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| 8-K - INSIGNIA SYSTEMS INC FORM 8-K - INSIGNIA SYSTEMS INC/MN | isig_form8k20171102.htm |
EXHIBIT 99.1
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Contact:
Insignia Systems,
Inc.
Investor
Relations
(763)
392-6200
|
FOR IMMEDIATE RELEASE
INSIGNIA SYSTEMS, INC. ANNOUNCES
2017 THIRD
QUARTER FINANCIAL
RESULTS
AND NINE MONTH FINANCIAL RESULTS
MINNEAPOLIS, MN – November 2, 2017 – Insignia Systems, Inc. (Nasdaq: ISIG)
(“Insignia”) today reported financial results
for the three (“Q3”) and nine months ended September
30, 2017.
Overview
●
Net sales increased
19.4% in Q3 2017 to $7,723,000 from $6,469,000 in Q3 2016, driven
primarily by our POPS program revenue.
●
Gross profit of $2,743,000, or 35.5% of net sales,
in Q3 2017, compared to $2,000,000 or 30.9% of net sales in Q3
2016.
●
Operating income of
$451,000 in Q3 2017, compared to an operating loss of $38,000 in Q3
2016.
●
Net income of
$451,000, or $0.04 per basic and diluted share, in Q3 2017,
compared to a net loss of $167,000, or $0.01 per basic and diluted
share, in Q3 2016.
Insignia’s President and CEO Kristine Glancy commented,
“We are pleased with our quarterly results, having delivered
both top and bottom line growth. The quarterly results reflect the
continued progress against our strategic initiatives with the
addition of new CPG customers, strengthening the relationships with
existing clients, and gaining traction on business development
projects. These strategic initiatives are expected to positively
impact the remainder of 2017 and beyond.”
Mrs. Glancy continued, “We are excited to have launched
freshADSSM,
an exclusive
advertising vehicle featured in produce, created to inspire
shoppers early in their trip and designed to help navigate them to
center store. We are continuing to research and develop innovative
new products to engage the shopper supporting both our retail and
CPG clients’ strategies. In addition, we remain on track to
deliver the $1.0 million in cost reductions for 2017 against the
Board approved plan we announced in February. We continue to make
progress against our strategic initiatives by transforming our
products, operating model, sales approach and
partnerships.”
Q3 2017 Results
Net
sales increased 19.4% to $7,723,000 in Q3 2017, from $6,469,000 in
Q3 2016, primarily due to a 30.4% increase in the number of signs
placed, partially due to programming shifts from second quarter to
third quarter to support CPG new item launches coupled with
increased signs placed for new and existing CPG clients, partially
offset by a 6.8% decrease in average price per sign, which was the
result of program and customer mix.
Gross
profit in Q3 2017 increased to $2,743,000, or 35.5% of net sales,
from $2,000,000, or 30.9% of net sales, in Q3 2016. The increased
gross profit was primarily due to an increase in sales and a
decrease in cost of services due to the discontinued sale of The
Like Machine, partially offset by a decreased average price per
sign. Gross profit is highly dependent on sales levels due to the
relatively fixed nature of a portion of our payments to retailers.
Insignia incurred costs of approximately $109,000 in Q3 2017
associated with the development of its new IT operating
infrastructure compared to approximately $105,000, in Q3 2016. The
project is expected to be substantially complete during the first
quarter of 2018, with estimated incremental expense of
$280,000.
Selling
expenses in Q3 2017 were $879,000, or 11.4% of net sales, compared
to $917,000, or 14.2% of net sales, in Q3 2016. The decrease in
expenses was primarily due to decreased staff related expenses,
partially offset by higher variable compensation.
Marketing
expenses in Q3 2017 were $409,000, or 5.3% of net sales, compared
to $242,000, or 3.7% of net sales, in Q3 2016. The increase was
primarily due to the filling of previously open
positions.
General
and administrative expenses in Q3 2017 were $1,004,000, or 13.0% of
net sales, from $879,000, or 13.6% of net sales, in Q3 2016. The
increase in expenses was primarily due to personnel and staff
related expenses.
Income
tax expense for Q3 2017 was $2,000, or 0.4% of pretax income,
compared to income tax expense of $141,000, or 542.3% of pretax
loss, in Q3 2016. Tax expense was nominal due primarily to a
reduction in the valuation allowance.
As a
result of the items above, the net income for Q3 2017 was $451,000,
or $0.04 per basic and diluted share, compared to a net loss of
$167,000, or $0.01 per basic and diluted share, in Q3
2016.
As of
September 30, 2017, cash and cash equivalents totaled $3.4 million,
compared to $12.3 million as of December 31, 2016. The amounts for
December 31, 2016 are prior to the one-time special dividend of
$8.2 million paid on January 6, 2017.
About Insignia Systems, Inc.
Insignia Systems, Inc. markets in-store advertising products,
programs and services primarily to both consumer packaged goods
manufacturers and retailers. Insignia provides at-shelf media
solutions in over 22,000 retail outlets, inclusive of grocery, mass
merchants and dollar. We partner with over 300 consumer packaged
goods manufacturers across various categories including center
store, refrigerated, frozen and the perimeter. For additional
information, contact (888) 474-7677, or visit the Insignia website
at www.insigniasystems.com.
