INSIGNIA SYSTEMS,
INC.
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(Exact
name of registrant as specified in its charter)
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Minnesota
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41-1656308
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(State
or other jurisdiction of incorporation or
organization)
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(I.R.S.
Employer Identification No.)
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8799 Brooklyn Blvd., Minneapolis, MN 55445
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(Address
of principal executive offices; zip code)
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(763) 392-6200
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(Registrant’s
telephone number, including area code)
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Large accelerated filer
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☐
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Accelerated filer
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☐
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Non-accelerated
filer
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☐
(Do not check if a smaller reporting company)
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Smaller reporting company
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☑
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Emerging
growth company
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☐
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Page
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PART I.
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1
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Item 1.
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1
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Condensed Balance Sheets
– March 31,
2018 (unaudited) and December 31, 2017
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1
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Condensed Statements of Operations
–
Three months ended March 31, 2018 and 2017 (unaudited)
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2
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Condensed Statements of Cash Flows
–
Three months ended March 31, 2018 and 2017 (unaudited)
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3
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Notes to Financial Statements
–
(unaudited)
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4
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Item 2.
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9
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Item 3.
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13
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Item 4.
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13
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PART II.
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14
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Item 1.
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14
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Item 1A.
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14
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Item 2.
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14
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Item 3.
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14
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Item 4.
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14
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Item 5.
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14
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Item 6.
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15
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Insignia Systems, Inc.
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C
ONDENSED BALANCE
SHEETS
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March 31,
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2018
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December 31,
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(Unaudited)
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2017
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ASSETS
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Current Assets:
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Cash
and cash equivalents
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$
7,259,000
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$
4,695,000
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Accounts
receivable, net
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8,900,000
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11,864,000
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Inventories
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485,000
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301,000
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Income
tax receivable
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295,000
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360,000
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Prepaid
expenses and other
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376,000
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415,000
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Total
Current Assets
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17,315,000
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17,635,000
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Other Assets:
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Property
and equipment, net
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2,733,000
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2,670,000
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Other,
net
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1,281,000
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1,383,000
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Total Assets
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$
21,329,000
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$
21,688,000
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LIABILITIES AND SHAREHOLDERS' EQUITY
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Current Liabilities:
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Accounts
payable
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2,928,000
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3,232,000
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Accrued
liabilities:
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Compensation
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796,000
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1,531,000
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Other
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776,000
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667,000
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Deferred
revenue
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671,000
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372,000
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Total
Current Liabilities
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5,171,000
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5,802,000
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Long-Term Liabilities:
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Deferred
tax liabilities
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245,000
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245,000
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Accrued
income taxes
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589,000
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581,000
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Deferred
rent
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203,000
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219,000
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Total
Long-Term Liabilities
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1,037,000
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1,045,000
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Commitments and Contingencies
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—
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—
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Shareholders' Equity:
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Common
stock, par value $.01:
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Authorized
shares - 40,000,000
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Issued
and outstanding shares - 11,963,000 at March 31, 2018 and
11,914,000 at December 31, 2017
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119,000
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119,000
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Additional
paid-in capital
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15,477,000
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15,361,000
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Accumulated
deficit
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(475,000
)
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(639,000
)
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Total
Shareholders' Equity
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15,121,000
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14,841,000
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Total Liabilities and Shareholders' Equity
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$
21,329,000
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$
21,688,000
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See accompanying notes to financial statements.
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Insignia Systems, Inc.
