Inscape Announces First Quarter 2022 Financial Results

Jon Szczur

Inscape, a leading designer and manufacturer of furnishings and movable wall systems for the workplace, recently announced its results of operations for the first quarter ended July 31, 2021.

Total sales revenue for the first quarter of fiscal 2022 was $7.9 million, compared to $11.4 million for the same period of fiscal 2021. The decline in the quarter, related to some customer sales pushouts from the first quarter to future quarters, which largely related to the availability of material supply and timing of certain projects. Net loss for the first quarter of fiscal 2022 was $3.4 million or negative $0.24 per diluted share, compared to net income of $3.4 million or positive $0.24 per diluted share for fiscal 2021. The decline was largely due to lower sales of $3.5 million, a decrease in net non-operating income by $3.9 million due to the adverse movement in market-to-market valuation on derivative instruments, and a lower level of government grants and subsidies. Non-GAAP EBITDA for the first quarter was negative $2.3 million, compared to a positive $4.4 million, for fiscal 2021.

“Non-controllable events, such as significant customer orders moving out to the second quarter and unanticipated supply chain disruptions also impacted our sales performance in the first quarter,” said Eric Ehgoetz, CEO. “These events continue to be driven by the pandemic and its effect on customer preferences and supply lines. We have initiated new procedures to help mitigate the ongoing supply chain disruptions being experienced globally in order to better deliver for our customers. Current visibility suggests the second quarter will begin to reflect an improved financial profile but exact timing to achieve normalized profitability levels remains dependent on a more fulsome economic recovery and management’s continued efforts to streamline operations and costs.”

First Quarter Financial Highlights

(All comparisons are relative to the three month period ended July 31, 2020, unless otherwise stated)

  • The Company’s borrowings under its revolving credit facility with its lender were $9.3 million as of July 31, 2021. Including cash, net borrowings were $4.9 million at the quarter-end versus nil the prior period.
  • Government assistance subsidy recognized in income during the quarter was $1.4 million, with $0.8 million received in cash during the period.
  • EBITDA of $(2.3) million, compared to EBITDA of $4.4 million.
  • Adjusted EBITDA of ($3.3) million, compared to adjusted EBITDA of ($0.2) million.
  • Total cash on hand as of July 31, 2021 was $4.4 million versus last quarter of $6.5 million.
  • Gross profit margin of 7.7%, with gross profit down by $2.8 million, versus gross profit margin of 30.2%.
  • Total sales of $7.9 million, a decrease of 30.9%.
  • SG&A expenses of $4.9 million, a slight increase of $0.3 million versus $4.6 million.
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