a2021_0823isigexh991
EXHIBIT 99.1
Contact:
Insignia Systems,
Inc.
Kristine Glancy,
CEO
(763)
392-6200
|
FOR IMMEDIATE RELEASE
INSIGNIA SYSTEMS, INC. ANNOUNCES
2021 SECOND
QUARTER AND SIX-MONTH FINANCIAL
RESULTS
MINNEAPOLIS, MN – August 23, 2021 – Insignia Systems, Inc. (Nasdaq: ISIG)
(“Insignia”) today reported financial results
for the second quarter ended June 30, 2021
(“Q2”).
Overview
●
Q2 2021 net sales
increased 82.1% to $6.1 million from $3.3 million in Q2
2020.
●
Q2 2021 operating
loss was $853,000 compared to operating loss of $1.8 million in Q2
2020.
●
Q2 2021 net loss
was $894,000, or $0.51 per basic and diluted share, compared to a
net loss of $1.8 million, or $1.07 per basic and diluted share in
Q2 2020.
Insignia’s President and CEO, Kristine
Glancy, commented, “Q2 2021 revenue was strong driven by the
continued momentum on our non-POPS portfolio. Our non-POPS revenue
increased 182% versus Q2 2020 partially offset by our POPS revenue
declining 9% in the same time period. Similar to Q1 2021, our
non-POPS revenue contributed the majority of our revenue with 79%
being driven by display, on-pack and mobile businesses. While we
are lapping Q2 2020, our most negatively impacted quarter from
COVID, the team was also successful in retaining existing clients
for repeat programs as well as acquiring new clients for first time
programs. I’m optimistic given our expanded internal
knowledge, and capabilties from our new hires as well as our
existing team, that we can continue to grow in our Non-POPS
businesses. While I’m optimistic about the continued
potential of our non-POPS businesses, our POPS business continues
to be challenged driven by continued competitive presses and the
expiration of our 10 year selling agreement with News America
Marketing in April 2021.”
Ms.
Glancy continued, “We are eager to start engaging with our
clients again in-person with the opening of our new office in
Minneapolis as well as the return of industry trade shows that we
will be both attending and exhibiting. Our new branding continues
to resonate with our current and prospective clients, with
engagement levels surprassing previous levels on all three of our
main social media platforms. Our website has also experienced
significant growth in both users +216% as well as time spent on our
site +128%. As we execute and plan for the remainder of 2021 and
into 2022, our primary focus will be on our growing solutions as we
allocate resources and investment; and right-size our resources on
POPS. It is imperative that we continue to listen to our clients
needs and pivot the organization’s focus to where brands and
retailers are looking to spend. With the overall diversity in our
product solutions, we believe we are well-suited to address both a
brands and retailers need in-store and
digitally.”
On August 13, Insignia filed an 8-K with the
Securities and Exchange Commission (SEC) announcing that it would
restate its audited financial results for years ended December 31,
2020 and 2019, and the unaudited financial results for the first
quarter of 2021 and the first three quarters of 2020 and 2019. The
restatement was necessary to correct material misstatements related
to accounting for sales taxes. On Augut 23, 2021, the Company filed
Form 10-K/A for the years ended December 31, 2020 and 2019 and Form
10-Q/A for the quarters ended March 31, 2021 and 2020 to restate
the financial statements. The Company has taken remedial action and
will continue to enhance controls over sales taxes. Additional
information can be found in the Form 10-K/A filed with the SEC on
August 23, 2021.
Q2 2021 Results
Net
sales increased 82.1% to $6,096,000 in Q2 2021, from $3,347,000 in
Q2 2020, primarily due to a 182% increase in non-POPS revenue,
partially offset by a 9% decrease in POPS solutions revenue. Our
non-POPS revenue has increased due to both sales to new CPGs and an
increase in sales to existing CPGs, as well as the comparison to
sales being depressed by the impact of COVID-19 in the three months
ended June 30, 2020. Our POPS revenue continues to be negatively
impacted by competitive pressures and brands not spending on
syndicated signage due to COVID-19.
Gross
profit in Q2 2021 increased to $1,208,000, or 19.8% of net sales,
from $332,000, or 9.9% of net sales, in Q2 2020. The increase in
gross profit was primarily due to the increase in non-POPS revenue,
as well as increases to POPS solutions margin as the Company
reduced guaranteed payment obligations in 2021 by renegotiating
several fixed or store-based retail payment contracts to sign
placement-based payment contracts.