Investor inquiries can be submitted to investorrelations@insigniasystems.com.
Cautionary Statement for the Purpose of Safe Harbor Provisions of
the Private Securities Litigation Reform Act of 1995
Statements
in this press release that are not statements of historical or
current facts are considered forward-looking statements within the
meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, as amended. The words
“anticipates,” “expects,”
“seeks,” “will” and similar expressions
identify forward-looking statements. Readers are cautioned not to
place undue reliance on these or any forward-looking
statements,
which
speak only as of the date of this press release. Statements made in
this press release regarding, for instance: expectations as to full
year and future financial performance; benefits of sales and
marketing investments and IT infrastructure investments; timing of
implementation of technology operating infrastructure; areas of
growth; and ability to sustain and grow core products and status
and timing of launch of new products, are forward-looking
statements. These forward-looking statements are based on current
information, which we have assessed and which by its nature is
dynamic and subject to rapid and even abrupt changes. As such,
actual results may differ materially from the results or
performance expressed or implied by such forward-looking
statements. Forward-looking statements involve known and unknown
risks, uncertainties and other factors, including: (i) the
risk that management may be unable to fully or successfully
implement the business plan to achieve and maintain increased sales
and resultant profitability in the future; (ii) the risk that the
company will not be able to sustain and grow core product offerings
or to develop, implement and grow new product offerings, including
mobile, digital or other new offerings, in a successful manner,
including our ability to gain retailer acceptance of new product
offerings; (iii) prevailing market conditions, including pricing
and other competitive pressures, in the in-store advertising
industry and, intense competition for agreements with retailers and
consumer packaged goods manufacturers; (iv) potentially incorrect
assumptions by management with respect to the financial effect of
cost containment or reduction initiatives, current strategic
decisions, the effect of current sales trends on fiscal year 2017
results and the benefit of our relationship with News America;
(v) termination of all or a major portion of, or a significant
change in terms and conditions of, a material agreement with a
consumer packaged goods manufacturer, retailer, or News America;
(vi) the effect of any delayed or cancelled customer programs;
(vii) our ability to successfully implement our new IT operating
infrastructure; (viii) our ability to attract and retain
highly qualified managerial, operational and sales personnel; and
(ix) other economic, business, market, financial, competitive
and/or regulatory factors affecting the company’s business
generally, including those set forth in our Annual Report on Form
10-K for the year ended December 31, 2016 and additional risks, if
any, identified in our Quarterly Reports on Form 10-Q and our
Current Reports on Forms 8-K filed with the SEC. Such
forward-looking statements should be read in conjunction with the
company's filings with the SEC. Insignia assumes no responsibility
to update the forward-looking statements contained in this press
release or the reasons why actual results would differ from those
anticipated in any such forward-looking statement, other than as
required by law.
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Insignia Systems, Inc.
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STATEMENTS OF OPERATIONS
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(Unaudited)
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Three
Months Ended
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Nine
Months Ended
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September
30,
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September
30,
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2017
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2016
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2017
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2016
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Net
sales
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$7,723,000
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$6,469,000
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$18,339,000
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$19,164,000
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Cost
of sales
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4,980,000
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4,469,000
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13,469,000
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13,081,000
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Gross
profit
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2,743,000
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2,000,000
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4,870,000
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6,083,000
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Operating
expenses:
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Selling
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879,000
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917,000
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2,598,000
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3,061,000
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Marketing
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409,000
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242,000
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1,262,000
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769,000
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General
and administrative
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1,004,000
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879,000
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2,871,000
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3,149,000
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Operating
income (loss)
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451,000
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( 38,000)
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( 1,861,000)
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( 896,000)
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Other
income, net
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2,000
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12,000
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7,000
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44,000
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Income
(loss) before income taxes
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453,000
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( 26,000)
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( 1,854,000)
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( 852,000)
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Income
tax expense (benefit)
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2,000
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141,000
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( 580,000)
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( 276,000)
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Net
income (loss)
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$451,000
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$( 167,000)
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$( 1,274,000)
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$( 576,000)
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Net
income (loss) per share:
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Basic
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$0.04
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$( 0.01)
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$( 0.10)
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$( 0.05)
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Diluted
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$0.04
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$( 0.01)
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$( 0.10)
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$( 0.05)
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Shares
used in calculation of net income (loss) per share:
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Basic
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11,758,000
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11,642,000
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11,698,000
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11,626,000
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Diluted
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11,777,000
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11,642,000
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11,698,000
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11,626,000
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SELECTED
BALANCE SHEET DATA
(Unaudited)
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September 30,
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December 31,
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2017
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2016
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Cash
and cash equivalents
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$3,375,000
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$12,267,000
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Working
capital
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10,716,000
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11,850,000
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Total
assets
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20,750,000
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28,228,000
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Total
liabilities
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6,612,000
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13,119,000
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Shareholders'
equity
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14,138,000
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15,109,000
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Working
capital represents current assets less current
liabilities.
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