Insignia Systems, Inc. Announces 2013 Fourth Quarter and Full Year Financial Results
February 26, 2014
2013 total net sales rose 37.6% to $27.8 million from $20.2 million in
2012, driven primarily by a 41.7% increase in POPS revenue.
Q4 2013 total net sales rose 29.6% to $6.9 million from $5.3 million
in Q4 2012, with POPS revenue increasing 31.2%.
2013 operating income improved to $2.4 million from an operating loss
of ($2.3) million in 2012.
Q4 2013 operating income increased to $708,000 from $208,000 in Q4
2013 net income improved to $1.4 million, or $0.10 per basic and
diluted share, from a net loss of ($1.6 million), or ($0.12) per basic
and diluted share, in 2012.
Q4 2013 net income improved to $441,000, or $0.03 per basic and
diluted share, from net income of $69,000, or $0.01 per basic and
diluted share, in Q4 2012.
At December 31, 2013
Total cash and equivalents of $21.8 million, or $1.62 per diluted
Working capital of $22.2 million.
$0 long-term debt.
Insignia Systems, Inc. (Nasdaq: ISIG) (“Insignia” or “the Company”) today
reported financial results for the fourth quarter (“Q4”) and full year
ended December 31, 2013, as compared to the fourth quarter and full year
ended December 31, 2012.
Insignia’s President and CEO Glen Dall commented, “We delivered a strong
2013, finishing the year with our sixth consecutive quarter of
profitable results following the initiation of our Insignia 2.0
turnaround efforts. We have continued to invest in our sales and
marketing infrastructure to help create a foundation for continuing
progress in 2014.
“We remain focused on growing our core POPS business by leveraging our
unique market position, network of retailers, and available capacity. We
also expect to capitalize on our strong financial position and cash flow
generating abilities to invest in programs that can expand our overall
operations, including developing new product offerings and advancing our
digital marketing initiatives to reach new customers.
“We continue to manage the business for long-term growth and
profitability, and believe that we are well-positioned to achieve these
objectives. Consistent with this philosophy, we are going to begin
reporting total bookings for the year as opposed to the next quarter’s
bookings. As of February 26, 2014, we have bookings of approximately
$14.5 million set to run at various points in 2014, which is
approximately 11% ahead of what we had sold at this same point one year
ago. Of the $14.5 million in 2014 programs, approximately $6.0 million
of those are set to run in the first quarter, which is down
approximately 13% from first quarter bookings at this point a year ago.
Recognizing that our POPS revenue can fluctuate on a quarterly basis, in
future releases, we will not reference the next quarter’s bookings
Q4 2013 Results
Q4 2013 total net sales rose 29.6% to $6.9 million from $5.3 million in
Q4 2012. Higher total net sales were primarily attributable to a 31.2%
rise in POPS revenue to $6.5 million from $4.9 million in Q4 2012,
mainly the result of volume increases. Products revenue rose 8.8% to
$420,000 in Q4 2013 from $386,000 in Q4 2012.
Gross profit in Q4 2013 rose to $3.3 million, or 48.5% of total net
sales, from $2.4 million, or 44.1% of total net sales, in Q4 2012.
Higher gross profit and gross profit margin was largely the result of
higher revenues and favorable program mix.
Selling expenses in Q4 2013 increased to $1.4 million, or 19.8% of total
net sales, from $1.2 million, or 22.1% of total net sales, in Q4 2012,
due primarily to higher revenue, additional sales staffing and
General and administrative expenses rose to $1.1 million, or 15.5% of
total net sales, from $732,000, or 13.7% of total net sales, in Q4 2012.
This increase was primarily the result of performance compensation.
Operating income for Q4 2013 rose to $708,000 from operating income of
$208,000 in Q4 2012.
Income tax expense for Q4 2013 was 38.4%, or $275,000, compared to
income tax expense of 67.9%, or $146,000, in Q4 2012. Tax expense will
vary between periods, given the Company’s policy of reassessing the
annual effective rate on a quarterly basis.
Net income for Q4 2013 improved to $441,000, or $0.03 per basic and
diluted share, from net income of $69,000, or $0.01 per basic and
diluted share, in Q4 2012.
Insignia’s CFO John Gonsior stated, “Our balance sheet remains strong,
with $21.8 million of cash and cash equivalents as of December 31, 2013,
up from cash and cash equivalents of $20.7 million as of September 30,
2013. As of December 31, 2013, we had over $22.2 million in working
capital compared to working capital of $21.4 million as of September 30,
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. The Company
expects to commence repurchasing shares under this plan during Q1 2014.
The Company will host a conference call today, February 26, at 4:00 p.m.
CT/5:00 p.m. ET. To access the live call, dial 877-268-1608. The
Conference ID is 50903278. Please be sure to call in about 5-10 minutes
before the call is scheduled to begin. Audio replay will be available
approximately two hours after the call until March 5, 2014. To access
the replay, dial 855-859-2056 and reference Conference ID 50903278. The
audio recording will also be archived on the Company’s website
approximately two days after the call until March 31, 2014.
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 over 13,500
chain retail supermarkets, over 1,900 mass merchants and over 7,000
dollar stores. Through the nationwide POPS network, over 200 major
consumer goods manufacturers, including General Mills, Kellogg Company,
Kraft Foods and NestlÉ, have taken their brand messages to 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 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, its President and
CEO Glen Dall or its Vice President of Finance and CFO John Gonsior,
regarding, for instance: current expectations as to future financial
performance (including but not limited to bookings in total and for the
first quarter of 2014, and results for fiscal year 2014); 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 success in our business relationships with
News America and Valassis; 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 or Valassis; (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, 2012 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
Cost of sales
General and administrative
Operating income (loss)
Other income, net
Income (loss) before taxes
Income tax expense (benefit)
Net income (loss)
Net income (loss) per share:
Shares used in calculation of net income (loss) per share:
SELECTED BALANCE SHEET DATA
Cash and cash equivalents
Insignia Systems, Inc. John Gonsior, CFO (763) 392-6200