-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Di7bVIRZv/zZ4GRBsE9WBF5eJ+bOmIxvDRIiQQ0+G+LMQrZUgpSaIl0EIZZKSnt5 oZsYt50kRiOx59lp+ASz4A== 0000897101-03-000179.txt : 20030307 0000897101-03-000179.hdr.sgml : 20030307 20030307123546 ACCESSION NUMBER: 0000897101-03-000179 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20020630 FILED AS OF DATE: 20030307 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INSIGNIA SYSTEMS INC/MN CENTRAL INDEX KEY: 0000875355 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS MANUFACTURING INDUSTRIES [3990] IRS NUMBER: 411656308 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-13471 FILM NUMBER: 03595727 BUSINESS ADDRESS: STREET 1: 5025 CHESHIRE LANE NORTH CITY: PLYMOUTH STATE: MN ZIP: 55446 BUSINESS PHONE: 7633926200 MAIL ADDRESS: STREET 1: 5025 CHESHIRE LANE NORTH CITY: PLYMOUTH STATE: MN ZIP: 55346 10-Q/A 1 isig031092_10qa.txt INSIGNIA SYSTEMS, INC. FORM 10Q/A DocnoDoc# 1673030\31 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q/A AMENDMENT NO. 2 TO FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. FOR THE PERIOD ENDED: JUNE 30, 2002 COMMISSION FILE NUMBER: 0-19380 INSIGNIA SYSTEMS, INC. ---------------------- (Name of small business issuer in its charter) MINNESOTA 41-1656308 --------- ---------- (State or other jurisdiction (IRS Employer of incorporation or organization) Identification No.) 6470 SYCAMORE COURT NORTH MAPLE GROVE, MINNESOTA 55369 ---------------------------- (Address of principal executive offices and zip code) Registrant's telephone number, including area code: (763) 392-6200 Former name, former address and former fiscal year, if changed since last report: 5025 CHESHIRE LANE NORTH PLYMOUTH, MN 55446 ------------------ Indicate by check mark whether the registration (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES _X_ NO ____ APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date. Common Stock, $.01 Par Value - - 12,167,748 shares as of March 3, 2003. 1 INDEX REGISTRANT COMPANY AND SUBSIDIARIES PART I. FINANCIAL INFORMATION - ------------------------------ Item 1. Financial Statements (Unaudited) Balance Sheets - June 30, 2002 and December 31, 2001 Statements of Operations - Three months ended June 30, 2002 and 2001; Six months ended June 30, 2002 and 2001 Statements of Cash Flows -- Six months ended June 30, 2002 and 2001 Notes to Financial Statements - June 30, 2002 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition Item 3. Quantitative and Qualitative Disclosures About Market Risk PART II. OTHER INFORMATION - -------------------------- Item 1. Legal Proceedings Item 2. Changes in Securities Item 3. Defaults upon Senior Securities Item 4. Submission of Matters to a Vote of Security Holders Item 5. Other Information Item 6. Exhibits and Reports on Form 8-K SIGNATURES CERTIFICATIONS 2 Part I. Financial Information Item 1. Financial Statements INSIGNIA SYSTEMS, INC. BALANCE SHEETS
June 30, December 31, ASSETS 2002 2001 - ----------------------------------------------------------------- ------------ ------------ (UNAUDITED) (NOTE) CURRENT ASSETS: Cash and cash equivalents $ 2,661,123 $ 2,209,448 Marketable securities 0 80,000 Accounts receivable - net of $218,511 allowance 3,471,849 2,995,527 Inventories 829,319 843,965 Prepaid expenses and other 385,273 146,002 ------------ ------------ TOTAL CURRENT ASSETS 7,347,564 6,274,942 PROPERTY AND EQUIPMENT: Production tooling, machinery and equipment 1,753,281 1,740,462 Office furniture and fixtures 243,051 243,051 Computer equipment 589,285 517,510 Leasehold improvements 275,292 266,836 ------------ ------------ 2,860,909 2,767,859 Accumulated depreciation and amortization (2,486,636) (2,411,900) ------------ ------------ TOTAL PROPERTY AND EQUIPMENT 374,273 355,959 ------------ ------------ TOTAL ASSETS $ 7,721,837 $ 6,630,901 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY - ----------------------------------------------------------------- CURRENT LIABILITIES: Accounts payable 1,566,054 $ 2,140,452 Accrued compensation and benefits 473,103 509,636 Accrued expenses 635,301 25,028 Deferred revenue 206,916 151,214 Line of credit 317,310 511,619 Other 75,007 53,618 ------------ ------------ TOTAL CURRENT LIABILITIES 3,273,691 3,391,567 STOCKHOLDERS' EQUITY: Common stock, par value $.01; authorized--20,000,000 shares; issued and outstanding June 30, 2002--10,906,765 shares; December 31, 2001--10,614,098 shares 109,068 106,141 Additional paid-in capital 18,701,884 18,017,617 Accumulated deficit (14,362,806) (14,884,424) ------------ ------------ TOTAL STOCKHOLDERS' EQUITY 4,448,146 3,239,334 ------------ ------------ TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 7,721,837 $ 6,630,901 ============ ============
