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A business consultancy, based in London, England, John Sacks' JSA Consultancy Services provides expert, in-depth, information advice and guidance as to how to exploit successfully the office furniture and interiors markets in Europe, North America, Australasia and Japan.

Inscape Announces 2014 results

Tuesday 1 July 2014

Inscape today announced its 4th quarter and fiscal year 2014 annual financial results ended April 30, 2014.
Fiscal year 2014 was said to have been a challenging year for the Company. The 4th quarter of fiscal year 2014 showed a net loss of $1.5 million. The same quarter of last year had a net loss of $1.4 million. On an annual basis, the fiscal year ended with a net loss of $7.1 million, compared to a net loss of $1.3 million or 9 cents per share in fiscal year 2013. Fiscal year 2014's operating loss before taxes was $6.1 million, compared with an operating loss of $1.6 million a year ago due to an 11.7% decline in sales.
The sales decline from fiscal 2013 to fiscal 2014 was the key driver of the Company's losses and is attributable to several factors: disruption to distribution channels partially caused by the bankruptcy of a major dealer; stagnation in US Government budget approvals; delayed key product launches, as well as significant concentration of resources on the launch of new products for fiscal 2015.
Although resolving these issues will take some time, management is cautiously optimistic about the plans in place to address them. A reinvigorated sales force focusing on key markets across North America, improved brand messaging and training programs, and a back-to-basics approach to communicating our brand to dealers demonstrate management's focus on distribution channels. The US Government has approved budgets for office spaces this year. A focus on sales efforts has begun paying off with an increase in opportunities, and the new product introductions which received five Best of NeoCon Awards (4 Gold and 1 Silver) in the June 2014 trade show. Inscape won the most awards of any manufacturers at NeoCon this year.
"We have a strong financial position and our foundation remains strong," said Jim Stelter, CEO. "Our outlook continues to improve as we actively engage our markets, intensify our marketing efforts, and make more people aware of how we can provide great solutions for them."
Sales in the 4th quarter of fiscal year 2014 at $15.2 million were 5.4% lower than the $16 million for same quarter of the previous year. The annual sales of $66.2 million fell 11.7% from last year's sales of $74.9 million. The drop in the year-over-year sales was mainly caused by a decline in the volume of the office furniture projects by 13.1%, while the moveable wall segment had a 3.9% decrease from last year.
The fourth quarter's gross profit as a percentage of sales was 21.1%, a decrease of 1.4 percentage points from the 22.5% of the same quarter a year ago. The decrease in gross profit percentage was mainly caused by lower realized selling prices, partially offset by lower overheads and better margin on services. The annual gross profit as a percentage of sales decreased 4.2 percentage points from last year's 26.5% to the current year's 22.3%. The reduced gross margin percentage was attributable to lower realized selling prices and decrease in volume, partially offset by lower overheads and variable production costs.
At the end of the fiscal year 2014, the company was debt-free with cash and cash equivalents totaling $18.9 million.

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