MINNEAPOLIS--(BUSINESS WIRE)--Insignia Systems, Inc. (Nasdaq: ISIG) (“Insignia” or “the Company”) today reported financial results for the three (“Q3”) and nine months ended September 30, 2015, as compared to Q3 and nine months ended September 30, 2014.
Insignia’s President and CFO John Gonsior commented, “Our core business continues to show modest growth in both the top-line and bottom line through nine months in 2015 compared to the first nine months of 2014, driven by increases in both POPS and Legacy revenue. Our third quarter profitability was strong and resulted in $.05 of EPS, compared to $.03 in the prior year. Current POPS bookings for Q4 2015 are approximately $6.8 million, compared to $5.2 million for Q4 2014 one year ago. While we are pleased with our third quarter performance and fourth quarter bookings, we continue to face growing marketplace pressures, which underscores our focus on near-term product diversification efforts.
“We have begun a focused effort on expanding our product portfolio in a way that both supports and complements our existing product lines. Our first step in this direction is our pilot of The Like MachineTM, and as we have begun expanding that pilot into higher-traffic stores, consumer engagement with this product continues has grown. While we believe that our core products are crucial for providing a return on our business, our primary growth opportunities are tied to expanded offerings.”
Q3 2015 Results
Q3 2015 total
net sales increased 0.4% to $7,548,000 from $7,520,000 in Q3 2014,
mainly due to our legacy product revenues. An 8.2% increase in our
legacy product sales revenues to $450,000 from $416,000 in Q3 2014 was
partially offset by a nominal decline in service revenues to $7,098,000
from $7,104,000 in Q3 2014.
Gross profit in Q3 2015 decreased to $3,499,000, or 46.3% of total net sales, from $3,709,000, or 49.3% of total net sales, in Q3 2014. The decrease was primarily due to a decrease in the average price per POPS sign in the 2015 period, as well as costs associated with the launch of The Like Machine.
Selling expenses in Q3 2015 were $962,000, or 12.7% of total net sales, as compared to $1,433,000, or 19.1% of total net sales in Q3 2014. The decrease in the 2015 period was primarily due to decreased staffing and staffing-related costs.
Marketing expenses in Q3 2015 were $468,000, or 6.2% of total net sales, as compared to $416,000, or 5.5% of total net sales in Q3 2014. Increased marketing expense was primarily the result of staffing-related costs.
General and administrative expenses in Q3 2015 increased to $1,145,000, or 15.1% of total net sales, from $1,022,000, or 13.6% of total net sales, in Q3 2014. The increase was primarily due to costs associated with the resignation of the Company’s Chief Executive Officer, partially offset by decreased staffing and legal costs.
Operating income for Q3 2015 increased to $924,000 from $838,000 in Q3 2014.
Income tax expense for Q3 2015 was 40.5% of pretax income, or $382,000, compared to income tax expense of 50.2% of pretax income, or $427,000, in Q3 2014. 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 during the quarter.
As a result of the items above, net income for Q3 2015 increased to $561,000, or $0.05 per basic and diluted share, from net income of $424,000, or $0.03 per basic and diluted share, in Q3 2014.
Mr. Gonsior concluded, “As of September 30, 2015, our balance sheet remains strong with $19.0 million of cash, cash equivalents and short-term debt security investments, up from cash, cash equivalents and short-term debt security investments of $16.9 million as of December 31, 2014. As of September 30, 2015, we had $21.1 million in working capital, compared to working capital of $20.7 million as of December 31, 2014.”
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 Q3
2015, the Company purchased approximately 577,000 shares at an average
price of $2.59.
Conference Call
Insignia’s
management team 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 201-689-8029,
or 877-407-8029. 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 investorrelations@insigniasystems.com.
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 innovative in-store
products, programs and services that help consumer goods manufacturers
and retail partners drive sales at the point of purchase. Insignia
provides at-shelf media solutions in approximately 13,000 retail
supermarkets, 2,000 mass merchants and 8,000 dollar stores. With a
client list of over 200 major consumer goods manufacturers, including
General Mills, Kellogg Company, Kraft Foods, Nestlé and P&G, Insignia
helps major brands deliver on their key engagement, promotion, and
advertising objectives right at the point-of-purchase. For additional
information, contact (800) 874-4648, 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’s management team, regarding, for
instance: current expectations as to future financial performance; our
ability to achieve revenue growth, cost improvements and 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 the Company’s 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 2015; 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, 2014 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 | ||||||||||||||
| (Unaudited) | ||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||
| Total net sales | $ | 7,548,000 | $ | 7,520,000 | $ | 20,762,000 | $ | 20,267,000 | ||||||
| Cost of sales | 4,049,000 | 3,811,000 | 11,475,000 | 10,972,000 | ||||||||||
| Gross profit | 3,499,000 | 3,709,000 | 9,287,000 | 9,295,000 | ||||||||||
| Operating expenses: | ||||||||||||||
| Selling | 962,000 | 1,433,000 | 3,451,000 | 4,160,000 | ||||||||||
| Marketing | 468,000 | 416,000 | 1,254,000 | 978,000 | ||||||||||
| General and administrative | 1,145,000 | 1,022,000 | 3,110,000 | 3,040,000 | ||||||||||
| Operating income | 924,000 | 838,000 | 1,472,000 | 1,117,000 | ||||||||||
| Other income, net | 19,000 | 13,000 | 56,000 | 25,000 | ||||||||||
| Income before taxes | 943,000 | 851,000 | 1,528,000 | 1,142,000 | ||||||||||
| Income tax expense | 382,000 | 427,000 | 621,000 | 533,000 | ||||||||||
| Net income | 561,000 | 424,000 | 907,000 | 609,000 | ||||||||||
|
Other comprehensive income (loss) net of tax |
— | (4,000 | ) | 7,000 | (4,000 | ) | ||||||||
| Comprehensive income | $ | 561,000 | $ | 420,000 | $ | 914,000 | $ | 605,000 | ||||||
| Net income per share: | ||||||||||||||
| Basic | $ | 0.05 | $ | 0.03 | $ | 0.07 | $ | 0.05 | ||||||
| Diluted | $ | 0.05 | $ | 0.03 | $ | 0.07 | $ | 0.05 | ||||||
| Shares used in calculation of net income per share: | ||||||||||||||
| Basic | 12,107,000 | 12,593,000 | 12,177,000 | 12,767,000 | ||||||||||
| Diluted | 12,241,000 | 12,824,000 | 12,351,000 | 13,003,000 | ||||||||||
| SELECTED BALANCE SHEET DATA | ||||||
| (Unaudited) | ||||||
| September 30, | December 31, | |||||
| 2015 | 2014 | |||||
| Cash and cash equivalents | $ | 9,095,000 | $ | 7,237,000 | ||
| Investments | 9,910,000 | 9,698,000 | ||||
| Working capital | 21,077,000 | 20,744,000 | ||||
| Total assets | 30,943,000 | 30,527,000 | ||||
| Total liabilities | 6,765,000 | 5,968,000 | ||||
| Shareholders' equity | 24,178,000 | 24,559,000 | ||||
