Insignia Systems, Inc. (Nasdaq:ISIG) (“Insignia” or “the
Company”) today provided certain preliminary information regarding its
expected financial results for the fourth quarter of 2014. As discussed
in Insignia’s press release, dated October 29, 2014, announcing
financial results for the third quarter of 2014 (the “third quarter 2014
release”), the Company’s business currently faces increasing challenges
in the market, driven primarily by recent overall cost reduction efforts
among consumer packaged goods (CPG) manufacturers and changes in
promotional spending by two of the Company’s larger CPG customers. In
the third quarter release, the Company disclosed that, as of the date of
that release, its year-over-year bookings for the fourth quarter of 2014
were down by approximately 12%. Insignia now expects net sales for the
fourth quarter of 2014 will range from $5.8 million to $6.1 million,
down 12% to 16% compared to the fourth quarter of 2013. Given the
Company’s investments in sales and marketing thus far in 2014 to sustain
and grow Insignia’s core products and launch The Like Machine™, the
Company now expects a net loss for the fourth quarter of 2014 ranging
from $300,000 to $500,000, including certain restructuring costs
described below. Fourth quarter 2014 expected results are preliminary
and are subject to the Company’s management and independent auditor
completing their customary closing and audit procedures following the
quarter, among other factors.
A restructuring plan has been approved and will be implemented to reduce
costs moving forward. The Company anticipates a pre-tax restructuring
charge of approximately $130,000, primarily consisting of an office
lease reserve, which will be reflected in its fourth quarter 2014
results. Current backlog for programs running in 2015 is $8.3 million,
while the backlog one year ago for programs running in 2014 was $7.4
million.
Glen Dall, President and CEO, commented, “We are disappointed in our
fourth quarter 2014 results. While we are encouraged by the increase in
backlog, it is too early to predict 2015 sales levels. Moving forward,
we are committed to aligning our expenses to revenue, while continuing
efforts to grow our core business, and successfully launch The Like
Machine. We have confidence in our team and remain dedicated to focusing
on delivering long-term value.”
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 (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 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. Statements made in this press release
regarding, for instance: current expectations as to fourth quarter 2014
or future financial performance; backlog; ability to implement and
achieve benefits from restructuring efforts; benefits of sales and
marketing investments; and ability to sustain and grow core products and
launch new 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, including restructuring efforts, to achieve and maintain
profitability in the future; (ii) the risk that backlog will not result
in actual sales; (iii) the risk that the Company will not be able to
sustain and grow core product offerings or to develop, implement and
grow new product offerings in a successful manner, including our ability
to gain retailer acceptance of new product offerings; (iv) the
unexpected loss of a major consumer packaged goods manufacturer
relationship or retailer agreement or termination of our relationship
with News America; (v) 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; (vi) 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, 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.
Copyright Business Wire 2014