Insignia Systems, Inc. Announces 2014 First Quarter Financial Results
• Q1 2014 net sales decreased 13.4% to $6,403,000 from $7,396,000 in Q1 2013,
driven primarily by a seasonally-influenced decline in POPS revenue.
• Q1 2014 operating income of $167,000 compared to $976,000 in Q1 2013.
• Q1 2014 net income of $115,000, or $0.01 per basic and diluted share,
compared to net income of $420,000, or $0.03 per basic and diluted share, in
At March 31, 2014
• Total cash and cash equivalents of $20,330,000, or $1.55 per diluted share.
• Working capital of $22.4 million.
• $0 long-term debt.
MINNEAPOLIS -- April 30, 2014
Insignia Systems, Inc. (Nasdaq:ISIG) (“Insignia” or “the Company”) today
reported financial results for the first quarter (“Q1”) ended March 31, 2014,
as compared to Q1 ended March 31, 2013.
Insignia’s President and CEO Glen Dall commented, “In the same way that
results in Q1 2013 benefited from an early Easter holiday, our results for Q1
2014 were negatively influenced by that holiday falling a full three weeks
later this year. However, our business is trending positively and we remain
optimistic for the balance of the year. On a trailing twelve-month basis ended
March 31, 2014, net sales increased 13.6% to $26.8 million from $23.6 million
in the comparable prior year period. Additionally, as of April 28, 2014, our
total backlog is up approximately 10% from the same time a year ago.
“We continue to pursue new, innovative ways to serve our clients and retailers
with products and services that leverage our operating assets and core
competencies. We are evaluating new business opportunities that can strengthen
our ability to expand our geographic footprint, and attract new customers.
Additionally, we are exploring new opportunities to expand our retail presence
beyond grocery stores to other mass retailers."
Mr. Dall concluded, “Finally, as you may have seen in our recent proxy
statement, Peter Derycz will be leaving our board effective May 21, 2014, in
conjunction with our board term limit of eight years. I would like to thank
Peter for his dedicated service on our board and his significant commitment to
the success of our Company during his time with us.”
Q1 2014 Results
Q1 2014 total net sales decreased 13.4% to $6,403,000 from $7,396,000 in Q1
2013, due primarily to seasonality. A 14.6% decline in POPS net sales to
$5,951,000 from $6,967,000 in Q1 2013 was partially offset by a 5.4% increase
in products net sales to $452,000 from $429,000 in Q1 2013.
Gross profit in Q1 2014 decreased to $2,683,000, or 41.9% of total net sales,
from $3,536,000, or 47.8% of total net sales, in Q1 2013. Lower gross profit
and gross profit margin was largely the result of lower net sales and program
mix as compared to the 2013 period.
Selling expenses in Q1 2014 were $1,351,000, or 21.1% of total net sales, as
compared to $1,395,000, or 18.9% of total net sales, in Q1 2013, due primarily
to lower sales and the resulting commissions on those sales.
General and administrative expenses decreased to $930,000, or 14.5% of total
net sales, from $956,000, or 12.9% of total net sales, in Q1 2013. This
decrease was primarily the result of decreased compensation-related expenses.
Operating income for Q1 2014 decreased to $167,000 from operating income of
$976,000 in Q1 2013.
Income tax expense for Q1 2014 was 33.5% of pretax income, or $58,000,
compared to income tax expense of 57.3% of pretax income, or $563,000, in Q1
2013. The decrease in the effective tax rate during the three months ended
March 31, 2014 is primarily the result of the tax benefit of disqualifying
dispositions of stock options. Tax expense will vary between periods, given
the Company’s policy of reassessing the annual effective rate on a quarterly
basis, as well as the impact of any discrete tax items in the quarter.
As a result, net income for Q1 2014 decreased to $115,000, or $0.01 per basic
and diluted share, from net income of $420,000, or $0.03 per basic and diluted
share, in Q1 2013.
Insignia’s CFO John Gonsior stated, “Our balance sheet remains strong, with
$20.3 million of cash and cash equivalents as of March 31, 2014, down from
cash and cash equivalents of $21.8 million as of December 31, 2013, which was
mainly due to the timing of collections on accounts receivable and the payment
of various current liabilities. As of March 31, 2014, we had nearly $22.4
million in working capital, compared to working capital of $22.2 million as of
December 31, 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. No purchases were made in Q1
Insignia’s President & CEO, Glen Dall, and VP of Finance & CFO, John Gonsior,
will host a conference call today at 4:00 pm CT / 5:00 pm ET to discuss these
results as well as recent corporate developments. After opening remarks, there
will be a question and answer period. Interested parties may participate in
the call by dialing 201-493-6739. Please call in 10 minutes before the
conference call is scheduled to begin and ask for the Insignia call. Questions
may be asked during the live call, or alternatively, you may e-mail questions
in advance to firstname.lastname@example.org.
The conference call will also be broadcast live over the Internet. To listen
to the live call, please go to www.insigniasystems.com, click on the Investor
Relations section where the conference call is posted. Please go to the
website 15 minutes early to download and install any necessary audio software.
If you are unable to listen live, the webcast of the conference call will be
archived and can be accessed for approximately 90 days. We suggest listeners
use Microsoft Explorer as their browser.
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 13,000 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 & CEO Glen Dall or its Vice President of Finance & 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 stability of 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; (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, 2013 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.
John Gonsior, 763-392-6200
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