Inscape Corporation
TSX : INQ

Inscape Corporation

March 12, 2009 19:58 ET

Inscape Corporation Announces Third Quarter Results

HOLLAND LANDING, ONTARIO--(Marketwire - March 12, 2009) - Peter Brunelle, President and Chief Executive Officer of Inscape (TSX:INQ), a leading designer, manufacturer and marketer of office systems, storage and architectural wall solutions for commercial office environments, announces the following financial results for the third quarter ended January 31, 2009:



Inscape Corporation
Summary of Consolidated Financial Results
(Unaudited) (in thousands except EPS)

Three Months Ended January 31,
2009 2008 Change
-------------------------------------------------------------------- -------

Sales $ 22,868 $ 21,531 6.2%
-------------------------------------------------------------------- -------
Gross margin 5,372 6,240 -13.9%
Selling, general &
administrative expenses 5,505 5,361 2.7%
Unrealized foreign
exchange (gain) loss (166) (177)
Interest income (164) (258)
--------------------------------------------------------------------
Income before taxes 197 1,314
Income taxes expense 209 213
--------------------------------------------------------------------
Net income (loss) $ (12) $ 1,101
--------------------------------------------------------------------
--------------------------------------------------------------------

Basic and diluted
income per share $ - $ 0.07

Weighted average number
of shares (in thousands)
for basic EPS calculation 15,097 15,097
for diluted EPS calculation 15,097 15,107


Nine Months Ended January 31,
2009 2008 Change
-------------------------------------------------------------------- -------
Sales $ 63,039 $ 69,945 -9.9%
-------------------------------------------------------------------- -------
Gross margin 14,790 21,450 -31.0%
Selling, general &
administrative expenses 17,471 17,179 1.7%
Unrealized foreign
exchange (gain) loss (1,308) 344
Interest income (629) (756)
--------------------------------------------------------------------
Income (Loss) before taxes (744) 4,683
Income taxes expense (recovery) (438) 1,447
--------------------------------------------------------------------
Net income (loss) $ (306) $ 3,236
--------------------------------------------------------------------
--------------------------------------------------------------------

Basic and diluted
income (loss) per share $ (0.02) $ 0.21

Weighted average number
of shares (in thousands)
for basic EPS calculation 15,097 15,097
for diluted EPS calculation 15,108 15,119


Commentary and Outlook

"Third quarter sales results were encouraging in that we exceeded the prior year comparable and showed improvement over the first two quarters of the current fiscal year. The breakeven operating results reflected the ongoing impact of higher material costs, lower US dollar hedged exchange rates and the impact of unfavourable material yield driven by specific product mix in the quarter. Despite beneficial sales results for the quarter, we are very mindful of the challenging business environment and during the quarter we undertook a series of cost rationalization efforts aimed to reduce our fixed cost structure, ensuring it is remains aligned with the demand decline anticipated within our industry. Fortunately, our balance sheet remains strong which allows us to navigate through the significant short term challenges while continuing to support investments in key strategic opportunities", said Peter Brunelle, President and CEO. "We expect that sales for the fourth quarter of fiscal 2009 will be lower than the third quarter of fiscal 2009 and in line with the first quarter of fiscal 2009" said Mr. Brunelle.

Operating Performance

The third quarter of fiscal 2009 ended on January 31, 2009 had a breakeven result compared to a net income of $1.1 million in the same period of fiscal 2008. The current quarter included pre-tax severance expense of $0.2 million as the Company made adjustments to its staffing levels. Last year's third quarter result included a pre-tax $0.3 million gain from a favourable capital tax assessment. The nine-month period ended January 31, 2009 had a loss of $0.3 million compared to a net income of $3.2 million in last year. The decline in year-over-year operating result was attributable to sales volume decline; lower average U.S. dollar hedge rates, higher material costs; as well as, increased investments in sales and marketing efforts since the beginning of this fiscal year.

Sales for the third quarter of fiscal 2009 were 6.2% ahead of the same quarter of fiscal 2008. Year-to-date sales were 9.9% behind the same quarter of last year. On a comparable U.S. exchange rate basis, current year's sales were 7.5% lower than the year before.

