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| 8-K - FORM 8-K - INSIGNIA SYSTEMS INC/MN | isig_form8k20181114.htm |
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EXHIBIT
99.1
Contact:
Insignia Systems,
Inc.
Kristine Glancy,
CEO
(763)
392-6200
|
FOR IMMEDIATE RELEASE
INSIGNIA SYSTEMS, INC. ANNOUNCES
2018 THIRD
QUARTER AND NINE MONTH FINANCIAL RESULTS
MINNEAPOLIS, MN – November 13, 2018 – Insignia Systems, Inc. (Nasdaq: ISIG)
(“Insignia”) today reported financial results
for the third quarter ended September 30, 2018
(“Q3”).
Overview
●
Q3 2018 net sales
increased 22.4% to $9.5 million from $7.7 million in Q3 2017,
driven by innovation
revenue
●
Q3 2018 operating
income was $846,000 compared to $451,000 in Q3 2017
●
Q3 2018 net income
was $645,000, or $0.05 per basic and diluted share, compared to
$451,000 or $0.04 per basic and diluted share in Q3
2017
Insignia’s
President and CEO Kristine Glancy commented, “Our continued
transformative efforts are demonstrated with another quarter of
both top and bottom line growth driven by both our product and
client diversification. We are pleased with our continued strong
results in Q3 2018 as net sales increased 22.4% in 2018 compared to
2017 driven primarily by our innovation revenue. Our net income for
Q3 2018 was $645,000 compared to $451,000 in 2017. The improvement
was primarily driven by our increase in sales and gross profit
while continuing to make strategic investments to fuel long-term
overall growth.”
Ms.
Glancy continued, “We are proud of our 2018 results to date
and the successes we have had in the marketplace. However, retailer
and CPG volatility in our POPS program make our future results
difficult to predict. Increased competition will change our
retail network and the mix of our customers resulting in downward
pressure on our financial results early in 2019. We remain focused
on maintaining our current clients while also pursuing new clients
within our core business. We are generating successful results with
our new products and will continue to aggressively push our
pipeline with greater focus in the areas our clients are most often
requesting and where we can build scale. As we introduce
innovation, these products and services may have lower margin
rates than our core business.”
“Our
industry continues to change rapidly, and as a result our
clients’ needs are as well. We remain confident that with the
combination of our high-performance team, aligned strategic
initiatives of accelerating growth with a diversified product
portfolio and broadened client base while continuing to
appropriately align our costs with strategic investments, we will
remain relevant and resilient in the industry.”
Q3 2018 Results
Net
sales increased 22.4% to $9,455,000 in Q3 2018, from $7,723,000 in
Q3 2017, primarily due to an increase in innovation initiatives.
POPS program revenue was relatively flat with a decrease in the
number of signs placed partially offset by an increase in average
price per sign, which was the result of a favorable mix of CPG
clients and contracts. Service revenues inclusive of POPS program
and innovation revenue increased during the three months ended
September 30, 2018, up 23.3% from the three months ended September
30, 2017.
Gross
profit in Q3 2018 increased to $3,563,000, or 37.7% of net sales,
from $2,743,000, or 35.5% of net sales, in Q3 2017. The higher
gross profit was primarily the result of increased sales, and
product mix combined with an increased average price per sign from
a favorable mix of CPG clients. The Company incurred costs of
approximately $166,000 associated with the implementation of its
new IT infrastructure during Q3 2018, compared to $109,000 in Q3
2017.
Selling
expenses in Q3 2018 were $908,000, or 9.6% of net sales, compared
to $879,000, or 11.4% of net sales, in Q3 2017. The increase was
primarily due to increased staff related expenses.
Marketing
expenses in Q3 2018 were $703,000, or 7.4% of net sales, compared
to $409,000, or 5.3% of net sales, in Q3 2017. Increased marketing
expenses were primarily due to increased staffing and staff related
costs, promotional activities, and an increase in new product
development activities.
General
and administrative expenses in Q3 2018 were $1,106,000, or 11.7% of
net sales, compared to $1,004,000, or 13.0% of net sales, in Q3
2017. The increase was primarily due to consulting and legal
services.
Income
tax expense for Q3 2018 was 25.1% of pretax income, or an expense
of $216,000, compared to income tax expense of 0.4% of pretax
income, or $2,000, in Q3 2017. Tax expense varies 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 Q3 2018 was $645,000,
or $0.05 per basic and diluted share, compared to $451,000, or
$0.04 per basic and diluted share, in Q3 2017.
As of
September 30, 2018, cash and cash equivalents totaled $7.6 million,
compared to $4.7 million as of December 31, 2017.
Share Repurchase Plan
As
announced on April 5, 2018, the Board of Directors has approved a
Stock Repurchase Plan authorizing the repurchase of up to $3.0
million of the Company’s common stock, from time to time on
the open market or in privately negotiated transactions through
March 31, 2020. During Q3 2018, the Company purchased approximately
45,000 shares at an average price of $1.77 per share.
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 has provided
in-store media solutions in over 20,000 retail outlets, inclusive
of grocery, mass merchants and dollar over the course of 2018. 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, anticipated
future profitability, future service revenues, innovation and
transformation of the Company’s business 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 those set forth
in our Annual Report on Form 10-K for the year ended December 31,
2017 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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2018
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2017
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2018
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2017
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Net
sales
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$9,455,000
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$7,723,000
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$25,119,000
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$18,339,000
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Cost
of sales
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5,892,000
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4,980,000
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15,805,000
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13,469,000
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Gross
profit
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3,563,000
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2,743,000
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9,314,000
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4,870,000
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Operating
expenses:
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Selling
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908,000
|
879,000
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2,530,000
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2,598,000
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Marketing
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703,000
|
409,000
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1,873,000
|
1,262,000
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General
and administrative
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1,106,000
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1,004,000
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3,580,000
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2,871,000
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Operating
income (loss)
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846,000
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451,000
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1,331,000
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(1,861,000)
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Other
income, net
|
15,000
|
2,000
|
27,000
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7,000
|
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Income
(loss) before income taxes
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861,000
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453,000
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1,358,000
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(1,854,000)
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Income
tax expense (benefit)
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216,000
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2,000
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365,000
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(580,000)
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Net
income (loss)
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$645,000
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$451,000
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$993,000
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$(1,274,000)
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Net
income (loss) per share:
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Basic
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$0.05
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$0.04
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$0.08
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$(0.10)
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Diluted
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$0.05
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$0.04
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$0.08
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$(0.10)
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Shares
used in calculation of net income (loss) per share:
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Basic
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11,729,000
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11,758,000
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11,784,000
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11,698,000
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Diluted
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12,012,000
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11,777,000
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12,026,000
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11,698,000
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SELECTED BALANCE SHEET DATA
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(Unaudited)
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September 30,
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December 31,
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2018
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2017
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Cash
and cash equivalents
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$7,590,000
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$4,695,000
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Working
capital
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12,703,000
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11,833,000
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Total
assets
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23,763,000
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21,688,000
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Total
liabilities
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7,946,000
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6,847,000
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Shareholders'
equity
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15,817,000
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14,841,000
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Working
capital represents current assets less current
liabilities.
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