Note: The balance sheet at December 31, 2001 has been derived from the audited financial statements at that date. See Notes to Financial Statements. 3 INSIGNIA SYSTEMS, INC. STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Six Months Ended June 30 June 30 ----------------------------- ----------------------------- 2002 2001 2002 2001 ------------ ------------ ------------ ------------ NET SALES $ 5,822,882 $ 4,625,223 $ 11,837,999 $ 9,772,723 Cost of Sales 2,133,384 1,965,338 4,610,562 4,183,871 ------------ ------------ ------------ ------------ GROSS PROFIT 3,689,498 2,659,885 7,227,437 5,588,852 OPERATING EXPENSES: POPS Program 1,806,328 1,457,001 3,600,766 2,787,206 Sales 302,231 307,054 626,890 633,792 Marketing 623,135 516,291 1,100,088 944,735 General & Administrative 662,451 491,719 1,277,290 1,028,612 ------------ ------------ ------------ ------------ TOTAL OPERATING EXPENSES 3,394,145 2,772,065 6,605,034 5,394,345 ------------ ------------ ------------ ------------ OPERATING INCOME (LOSS) 295,353 (112,180) 622,403 194,507 OTHER INCOME (EXPENSE): Interest Income 12,645 18,509 23,087 36,525 Interest Expense (14,829) (19,067) (28,698) (38,252) Other Income (Expense) (100,853) 24,140 (95,781) 24,824 ------------ ------------ ------------ ------------ PRE-TAX INCOME (LOSS) 192,316 (88,598) 521,011 217,604 Provision for Income Tax (9,397) 10,575 (607) 15,650 ------------ ------------ ------------ ------------ NET INCOME (LOSS) $ 201,713 $ (99,173) $ 521,618 $ 201,954 ============ ============ ============ ============ Basic Earnings (Loss) per share $ 0.02 $ (0.01) $ .05 $ 0.02 ============ ============ ============ ============ Diluted Earnings (Loss) per share $ 0.02 $ (0.01) $ .04 $ 0.02 ============ ============ ============ ============ Shares used in calculation of net income (loss) per share: Basic 10,801,128 10,401,404 10,750,602 10,381,673 ============ ============ ============ ============ Diluted 11,744,213 10,401,404 11,670,733 11,648,003 ============ ============ ============ ============
4 INSIGNIA SYSTEMS, INC. STATEMENTS OF CASH FLOWS (Unaudited)
Six Months Ended June 30 2002 2001 ----------- ----------- OPERATING ACTIVITIES: Net income (loss) $ 521,618 $ 201,954 Non-cash expenses included in income (loss): Depreciation and amortization 74,736 84,928 Provision for bad debt expense (42,000) 9,948 Amortization of unearned compensation 0 5,753 Changes in operating assets & liabilities: Accounts receivable (434,322) (510,206) Inventories 14,646 240,201 Prepaids and other (74,271) 121,090 Accounts payable (574,398) 474,297 Accrued compensation and benefits (36,533) (39,691) Deferred revenue 55,702 43,488 Accrued expenses and other 631,662 (86,427) ----------- ----------- NET CASH USED IN OPERATING ACTIVITIES 136,840 545,335 INVESTING ACTIVITIES: (Purchase) Sale of property and equipment (93,050) (143,775) (Purchase) Sale of marketable securities 80,000 80,000 ----------- ----------- NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (13,050) (63,775) FINANCING ACTIVITIES: Proceeds from issuance of Common Stock 522,194 262,735 Proceeds (to) from credit line (194,309) (92,092) ----------- ----------- CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 327,885 170,643 ----------- ----------- INCREASE (DECREASE) IN CASH & EQUIVALENTS 451,675 652,203 Cash and equivalents at beginning of period 2,209,448 1,106,160 ----------- ----------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 2,661,123 $ 1,758,363 =========== ===========
