Inscape Corporation Announces Third Quarter Results

Business Wire, March 10, 2005

6. PENSION EXPENSE

The pension expense relating to the various defined benefit plans for the quarter is approximately $131 (January 2004 $252) comprising the following components:

Three months ended  Three months ended
                                           ended               ended
                                January 31, 2005    January 31, 2005
                              ------------------   ------------------
Defined benefit plans
 Benefits earned during the year       $     101           $      94
 Interest cost on benefit obligation         214                 208
 Curtailment cost                              -                  94
 Return on plan assets                      (234)               (205)
 Other                                        50                  61
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                                       $     131           $     252
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The pension expense relating to the various defined benefit plans for the nine months ended is approximately $393 (January 2004 $756) comprising the following components:

Nine months ended   Nine months ended
                                January 31, 2005    January 31, 2004
                              ------------------   ------------------

Defined benefit plans
 Benefits earned during the year       $     303           $     282
 Interest cost on benefit obligation         642                 624
 Curtailment cost                              -                 282
 Return on plan assets                      (702)               (615)
 Other                                       150                 183
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                                       $     393           $     756
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7. RESTRUCTURING COSTS AND ASSET IMPAIRMENT

The Company has recently undertaken a strategic review of its business. As a result of this review, the Company has decided to discontinue its seating product line. The Company has also concluded that its architectural products business is unlikely to generate the levels of income required to support the book value of the underlying assets. Consequently, during the three months ended January 31, 2005, the Company has recorded a total of $9,900 with respect to these two items. These costs are non-cash items and consist of:

a) $1,795 with respect to the write-down of assets and inventory relating to the Company's discontinued seating product line;

b) An impairment of $2,593 with respect to goodwill that had originated from the acquisition of Dowcraft Corporation in 2001;

c) An impairment in the value of fixed assets and related intangible assets of $4,251 and $1,261 respectively, with respect to the Company's architectural products business.