The third quarter's gross margin as a percentage of sales was 23.5% compared to 29.0% in the same quarter of last year. In spite of better sales volume, gross margin was suppressed by product mix yields and increased material costs. Year-to-date gross margin fell from last year's 30.7% to current year's 23.5%. The decline in gross margin was due to unfavourable U.S. dollar exchange rates, higher material costs and unfavourable overhead absorption due to lower volume.

With higher sales in the third quarter of fiscal 2009, SG&A as a percentage of sales was 24.1% compared with 24.9% in the same quarter of last year. The higher dollar amount spent in the quarter was due to increased selling expenses and the severance discussed above. Year-to-date SG&A as a percentage of sales was up from last year's 24.6% to current year's 27.7% due to lower absorption of fixed overheads, as well as higher investments in sales and marketing efforts. The year-to-date SG&A amount was slightly higher than prior year because of increased investments in sales and marketing efforts.

Income tax expense accrued in the third quarter of fiscal 2009 was high relative to income because of certain non-deductible expenses for income tax purposes, as well as a reduction in the tax rate of loss carryforwards. For the nine-month period ended January 31, 2009 tax recoverable was very high relative to the pre-tax loss. This was because the $1.3 million unrealized exchange gain arising from the currency translation of the net assets of the U.S. subsidiaries was not a taxable item for U.S. tax purposes.

Given the current economic condition and challenging industry outlook in the near-term, the Company has taken steps to trim its fixed overheads and reduce headcount in order to cope with anticipated downturn in sales volumes and pressure on gross margin. Capital expenditures will be restricted to those with higher payback or cost-benefit justifications. At the same time, the Company continues its commitments to sales and product development efforts to be prepared for the recovery of the market.

At the end of the quarter, the Company remained debt free and had cash and cash equivalents of $10.4 million and highly liquid short-term investments of $11.1 million. The Company also has an unused line of credit of $10 million.

Conference Call

Inscape will host a conference call at 8:30 a.m. on Friday, March 13, 2009 to discuss the Company's quarterly results and to provide additional outlook on the next quarter. To participate, please call 1-800-732-5617. A replay of the conference call will also be available from Friday, March 13, 2009 after 10:30 a.m. until midnight on Friday, March 20, 2009. To access the rebroadcast, please dial 1-800-558-5253 (Reservation Number 21416052).

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 Corporation is a leading designer, manufacturer and marketer of office systems, storage and architectural wall solutions for commercial office environments. Headquartered in Holland Landing, Ontario, the company has offices and production facilities in Canada and the United States totalling approximately 485,000 square feet and serves customers through a growing network of authorized dealers. For more information, please visit www.inscapesolutions.com.



INSCAPE CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)(in thousands)

----------------------------------------------------------------------------
----------------------------------------------------------------------------
January 31 April 30
2009 2008
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ASSETS
CURRENT
Cash and cash equivalents $ 10,439 $ 6,126
Short-term investments (Note 9) 11,086 21,618
Accounts receivable 15,196 12,732
Inventory (Note 5) 5,847 5,340
Derivative assets - 688
Prepaid expenses 1,009 786
----------------------------------------------------------------------------
43,577 47,290
CAPITAL ASSETS 25,330 25,896
OTHER ASSETS 1,903 1,673
FUTURE INCOME TAX ASSETS 4,095 2,156
----------------------------------------------------------------------------
$ 74,905 $ 77,015
----------------------------------------------------------------------------
----------------------------------------------------------------------------

LIABILITIES
CURRENT
Accounts payable and accrued liabilities $ 10,487 $ 13,075
Derivative liabilities 4,906 -
Income taxes payable 480 960
----------------------------------------------------------------------------
15,873 14,035
DERIVATIVE LIABILITIES 515 -
OTHER LONG-TERM OBLIGATIONS 426 622
FUTURE INCOME TAX LIABILITIES 2,601 3,115
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19,415 17,772
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SHAREHOLDERS' EQUITY
SHARE CAPITAL 57,059 57,059
CONTRIBUTED SURPLUS 84 84
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (3,198) 310
RETAINED EARNINGS 1,545 1,790
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55,490 59,243
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$ 74,905 $ 77,015
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----------------------------------------------------------------------------

See accompanying notes to the financial statements




INSCAPE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Unaudited)(in thousands, except per share amounts)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended Nine Months Ended
January 31, January 31,
2009 2008 2009 2008
----------------------------------------------------------------------------

