Insignia Systems, Inc. (Nasdaq: ISIG) today reported net sales of $3,997,000 for the first quarter ended March 31, 2012, a decrease of 19.2%, compared to net sales of $4,947,000 for the first quarter ended March 31, 2011. The net loss for the first quarter of 2012 was $(1,577,000), or $(0.12) per basic and diluted share, compared to net income of $53,873,000, or $3.37 per basic share and $3.17 per diluted share, for the first quarter of 2011. Net income for the first quarter of 2011 included a gain from the settlement of the litigation against News America Marketing In-Store, LLC (“News America”) of $55,062,000, net of tax. Insignia Point-of-Purchase Services ® (POPS) revenue for the first quarter of 2012 was $3,468,000, a decrease of 20.7% compared to first quarter 2011 POPS revenue of $4,374,000.
CEO Scott Drill commented, “The results in the first quarter of 2012, while disappointing, were in-line with our estimates for quarterly performance announced a couple of months ago. These poor results are not acceptable and that was the driving force behind our decision to restructure our operations in March. The restructuring should remove over $3 million of expense on an annual basis. As the charge related to this restructuring was booked in March, the Company will not realize any financial benefit from this reduced expense until the second quarter of 2012 and beyond. This expense reduction allows us to be profitable at lower revenue levels, while not affecting our ability to provide our customers with the same superior, timely performance they are used to.”
Executive Vice President and COO Glen Dall commented, “We remain cautiously optimistic about the remainder of 2012 for several key reasons. First, and most importantly, it appears that the focus of our sales team will translate into sales levels that we had seen prior to 2011. In the past few weeks, we have signed several significant contracts with our CPG customers that are set to run later this year. We have over $4.3 million of revenue on the books for the second quarter of 2012, with approximately five weeks of selling time left. Additionally, we have over twice as much revenue booked for the second half of 2012 as we had booked for the second half of 2011 at this time last year. We see this as a sign that helps support the optimism we have seen from our sales force in recent months.
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