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CONDENSED S
TATEMENTS OF
OPERATIONS
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(Unaudited)
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Three Months Ended March 31
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2018
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2017
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Services
revenues
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$
7,026,000
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$
4,304,000
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Products
revenues
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393,000
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463,000
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Total
Net Sales
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7,419,000
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4,767,000
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Cost
of services
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4,404,000
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3,819,000
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Cost
of goods sold
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269,000
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319,000
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Total
Cost of Sales
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4,673,000
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4,138,000
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Gross
Profit
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2,746,000
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629,000
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Operating Expenses:
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Selling
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903,000
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888,000
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Marketing
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604,000
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426,000
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General
and administrative
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1,007,000
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1,053,000
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Total
Operating Expenses
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2,514,000
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2,367,000
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Operating
Income (Loss)
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232,000
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(1,738,000
)
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Other
income
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5,000
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3,000
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Income
(Loss) Before Taxes
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237,000
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(1,735,000
)
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Income
tax expense (benefit)
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73,000
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(544,000
)
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Net
Income (Loss)
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$
164,000
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$
(1,191,000
)
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Net
income (loss) per share:
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Basic
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$
0.01
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$
(0.10
)
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Diluted
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$
0.01
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$
(0.10
)
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Shares
used in calculation of net income (loss) per share:
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Basic
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11,819,000
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11,661,000
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Diluted
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11,982,000
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11,661,000
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See accompanying notes to financial statements.
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Insignia Systems, Inc.
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CONDENSED S
TATEMENTS OF CASH
FLOWS
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(Unaudited)
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Three Months Ended March 31
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2018
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2017
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Operating Activities:
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Net
income (loss)
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$
164,000
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$
(1,191,000
)
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Adjustments
to reconcile net income (loss) to
net cash provided by operating activities:
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Depreciation
and amortization
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287,000
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335,000
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Changes
in allowance for doubtful accounts
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4,000
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48,000
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Deferred
income tax benefit
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—
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(153,000
)
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Stock-based
compensation expense
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67,000
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147,000
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Changes
in operating assets and liabilities:
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Accounts
receivable
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2,960,000
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1,657,000
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Inventories
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(184,000
)
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(7,000
)
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Income
tax receivable
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65,000
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(377,000
)
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Prepaid
expenses and other
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39,000
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49,000
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Accounts
payable
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(358,000
)
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(384,000
)
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Accrued
liabilities
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(642,000
)
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(180,000
)
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Accrued
income taxes
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8,000
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—
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Deferred
revenue
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299,000
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630,000
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Net
cash provided by operating activities
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2,709,000
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574,000
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Investing Activities:
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Purchases
of property and equipment
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(194,000
)
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(285,000
)
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Net
cash used in investing activities
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(194,000
)
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(285,000
)
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Financing Activities:
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Cash
dividends paid ($0.70 per share)
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—
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(8,163,000
)
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Proceeds
from issuance of common stock
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49,000
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—
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Net
cash provided by (used in) financing activities
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49,000
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(8,163,000
)
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Increase
(decrease) in cash and cash equivalents
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2,564,000
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(7,874,000
)
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Cash
and cash equivalents at beginning of period
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4,695,000
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12,267,000
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Cash
and cash equivalents at end of period
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$
7,259,000
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$
4,393,000
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Supplemental disclosures for cash flow information:
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Cash
paid during the year for income taxes
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$
—
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$
2,000
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Non-cash investing and financing activities:
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Purchases
of property and equipment included in accounts payable
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$
93,000
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$
67,000
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See accompanying notes to financial statements.
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March
31,
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December
31,
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2018
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2017
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Raw
materials
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$
146,000
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$
68,000
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Work-in-process
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14,000
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10,000
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Finished
goods
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325,000
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223,000
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$
485,000
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$
301,000
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Three
months ended March 31
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2018
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2017
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Denominator
for basic net income (loss) per share - weighted average
shares
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11,819,000
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11,661,000
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Effect
of dilutive securities:
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Stock
options, restricted stock and restricted stock units
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163,000
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—
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Denominator
for diluted net income (loss) per share - weighted average
shares
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11,982,000
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11,661,000
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Three
months ended March 31, 2018
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Services
Revenues
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Products
Revenue
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Total
Revenue
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Timing of revenue recognition:
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Products
and services transferred over time
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$
7,026,000
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—
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$
7,026,000
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Products
and services transferred at a point in time
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—
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393,000
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393,000
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Total
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$
7,026,000
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$
393,000
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$
7,419,000
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Balance
at December 31, 2017
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$
372,000
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Reclassification
of beginning deferred revenue to revenue, as a result of
performance obligations satisfied.
