Quarterly Sales Increased by 36% Year Over Year - 4 West Elm Workspace With Inscape Showrooms Open This Month
HOLLAND LANDING, ONTARIO--(Marketwired - Mar 10, 2016) - Inscape (INQ.TO) Thursday reported sales of $22.9 million for the third quarter of fiscal 2016, a 36% increase from $16.9 million in the third quarter of fiscal 2015.
Year-to-date sales of $59.4 million were 4.5% higher than the same period of last year ($56.8 million).
"We are pleased with the improved momentum resulting from the execution of our strategy outlined over 18 months ago," said Jim Stelter, CEO. "We are seeing growth in quoting and project activity bolstered by committed distribution. Sales benefitted from new additions to Inscape's distribution network. The West Elm Workspace with Inscape reseller network has also been further solidified with our first 4 showrooms opening in March in Tampa, Seattle, New York and Los Angeles -- 12 more showrooms are slated to open before June of this year."
"Revenue growth and margin improvement remain our priority over the long term," added Stelter. "We are vigorously reviewing our internal processes and making changes that will enhance both margins and the ability to fulfil the needs of our distributors and clients. We are far from our goal but our path is clearly chartered and our team is united in our efforts."
Gross profit as a percentage of sales for the third quarter of fiscal year 2016 was 27.6%, compared to 20.6% of the same quarter of the previous year. This increase was due to favourable overhead absorption with higher sales volume, lower variable and fixed cost of sales, which was offset by unfavourable realized selling prices. Year-to-date gross margin percentage was 24.6%, compared to 24.0% for the same period of last year.
Selling, general and administrative expenses (SG&A) in the third quarter of fiscal year 2016 were 29.5% of sales, compared to 34.1% in the same quarter of last year. In terms of dollars, SG&A had an increase of $1.0 million. This $1.0 million increase includes a one-time charge of $0.4 million for the wind-up one of the Company's defined benefit pension plans and $0.6 million for increased investment in sales initiatives and new products. Year-to-date SG&A was 32.5% of sales, compared to 28.2% for the same period of last year (or an increase of $3.3 million). The higher SG&A amount was mainly attributable to increased investments in sales initiatives, West Elm Workspace with Inscape start-up costs, new products and higher health care expenses.
The third quarter of fiscal year 2016 ended with a net loss of $2.2 million or 15 cents per share, compared with a net loss of $9.4 million or 65 cents per share in the same quarter of last year. The current quarter's results included an unrealized derivative loss of $2.2 million due to an increase in derivative liabilities relating to the fair value of outstanding U.S. currency hedge contracts; the same quarter of last year had an unrealized derivative loss of $7.0 million and a long-lived asset impairment loss of $1.7 million.
On a year-to-date basis, the nine-month period had a net loss of $6.6 million or 46 cents per share, compared to a net loss of $9.7 million, or 67 cents per share a year ago. The current year-to-date period included a derivative loss of $2.9 million and unrealized exchange gain of $0.9 million due to the revaluation of FX hedges and exchange, respectively.
With the exclusion of the currency adjustments and certain one-time items, the current quarter had an adjusted income of $0.3 million compared to last year's adjusted loss of $1.9 million before taxes; the nine-month period would have an adjusted pre-tax loss of $3.7 million, compared to last year's adjusted pre-tax loss of $0.9 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.
At the end of the third quarter of fiscal year 2016, the company was debt-free with cash and cash equivalents of $4.2 million and short-term investments of $4.5 million.
Financial Statements