Selling
expenses in Q2 2021 were $465,000, or 7.6% of net sales, compared
to $927,000, or 27.7% of net sales, in Q2 2020 due to staff
restructuring-related expense incurred in 2020.
Marketing
expenses in Q2 2021 were $260,000, or 4.3% of net sales, were
relatively consistent compared to $243,000, or 7.3% of net sales,
in Q2 2020.
General
and administrative expenses in Q2 2021 were $1,336,000, or 21.9% of
net sales, compared to $992,000, or 29.6% of net sales, in Q2 2020
due to increased litigation expenses.
Income
tax expense for Q2 2021 was 1.1% of pretax loss, or an expense of
$10,000, compared to income tax expense of 0.6% of pretax loss, or
an expense of $11,000, in Q2 2020.
As a
result of the items above, the net loss for Q2 2021 was $894,000,
or $0.51 per basic and diluted share, compared to a net loss of
$1,843,000, or $1.07 per basic and diluted share, in Q2
2020.
As of
June 30, 2021, cash and cash equivalents and restricted cash
totaled $6.0 million, compared to $7.1 million as of December 31,
2020.
About Insignia Systems, Inc.
Insignia
Systems, Inc. sells product solutions ranging from in-store to
digital advertising. Consumer-packaged goods (CPG) manufacturers
and retailers across the country rely on our deep expertise in the
dynamic retail environment to provide a full suite of shopper
engagement solutions.
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 “anticipate,” “continue,”
“expect,” “intend,” “remain,”
“seek,” “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 Insignia’s business, allocations of
resources, benefits of new relationships, and the impacts of the
COVID-19 pandemic and efforts to mitigate the same 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/A for the year ended December 31,
2020 and additional risks, if any, identified in our Quarterly
Reports on Form 10-Q and 10-Q/A and our Current Reports on Forms
8-K filed with the SEC. Such forward-looking statements should be
read in conjunction with Insignia'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
|
$6,096,000
|
$3,347,000
|
$11,482,000
|
$7,993,000
|
Cost
of sales
|
4,888,000
|
3,015,000
|
9,345,000
|
6,728,000
|
Gross
profit
|
1,208,000
|
332,000
|
2,137,000
|
1,265,000
|
Operating
expenses:
|
|
|
|
|
Selling
|
465,000
|
927,000
|
981,000
|
1,647,000
|
Marketing
|
260,000
|
243,000
|
495,000
|
608,000
|
General
and administrative
|
1,336,000
|
992,000
|
3,273,000
|
1,996,000
|
|
|
|
|
|
Operating
loss
|
( 853,000)
|
( 1,830,000)
|
( 2,612,000)
|
( 2,986,000)
|
Other
income (expense), net
|
( 31,000)
|
( 2,000)
|
1,004,000
|
7,000
|
|
|
|
|
|
Loss
before taxes
|
( 884,000)
|
( 1,832,000)
|
( 1,608,000)
|
( 2,979,000)
|
Income
tax expense (benefit)
|
10,000
|
11,000
|
23,000
|
( 211,000)
|
|
|
|
|
|
Net
loss
|
( 894,000)
|
( 1,843,000)
|
( 1,631,000)
|
( 2,768,000)
|
|
|
|
|
|
Net
loss per share:
|
|
|
|
|
Basic
|
$( 0.51)
|
$( 1.07)
|
$( 0.93)
|
$( 1.60)
|
Diluted
|
$( 0.51)
|
$( 1.07)
|
$( 0.93)
|
$( 1.60)
|
|
|
|
|
|
Shares
used in calculation of net loss per share:
|
|
|
|
|
Basic
|
1,755,000
|
1,725,000
|
1,753,000
|
1,725,000
|
Diluted
|
1,755,000
|
1,725,000
|
1,753,000
|
1,725,000
|
SELECTED BALANCE SHEET DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents and restricted cash
|
$5,964,000
|
$7,128,000
|
Working
capital
|
5,756,000
|
7,668,000
|
Total
assets
|
11,582,000
|
14,289,000
|
Total
liabilities
|
6,386,000
|
7,621,000
|
Shareholders'
equity
|
5,196,000
|
6,668,000
|
|
|
|
Working
capital represents current assets less current
liabilities.
|