Attached files
| file | filename |
|---|---|
| 8-K - INSIGNIA SYSTEMS INC 8-K 03-14-2018 - INSIGNIA SYSTEMS INC/MN | isig_form8k20180313.htm |
EXHIBIT 99.1
 |
|
Contact:
Insignia Systems,
Inc.
Kristine Glancy,
CEO
(763)
392-6200
|
FOR IMMEDIATE RELEASE
INSIGNIA SYSTEMS, INC. ANNOUNCES
FOURTH
QUARTER AND FULL YEAR 2017 FINANCIAL RESULTS
MINNEAPOLIS, MN – March 14, 2018 – Insignia Systems, Inc. (Nasdaq: ISIG)
(“Insignia”) today reported financial results
for the fourth quarter (“Q4”) and the full year ended
December 31, 2017.
Overview
●
Q4 2017 net sales
increased 40.8% to $8.1 million from $5.7 million in Q4 2016,
driven primarily by our POPS program revenue.
●
2017 net sales were
$26.4 million, an increase of 6.1% from $24.9 million in
2016.
●
Q4 2017 operating
income was $1.0 million, compared to an operating loss of $1.2
million in Q4 2016.
●
2017 operating loss
was $0.9 million, compared to an operating loss of $2.1 million in
2016.
●
Q4 2017 net income
was $0.6 million, or $0.05 per basic and diluted share, compared to
a net loss of $0.7 million, or $0.06 per basic and diluted share,
in Q4 2016.
●
2017 net loss was
$0.6 million, or $0.06 per basic and diluted share, compared to a
net loss of $1.3 million, or $0.11 per basic and diluted share in
2016.
Insignia’s
President and CEO Kristine Glancy commented, “We are pleased
with our strong finish to 2017 as full year net sales increased
6.1% in 2017 compared to 2016. The majority of the net sales
increase was driven by sales to both existing and new clients of
existing products. In addition, we continued to make steady
progress behind our business development activities which has
resulted in incremental revenue from both new CPG and retail
clients, and positively impacted sales in 2017. Our net loss for
the year was $0.6 million compared to a $1.3 million net loss in
2016. The improvement was attributable to our increase in revenues
and gross profit margin, product rationalization and overall
operating expense management, while making continued strategic
investments to fuel our growth initiatives and our new IT operating
infrastructure”
Ms.
Glancy continued, “The retail industry is in the midst of a
profound transformation. Traditional department stores and
brick-and-mortar retailers are experiencing substantial change and
are adapting through store closings, consolidation and fundamental
shifts in their merchandising and promotion strategies. The grocery
industry is not immune to this, and we expect more, not less,
change as consumer shopping habits result in adaptations and
adjustments to grocery and CPG marketing priorities and tactics.
Brand spending is continually shifting between media vehicles as
brands look to optimize their budgets which are under increasing
scrutiny. And we are seeing new competitors and technologies
entering the marketplace and existing competitors becoming more
aggressive, which is giving our clients more choices than ever
before.”
“Despite a
rapidly evolving marketplace, we have made significant progress in
our transformation and I am very pleased with our results as we
manage through the change. We are committed to working with our CPG
and retail partners as they face the opportunities and the risks of
the marketplace. However we must also continue to invest in our
transformation and face the risk of short to intermediate term
volatility in our operating and financial
performance.”
“We
previously communicated a focus on building a revitalized
organization, a long-range strategic business plan, a broadened
product portfolio and increasing our overall awareness of the
environment in which we operate. We have made meaningful progress
on these initiatives which has contributed to our operational and
financial improvement. During 2018, we will remain focused on these
initiatives, continued operational improvement and prudent
financial management against the backdrop of a rapidly changing
environment.”
Q4 2017 Results
Total
net sales increased 40.8% to $8,091,000 in Q4 2017 from $5,748,000
in Q4 2016, primarily due to a 26.7% increase in the number of
signs placed and a 11.2% increase in average price per sign for
existing and new CPG relationships coupled with their associated
programs, partially offset by a 19.6% decrease in product
sales.
Gross
profit in Q4 2017 increased to $3,531,000, or 43.6% of total net
sales, from $980,000, or 17.0% of total net sales, in Q4 2016. The
higher gross profit and gross profit margin was primarily the
result of an increase in sales, as our gross profit margin is
highly dependent on sales levels due to the relatively fixed nature
of a portion of our payments to retailers, favorable mix of
programs sold and the absence of losses associated with The Like
Machine product.