SALES $ 22,868 $ 21,531 $ 63,039 $ 69,945
COST OF GOODS SOLD (Note 9) 17,496 15,291 48,249 48,495
----------------------------------------------------------------------------
GROSS MARGIN 5,372 6,240 14,790 21,450

EXPENSES
Selling, general and
administrative (Note 9) 5,505 5,361 17,471 17,179
Unrealized foreign exchange
(gain) loss (Note 9) (166) (177) (1,308) 344
Interest income (164) (258) (629) (756)
----------------------------------------------------------------------------
5,175 4,926 15,534 16,767
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INCOME (LOSS) BEFORE TAXES 197 1,314 (744) 4,683
INCOME TAXES EXPENSE
(RECOVERY) 209 213 (438) 1,447
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NET INCOME (LOSS) $ (12) $ 1,101 $ (306) $ 3,236
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BASIC AND DILUTED INCOME
(LOSS) PER SHARE (Note 6) $ 0.00 $ 0.07 $ (0.02) $ 0.21
----------------------------------------------------------------------------
----------------------------------------------------------------------------



INSCAPE CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)(in thousands)

Three Months Ended Nine Months Ended
January 31, January 31,
2009 2008 2009 2008
----------------------------------------------------------------------------
NET INCOME (LOSS) $ (12) $ 1,101 $ (306) $ 3,236
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OTHER COMPREHENSIVE INCOME
(LOSS), NET OF TAXES
Unrealized gains (losses)
on derivatives designated
as cash flow hedges,
(three-month net of taxes
of $148, 2008 - $973,
nine-month net of taxes
of $1,459, 2008 - $307) 326 (1,917) (3,198) 616

Reclassification of gains on
derivatives designated as
cash flow hedges to income,
(three-month net of taxes
of $36, 2008 - $77,
nine-month net of taxes
of $154, 2008 - $388) (72) (161) (310) (776)
----------------------------------------------------------------------------
OTHER COMPREHENSIVE INCOME
(LOSS), NET OF TAXES 254 (2,078) (3,508) (160)
----------------------------------------------------------------------------
COMPREHENSIVE INCOME
(LOSS), NET OF TAXES $ 242 $ (977) $ (3,814) $ 3,076
----------------------------------------------------------------------------
----------------------------------------------------------------------------

See accompanying notes to the financial statements



INSCAPE CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Nine Months Ended January 31, 2009
(Unaudited)(in thousands)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Accum-
ulated
Other
Compre-
hensive Total Total
Contri- Income AOCI and Share-
Share buted (Loss) Retained Retained holders'
Capital Surplus ("AOCI") Earnings Earnings Equity
----------------------------------------------------------------------------
----------------------------------------------------------------------------
BALANCE -
May 1, 2008 $ 57,059 $ 84 $ 310 $ 1,790 $ 2,100 $ 59,243
Transitional
adjustment on
adoption of new
accounting
policies on
inventories (net
of taxes of $34)
(Note 2) 61 61 61
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BALANCE -
May 1, 2008,
as restated 57,059 84 310 1,851 2,161 59,304
Net Loss - - - (306) (306) (306)

Other Comprehensive
Loss - - (3,508) - (3,508) (3,508)
----------------------------------------------------------------------------
BALANCE - January
31, 2009 $ 57,059 $ 84 $(3,198) $ 1,545 $ (1,653)$ 55,490
----------------------------------------------------------------------------
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Nine Months Ended January 31, 2008
(Unaudited)(in thousands)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Accum-
ulated
Other
Compre- Total
Contri- hensive (Deficit) Total Share-
Share buted Income Retained AOCI and holders'
Capital Surplus ("AOCI") Earnings Deficit Equity
----------------------------------------------------------------------------
----------------------------------------------------------------------------
BALANCE -
May 1, 2007 $ 57,059 $ 84 $ - $ (2,958) $ (2,958)$ 54,185

Opening balance
adjustment for
unrealized gain on
cash flow hedges
(net of taxes
of $392) - - 776 - 776 776
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BALANCE - May 1,
2007 as restated 57,059 84 776 (2,958) (2,182) 54,961
Net Income - - - 3,236 3,236 3,236
Other Comprehensive
Loss (160) (160) (160)
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BALANCE -
January 31, 2008 $ 57,059 $ 84 $ 616 $ 278 $ 894 $ 58,037
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See accompanying notes to the financial statements



