MINNEAPOLIS, MN / ACCESSWIRE / October 26, 2016 / Insignia Systems, Inc. (Nasdaq: ISIG) ("Insignia") today reported financial
results for the third quarter ("Q3") and nine months ended September 30, 2016, as compared to Q3 and nine months ended September
30, 2015.
Insignia's President and CEO Kristine Glancy commented, "As communicated at our shareholder meeting, Insignia is investing in
both our existing core products to enhance their effectiveness; and in creating a foundation for product line expansion. We are in
a transition period and making progress. However, our net sales in this quarter declined versus 2015 performance. During the third
quarter our net sales were down year-over-year by 14.3%; partly due to a 2015 sales promotion we elected not to repeat during the
third quarter of 2016 in favor of a promotion that offers stronger 2017 revenue performance, as well as, competitive pressures and
changes in CPG spending patterns. We implemented a plan to restructure our operations in September 2016, including workforce
reductions and other cost-saving initiatives. Third quarter 2016 operating loss was $38,000, which included $121,000 of pre-tax
restructuring charges, compared to operating income of $924,000 in third quarter 2015. The decrease was primarily driven by
decreased service revenues, and continued planned expenses related to our investments into our new IT operating infrastructure,
which remains on schedule to be completed in mid-2017."
Ms. Glancy continued: "Since joining Insignia five months ago, I have been focused on improving our day-to-day business
operations and building an organization and strategy for 2017 and beyond. We are making investments in our core business, business
development, and our people that we believe enable a platform for growth. Our restructuring action was taken, along with key new
hires, most recently James Illingworth, SVP of Marketing & Business Development, to size our company for the near term and better
position our company for our strategy for future growth. In late fourth quarter, I plan to announce our new strategic framework and
financial expectations for 2017."
"Current POPS bookings for Q4 2016 are $5.1 million, compared to $6.8 million for Q4 2015 one year ago. As noted above, the 2015
promotion not repeated also is expected to have an impact on Q4 2016. This 2015 promotion was focused on a limited time special
price offer we elected to not repeat in 2016."
Q3 2016 Results
Q3 2016 total net sales decreased 14.3% to $6,469,000 from $7,548,000 in Q3 2015, primarily due to a 9.6% decrease in the number
of signs placed, partially due to the 2015 sales promotion that was not repeated in 2016, and a 6.7% decrease in average price per
sign, which was a result of competitive pressures and changes in CPG spending patterns.
Gross profit in Q3 2016 decreased to $2,000,000, or 30.9% of total net sales, from $3,499,000, or 46.3% of total net sales, in
Q3 2015. The lower gross profit was primarily the result of decreased service revenues, combined with increased costs associated
with retail network growth initiatives, and costs associated with the implementation project for our new IT operating
infrastructure, partially offset by decreased facilities costs.
Selling expenses in Q3 2016 were $917,000, or 14.2% of total net sales, as compared to $962,000, or 12.7% of total net sales, in
Q3 2015. The decrease in expenses was primarily due to lower variable compensation related to lower sales and other sales related
expenses, partially offset by costs related to restructuring.
Marketing expenses in Q3 2016 were $242,000, or 3.7% of total net sales, as compared to $468,000, or 6.2% of total net sales, in
Q3 2015. The decrease in the 2016 period was primarily due to decreased staffing and staff related costs, partially due to open
positions, combined with decreased consulting fees.
General and administrative expenses in Q3 2016 decreased to $879,000, or 13.6% of total net sales, from $1,145,000, or 15.1% of
total net sales, in 2015. The decrease was primarily due to costs associated with the resignation of the Company's former Chief
Executive Officer in 2015.
Income tax expense for Q3 2016 was (542.3%) of pretax loss, or $141,000, compared to income tax expense of 40.5% of pretax
income, or $382,000, in Q3 2015. 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, the net loss for Q3 2016 was $167,000, or $0.01 per basic and diluted share, compared to net
income of $561,000, or $0.05 per basic and diluted share, in Q3 2015.
As of September 30, 2016, cash, cash equivalents and available-for-sale investments totaled $14.8 million, compared to cash,
cash equivalents and available-for-sale investments of $18.0 million as of December 31, 2015. As of September 30, 2016, working
capital was $21.4 million compared to working capital of $21.3 million as of December 31, 2015.
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 through October
30, 2017. During Q3 2016, the Company purchased approximately 23,000 shares at an average price of $2.28 per share.
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, 1,000 mass merchants and 8,000 dollar stores. With a client list of over 200 major
consumer goods manufacturers, including General Mills, Kraft Heinz Company, 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 full year and future financial
performance; benefits of sales and marketing investments and IT infrastructure investments; timing of implementation of technology
operating infrastructure; plans to announce strategic framework and financial expectations, 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 to achieve and maintain profitability in the future;
(ii) 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; (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 2016; 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, 2015 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.
Contact:
Insignia Systems, Inc. Kristine Glancy, CEO (763) 392-6200
Insignia Systems, Inc. STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Net sales $ 6,469,000 $ 7,548,000 $
19,164,000 $ 20,762,000 Cost of sales 4,469,000 4,049,000 13,081,000 11,475,000 Gross profit 2,000,000 3,499,000 6,083,000
9,287,000 Operating expenses: Selling 917,000 962,000 3,061,000 3,451,000 Marketing 242,000 468,000 769,000 1,254,000 General and
administrative 879,000 1,145,000 3,149,000 3,110,000 Operating income (loss) (38,000 ) 924,000 (896,000 ) 1,472,000 Other income,
net 12,000 19,000 44,000 56,000 Income (loss) before taxes (26,000 ) 943,000 (852,000 ) 1,528,000 Income tax expense (benefit)
141,000 382,000 (276,000 ) 621,000 Net income (loss) (167,000 ) 561,000 (576,000 ) 907,000 Other comprehensive income (loss), net
of tax - - 11,000 7,000 Comprehensive income (loss) $ (167,000 ) $ 561,000 $ (565,000 ) $ 914,000 Net income (loss) per share:
Basic $ (0.01 ) $ 0.05 $ (0.05 ) $ 0.07 Diluted $ (0.01 ) $ 0.05 $ (0.05 ) $ 0.07 Shares used in calculation of net income (loss)
per share: Basic 11,642,000 12,107,000 11,626,000 12,177,000 Diluted 11,642,000 12,241,000 11,626,000 12,351,000 SELECTED BALANCE
SHEET DATA(Unaudited) September 30, 2016 December 31, 2015 Cash, cash equivalents and debt security investments $ 14,842,000 $
18,013,000 Working capital 21,439,000 21,297,000 Total assets 28,362,000 31,714,000 Total liabilities 4,313,000 6,994,000
Shareholders' equity 24,049,000 24,720,000
SOURCE: Insignia Systems, Inc.
