Inscape’s Response to Impact of COVID-19
HOLLAND LANDING, Ontario, May 14, 2020 (GLOBE NEWSWIRE) — Inscape (TSX: INQ), a leading designer and manufacturer of furnishings for the workplace, is providing an update on the company’s response to the COVID-19 crisis.
During the COVID-19 pandemic, Inscape’s primary focus has been the health and well-being of our employees while keeping the business moving forward and delivering products to our customers in need.The economic impact from COVID-19 on the global economy has been unprecedented. In anticipation of its impacts, Inscape took aggressive actions to minimize all non-essential spending while re-evaluating certain commitments to reduce the anticipated short-term impact to our cash flow. As part of this exercise, we also had to eliminate some full-time positions and temporarily furlough certain employees to achieve further savings.We are thankful that some of our major customers who provide essential services have continued their planned purchasing and installations, but, like others in our industry, our business has been impacted by other projects that have been postponed or delayed as customers wait to evaluate the economic effects of the crisis or have been unable to take deliveries as previously contemplated.Our two manufacturing facilities have remained in operation as per government guidelines and are following Public Health Agency of Canada, Centers for Disease Control and Prevention and World Health Organization best practices to ensure the safety of all our employees who are required to be onsite at these facilities. Most of our office staff relating to these facilities as well as our showrooms and sales teams are working remotely and continue to support the company’s operations.As we anticipated, additional initiatives relating to people costs are required. Inscape is now implementing a Work-Share program to include most of the salaried office staff in the company’s headquarters and anticipate similar actions will need to be taken in our walls operations in late June as part of the overall cost reduction program. Team members who cannot work a reduced work week in view of business demands will be taking a 20% salary reduction. Additionally, Inscape’s leadership team will take a 25% salary reduction while the CEO will be taking a 30% salary reduction. These employee initiatives will be in force for the next three months and re-evaluated quarterly. The leadership team and CEO salary reductions will be in force for six months. The Board of Directors is also reducing their cash compensation by 30% for a similar period of time as the leadership group.These measures are in addition to the company’s efforts to access government subsidy, loan and grant programs, some of which have already proven successful and some of which the company anticipates will be available, which together with the people initiatives and thorough working capital management have allowed us to reinforce our balance sheet and prepare us for the economic impact of the COVID-19 pandemic. We are pleased to report that at the end of the fiscal year-end as at April 30, 2020 the company was debt-free, excluding a $1 million loan expected to convert to a full grant during Q1 of the current fiscal year, had over $5.9 million in cash and our $5 million bank operating loan facility was unutilized.
Inscape is actively developing selling strategies, evaluating and adapting existing product development plans and improving our operating efficiencies to enable us to be resilient in the face of this adversity and to ensure we will be in a much stronger position to grow our business as the economic recovery begins.Forward-looking Information
This press release includes certain forward-looking information that is based on Inscape’s best information and judgments as at the date hereof. Forward-looking information in this press release includes, but is not limited to, statements with respect to Inscape’s plans to implement a Work-Share program and the departments that will affect, the employees that are subject to a salary reduction, as well as the size and length of the salary reduction, the length of time that the initiatives will be in place and the frequency with which they are evaluated, Inscape’s ability to access government subsidy, loan and grant programs and the impacts thereof, the sufficiency of Inscape’s liquidity position in light of the COVID-19 pandemic and related economic results and Inscape’s ability to develop and deploy new selling strategies, product development plans and operating efficiencies. Readers are cautioned not to place undue reliance on forward-looking statements found throughout this press release.These forward-looking statements are based on our plans, intentions or expectations and include known and unknown assumptions and other factors which, if incorrect, may cause actual results or achievements to be materially different from those expressed or implied, including, but not limited to, assumptions about the rate of economic growth in North America in light of the COVID-19 pandemic, there being no cases of COVID-19 in Inscape’s workforce and the assumption that no members of the workforce are required to self-isolate, there being no material disruption to Inscape’s supply chains, growth expectations for the contract office furniture business, currency fluctuations and Inscape being able to access government subsidy, loan and grant programs in sufficient amounts to positively impact its balance sheet.The forward-looking statements are subject to risks and uncertainties that may cause the actual results to differ materially from those anticipated in the discussion, including but not limited to, there being cases of COVID-19 in the Company’s workforce, disruptions to Inscape’s supply chain due to the COVID-19 outbreak, the economic downturn as a result of the COVID-19 outbreak having a material adverse impact on Inscape’s operations and liquidity position (other than as anticipated herein) and resulting in longer than expected salary reductions, furloughs or other employee initiatives and Inscape not being able to access government subsidy, loan and grant programs. See also “Risks and Uncertainties” of Inscape’s most recent management discussion and analysis and annual information form for more information. While management believes that the expectations expressed by such forward-looking statements are reasonable, we cannot assure that they will be correct. In evaluating forward-looking information and statements, readers should carefully consider the various factors which could cause actual results or events to differ materially from those indicated in the forward-looking information and statements. Readers are cautioned that the foregoing list of important factors is not exhaustive. Furthermore, the Company disclaims any obligations to update publicly or otherwise revise any such factors or any of the forward-looking information or statements contained herein to reflect subsequent information, events or developments, changes in risk factors or otherwise.
Since 1888, Inscape has been designing products and services that are focused on the future, so businesses can adapt and evolve without investing in their workspaces all over again. Our versatile portfolio includes systems furniture, storage, and walls – all of which are adaptable and built to last. Inscape’s wide dealer network, showrooms in the United States and Canada, along with full service and support for all our clients, enable us to stand out from the crowd. We make it simple. We make it smart. We make our clients wonder why they didn’t choose us sooner. myinscape.comMedia Contact:
647 355 8514