial Statements
As at July 31, 2004
Unaudited (in thousands of dollars except share and
per share amounts)
1. BASIS OF PRESENTATION These interim consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge have been prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ; however, they do not include all of the disclosure requirements for annual consolidated financial statements. These interim consolidated financial statements follow the same accounting policies as were used for the consolidated financial statements for the year ended April 30, 2004, except for the changes disclosed in Note 2. These interim consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended April 30, 2004 including notes thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. . These interim consolidated financial statements contain all adjustments, consisting of normal recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. adjustments, necessary for a fair presentation of the results for the periods reported. 2. CHANGE IN ACCOUNTING POLICIES Effective May 1, 2004, the Company adopted the requirements of the CICA CICA Competition In Contracting Act of 1984 (USA) CICA Canadian Institute of Chartered Accountants CICA Competition In Contracting Act CICA Criminal Injuries Compensation Authority (UK) handbook
This article is about reference works. For the subnotebook computer, see .
adj. Influencing or applying to a period prior to enactment: a retroactive pay increase. [French rétroactif, from Latin with restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. , which requires the Company to estimate the fair value of asset retirement obligations Asset Retirement Obligations provide for future disposal of assets as required by SFAS 143 [1]. Firms must recognize the ARO liability in the period it was acquired, generally acquisition. arising from the retirement of long lived assets. The Company's obligations are in connection with leased properties. An adjustment was recorded to decrease opening retained earnings Retained Earnings The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. for the year ended April 30, 2003 by $137 (net of tax of $81), representing the expense incurred prior to May 1, 2003. There was also an adjustment to increase retained earnings by $65 (net of tax of $33) to reflect the income statement impact for the year ended April 30, 2004. The total estimated undiscounted asset retirement obligations which are expected to settle in 2008 and 2009 is $360. As at May 1, 2004, the present value of these obligations was estimated using a credit-adjusted risk-free rate Risk-free rate The rate earned on a riskless asset. of 4.21%. During the quarter, the Company's asset retirement obligation increased from $325 to $328 as a result of accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the . Effective May 1, 2004, the Company adopted the requirements of the Canadian Institute of Chartered Accountants The Canadian Institute of Chartered Accountants (CICA) is the umbrella body for the Chartered Accountant profession in Canada and Bermuda. Membership of the CICA totals 70,000 Chartered Accountants and 8,500 students. ("CICA") handbook Section 3870 retroactively without restatement. This section requires the Company to estimate the fair value of stock-based compensation granted to employees and to record the expense over the estimated vesting Vesting The process by which employees accrue non-forfeitable rights over employer contributions that are made to the employee's qualified retirement plan account. Notes: period of the stock options granted. The Company uses a Black Scholes Scholes(/skowlz/ or /šowlz/) could refer to the following places: United Kingdom:
Effective May 1, 2004, the Company adopted the requirements of the CICA handbook accounting guideline guideline Medtalk A series of recommendations by a body of experts in a particular discipline. See Cancer screening guidelines, Cardiac profile guidelines, Gatekeeper guidelines, Harvard guidelines, Transfusion guidelines. AcG-13 which requires the Company to identify, designate des·ig·nate tr.v. des·ig·nat·ed, des·ig·nat·ing, des·ig·nates 1. To indicate or specify; point out. 2. To give a name or title to; characterize. 3. , document and assess the effectiveness of their hedging relationships. Adoption of this section had no impact on the financial statements.
3. OTHER ASSETS
As at July 31, As at April 30,
2004 2004
---------------------------------
Goodwill $2,593 $2,593
Deferred pension asset 1,479 1,452
Other (net of accumulated
amortization of $892; 2003-$807) 675 700
---------------------------------
$4,747 $4,745
---------------------------------
---------------------------------
4. SHARE CAPITAL
The share capital which was unchanged from year-end, is as follows:
Number of Amount
Shares $000's
Class A multiple voting shares 5,345,881 $376
Class B subordinated voting shares 9,750,936 56,683
------------------------------
Total outstanding at July 31, 2004 15,096,817 $57,059
------------------------------
------------------------------
Stock options outstanding as at July 31, 2004 have exercise prices ranging from $13.98 to $18.34 per share and expiry dates expiry date expire n → date f d'expiration; (on label) → à utiliser avant ... expiry date expire n → Ablauftermin m up to April 30, 2010. There were no stock options issued during the quarter. During the quarter, dividends of $1,661 were declared and paid. Basic and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of calculations The following tables set forth the computation Computation is a general term for any type of information processing that can be represented mathematically. This includes phenomena ranging from simple calculations to human thinking. of basic and diluted earnings per share:
Numerator Quarter Quarter
Ended Ended
7/31/04 7/31/03
---------------------------
Net (loss)/income for the quarter ended for
basic and diluted earnings per share $(1,186) $1,767
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Denominator
Denominator for basic earnings per share
Weighted average shares 15,096,817 15,067,817
Effect of dilutive securities
Stock options 0 9,869
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15,096,817 15,077,686
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Stock options for 469,400 shares (July 31, 2003 - 573,400 shares) were not included in the computation of diluted earnings per share, as they were anti dilutive for the periods presented. 5. SEGMENT INFORMATION The Company operates under one reporting segment, which is the design, manufacture and distribution of office systems and furniture. The Company's ultimate customers are primarily located in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area.
Revenue from: Three months ended July 31,
2004 2003
--------------------------------
United States $19,950 $28,661
Canada 1,603 2,937
Other 270 211
--------------------------------
$21,823 $31,809
--------------------------------
--------------------------------
Goodwill and Capital Assets As at July 31, 2004 April 30, 2004
--------------------------------------
United States $ 11,080 $11,127
Canada 37,940 38,853
--------------------------------------
$ 49,020 $ 49,980
--------------------------------------
--------------------------------------
The goodwill relates to US operations (Note 3).
6. PENSION EXPENSE The pension expense relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the various defined benefit plans Defined benefit plan A pension plan obliging the sponsor to make specified dollar payments to qualifying employees at retirement. The pension obligations are effectively the debt obligation of the plan sponsor. Related: Defined contribution plan for the quarter is approximately $131 (July 2003 $252) comprising of the follows components:
Quarter Quarter
Ended Ended
7/31/04 7/31/03
----------------------------
Defined benefit plans
Benefits earned during the year $ 101 $ 94
Interest cost on benefit obligation 214 208
Curtailment cost - 94
Return on plan assets (234) (205)
Other 50 61
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$ 131 $ 252
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