Blueprint
EXHIBIT 99.1
Contact:
Insignia Systems,
Inc.
Kristine Glancy,
CEO
(763)
392-6200
|
FOR IMMEDIATE RELEASE
INSIGNIA SYSTEMS, INC. ANNOUNCES
2018 SECOND
QUARTER AND SIX MONTH FINANCIAL
RESULTS
MINNEAPOLIS, MN – July
31, 2018 – Insignia
Systems, Inc. (Nasdaq: ISIG) (“Insignia”) today
reported financial results for the second quarter ended June 30,
2018 (“Q2”).
Overview
●
Q2 2018 net sales
increased 41.0% to $8.2 million from $5.8 million in Q2 2017,
driven by POPS program revenue and innovation.
●
Q2 2018 operating
income was $253,000 (inclusive of incurred Cooperation Agreement
expenses of $460,000) compared to an operating loss of $574,000 in
Q2 2017
●
Q2 2018 net income
was $184,000, or $0.02 per basic and diluted share, compared to a
net loss of $534,000 or ($0.05) per basic and diluted share in Q2
2017
Insignia’s
President and CEO Kristine Glancy commented, “We are pleased
with our continued strong results in Q2 2018 as net sales increased
41.0% compared to Q2 2017. The majority of the net sales increase
was driven by both our POPS program and product innovation, while
also lapping a softer Q2 2017. Our net income for Q2 2018 was
$184,000 compared to a net loss of $534,000 for Q2 2017. The
improvement in net income was primarily driven by our increase in
revenues and gross profit, product diversification and overall
operating expense management, while continuing to make strategic
investments to fuel long-term sustainable growth and our new IT
operating infrastructure.”
Ms.
Glancy continued, “Last week we published our first white
paper in five years, titled The
Grocery Store as a Media Vehicle. In our paper, we discuss
why in-store messaging is a powerful and increasingly leveraged
complement to digital advertising. Brands’ budgets are being
squeezed and they are continually seeking the greatest optimal ROI
possible. The average US consumer will make 1.5 grocery trips per
week, resulting in a total of over 224 million weekly grocery
trips—or the opportunity to reach an average of 1.3 million
active shoppers per hour with a well placed in-store messaging
program. And with over 70% of purchase decisions being made at the
shelf, we are seeing a trend of brands redirecting a portion of
their spending back to tactics that reach the right person at the
right time, a time when their message can have maximum potential
impact, making the grocery store an effective media
vehicle.”
“While we are
making progress in our overall transformation, we are also
continuing to navigate the rapidly evolving marketplace and ensure
we maintain relevancy to our customers needs. We remain committed
to driving overall shareholder value with the focus on our key
initiatives of accelerating growth with a broadened product
portfolio and client base, aligning our cost structure
appropriately while making strategic investments and instilling a
high-performance team, with credible industry
expertise.
Q2 2018 Results
Net
sales increased 41.0% to $8,245,000 in Q2 2018, from $5,849,000 in
Q2 2017, due to increases in both POPS program revenue and
innovation initiatives. POPS program revenue increased primarily
due to the number of signs placed, mostly due to increased signs
placed from new and existing CPG customers and an increase in
average price per sign, which was the result of a favorable mix of
CPG clients. Service revenues inclusive of POPS program revenue
increased during the three months ended June 30, 2018, up 42.7%
from the three months ended June 30, 2017. This strong growth is
indicative of the progress we have made on our transformation
efforts, and is also a result of lapping a soft second quarter in
2017. Accordingly, we do not expect a similar increase in the
percentage of service revenues (or in the gross profit as a
percentage of net sales) during the remainder of 2018 as compared
to the comparable periods in 2017.
Gross
profit in Q2 2018 increased to $3,005,000, or 36.4% of net sales,
from $1,498,000, or 25.6% of net sales, in Q2 2017. The higher
gross profit was primarily the result of increased sales, product
mix combined with an increased average price per sign from a
favorable mix of CPG clients. The company incurred costs of
approximately $155,000 associated with the implementation of its
new IT infrastructure during Q2 2018, compared to $50,000 in Q2
2017.