5 INSIGNIA SYSTEMS, INC. NOTES TO FINANCIAL STATEMENTS (Unaudited) NOTE A -- BASIS OF PRESENTATION The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six month period ended June 30, 2002 are not necessarily indicative of the results that may be expected for the year ended December 31, 2002. For further information, refer to the financial statements and footnotes thereto for the year ended December 31, 2001. NOTE B -- INVENTORIES Inventories consist primarily of Finished Goods on site. Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition (Second Quarter Ended June 30, 2002) RESULTS OF OPERATIONS NET SALES. The Company's net sales for the second quarter ended June 30, 2002 were $5,823,000, an increase of 26%, compared to net sales of $4,625,000 for the second quarter of 2001. For the six months ended June 30, 2002, net sales were $11,838,000, an increase of 21% compared to net sales of $9,773,000 for the first half of 2001. POPS program sales increased 37% from $6,833,000 in the first half of 2001 to $9,348,000 for the first half of 2002. Thermal sign card sales decreased 13% from $1,479,000 during the first half of 2001 to $1,280,000 in the first half of 2002. Printing sales decreased 10% from $858,000 in the first half of 2001 to $769,000 in the first half of 2002. 6 GROSS PROFIT. The Company's gross profit for the second quarter of 2002 increased 39% to $3,689,000, compared to $2,660,000 for the second quarter of 2001. Gross profit for the first six months of 2002 increased 29% to $7,227,000, compared to $5,589,000 for the first half of 2001. The increase in gross profit for the second quarter and the first six months of 2002 is primarily due to the increase in the POPS program sales. Gross profit as a percentage of net sales was 63.4% for the second quarter of 2002, compared to 57.5% for the second quarter of 2001, and was 61.1% for the first six months of 2002, compared to 57.2% for the first half of 2001. OPERATING EXPENSES. Operating expenses increased 22% in the second quarter of 2002 compared to the second quarter of 2001. Sales expenses decreased 2% for the second quarter of 2002, compared to the second quarter of 2001. Marketing expenses increased 21% for the second quarter of 2002, compared to the second quarter of 2001. This increase was due primarily to additional sign promotional expenses incurred during the second quarter of 2002. General and administrative expenses increased 35% for the second quarter of 2002, compared to the second quarter of 2001. This increase was due primarily to increased legal expenses. POPS expenses increased 24% for the second quarter of 2002, compared to the second quarter of 2001 and reflects the continuing commitment to the POPS program. Operating expenses increased 22% for the first six months of 2002, compared to the first six months of 2001. Sales expenses decreased 1% for the first sixth months of 2002, compared to the first six months of 2001. Marketing expenses increased 16% for the first six months of 2002 compared to the first six months of 2001 and is due primarily to additional sign promotional expenses during the first six months of 2002. General and administrative expenses increased 24% for the first six months of 2002, compared to the first six months of 2001. This increase was due primarily to increased legal expenses. POPS expenses increased 29% for the first six months of 2002, compared to the first six months of 2001. This increase in POPS operating expenses for the first six months of 2002 reflects the continuing commitment to the POPS program. Operating expenses as a percentage of net sales were 58% in the second quarter of 2002 and 56% for the first six months of 2002, compared to 60% in the second quarter of 2001 and 55% for the first six months of 2001. NET INCOME (LOSS). The Company had a net income of $202,000, or $.02 per share for the second quarter of 2002, compared to a net loss of $(99,000), or $(.01) per share for the second quarter of 2001. For the first six months of 2002, the net income was $522,000, or $0.05 per share, compared to a net income of $202,000, or $.02 per share for the first half of 2001. The net income for the first half of 2002 and for the second quarter of 2002, compared to the first half of 2001 and the second quarter of 2001 resulted primarily from the company's ability to increase its sales at a proportionally higher rate than the increase in operating expenses. 