Blueprint
EXHIBIT 99.1
Contact:
Insignia Systems,
Inc.
Kristine Glancy,
CEO
(763)
392-6200
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FOR IMMEDIATE RELEASE
INSIGNIA SYSTEMS, INC. ANNOUNCES
2019 SECOND
QUARTER AND SIX-MONTH FINANCIAL
RESULTS
MINNEAPOLIS, MN – August 6, 2019 – Insignia Systems, Inc. (Nasdaq: ISIG)
(“Insignia”) today reported financial results
for the second quarter ended June 30, 2019
(“Q2”).
Overview
●
Q2 2019 net sales
decreased 29.1% to $5.8 million from $8.2 million in Q2 2018,
primarily driven by a decrease in POPS solution revenue partially
offset by increased innovation initiatives revenue.
●
Q2 2019 operating
loss was $683,000 compared to operating income of $253,000 in Q2
2018.
●
Q2 2019 net loss
was $488,000, or $0.04 per basic and diluted share, compared to net
income of $184,000, or $0.02 per basic and diluted share in Q2
2018.
Insignia’s
President and CEO Kristine Glancy commented, “Despite the
challenges we have faced in 2019, I’m proud of the
teams’ relentless approach on diversifying our portfolio,
building client relationships and improving our overall operational
effectivness. As a result, our expanded product portfolio continues
to drive growth, delivering nearly 40% of sales in the second
quarter. We believe these products will continue to drive growth
and success for the organization, as we continue our overall focus
on improving efficiency and effectiveness while allocating
resources to drive continued growth. In addition, our Q2 2019
operating loss improved from our Q1 2019 results driven by the
revenue growth on our new products. In July 2019, we filed a
complaint against News America Marketing In-Store Services L.L.C.
and certain of its affiliates as a
result of their exercise of monopoly power through various actions
designed to harm our core business. We continue to expect ongoing
competivive pressure to challenge our business results for the
remainder of the year.”
Ms.
Glancy continued, “While we continue to focus on our
innovation, we are not taking our eye off our core in-store signage
business. We are actively working on deepening our relationships
with existing clients, identifying new clients, while also staying
focused on new retailer acquisition opportunities. Given the
continued transformation and changes in our industry, we believe we
are building a portfolio of products, a talented team and a
customer-first approach that will be successful long-term. Despite
a challenging year and situation we continue to maintain a strong
balance sheet while strategically allocating resources to growth
areas.”
Q2 2019 Results
Net
sales decreased 29.1% to $5,842,000 in Q2 2019, from $8,245,000 in
Q2 2018, primarily due to a decrease in POPS solution revenue. The
number of signs placed and average price per sign both decreased,
due to the loss of a significant retailer as a result of
competitive pressures, and the completion of a non-recurring
favorable CPG contract. Q2 2019 net sales were positively impacted
by a 71.6% increase in innovation solutions revenue compared to Q2
2018.
Gross
profit in Q2 2019 decreased to $1,465,000, or 25.1% of net sales,
from $3,005,000, or 36.4% of net sales, in Q2 2018. The decrease in
gross profit was primarily due to a decrease in POPS solution sales
as our gross profit is highly dependent on sales levels due to the
relatively fixed nature of a portion of our payments to retailers,
combined with the decrease in average price per sign due to the
completion of a non-recurring favorable contract, partially offset
by an increase in revenue and profitability from innovation
solutions.
Selling
expenses in Q2 2019 were $693,000, or 11.9% of net sales, compared
to $719,000, or 8.7% of net sales, in Q2 2018 due to reduced
variable staff related expenses.
Marketing
expenses in Q2 2019 were $585,000, or 10.0% of net sales, compared
to $566,000, or 6.9% of net sales, in Q2 2018. Increased marketing
expense was primarily the result of increased consulting expenses,
partially offset by decreased staffing and variable staff related
expenses.
General
and administrative expenses in Q2 2019 were $870,000, or 14.9% of
net sales, compared to $1,467,000, or 17.7% of net sales, in Q2
2018 due to lower variable staff related expenses and lower
administrative costs. Q2 2018 general and administrative expense
included $460,000 of expenses related to the negotiation and
satisfaction of obligations under the May 2018 Cooperation
Agreement.
Income
tax benefit for Q2 2019 was 25.3% of pretax loss, or a benefit of
$165,000, compared to income tax expense of 29.2% of pretax income,
or $76,000, in Q2 2018.
As a
result of the items above, the net loss for Q2 2019 was $488,000,
or $0.04 per basic and diluted share, compared to net income of
$184,000, or $0.02 per basic and diluted share, in Q2
2018.
As of
June 30, 2019, cash and cash equivalents and held to maturity
investments together totaled $9.3 million, compared to $10.2
million as of December 31, 2018.
About Insignia Systems, Inc.
Insignia Systems, Inc. sells product solutions ranging from
in-store to digital advertising. Consumer-packaged goods
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,” “believe,”
“continue,” “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 growth, future service revenues, changes in composition of
retailer and CPG manufacturer networks, innovation and
transformation of the Company’s business, and the nature or
impact of pending legal proceedings, 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,
2018 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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CONDENSED STATEMENTS OF OPERATIONS
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Net
sales
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$5,842,000
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$8,245,000
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$10,982,000
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$15,664,000
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Cost
of sales
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4,377,000
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5,240,000
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8,743,000
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9,913,000
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Gross
profit
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1,465,000
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3,005,000
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2,239,000
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5,751,000
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Operating
expenses:
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Selling
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693,000
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719,000
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1,431,000
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1,622,000
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Marketing
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585,000
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566,000
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1,250,000
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1,170,000
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General
and administrative
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870,000
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1,467,000
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1,578,000
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2,474,000
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Operating
income (loss)
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( 683,000)
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253,000
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( 2,020,000)
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485,000
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Other
income, net
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30,000
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7,000
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67,000
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12,000
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Income
(loss) before taxes
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( 653,000)
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260,000
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( 1,953,000)
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497,000
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Income
tax expense (benefit)
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( 165,000)
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76,000
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( 369,000)
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149,000
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Net
income (loss)
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( 488,000)
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184,000
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( 1,584,000)
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348,000
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Net
income (loss) per share:
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Basic
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$( 0.04)
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$0.02
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$( 0.13)
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$0.03
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Diluted
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$( 0.04)
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$0.02
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$( 0.13)
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$0.03
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Shares
used in calculation of net income (loss) per share:
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Basic
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11,888,000
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11,804,000
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11,872,000
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11,812,000
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Diluted
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11,888,000
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12,076,000
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11,872,000
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12,040,000
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SELECTED BALANCE SHEET DATA
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Cash
and cash equivalents
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$4,282,000
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$10,160,000
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Held
to maturity investments
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5,014,000
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-
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Working
capital*
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11,976,000
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13,351,000
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Total
assets
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20,291,000
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23,953,000
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Total
liabilities
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5,179,000
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7,633,000
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Shareholders'
equity
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15,112,000
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16,320,000
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*Defined
as current assets less current liabilities.