Selling
expenses in Q2 2018 were $719,000, or 8.7% of net sales, compared
to $831,000, or 14.2% of net sales, in Q2 2017. The decrease was
primarily due to decreased staff related expenses.
Marketing
expenses in Q2 2018 were $566,000, or 6.9% of net sales, compared
to $427,000, or 7.3% of net sales, in Q2 2017. The increase in
dollars was primarily due to increased staffing and staff related
expenses due to an increase in new product development
activities.
General
and administrative expenses in Q2 2018 increased to $1,467,000, or
17.8% of net sales, from $814,000, or 13.9% of net sales, in Q2
2017. The increase of $653,000 includes $460,000 of expenses
related to the negotiation and satisfaction of obligations under
the Cooperation Agreement that was announced on May 18, 2018, and
is in effect into 2020.
Income
tax expense for Q2 2018 was 29.2% of pretax income, or an expense
of $76,000, compared to income tax benefit of 6.6% of pretax loss,
or $38,000, in Q2 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 Q2 2018 was $184,000,
or $0.02 per basic and diluted share, compared to a net loss of
$534,000, or $0.05 per basic and diluted share, in Q2
2017.
As of
June 30, 2018, cash and cash equivalents totaled $8.0 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 Q2 2018, the Company purchased approximately
103,000 shares at an average price of $1.79 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 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, anticipated
future profitability, future service revenues and growth 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
$8,245,000
|
$5,849,000
|
$15,664,000
|
$10,616,000
|
Cost
of sales
|
5,240,000
|
4,351,000
|
9,913,000
|
8,489,000
|
Gross
profit
|
3,005,000
|
1,498,000
|
5,751,000
|
2,127,000
|
Operating
expenses:
|
|
|
|
|
Selling
|
719,000
|
831,000
|
1,622,000
|
1,719,000
|
Marketing
|
566,000
|
427,000
|
1,170,000
|
853,000
|
General
and administrative
|
1,467,000
|
814,000
|
2,474,000
|
1,867,000
|
|
|
|
|
|
Operating
income (loss)
|
253,000
|
(574,000)
|
485,000
|
(2,312,000)
|
Other
income, net
|
7,000
|
2,000
|
12,000
|
5,000
|
|
|
|
|
|
Income
(loss) before taxes
|
260,000
|
(572,000)
|
497,000
|
(2,307,000)
|
Income
tax expense (benefit)
|
76,000
|
(38,000)
|
149,000
|
(582,000)
|
|
|
|
|
|
Net
income (loss)
|
184,000
|
(534,000)
|
348,000
|
(1,725,000)
|
|
|
|
|
|
Net
income (loss) per share:
|
|
|
|
|
Basic
|
$0.02
|
$(0.05)
|
$0.03
|
$(0.15)
|
Diluted
|
$0.02
|
$(0.05)
|
$0.03
|
$(0.15)
|
|
|
|
|
|
Shares
used in calculation of net income (loss) per share:
|
|
|
|
|
Basic
|
11,804,000
|
11,674,000
|
11,812,000
|
11,667,000
|
Diluted
|
12,076,000
|
11,674,000
|
12,040,000
|
11,667,000
|
|
|
|
|
|
SELECTED BALANCE SHEET DATA
|
|
|
(Unaudited)
|
|
|
June 30,
|
December 31,
|
|
2018
|
2017
|
|
|
|
Cash
and cash equivalents
|
$8,041,000
|
$4,695,000
|
Working
capital*
|
12,131,000
|
11,833,000
|
Total
assets
|
22,652,000
|
21,688,000
|
Total
liabilities
|
7,466,000
|
6,847,000
|
Shareholders'
equity
|
15,186,000
|
14,841,000
|
|
|
|
*Defined
as current assets less current liabilities.
|
|
|