INSCAPE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)(in thousands)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended Nine Months Ended
January 31, January 31,
2009 2008 2009 2008
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NET INFLOW (OUTFLOW) OF CASH
RELATED TO THE FOLLOWING
ACTIVITIES:

OPERATING ACTIVITIES
Net income (loss) $ (12) $ 1,101 $ (306) $ 3,236
Items not affecting cash:
Amortization 1,078 1,187 3,184 3,581
Unrealized loss (gain) on
short-term investments held
for trading 1 (59) 40 (30)
Future income taxes 71 210 (438) (384)
Deferred expenses and other
expenses (129) (30) (233) (320)
Stock based compensation 42 (3) (69) (63)
Unrealized foreign exchange
(gain) loss (Note 10) (166) (177) (1,308) 344
Gain on sale of capital
assets (20) - (40) 1
----------------------------------------------------------------------------
865 2,229 830 6,365
Changes in non-cash
operating working
capital items (3,793) 1,277 (4,974) 203
----------------------------------------------------------------------------
Cash generated from
(used for) operating
activities (2,928) 3,506 (4,144) 6,568
----------------------------------------------------------------------------
----------------------------------------------------------------------------

INVESTING ACTIVITIES
Short-term investments held
for trading (Note 9) 4,267 (4,338) 10,492 (4,737)
Additions to capital assets (974) (732) (2,618) (2,696)
Proceeds from sale of
capital assets 20 44 111 135
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Cash generated from
(used for) investing
activities 3,313 (5,026) 7,985 (7,298)
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Unrealized foreign exchange
gain (loss) on cash and
cash equivalents 71 676 472 570
----------------------------------------------------------------------------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS 456 (844) 4,313 (160)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 9,983 5,235 6,126 4,551
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CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 10,439 $ 4,391 $ 10,439 $ 4,391
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----------------------------------------------------------------------------

CASH AND CASH EQUIVALENTS
CONSIST OF:
Cash $ 2,610 $ 4,391 $ 2,610 $ 4,391
Cash equivalents 7,829 - 7,829 -
----------------------------------------------------------------------------
$ 10,439 $ 4,391 $ 10,439 $ 4,391
----------------------------------------------------------------------------
----------------------------------------------------------------------------

SUPPLEMENTAL INFORMATION
Income taxes paid $ - $ (27) $ 572 $ 573

See accompanying notes to the financial statements


Inscape Corporation

Notes to the Interim Consolidated Financial Statements

Unaudited (in thousands except share and per share amounts)

1. BASIS OF PRESENTATION

These unaudited interim consolidated financial statements (the "interim consolidated financial statements") have been prepared in accordance with Canadian generally accepted accounting principles. These interim financial statements do not include all of the disclosure requirements for annual consolidated financial statements, and accordingly, these statements should be read in conjunction with the consolidated financial statements for the year ended April 30, 2008 including the notes thereto.

2. ACCOUNTING POLICIES

Changes in Accounting Policies

These interim consolidated financial statements follow the same accounting policies as were used for the consolidated financial statements for the year ended April 30, 2008, except for the new accounting policies as noted below.

On May 1, 2008 the Company adopted the following Canadian Institute of Chartered Accountants ("CICA") new accounting standards:

(a) Inventories

Section 3031 "Inventories" - This standard provides guidance on the determination of cost of inventories to include the cost of purchase, other costs incurred in bringing the inventories to their present location and condition, costs of conversion and systematic allocation of fixed and variable production overheads. The cost of inventories shall be assigned by using the first-in, first-out (FIFO) or weighted average cost formula. The standard permits reversal of write-down of inventories arising from an increase in net realizable value. The new standard also requires additional disclosures including the accounting policies adopted in measuring inventories, the carrying amount of inventories, amount of inventories recognized as an expense during the period, the amount of write-downs during the period and the amount of any reversal of write-downs that is recognized as a reduction of expenses. As a result of adopting the new standard retrospectively without restatement, opening retained earnings on May 1, 2008 was increased by an after-tax amount of $61.