7 LIQUIDITY AND CAPITAL RESOURCES At June 30, 2002, working capital was $4,074,000, compared to $2,883,000 at December 31, 2001. Cash, cash equivalents and marketable securities increased $452,000 from $2,209,000 at December 31, 2001 to $2,661,000 on June 30, 2002, primarily due to the net income of $522,000, an increase in accrued expenses and other expenses of $632,000 and the proceeds received from the issuance of common stock of $522,000, offset by an increase in accounts receivable of $434,000, a decrease in accounts payable of $574,000, an increase in prepaids and other of $74,000 and a decrease in the credit line of $194,000. The Company anticipates that its working capital needs will continue to increase due to the expected growth in the business. However, the company believes that it will have sufficient capital resources to fund its current business operations and anticipated growth for the foreseeable future. Item 3. Quantitative and Qualitative Disclosures About Market Risk None. Part II. OTHER INFORMATION Item 1. Legal Proceedings None Item 2. Changes in Securities None Item 3. Defaults upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders The Company held its Annual Meeting of Shareholders on May 22, 2002. The shareholders present or by proxy voted to elect Scott Drill, G. L. Hoffman, Erwin A. Kelen, W. Robert Ramsdell, Gordon F. Stofer, Frank D. Trestman and Gary L. Vars as directors with each director receiving the following votes: WITHHOLD FOR AUTHORITY --- --------- Scott F. Drill 10,058,194 98,600 G. L. Hoffman 6,628,743 3,528,051 Erwin A. Kelen 10,084,794 72,000 8 Gordon F. Stofer 10,087,194 69,600 W. Robert Ramsdell 9,447,244 709,550 Frank D. Trestman 10,082,994 73,800 Gary L. Vars 10,057,994 98,800 The shareholders present or by proxy voted to ratify an amendment to the Company's Stock Plan to increase by 250,000 shares the number of shares available under the Plan with 9,682,991 shares in favor, 454,868 shares against, and 18,935 shares abstaining. The shareholders present or by proxy voted to approve the appointment of Ernst & Young LLP as independent auditors with 10,116,089 votes in favor, 14,800 votes against, and 25,905 votes abstaining. Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K (a) Exhibits None. (b) Reports on Form 8-K No reports on Form 8-K were filed during the quarter covered by this Form 10-Q. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Dated: March 4, 2003 Insignia Systems, Inc. --------------- ------------------------------------ (Registrant) /s/ Scott F. Drill ------------------------------- Scott F. Drill President and CEO /s/ Denni J. Lester ------------------------------- Denni J. Lester Vice President, Finance and CFO 9 CERTIFICATIONS -------------- I, Scott Drill, certify that: 1. I have reviewed this quarterly report on Form 10-Q/A of Insignia Systems, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report. Date: March 4, 2003 /s/ Scott F. Drill ------------------ ----------------------- Scott F. Drill President and Chief Executive Officer 10 I, Denni J. Lester, certify that: 1. I have reviewed this quarterly report on Form 10-Q/A of Insignia Systems, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report. Date: March 4, 2003 /s/ Denni J. Lester ------------------ --------------------------- Denni J. Lester Vice President, Finance and Chief Financial Officer 11 EX-99.1 3 isig031092_ex99-1.txt CERTIFICATION OF CEO EXHIBIT 99.1 CERTIFICATION The undersigned certifies pursuant to 18 U.S.C.ss.1350, that: (1) The accompanying Quarterly Report on Form 10-Q/A for the period ended June 30, 2002, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the accompanying Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: March 4, 2003 /s/ Scott F. Drill ------------------ ----------------------- Scott F. Drill President and Chief Executive Officer 12 EX-99.2 4 isig031092_ex99-2.txt CERTIFICATION OF CFO EXHIBIT 99.2 CERTIFICATION The undersigned certifies pursuant to 18 U.S.C.ss.1350, that: (1) The accompanying Quarterly Report on Form 10-Q/A for the period ended June 30, 2002, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the accompanying Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: March 4, 2003 /s/ Denni J. Lester ------------------ --------------------------- Denni J. Lester Vice President, Finance and Chief Financial Officer 13 -----END PRIVACY-ENHANCED MESSAGE-----