Insignia Systems, Inc. Announces 2013 Fourth Quarter and Full Year Financial
*2013 total net sales rose 37.6% to $27.8 million from $20.2 million in
2012, driven primarily by a 41.7% increase in POPS revenue.
*Q4 2013 total net sales rose 29.6% to $6.9 million from $5.3 million in Q4
2012, with POPS revenue increasing 31.2%.
*2013 operating income improved to $2.4 million from an operating loss of
($2.3) million in 2012.
*Q4 2013 operating income increased to $708,000 from $208,000 in Q4 2012.
*2013 net income improved to $1.4 million, or $0.10 per basic and diluted
share, from a net loss of ($1.6 million), or ($0.12) per basic and diluted
share, in 2012.
*Q4 2013 net income improved to $441,000, or $0.03 per basic and diluted
share, from net income of $69,000, or $0.01 per basic and diluted share,
in Q4 2012.
At December 31, 2013
*Total cash and equivalents of $21.8 million, or $1.62 per diluted share.
*Working capital of $22.2 million.
*$0 long-term debt.
MINNEAPOLIS -- February 26, 2014
Insignia Systems, Inc. (Nasdaq: ISIG) (“Insignia” or “the Company”) today
reported financial results for the fourth quarter (“Q4”) and full year ended
December 31, 2013, as compared to the fourth quarter and full year ended
December 31, 2012.
Insignia’s President and CEO Glen Dall commented, “We delivered a strong 2013,
finishing the year with our sixth consecutive quarter of profitable results
following the initiation of our Insignia 2.0 turnaround efforts. We have
continued to invest in our sales and marketing infrastructure to help create a
foundation for continuing progress in 2014.
“We remain focused on growing our core POPS business by leveraging our unique
market position, network of retailers, and available capacity. We also expect
to capitalize on our strong financial position and cash flow generating
abilities to invest in programs that can expand our overall operations,
including developing new product offerings and advancing our digital marketing
initiatives to reach new customers.
“We continue to manage the business for long-term growth and profitability,
and believe that we are well-positioned to achieve these objectives.
Consistent with this philosophy, we are going to begin reporting total
bookings for the year as opposed to the next quarter’s bookings. As of
February 26, 2014, we have bookings of approximately $14.5 million set to run
at various points in 2014, which is approximately 11% ahead of what we had
sold at this same point one year ago. Of the $14.5 million in 2014 programs,
approximately $6.0 million of those are set to run in the first quarter, which
is down approximately 13% from first quarter bookings at this point a year
ago. Recognizing that our POPS revenue can fluctuate on a quarterly basis, in
future releases, we will not reference the next quarter’s bookings amount.”
Q4 2013 Results
Q4 2013 total net sales rose 29.6% to $6.9 million from $5.3 million in Q4
2012. Higher total net sales were primarily attributable to a 31.2% rise in
POPS revenue to $6.5 million from $4.9 million in Q4 2012, mainly the result
of volume increases. Products revenue rose 8.8% to $420,000 in Q4 2013 from
$386,000 in Q4 2012.
Gross profit in Q4 2013 rose to $3.3 million, or 48.5% of total net sales,
from $2.4 million, or 44.1% of total net sales, in Q4 2012. Higher gross
profit and gross profit margin was largely the result of higher revenues and
favorable program mix.
Selling expenses in Q4 2013 increased to $1.4 million, or 19.8% of total net
sales, from $1.2 million, or 22.1% of total net sales, in Q4 2012, due
primarily to higher revenue, additional sales staffing and performance
General and administrative expenses rose to $1.1 million, or 15.5% of total
net sales, from $732,000, or 13.7% of total net sales, in Q4 2012. This
increase was primarily the result of performance compensation.
Operating income for Q4 2013 rose to $708,000 from operating income of
$208,000 in Q4 2012.
Income tax expense for Q4 2013 was 38.4%, or $275,000, compared to income tax
expense of 67.9%, or $146,000, in Q4 2012. Tax expense will vary between
periods, given the Company’s policy of reassessing the annual effective rate
on a quarterly basis.
Net income for Q4 2013 improved to $441,000, or $0.03 per basic and diluted
share, from net income of $69,000, or $0.01 per basic and diluted share, in Q4
Insignia’s CFO John Gonsior stated, “Our balance sheet remains strong, with
$21.8 million of cash and cash equivalents as of December 31, 2013, up from
cash and cash equivalents of $20.7 million as of September 30, 2013. As of
December 31, 2013, we had over $22.2 million in working capital compared to
working capital of $21.4 million as of September 30, 2013.”