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(122,000
)
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Cash
received in advance and not recognized as revenue.
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421,000
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Cumulative
catch-up from a change in the timeframe for recognition of revenue
arising from deferred revenue.
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—
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Balance
at March 31, 2018
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$
671,000
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For
the Three Months Ended March 31
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2018
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2017
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Net
sales
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100.0
%
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100.0
%
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Cost
of sales
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63.0
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86.8
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Gross
profit
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37.0
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13.2
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Operating
expenses:
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Selling
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12.2
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18.7
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Marketing
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8.1
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8.9
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General
and administrative
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13.6
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22.1
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Total
operating expenses
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33.9
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49.7
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Operating
income (loss)
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3.1
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(36.5
)
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Other
income
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0.1
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0.1
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Income
(loss) before taxes
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3.2
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(36.4
)
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Income
tax expense (benefit)
|
1.0
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(11.4
)
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Net
income (loss)
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2.2
%
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(25.0
)%
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Exhibit
Number
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Description
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Method
of Filing
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3.1
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Incorporated
by Reference
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3.2
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Incorporated
by Reference
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10.1
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Filed
Electronically
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31.1
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Filed
Electronically
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31.2
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Filed
Electronically
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32
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Furnished
Electronically
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101
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The
following materials from Insignia Systems, Inc.’s Quarterly
Report on Form 10-Q for the quarter ended March 31, 2018, formatted
in XBRL (eXtensible Business Reporting Language): (i) Condensed
Balance Sheets; (ii) Condensed Statements of Operations; (iii)
Condensed Statements of Cash Flows; and (iv) Notes to Financial
Statements.
|
|
Filed
Electronically
|
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INSIGNIA
SYSTEMS, INC.
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(Registrant)
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Dated: May
8, 2018
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/s/
Kristine A. Glancy
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Kristine
A. Glancy
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President
and Chief Executive Officer
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(on
behalf of registrant)
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Dated: May
8, 2018
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/s/
Jeffrey A. Jagerson
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Jeffrey
A. Jagerson
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Chief
Financial Officer and Treasurer
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(principal
financial and accounting officer)
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Exhibit
Number
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Description
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Method
of Filing
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3.1
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Incorporated
by Reference
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3.2
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Incorporated
by Reference
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10.1
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Filed
Electronically
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31.1
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Filed
Electronically
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31.2
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Filed
Electronically
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32
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Furnished
Electronically
|
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101
|
|
The
following materials from Insignia Systems, Inc.’s Quarterly
Report on Form 10-Q for the quarter ended March 31, 2018, formatted
in XBRL (eXtensible Business Reporting Language): (i) Condensed
Balance Sheets; (ii) Condensed Statements of Operations; (iii)
Condensed Statements of Cash Flows; and (iv) Notes to Financial
Statements.
|
|
Filed
Electronically
|
Date:
May 8, 2018
|
/s/
Kristine A. Glancy
|
|
|
Kristine
A. Glancy
|
|
|
President
and Chief Executive Officer
|
|
|
(on
behalf of registrant)
|
|
Date:
May 8, 2018
|
/s/
Jeffrey A. Jagerson
|
|
|
Jeffrey
A. Jagerson
|
|
|
Chief
Financial Officer and Treasurer
|
|
|
(principal
financial and accounting officer)
|
|
Date:
May 8, 2018
|
/s/
Kristine A. Glancy
|
|
|
Kristine
A. Glancy
|
|
|
President
and Chief Executive Officer
|
|
|
(on
behalf of registrant)
|
|
|
|
|
Date:
May 8, 2018
|
/s/
Jeffrey A. Jagerson
|
|
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Jeffrey
A. Jagerson
|
|
|
Chief
Financial Officer and Treasurer
|
|
|
(principal
financial and accounting officer)
|
|