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8-K - FORM 8-K - INSIGNIA SYSTEMS INC/MN | a2020_1111isigform8k.htm |
EXHIBIT 99.1
Contact:
Insignia Systems,
Inc.
Kristine Glancy,
CEO
(763)
392-6200
|
FOR IMMEDIATE RELEASE
INSIGNIA SYSTEMS, INC. ANNOUNCES
2020 THIRD
QUARTER AND NINE-MONTH FINANCIAL RESULTS
MINNEAPOLIS, MN – November 11, 2020 – Insignia Systems, Inc. (Nasdaq: ISIG)
(“Insignia”) today reported financial results
for the third quarter ended September 30, 2020
(“Q3”).
Overview
●
Q3 2020 net sales
decreased 3.5% to $4.5 million from $4.7 million in Q3 2019,
primarily driven by a decrease in overall signage revenue partially
offset by increased non-signage revenue.
●
Q3 2020 operating
loss was $792,000 compared to operating loss of $1.1 million in Q3
2019.
●
Q3 2020 net loss
was $794,000, or $0.07 per basic and diluted share, compared to net
loss of $978,000, or $0.08 per basic and diluted share in Q3
2019.
Insignia’s
President and CEO Kristine Glancy commented, “I’m
extremely pleased with the momentum in Q3 2020 especially with our
non-signage revenue, which grew 150% or $1,463,000 versus Q3 2019.
Our overall business was down 3.5% primarily driven by the decrease
in our signage business, as well as lapping our Custom Print
business which we sold early in Q3 2020. Our POPS business
continues to be impacted by anticompetitive conduct at issue in our
ongoing antitrust litigation against News America Marketing as well
as brands reducing spend on syndicated signage due to COVID,
however, we have built a diversified portfolio including our
digital, display and on-pack and businesses that brands are
spending on. These businesses have allowed us to expand our
footprint into highly sought after retailers where our POPS
business is not offered. We expect our non-POPS revenue to exceed
50% of our total business in 2020.”
Ms.
Glancy continued, “While we feel optimistic about continued
growth on our non-POPS business, there remains a high-level of
uncertainty due to the impact COVID is having not only on our
business, but the overall industry and our CPG and retail partners.
As we plan for the remainder of the year and 2021, we will continue
to make investments into our growth businesses and optimize costs
on our core signage business. We are also focused on cost reduction
initiatives which includes the relocation of our office space and
the decision to shift our production to an external strategic
partner. We have also worked with our retail partners to optimize
our overall fixed expenses on our POPS business. These changes will
contribute significant savings to our 2021 plan. While these
changes are necessary, they were not easy to make and affects our
team. Our production team has been an invaluable part of our
organization, and we look forward to them continuing to be a part
of our team while working for our external manufacturing partner.
The organization continues to work to address headwinds in this
challenging market and our work will continue to chart a path for
future growth. I could not be more proud of the entire Insignia
team as we work together to navigate these difficult
times.”
Q3 2020 Results
Net
sales decreased 3.5% to $4,491,000 in Q3 2020, from $4,654,000 in
Q3 2019, primarily due to a decrease in signage revenue. The number
of POPS signs placed and average price per sign both decreased, due
to the anticompetitive conduct at issue in our ongoing antitrust
litigation against News America Marketing. Q3 2020 net sales were
positively impacted by a 150% increase in non-signage revenue
compared to Q3 2019.
Gross
profit in Q3 2020 decreased to $615,000, or 13.7% of net sales,
from $926,000, or 19.9% of net sales, in Q3 2019. The decrease in
gross profit was primarily due to a decrease in signage revenue,
partially offset by an increase in revenue from
non-signage.
Selling
expenses in Q3 2020 were $585,000, or 13.0% of net sales, compared
to $573,000, or 12.3% of net sales, in Q3 2019 due to an increase
in staff related expense.
Marketing
expenses in Q3 2020 were $192,000, or 4.3% of net sales, compared
to $559,000, or 12.0% of net sales, in Q3 2019. Decreased marketing
expense was primarily the result of decreased staffing and variable
staff related expenses, and due to decreased consulting
expenses.