(b) Financial Instruments

Section 3862 "Financial Instruments - Disclosures" - This standard requires the disclosure of information about: a) the significance of financial instruments for the entity's financial position and performance and b) the nature and extent of risks arising from financial instruments to which the entity is exposed during the period and at the balance sheet date, and how the entity manages those risks.

Section 3863 "Financial Instruments - Presentation" - This section establishes standards for presentation of financial instruments and non-financial derivatives.

The adoption of these standards had no impact on the Company's financial statements except for additional disclosures in Note 3.

(c) Capital Management

Section 1535 "Capital Disclosures" - This standard requires the disclosure of information about an entity's objectives, policies and processes for managing capital, including disclosures of any externally imposed capital requirements and the consequences of non-compliance. The adoption of this standard had no impact on the Company's financial statements except for additional disclosures in Note 4.

Future Accounting Policy Changes

International Financial Reporting Standards ("IFRS")

In February 2008, the CICA announced that accounting standards for public companies will be replaced by International Financial Reporting Standards ("IFRS") for fiscal years beginning on or after January 1, 2011. Accordingly the Company will adopt IFRS for its fiscal years beginning May 1, 2011.

The Company is currently in the stage of identifying Canadian GAAP and IFRS differences that are applicable to the financial statements, IT systems requirements, as well as any potential impact on operational processes and internal controls.

3. RISK MANAGEMENT

Risk exposures of the Company's financial instruments and the related risk management are as follows:

(a) Credit risk - The Company's cash and cash equivalents, short-term investments, and trade accounts receivable are subject to the risk that the counter-parties may fail to discharge their obligation to pay the Company. The Company's investment policy specifies the types of permissible investments, the minimum credit ratings required and the maximum balances allowed. Management reports to the Board of Directors quarterly the Company's investment portfolios to show their compliance with the investment policy. The Company has credit policies and procedures to manage trade accounts receivable credit risk by assessing new customers' credit history, reviewing of credit limits, monitoring aging of accounts receivable and establishing allowance for doubtful accounts based on specific customer information and general historical trends. The Company has historically experienced minimal customer defaults on trade accounts receivable. As at January 31, 2009, the allowance for doubtful accounts was $215 (April 30, 2008 - $210).

(b) Currency risk - The Company's U.S. dollar denominated cash, trade accounts receivable, accounts payable and accrued liabilities are subject to the risk that their fair values will fluctuate because of changes in U.S. dollar exchange rate relative to the Canadian dollar. The Company uses U.S. dollar forward exchange contracts to manage the currency risk. The Company has a policy in place to ensure that all such derivatives are used only to manage currency risk and not for trading purposes. Based on existing average forward contract exchange rate and the mix of U.S. dollar denominated sales and expenses, for the nine-month periods ended January 31, 2009 and January 31, 2008, variation in U.S. dollar spot exchange rate has no material impact on the Company's net earnings because in both periods the unhedged U.S. dollar sales almost offset U.S. dollar expenses.

(c) Interest rate risk - The Company's cash equivalents and short-term investments are subject to the risk that interest income will fluctuate because of changes in market interest rates. The Company manages the interest rate risk by investing in highly liquid financial instruments with staggering maturity dates. For the nine-months ended January 31, 2009, each 100 basis point variation in the market interest rate is estimated to result in a change of $118 in the Company's net income (2008 - $127).

(d) Liquidity risk - Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. The Company's liquidity risk is minimal as its cash, cash equivalents and short-term investments are consistently in excess of the financial liabilities. The Company is debt-free and has a line of credit of $10,000 which remained unused as at January 31, 2009.

4. CAPITAL MANAGEMENT

The Company objectives when managing capital are:

a. to safeguard the entity's ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders, and

b. to provide an adequate return to shareholders through growth in earnings.

Management defines capital as the Company's total shareholders' equity excluding components of accumulated other comprehensive income (loss) arising from cash flow hedges. The Company manages its capital structure and makes modifications in response to changes in economic conditions and the risks associated with the underlying strategic initiatives. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, or draw on its line of credit. Although the Company does not establish a specific quantitative return on capital target, it formulates and implements strategic plans to achieve sustainable growth in earnings. The Company has no externally imposed capital requirements.

