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Insignia Systems, Inc. Reports Third Quarter Results

Insignia Systems, Inc. (Nasdaq: ISIG) today reported a net loss for the third quarter of 2011 of $(1,721,000) or $(0.11) per basic and diluted share, compared to net income of $932,000 or $0.06 per basic share ($0.05 per diluted share), for the third quarter of 2010. Net sales were $3,060,000 for the third quarter ended September 30, 2011, a decrease of 64.1%, compared to net sales of $8,517,000 for the third quarter of 2010. Insignia Point-of-Purchase Services ® (POPS) revenue for the third quarter of 2011 was $2,563,000, a decrease of 67.4% compared to third quarter 2010 POPS revenue of $7,858,000.

For the nine months ended September 30, 2011, net sales were $13,033,000, a decrease of 42.7%, compared to net sales of $22,726,000 for the nine months ended September 30, 2010. Net income for the first nine months of 2011 was $51,477,000, or $3.31 per basic share ($3.23 per diluted share), compared to $1,151,000, or $0.07 per basic and diluted share for the same period of 2010. Insignia POPS revenue for the first nine months of 2011 was $11,383,000, a decrease of 44.6%, compared to the first nine months of 2010 POPS revenue of $20,557,000. Net income in the first nine months of 2011 included a gain from the settlement of the litigation against News America Marketing In-Store, LLC (News America) of $89,762,000 before income taxes.

CEO Scott Drill stated, “To state the obvious, our business in the third quarter was more than extremely disappointing. Our business arrangement with News America is currently very tenuous. It did seem to improve for a while in the aftermath of the August 25 th ruling by the Federal Magistrate Judge following the hearing on August 19 th. However, recently things have deteriorated, and we have a hearing scheduled for this Friday in which the major issue is whether they will hang our signs for a cycle beginning November 6 th. Last Thursday we were informed that they would not hang our signs for the cycle beginning November 6 th because the signs contain a color background. Historically most of the signs placed under the News America Price Pop Guaranteed program have contained color backgrounds. We are hoping for a favorable emergency ruling on Friday so that the cycle beginning November 6 th can be executed. The lack of a favorable ruling Friday will be detrimental to our business.

While business has been disappointing this year, we believe that the worst is behind us. We remain hopeful that our efforts to resolve the remaining issues with News America will result in increased revenues in 2012. We are currently in the final testing phase of our new laser die cutter that is expected to be in production in the first quarter of 2012. We are excited to add the capabilities of this laser die cutter to our service offerings for our customers and think it will set Insignia apart in our industry.

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