Inscape Announces Second Quarter 2023 Financial Results
Floundering manufacturer Inscape Friday announced its results of operations for the three and six months ended October 31, 2022.
“Second quarter fiscal 2023 was disappointing as sales volumes did not achieve expected levels and certain orders were unable to be recognized within the quarter further diminishing revenue levels reported. Management is responding to these challenges appropriately.”
Total sales revenue for the second quarter of fiscal 2023 was $8.3 million, compared to $9.7 million for the same period of fiscal 2022. The decline in the quarter was due to delays in the completion of certain projects, reduced average size of incoming orders and lower than expected order volumes related to a slower return-to-office observed throughout North America.
Net loss for the second quarter of fiscal 2023 was $7.9 million or negative $0.55 per diluted share, compared to net loss of $2.6 million or negative $0.18 per diluted share for fiscal 2022. The decline is primarily attributed to lower sales volume, the impact of one-off adjustments which increased cost of goods sold in the period, failure to realize volume-driven labour cost efficiencies, and the resumption of spending on marketing and selling activities, which are expected to realize benefits in future periods. The net loss during the quarter was also the result of $1.1 million in foreign exchange expenses relating to unanticipated volatility in FX markets as a result of certain developments in the UK impacting broader currency markets during the period as well as $0.6 million of lease expenses relating to the Holland Landing sale leaseback transaction completed earlier in the calendar year which have not yet been offset by the planned footprint reduction plan.
Earlier termination of Toronto showroom lease and ERP upgrade were also contributing factors.
Non-GAAP Adjusted EBITDA for the second quarter was negative $4.7 million, compared to negative $2.2 million, for fiscal 2022.