5. INVENTORY



January 31, April 30,
2009 2008
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Raw materials $ 4,552 $ 4,178
Work-in-process 484 440
Finished goods 811 5,340
----------------------------------------------------------------------------
$ 5,847 $ 5,340
----------------------------------------------------------------------------
----------------------------------------------------------------------------


Raw materials are measured at the lower of cost and replacement cost, determined on a first-in, first-out basis. Work-in-progress and finished goods are measured at the lower of cost and net realizable value, determined on a first-in, first-out basis. For the three-month period ended January 31, 2009, inventories of $16,628 were expensed and included in cost of goods sold (2008 - $14,861). For the nine-month period ended January 31, 2009, inventories of $46,363 were expensed and included in cost of goods sold (2008 - $46,578).

6. EARNINGS (LOSS) PER SHARE

The following table sets forth the computation of basic and diluted earnings (loss) per share:



Three Months Ended January 31,

Numerator 2009 2008
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Net income (loss) for the quarter for basic and
diluted earnings (loss) per share $ (12) $ 1,101

----------------------------------------------------------------------------
----------------------------------------------------------------------------

Denominator 2009 2008
----------------------------------------------------------------------------
Weighted average number of shares outstanding
for basic earnings per share 15,096,817 15,096,817


Weighted average number of shares outstanding
for diluted earnings per share 15,096,817 15,106,818
----------------------------------------------------------------------------
----------------------------------------------------------------------------



Nine Months Ended January 31,
Numerator 2009 2008
----------------------------------------------------------------------------

Net income (loss) for the quarter for basic and
diluted earnings (loss) per share $ (306) $ 3,236

----------------------------------------------------------------------------
----------------------------------------------------------------------------

Denominator
----------------------------------------------------------------------------
Weighted average number of shares outstanding for
basic earnings per share 15,096,817 15,096,817
Weighted average number of shares outstanding for
diluted earnings per share 15,108,231 15,114,111
----------------------------------------------------------------------------
----------------------------------------------------------------------------


Stock options for 742,000 shares were not included in the computation of diluted earnings per share for the three-month period ended January 31, 2009 as they were anti-dilutive for the period (2008 - 642,000). Stock options for 682,000 were not included in the computation of diluted earnings per share for the nine-month period ended January 31, 2009 as they were anti-dilutive for the period (2008 - 552,000).

7. SEGMENT INFORMATION

The Company operates under one reporting segment, which is the design and manufacture of office systems and furniture.



Three Months Ended January 31,
2009 2008
----------------------------------------------------------------------------
Sales from
United States $ 19,509 $ 18,833
Canada 3,239 $ 2,485
Other 120 213
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$ 22,868 $ 21,531
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----------------------------------------------------------------------------

Nine Months Ended January 31,
2009 2008
----------------------------------------------------------------------------
Sales from
United States $ 53,397 $ 60,315
Canada 8,697 8,996
Other 945 634
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$ 63,039 $ 69,945
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January 31 April 30
2009 2008
----------------------------------------------------------------------------
Capital Assets
Canada $ 23,915 $ 24,502
United States 1,415 1,394
----------------------------------------------------------------------------
$ 25,330 $ 25,896
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----------------------------------------------------------------------------


8. PENSION EXPENSE

Total pension expense relating to the various defined benefit plans is $113 for the three-month period ended January 31, 2009 (2008 - $126) and $333 for the nine-month period ended January 31, 2009 (2008 - $172).

9. COLLATERAL

The Company's contractual obligations under the U.S. currency forward exchange contracts are secured by certain short-term investments totaling $7,648. The pledge agreement entered in November 2008 provides that the short-term investments should have a DBRS rating of AA- or better. The security holder may have exclusive control over the short-term investments if at any time during the agreement the market value of the investments is equal to or less than $7,400.

10. RECLASSIFICATION OF COMPARATIVE AMOUNTS FOR FOREIGN EXCHANGE PRESENTATION

Prior period amounts have been reclassified to specifically present unrealized foreign exchange gains and losses as a separate item on the consolidated statements of income (loss) with a view to providing more useful and relevant information on the Company's performance.

Contact Information

  • Inscape Corporation
    Kent Smallwood CA
    Chief Financial Officer
    (905) 836-7676
    (905) 836-5037 (FAX)
    Website: www.inscapesolutions.com