8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549-1004

FORM 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report:

February 20, 2008

INSIGNIA SYSTEMS, INC.

(Exact name of registrant as specified in its chapter)

Minnesota (State or other jurisdiction of incorporation)	1-13471 (Commission File Number)	41-1656308 (IRS Employer Identification No.)
6470 Sycamore Court North, Maple Grove, Minnesota (Address of principal executive offices)		55369 (Zip Code)

Registrant’s telephone number, including area code (763) 392-6200

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4© under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On February 20, 2008, the registrant issued a press release disclosing financial information regarding the fourth quarter and year ended December 31, 2007. A copy of the press release is attached as Exhibit 99.1.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

99.1 Press Release dated February 20, 2008.

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 hereunto duly authorized.

	Insignia Systems, Inc.
	(Registrant)
Date:   February 21, 2008	By	/s/ Scott F. Drill
		Scott F. Drill, President and Chief Executive Officer

EX-99.1

EXHIBIT 99.1

Contact: Scott Drill, President and CEO

(763) 392-6200; (800) 874-4648

FOR IMMEDIATE RELEASE

Insignia Systems, Inc. Reports Fourth Quarter Operating Loss of

$(608,000) on Soft POPS Revenue; 2008 Revenue Growth Outlook Still Strong

MINNEAPOLIS – February 20, 2008 – Insignia Systems, Inc. (Nasdaq: ISIG) today reported net sales of $4,936,000 for the fourth quarter ended December 31, 2007, a decrease of 10.4%, compared to net sales of $5,507,000 for the fourth quarter of 2006. The net income for the fourth quarter of 2007 was $1,625,000 or $0.10 per share, compared to a net income of $580,000, or $0.04 per share, for the fourth quarter of 2006. The net income for the fourth quarter of 2007 included a tax benefit of $2,131,000 related to the reduction of the valuation allowance against deferred tax assets. The operating loss of $(608,000) for the fourth quarter of 2007 compared to operating income of $563,000 for the fourth quarter of 2006. Insignia Point-of-Purchase Services^® (POPS) revenue for the fourth quarter was $4,308,000, a decrease of 12.5%, compared to the fourth quarter 2006 POPS revenue of $4,925,000.

For the year ended December 31, 2007, net sales were $24,431,000, an increase of 11.6%, compared to net sales of $21,894,000 for 2006. The net income for the year ended December 31, 2007 was $2,343, 000 or $0.15 per basic share ($0.14 per fully diluted share), compared to $2,396,000, or $0.16 per basic share ($0.15 per fully diluted share) period in 2006. The net income for the year ended December 31, 2007 included the tax benefit of $2,131,000 related to the reduction of the valuation allowance against deferred tax assets. Net income for the year ended December 31, 2007 also included warrant expense of $1,521,000 related to a one-time non-cash charge for a warrant issued in the third quarter of 2007 to Valassis Communications, Inc. for expansion of its strategic alliance with Insignia to include development and integration of new retailer relationships. The warrant expense of $1,521,000 was increased by $552,000 from the previously reported $969,000 of expense as the result of revised assumptions used in the calculation of the fair value of the warrant. An amended Form 10-Q for the third quarter of 2007 will be filed with the SEC to reflect this increase in the warrant expense from that originally reported. Factoring out the warrant expense and the income tax benefit, net income for the year would have been

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Insignia Systems, Inc. • 6470 Sycamore Court North, Maple Grove, MN 55369 • Phone 763-392-6200 • Fax 763-392-6222

http://www.insigniasystems.com • email: info@insigniasystems.com

February 20, 2008 Insignia Systems, Inc. Reports Fourth Quarter Results Page 2

$1,755,000 or $0.11 per share on both a basic and fully diluted basis. Insignia POPS revenue for the year ended December 31, 2007 was $21,589,000, an increase of 12.3%, compared to POPS revenue of $19,219,000 for 2006.

CEO Scott Drill commented, “After achieving POPS revenue growth in each of the first three quarters of 2007, we were disappointed with the softness our POPS business experienced in the fourth quarter. However, our 2008 outlook continues to be strong. We currently have POPS customer orders of approximately $5,800,000 for the first quarter with roughly two weeks of selling time left. For the year, booked revenue is 25% ahead of what it was a year ago.

Our relationship with Valassis is excellent. Although the retail distribution recruitment efforts have not produced results as quickly as hoped, we are still optimistic we will be successful in building the size of our network. Last week we signed a new agreement with Hy-Vee, Inc. which is a chain of 223 stores based in Iowa.”