Selling
expenses in Q4 2017 were $941,000, or 11.6% of total net sales,
compared to $779,000, or 13.6% of total net sales, in Q4 2016. The
dollar increase in expenses was primarily due to variable
components of sales staff related expenses driven by the increase
in net sales.
Marketing
expenses in Q4 2017 were $454,000, or 5.6% of total net sales,
compared to $421,000, or 7.3% of total net sales, in Q4 2016. The
dollar increase was primarily due to business development
activities.
General
and administrative expenses in Q4 2017 increased to $1,183,000, or
14.6% of total net sales, from $960,000, or 16.7% of total net
sales, in Q4 2016. The dollar increase was primarily due to staff
and staff related expenses.
Income
tax for Q4 2017 was 32.8% of pretax income, or an expense of
$310,000, compared to income tax benefit of 43.1% of pretax loss,
or a benefit of $538,000, in Q4 2016. Tax expense will vary between
periods, given the company’s policy of reassessing the annual
effective rate on a quarterly basis, as well as the impact of any
discrete tax items during the quarter.
As a
result of the items above, the net income for Q4 2017 was $635,000,
or $0.05 per basic and diluted share, compared to a net loss of
$710,000, or $0.06 per basic and diluted share, in Q4
2016.
As of
December 31, 2017, cash and cash equivalents totaled $4.7 million,
compared to cash and cash equivalents of $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 21,000 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 (800) 874-4648, 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 2018
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.
|
Insignia Systems, Inc.
|
||||
|
STATEMENTS OF OPERATIONS
|
||||
|
(Unaudited)
|
||||
|
|
|
|
|
|
|
|
Three
Months Ended
|
Year
Ended
|
||
|
|
December
31,
|
December
31,
|
||
|
|
2017
|
2016
|
2017
|
2016
|
|
|
|
|
|
|
|
Net
sales
|
$8,091,000
|
$5,748,000
|
$26,430,000
|
$24,912,000
|
|
Cost
of sales
|
4,560,000
|
4,768,000
|
18,029,000
|
17,849,000
|
|
Gross
profit
|
3,531,000
|
980,000
|
8,401,000
|
7,063,000
|
|
Operating
expenses:
|
|
|
|
|
|
Selling
|
941,000
|
779,000
|
3,539,000
|
3,840,000
|
|
Marketing
|
454,000
|
421,000
|
1,716,000
|
1,190,000
|
|
General
and administrative
|
1,183,000
|
960,000
|
4,054,000
|
4,109,000
|
|
|
|
|
|
|
|
Operating
income (loss)
|
953,000
|
( 1,180,000)
|
( 908,000)
|
( 2,076,000)
|
|
Other
loss, net
|
( 8,000)
|
( 68,000)
|
( 1,000)
|
( 24,000)
|
|
|
|
|
|
|
|
Income
(loss) before taxes
|
945,000
|
( 1,248,000)
|
( 909,000)
|
( 2,100,000)
|
|
Income
tax expense (benefit)
|
310,000
|
( 538,000)
|
( 270,000)
|
( 814,000)
|
|
|
|
|
|
|
|
Net
income (loss)
|
$635,000
|
$( 710,000)
|
$( 639,000)
|
$( 1,286,000)
|
|
|
|
|
|
|
|
Net
income (loss) per share:
|
|
|
|
|
|
Basic
|
$0.05
|
$( 0.06)
|
$( 0.06)
|
$( 0.11)
|
|
Diluted
|
$0.05
|
$( 0.06)
|
$( 0.06)
|
$( 0.11)
|
|
|
|
|
|
|
|
Shares
used in calculation of net income (loss) per share:
|
|
|
|
|
|
Basic
|
11,774,000
|
11,636,000
|
11,717,000
|
11,629,000
|
|
Diluted
|
11,867,000
|
11,636,000
|
11,717,000
|
11,629,000
|
|
|
|
|
|
|
|
SELECTED BALANCE SHEET DATA
|
||
|
(Unaudited)
|
||
|
|
December
31,
|
December
31,
|
|
|
2017
|
2016
|
|
|
|
|
|
Cash
and cash equivalents
|
$4,695,000
|
$12,267,000
|
|
Working
capital
|
11,833,000
|
11,850,000
|
|
Total
assets
|
21,688,000
|
28,228,000
|
|
Total
liabilities
|
6,847,000
|
13,119,000
|
|
Shareholders'
equity
|
14,841,000
|
15,109,000
|
|
|
|
|
|
Working
capital represents current assets less current
liabilities.
|
|
|