EXHIBIT 99.1
[LOGO OF INSIGNIA SYSTEMS, INC.]
Contact: Scott Drill, President and CEO
(763) 392-6200; (800) 874-4648
FOR IMMEDIATE RELEASE
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Insignia Systems, Inc. Reports Third Quarter Net Income
of $141,714 on POPS Revenue Increase of 60%
MINNEAPOLIS - OCTOBER 16, 2003 - Insignia Systems, Inc. (Nasdaq: ISIG) today
reported net sales of $7,109,845 for the third quarter ended September 30, 2003,
an increase of 40%, compared to net sales of $5,075,908 for the third quarter of
2002. Net income for the third quarter of 2003 was $141,714 or $.01 per share,
compared to a net loss of $(499,216), or $(.05) per share, for the third quarter
of 2002. Insignia Point-of-Purchase Services (POPS) revenue for the third
quarter was $6,179,936, an increase of 60%, compared to third quarter 2002 POPS
revenue of $3,870,342.
For the nine months ended September 30, 2003, net sales were $20,832,306, an
increase of 23%, compared to net sales of $16,913,907 for the nine months of
2002. The net loss for the first nine months of 2003 was $(952,348) or $(.08)
per share, compared to net income of $22,402, or $.00 per share for the same
period of 2002. POPS revenue for the first nine months of 2003 was $17,813,549,
an increase of 35%, compared to the first nine months of 2002 POPS revenue of
$13,218,091.
CEO Scott Drill stated, "The third quarter results benefited from the
initiatives we took during the first half of the year to reduce our cost of
sales as well as our operating expenses. Fiscal year 2003 has been an unusual
year relative to historical seasonal patterns in our POPS business. During the
past couple years the second and third quarters have had lower revenue than the
first quarter, whereas this year both have had higher revenue. Also,
historically the fourth quarter has been our strongest. Based on current
bookings, this is highly unlikely to be the case this year in that the fourth
quarter might be this year's lowest revenue quarter. Unfortunately, brand
spending for the fourth quarter has been lighter than anticipated during the six
weeks since Labor Day.
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Insignia Systems, Inc. o 6470 Sycamore Court North, Maple Grove, MN 55369
o Phone 763-392-6200 o Fax 763-392-6222
http://www.insigniasystems.com o email: info@insigniasystems.com
Oct. 16, 2003 INSIGNIA SYSTEMS, INC. REPORTS THIRD QUARTER NET INCOME Page 2
This has been a year in which brand spending patterns have fluctuated more so
than in any of our five previous years in the in-store promotion business. "
Drill went on to state, "Looking ahead we are hopeful that fiscal year 2004 will
be a good growth year for POPS. We continue to strive to add new retail
distribution. Further, we expect our VALUStix business unit to perform much
better than it has to date. It has been a year of learning for us with VALUStix
on both the sales and operational sides of the equation.
During the third quarter a test program for VALUStix was completed at no charge
to our customers. We are using the information obtained from that program to
refine and redirect our efforts related to VALUStix. Year to date we have
incurred approximately $900,000 of expenses related to VALUStix. However, we
have recently taken steps to reduce our operating expenses related to VALUStix
and thus expect significantly lower expenses, beginning in 2004. Additionally,
we have recently hired Steve Aase to be the VALUStix General Manager. He has
been a consultant to VALUStix since May. Steve has held key leadership positions
in management, sales and marketing in the consumer products industry. His
previous work experience in the manufacturing, marketing, research, retail and
executive consulting areas include CAP Gemini Ernst & Young, Fleming,
Inc/Cerespan, Information Resources, Inc., Carlson Companies, Inc.
and The Pillsbury Company."
Drill concluded, "In summary we are in strong position to build our POPS
business for the next several years. We have a strong balance sheet with $4.8
million in cash and no debt. We have over 12,000 stores in our retail network
and a product offering which is very attractive to both our consumer packaged
goods customers and our grocery and drug retail partners."
Insignia Systems, Inc. is an innovative developer and marketer of in-store
promotional products, programs and services to retailers and consumer goods
manufacturers. Through its Point-Of-Purchase Services (POPS) business, Insignia
is contracted with more than 12,000 chain retail supermarkets and drug stores,
including A&P, Kroger, Pathmark, Safeway, Shaw's Supermarkets and Rite Aid.
Through the nationwide POPS network, over 180 major consumer goods
manufacturers, including General Mills, Hormel Foods, Kellogg Company, Nestle,
Pfizer, S.C. Johnson & Son and Tyson Foods, have taken their brand messages to
the point-of-purchase.
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Insignia Systems, Inc. o 6470 Sycamore Court North, Maple Grove, MN 55369
o Phone 763-392-6200 o Fax 763-392-6222
http://www.insigniasystems.com o email: info@insigniasystems.com
Oct. 16, 2003 INSIGNIA SYSTEMS, INC. REPORTS THIRD QUARTER NET INCOME Page 3
For additional information, contact 888-474-7677, or visit the Insignia POPS Web
site at www.insigniapops.com.
This press release, as it relates to expectations regarding future sales and
profitability, contains forward-looking statements regarding future performance
of the Company. The Company's actual results could differ materially from these
forward-looking statements as a result of a number of factors, including risks
and uncertainties as described in the Company's SEC Form 10-K/A for the year
ended December 31, 2002. The Company wishes to caution readers not to place
undue reliance upon any such forward-looking statements, which speak only as of
the date made.
- more -
Insignia Systems, Inc. o 6470 Sycamore Court North, Maple Grove, MN 55369
o Phone 763-392-6200 o Fax 763-392-6222
http://www.insigniasystems.com o email: info@insigniasystems.com
Oct. 16, 2003 INSIGNIA SYSTEMS, INC. REPORTS THIRD QUARTER NET INCOME Page 4
INSIGNIA SYSTEMS, INC.
RESULTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
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2003 2002 2003 2002
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Net Sales $ 7,109,845 $ 5,075,908 $ 20,832,306 $ 16,913,907
Cost of Sales 3,889,855 2,836,783 11,764,790 8,701,544
Gross Profit 3,219,990 2,239,125 9,067,516 8,212,363
Operating Expenses:
Selling 2,062,665 1,699,618 6,532,743 5,051,027
Marketing 328,683 440,253 1,069,050 1,162,389
G&A 702,742 598,731 2,468,683 1,876,021
Operating Income (Loss) 125,900 (499,477) (1,002,960) 122,926
Other Income (Expense) 15,814 261 50,612 (100,524)
Net Income (Loss) $ 141,714 $ (499,216) $ (952,348) $ 22,402
Net Income (Loss) Per Share
Basic $ .01 $ (.05) $ (.08) $ .00
Diluted $ .01 $ (.05) $ (.08) $ .00
Shares used in calculation of
net income (loss) per share:
Basic 12,349,372 10,915,056 12,211,848 10,802,774
Diluted 12,590,051 10,915,056 12,211,848 11,679,294
SELECTED BALANCE SHEET DATA
September 30, December 31,
2003 2002
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Cash and cash equivalents $ 4,780,595 $ 6,471,581
Working capital $ 6,797,651 $ 7,324,154
Total assets $15,010,383 $16,722,330
Total liabilities $ 3,928,416 $ 5,464,252
Shareholders' equity $11,081,967 $11,258,078
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Insignia Systems, Inc. o 6470 Sycamore Court North, Maple Grove, MN 55369
o Phone 763-392-6200 o Fax 763-392-6222
http://www.insigniasystems.com o email: info@insigniasystems.com