Share Repurchase Plan
As previously announced, Insignia’s Board of Directors approved a Stock
Repurchase Plan authorizing the repurchase of up to $5.0 million of the
Company’s common stock, from time to time on the open market or in privately
negotiated transactions until December 3, 2015. The Company expects to
commence repurchasing shares under this plan during Q1 2014.
The Company will host a conference call today, February 26, at 4:00 p.m.
CT/5:00 p.m. ET. To access the live call, dial 877-268-1608. The Conference ID
is 50903278. Please be sure to call in about 5-10 minutes before the call is
scheduled to begin. Audio replay will be available approximately two hours
after the call until March 5, 2014. To access the replay, dial 855-859-2056
and reference Conference ID 50903278. The audio recording will also be
archived on the Company’s website approximately two days after the call until
March 31, 2014.
About Insignia Systems, Inc.
Insignia Systems, Inc. is a 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 provides
at-shelf advertising products in over 13,500 chain retail supermarkets, over
1,900 mass merchants and over 7,000 dollar stores. Through the nationwide POPS
network, over 200 major consumer goods manufacturers, including General Mills,
Kellogg Company, Kraft Foods and Nestlé, have taken their brand messages to
the point-of-purchase. For additional information, contact (888) 474-7677, or
visit the Insignia website at www.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 or the subsequent conference call which 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 “believes,”
“expects,” “anticipates,” “seeks” 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 and conference call. Statements made in this press release
(or during the conference call referred to herein) by the Company, its
President and CEO Glen Dall or its Vice President of Finance and CFO John
Gonsior, regarding, for instance: current expectations as to future financial
performance (including but not limited to bookings in total and for the first
quarter of 2014, and results for fiscal year 2014); our ability to continue
revenue growth, cost improvements and to maintain profitability; current sales
trends with consumer packaged goods manufacturers; the expected addition of
retailers and the ability to increase revenue; continued success in our
business relationships with News America and Valassis; our ability to develop
and successfully implement new products to diversify our business and to
increase our retailer access for these products, 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: (i) the risk that management may
be unable to fully or successfully implement its business plan to achieve and
maintain profitability in the future; (ii) the risk that the Company will not
be able to expand core product offerings or to develop and implement new
product offerings in a successful manner, including our ability to gain
retailer acceptance of new product offerings; (iii) the unexpected loss of a
major consumer packaged goods manufacturer relationship or retailer agreement
or termination of our relationship with News America or Valassis; (iv)
prevailing market conditions in the in-store advertising industry, including
intense competition for agreements with retailers and consumer packaged goods
manufacturers and the effect of any delayed or cancelled customer programs;
(v) potentially incorrect assumptions by management with respect to the
financial effect of cost containment or reduction initiatives, current
strategic decisions, current sales trends for fiscal year 2014; and (vi) other
economic, business, market, financial, competitive and/or regulatory factors
affecting the Company’s business generally, including those set forth in our
Annual Report on Form 10-K for the year ended December 31, 2012 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. The Company 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.
Insignia Systems, Inc.
STATEMENTS OF OPERATIONS
Three Months Ended Year Ended
December 31, December 31,
2013 2012 2013 2012
Net sales $ 6,906,000 $ 5,330,000 $ 27,755,000 $ 20,174,000
Cost of sales 3,557,000 2,982,000 15,009,000 12,872,000
Gross profit 3,349,000 2,348,000 12,746,000 7,302,000
Selling 1,367,000 1,178,000 5,505,000 5,049,000
Marketing 207,000 230,000 856,000 1,149,000
General and 1,067,000 732,000 3,988,000 3,388,000
Operating income 708,000 208,000 2,397,000 (2,284,000 )
Other income, net 8,000 7,000 28,000 27,000
Income (loss) 716,000 215,000 2,425,000 (2,257,000 )
Income tax expense 275,000 146,000 1,046,000 (633,000 )
Net income (loss) $ 441,000 $ 69,000 $ 1,379,000 $ (1,624,000 )
Net income (loss)
Basic $ 0.03 $ 0.01 $ 0.10 $ (0.12 )
Diluted $ 0.03 $ 0.01 $ 0.10 $ (0.12 )
Shares used in
net income (loss)
Basic 12,751,000 13,602,000 13,324,000 13,605,000
Diluted 12,948,000 13,613,000 13,422,000 13,605,000
SELECTED BALANCE SHEET DATA
December 31, December 31,
Cash and cash equivalents $ 21,763,000 $ 20,271,000
Working capital 22,203,000 21,791,000
Total assets 31,572,000 31,706,000
Total liabilities 5,402,000 5,211,000
Shareholders' equity 26,170,000 26,495,000
Insignia Systems, Inc.
John Gonsior, CFO
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