Insignia Systems, Inc. Announces 2014 Second Quarter and Six Months
SIGNS DIRECT AGREEMENT WITH SUPERVALU, INC.
ANNOUNCES EXPANSION OF GROCERY RETAIL DISTRIBUTION NETWORK
*Net sales in Q2 2014 increased 3.4% to $6.3 million from $6.1 million in
Q2 2013, driven by increases in both POPS® sales and legacy product sales.
*Net sales for the six months ended June 30, 2014 decreased 5.8% to $12.7
million, from $13.5 million for the six months ended June 30, 2013.
*Operating income in Q2 2014 was $112,000 compared to $169,000 in Q2 2013.
*Operating income for the six months ended June 30, 2014 was $279,000
compared to operating income of $1.1 million for the six months ended June
*Net income in Q2 2014 was $70,000, or $0.01 per basic and diluted share,
compared to $164,000, or $0.01 per basic and diluted share, in Q2 2013.
*Net income for the six months ended June 30, 2014 was $185,000, or $0.01
per basic and diluted share, compared to $584,000, or $0.04 per basic and
diluted share, in 2013.
At June 30, 2014
*Total cash and cash equivalents of $19.5 million, or $1.49 per diluted
*Working capital of $22.2 million.
*$0 long-term debt.
MINNEAPOLIS -- July 30, 2014
Insignia Systems, Inc. (Nasdaq:ISIG) (“Insignia” or “the Company”) today
reported financial results for the three (“Q2”) and six months ended June 30,
2014, as compared to Q2 and six months ended June 30, 2013.
Insignia’s President and CEO Glen Dall commented, “While sales were lower than
our expectations, we are able to report sales growth and continued
profitability in Q2 2014. This was accomplished during a period in which we
needed to shift a significant amount of focus towards ensuring our retail
distribution network remained stable after the termination of our Valassis
agreement. Importantly, we made significant progress during Q2 2014 in
business development, product innovation efforts, and the continuing evolution
of our operating model.”
Mr. Dall continued, “In business development, we entered into a direct
agreement with SUPERVALU, Inc., a top tier national retailer and wholesaler,
which allows us the opportunity for expanded access and direct partnership
that we did not have previously.
“We have retained nearly 90% of the store count distribution of retailers we
previously had access to under our agreement with Valassis, and our
conversations in securing the balance of these retailers is continuing. Also
during Q2, our retail distribution team secured an incremental 300 stores of
retail grocery distribution, which should come online in August. Finally,
during Q2, our retail products sales team grew sales by 29% over last year.”
Mr. Dall concluded, “We see a substantial opportunity to strengthen the market
position of our POPS program, expand our geographies, and introduce innovative
ways to help our CPGs customers and retailers partner reach consumers. We are
making the necessary investments in products, people and infrastructure
required to advance our strategy. We are supported in these initiatives by a
strong balance sheet, and a talented team. We remain quite optimistic about
the balance of 2014 and beyond.”
Q2 2014 Results
Q2 2014 total net sales increased 3.4% to $6,344,000 from $6,133,000 in Q2
2013, due to increases in both POPS sales and product sales.
Gross profit in Q2 2014 increased to $2,903,000, or 45.7% of total net sales,
from $2,541,000, or 41.4% of total net sales, in Q2 2013. Higher gross profit
margin was the result of, among other factors, favorable pricing and program
Selling expenses in Q2 2014 were $1,376,000, or 21.7% of total net sales, as
compared to $1,157,000, or 18.8% of total net sales, in Q2 2013, due primarily
to an increase in staffing in the 2014 period.
General and administrative expenses increased to $1,088,000, or 17.1% of total
net sales, from $995,000, or 16.2% of total net sales, in Q2 2013. This
increase was primarily the result of the timing of stock-based compensation
Operating income for Q2 2014 decreased to $112,000 from operating income of
$169,000 in Q2 2013.
Income tax expense for Q2 2014 was 40.7% of pretax income, or $48,000,
compared to income tax expense of 6.8% of pretax income, or $12,000, in Q2
2013. The fluctuation between years relates primarily to the impact of
discrete tax items, related mainly to stock option exercises, during the
Net income for Q2 2014 decreased to $70,000, or $0.01 per basic and diluted
share, from net income of $164,000, or $0.01 per basic and diluted share, in
Insignia’s CFO John Gonsior stated, “Our balance sheet continues to be strong,
with $19.5 million of cash and cash equivalents as of June 30, 2014, down from
cash and cash equivalents of $21.8 million as of December 31, 2013. This
decrease was due primarily to the timing of collections on accounts
receivable, as well as the payment of various liabilities and the repurchase
of our common stock. As of June 30, 2014, we had approximately $22.2 million
in working capital, which is unchanged from December 31, 2013.”
Mr. Gonsior concluded, “On a trailing twelve-month basis ended June 30, 2014,
net sales increased 8% to $27.0 million from $24.9 million in the comparable
prior year period. Our backlog for programs running in the next 12 months
increased approximately 19% from the same time a year ago, with $7.0 million
of bookings in Q3 with time remaining to sell.”
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. During Q2 2014, the Company
purchased approximately 147,000 shares at an average price of $3.05.
Insignia’s management team will host a conference call today at 5:00 pm ET /
4:00 pm CT 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 (877) 407-9753 or
(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
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 approximately 13,000 chain retail
supermarkets, 2,000 mass merchants and 7,000 dollar stores. Through the
nationwide POPS network, major consumer goods manufacturers take their brand
messages to the point-of-purchase in Insignia’s available retail network. For
additional information, contact (888) 474-7677, or visit the Insignia website
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’s management
team, regarding, for instance: current expectations as to future financial
performance; 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 relationship with News America;
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.
STATEMENTS OF OPERATIONS
Three Months Ended Six Months Ended
June 30, June 30,
2014 2013 2014 2013
Net sales $ 6,344,000 $ 6,133,000 $ 12,747,000 $ 13,529,000
Cost of sales 3,441,000 3,592,000 7,161,000 7,452,000
Gross profit 2,903,000 2,541,000 5,586,000 6,077,000
Selling 1,376,000 1,157,000 2,727,000 2,552,000
Marketing 327,000 220,000 562,000 429,000
General and 1,088,000 995,000 2,018,000 1,951,000
Operating income 112,000 169,000 279,000 1,145,000
Other income, net 6,000 7,000 12,000 14,000
Income before taxes 118,000 176,000 291,000 1,159,000
Income tax expense 48,000 12,000 106,000 575,000
Net income $ 70,000 $ 164,000 $ 185,000 $ 584,000
Net income per
Basic $ 0.01 $ 0.01 $ 0.01 $ 0.04
Diluted $ 0.01 $ 0.01 $ 0.01 $ 0.04
Shares used in
calculation of net
income per share:
Basic 12,854,000 13,660,000 12,854,000 13,657,000
Diluted 13,093,000 13,687,000 13,092,000 13,686,000
SELECTED BALANCE SHEET DATA
June 30, December 31,
Cash and cash equivalents $ 19,486,000 $ 21,763,000
Working capital 22,162,000 22,203,000
Total assets 31,173,000 31,572,000
Total liabilities 4,878,000 5,402,000
Shareholders' equity 26,295,000 26,170,000
Insignia Systems, Inc.
John Gonsior, CFO, 763-392-6200
Press spacebar to pause and continue. Press esc to stop.