Drill continued, “On the legal front, the schedule now calls for us to be trial ready December 12, 2008. The slippage in the schedule was due primarily to the sheer volume of documents being exchanged. As has been the case from the start, we continue to be optimistic about the prospects for our affirmative claims and our defense of the counterclaims. Legal expense for the fourth quarter of 2007 was $495,000 versus $310,000 in the fourth quarter of 2006. Our cash position at December 31, 2007 was $7,393,000, up from $6,875,000 on September 30, 2007 and $3,785,000 on December 31, 2006.”

Conference Call

The Company will host a conference call today, February 20, at 4:00 p.m. Central Time. To access the live call, dial 877-795-3647. The conference code is 2574664. Please be sure to call in about 5-10 minutes before the call is scheduled to begin. Audio replay will be available approximately three hours after the call for 10 days. To access the replay, dial 888-203-1112 and reference the passcode 2574664.

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Insignia Systems, Inc. • 6470 Sycamore Court North, Maple Grove, MN 55369 • Phone 763-392-6200 • Fax 763-392-6222

http://www.insigniasystems.com • email: info@insigniasystems.com

February 20, 2008 Insignia Systems, Inc. Reports Fourth Quarter Results Page 3

Insignia Systems, Inc. is an innovative developer and marketer of in-store advertising products, programs and services to retailers and consumer goods manufacturers. Through its Point-Of-Purchase Services (POPS) business, Insignia is contracted with more than 9,000 chain retail supermarkets and drug stores, including A&P, Kroger and Safeway. Through the nationwide POPS network, over 200 major consumer goods manufacturers, including General Mills, Reckitt Benckiser, Kellogg Company, Nestlé, Pfizer, S.C. Johnson & Son and Tyson Foods, have taken their brand messages to the point-of-purchase. For additional information, contact (888) 474-7677, or visit the Insignia POPS Web site at www.insigniapops.com.

Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements. The Company’s actual results could differ materially from these forward-looking statements as a result of a number of factors, including risks and uncertainties as described in the Company’s SEC Form 10-K for the year ended December 31, 2006 and other recent filings with the Securities and Exchange Commission. The Company wishes to caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made.

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Insignia Systems, Inc. • 6470 Sycamore Court North, Maple Grove, MN 55369 • Phone 763-392-6200 • Fax 763-392-6222

http://www.insigniasystems.com • email: info@insigniasystems.com

February 20, 2008 Insignia Systems, Inc. Reports Fourth Quarter Results Page 4

Insignia Systems, Inc.

STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended December 31,					Year Ended December 31,
	2007			2006		2007			2006
Net Sales	$	4,936,000		$	5,507,000	$	24,431,000		$	21,894,000
Cost of Sales		2,520,000			2,473,000		10,889,000			10,054,000
Gross Profit		2,416,000			3,034,000		13,542,000			11,840,000
Operating Expenses:
Selling		1,369,000			1,223,000		5,664,000			4,838,000
Marketing		360,000			297,000		1,412,000			1,051,000
Warrant expense (Selling & Marketing)		—			—		1,521,000	(1)		—
General & administrative		1,295,000			951,000		4,864,000			3,637,000
Operating Income (Loss)		(608,000	)		563,000		81,000			2,314,000
Other Income, net		64,000			17,000		153,000			82,000	(2)
Income (Loss) before Taxes		(544,000	)		580,000		234,000			2,396,000
Income Tax Benefit		2,169,000			—		2,109,000			—
Net Income	$	1,625,000		$	580,000	$	2,343,000		$	2,396,000
Net Income per Share
Basic	$	0.10		$	0.04	$	0.15		$	0.16
Diluted	$	0.10		$	0.04	$	0.14		$	0.15
Shares used in calculation of net income per share:
Basic		15,539,000			15,150,000		15,411,000			15,093,000
Diluted		16,220,000			15,917,000		16,186,000			15,556,000

(1) Reflects the adjustment of a one-time non-cash charge related to a warrant issued in the third quarter to Valassis Communications, Inc. for the development and integration of new retailer relationships. The $552,000 increase in expense from the previously reported $969,000 of expense was the result of revised assumptions used in the calculation of the fair value of the warrant.

(2) Includes $100,000 related to the settlement with the founder of VALUStix.

SELECTED BALANCE SHEET DATA

	December 31, 2007		December 31, 2006
Cash and cash equivalents	$	7,393,000	$	3,785,000
Working capital		7,751,000		5,017,000
Total assets		13,340,000		8,583,000
Total liabilities		3,663,000		3,721,000
Shareholders’ equity		9,677,000		4,862,000

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Insignia Systems, Inc. • 6470 Sycamore Court North, Maple Grove, MN 55369 • Phone 763-392-6200 • Fax 763-392-6222

http://www.insigniasystems.com • email: info@insigniasystems.com