Insignia Systems, Inc. (Nasdaq: ISIG) today reported net sales of $5,883,000 for the first quarter ended March 31, 2010, a decrease of 4.9%, compared to net sales of $6,186,000 for the first quarter of 2009. The net loss for the first quarter of 2010 was $(435,000) or $(0.03) per share, compared to a net income of $1,317,000, or $0.09 per share, for the first quarter of 2009. Net income for the first quarter of 2009 included one-time insurance settlement proceeds of $1,387,000. Insignia Point-of-Purchase Services ® (POPS) revenue for the first quarter of 2010 was $5,137,000, a decrease of 8.8%, compared to the first quarter 2009 POPS revenue of $5,631,000.
CEO Scott Drill commented, “Our first quarter 2010 results were consistent with our expectations. As mentioned in our last earnings release on February 24, 2010, first quarter POPS customer orders at the time were $4,860,000 with two weeks of selling time left. We continue to expect a strong second half of 2010 which will be helped by the addition of approximately 1,100 SUPERVALU corporate stores in late June as well as approximately 525 Winn-Dixie stores in late July. In the current quarter, we have $5,900,000 in POPS customer orders with approximately five weeks of selling time left. In last year’s second quarter POPS revenue was $5,285,000. Our relationship with Valassis continues to be excellent.”
Drill continued, “On the legal front, in connection with our lawsuit against News America Marketing In-Store, Inc. (NAM) we participated in a court-ordered settlement conference on April 12 th. No settlement was reached. We have a Status Conference on May 4 th which hopefully will result in the scheduling of a trial date. We continue to be optimistic about our case. The Summary Judgment ruling on September 30, 2009 was significant in that the Court awarded judgment to Insignia and to me personally on all of NAM’s counterclaims. The Court also denied NAM’s Motion for Summary Judgment on Insignia’s claims against NAM, except that it granted NAM’s Motion on the sole issue of whether NAM possessed market power over retailers. By denying NAM’s Motion, the Court set the stage for trial on our antitrust and unfair-competition claims, which include violations of the Sherman and Clayton Antitrust Acts, the Lanham Act, and those statutes’ counterparts in Minnesota state law. First quarter 2010 legal expense was $523,000 versus $742,000 in the first quarter of 2009. Cash, cash equivalents and short-term investments at March 31, 2010 were $10,933,000. Finally, on February 23, 2010, the Board authorized the repurchase of up to an aggregate of $2 million of our Common Stock. During the quarter 75,000 shares were repurchased at an average price of $5.47.”
Non-GAAP versus GAAP Financial StatementsTo supplement the Company’s financial statements presented in accordance with GAAP, the Company provides certain non-GAAP financial measures of financial performance. These non-GAAP measures include net loss before insurance settlement payment, and net income (loss) before insurance settlement payment and News America related legal fee expense. The Company’s reference to these non-GAAP measures should be considered in addition to results prepared under current accounting standards, but are not a substitute for, or superior to, GAAP results.