General
and administrative expenses in Q3 2020 were $825,000, or 18.3% of
net sales, compared to $865,000, or 18.6% of net sales, in Q3 2019
due to decreased staffing.
Gain on
sale of business in Q3 2020 was $195,000, or 4.3% of net sales. The
gain is from the sale of our Custom Print business, which was not
material to our operations as a whole, and did not represent a
strategic shift and therefore is not presented as a discontinued
operation.
Income
tax expense for Q3 2020 was 1.0% of pretax loss, or an expense of
$8,000, compared to income tax benefit of 4.6% of pretax loss, or
$47,000, in Q3 2019.
As a
result of the items above, the net loss for Q3 2020 was $794,000,
or $0.07 per basic and diluted share, compared to net loss of
$978,000, or $0.08 per basic and diluted share, in Q3
2019.
As of
September 30, 2020, cash and cash equivalents totaled $7.1 million,
compared to $7.5 million as of December 31, 2019.
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,” “continue,”
“expect,” “intend,” “remain,”
“seek,” “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 profitability, future service revenues, innovation and
transformation of Insignia’s business, allocations of
resources, benefits of new relationships, and the impacts of the
COVID-19 pandemic and efforts to mitigate the same 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,
2019 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 ’Insignia’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.
Insignia Systems, Inc.
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CONDENSED STATEMENTS OF OPERATIONS
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(Unaudited)
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||||
|
|
|
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Three
Months Ended
|
Nine
Months Ended
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September
30,
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September
30,
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||
|
2020
|
2019
|
2020
|
2019
|
|
|
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Net
sales
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$4,491,000
|
$4,654,000
|
$12,561,000
|
$15,636,000
|
Cost
of sales
|
3,876,000
|
3,728,000
|
10,604,000
|
12,471,000
|
Gross
profit
|
615,000
|
926,000
|
1,957,000
|
3,165,000
|
Operating
expenses:
|
|
|
|
|
Selling
|
585,000
|
573,000
|
2,232,000
|
2,004,000
|
Marketing
|
192,000
|
559,000
|
800,000
|
1,809,000
|
General
and administrative
|
825,000
|
865,000
|
2,798,000
|
2,443,000
|
Gain on sale of business
|
(195,000)
|
-
|
(195,000)
|
-
|
|
|
|
|
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Operating
loss
|
(792,000)
|
(1,071,000)
|
(3,678,000)
|
(3,091,000)
|
Other
income, net
|
6,000
|
46,000
|
46,000
|
113,000
|
|
|
|
|
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Loss
before income taxes
|
(786,000)
|
(1,025,000)
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(3,632,000)
|
(2,978,000)
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Income
tax expense (benefit)
|
8,000
|
( 47,000)
|
(203,000)
|
(416,000)
|
|
|
|
|
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Net
loss
|
$(794,000)
|
$(978,000)
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$(3,429,000)
|
$(2,562,000)
|
|
|
|
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Net
loss per share:
|
|
|
|
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Basic
|
$(0.07)
|
$(0.08)
|
$(0.28)
|
$(0.22)
|
Diluted
|
$(0.07)
|
$(0.08)
|
$(0.28)
|
$(0.22)
|
|
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Shares
used in calculation of net loss per share:
|
|
|
|
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Basic
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12,179,000
|
11,986,000
|
12,108,000
|
11,911,000
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Diluted
|
12,179,000
|
11,986,000
|
12,108,000
|
11,911,000
|
|
|
|
|
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SELECTED BALANCE SHEET DATA
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||
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(Unaudited)
|
|
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September
30,
|
December
31,
|
|
2020
|
2019
|
|
|
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Cash
and cash equivalents
|
$7,066,000
|
$7,510,000
|
Working
capital
|
9,071,000
|
11,395,000
|
Total
assets
|
14,063,000
|
16,990,000
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Total
liabilities
|
5,525,000
|
5,196,000
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Shareholders'
equity
|
8,538,000
|
11,794,000
|
|
|
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Working
capital represents current assets less current
liabilities.
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