Insignia Systems Inc. (ISIG, Financial) filed Quarterly Report for the period ended 2009-03-31.
Insignia Systems Inc. is the leading marketer of software printing equipment and related print media products used primarily by retailers to produce their promotional and point-of-sale display materials. The company's mission is to help retailers compete more effectively by providing the finest in-store promotion tools available. Using their products Stylus Sign & Label Works software SIGNright or the Impulse Retail System retailers can easily create and print professional point-of-sale signs labels posters and more. Insignia Systems Inc. has a market cap of $43.1 million; its shares were traded at around $2.85 with a P/E ratio of 57 and P/S ratio of 1.4.
General and administrative. General and administrative expenses for the three months ended March 31, 2009 decreased 97.9% to $38,000 compared to $1,822,000 for the three months ended March 31, 2008, primarily due to a payment to the Company from an insurer for settlement of a claim against the insurer for defense costs, decreased legal expense and decreased facility related expenses. The Company received a payment of $1,387,000 in the first quarter of 2009 from an insurer as part of a settlement of the Companys claim that the insurer owed the Company defense costs for claims asserted against the Company and one of its officers in the News America litigation. General and administrative expenses as a percentage of total net sales decreased to 0.6% in 2009 compared to 27.8% in 2008, due to the settlement payment and decreased costs discussed above. Legal fees were $742,000 for the three months ended March 31, 2009 compared to $1,031,000 for the three months ended March 31, 2008. The legal fees in each quarter were incurred primarily in connection with the News America lawsuit described in Note 2 to the financial statements. We currently expect the amount of additional legal fees that will be incurred in connection with the ongoing lawsuit to be significant throughout the remainder of 2009 as trial preparation continues and as the trial is conducted. Also, if the Company is required to pay a significant amount in settlement or damages, it will have a material adverse effect on its operations and financial condition. In addition, a negative outcome of this litigation could affect long-term competitive aspects of the Companys business.
The Company has financed its operations with proceeds from public and private stock sales and sales of its services and products. At March 31, 2009, working capital was $7,944,000 compared to $6,396,000 at December 31, 2008. During the three months ended March 31, 2009, cash and cash equivalents decreased $2,878,000 from $11,052,000 at December 31, 2008 to $8,174,000 at March 31, 2009. During the three months ended March 31, 2009 the Company invested $1,100,000 of its cash and cash equivalents in certificates of deposit with twenty-six week maturities which are classified as short-term investments at March 31, 2009.
Net cash used in operating activities during the three months ended March 31, 2009 was $1,787,000. The decrease in cash and cash equivalents from operating activities primarily resulted from net income of $1,317,000 which was more than offset by $2,981,000 of reductions in accrued liabilities and accounts payable. The reductions in accrued liabilities and accounts payable were primarily the payment in January 2009 of accrued commissions, retailer payments and legal fees which had accrued during 2008 and were payable after December 31, 2008.
Net cash of $1,117,000 was used in investing activities during the three months ended March 31, 2009, due to the purchase of $1,100,000 of short-term investments (certificates of deposit with twenty-six week maturities) and $17,000 of expenditures for property and equipment. Capital expenditures for each of the remaining quarters of 2009 are expected to be higher due to planned capital equipment expenditures.
Net cash of $26,000 was provided by financing activities during the three months ended March 31, 2009 as a result of $49,000 of proceeds from the issuance of common stock from the employee stock purchase plan which was partially offset by the payment of $23,000 of principal on long-term liabilities.
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Insignia Systems Inc. is the leading marketer of software printing equipment and related print media products used primarily by retailers to produce their promotional and point-of-sale display materials. The company's mission is to help retailers compete more effectively by providing the finest in-store promotion tools available. Using their products Stylus Sign & Label Works software SIGNright or the Impulse Retail System retailers can easily create and print professional point-of-sale signs labels posters and more. Insignia Systems Inc. has a market cap of $43.1 million; its shares were traded at around $2.85 with a P/E ratio of 57 and P/S ratio of 1.4.
Highlight of Business Operations:
Gross Profit. Gross profit for the three months ended March 31, 2009 decreased 8.8% to $3,223,000 compared to $3,534,000 for the three months ended March 31, 2008. Gross profit as a percentage of total net sales decreased to 52.1% for 2009 compared to 53.9% for 2008.General and administrative. General and administrative expenses for the three months ended March 31, 2009 decreased 97.9% to $38,000 compared to $1,822,000 for the three months ended March 31, 2008, primarily due to a payment to the Company from an insurer for settlement of a claim against the insurer for defense costs, decreased legal expense and decreased facility related expenses. The Company received a payment of $1,387,000 in the first quarter of 2009 from an insurer as part of a settlement of the Companys claim that the insurer owed the Company defense costs for claims asserted against the Company and one of its officers in the News America litigation. General and administrative expenses as a percentage of total net sales decreased to 0.6% in 2009 compared to 27.8% in 2008, due to the settlement payment and decreased costs discussed above. Legal fees were $742,000 for the three months ended March 31, 2009 compared to $1,031,000 for the three months ended March 31, 2008. The legal fees in each quarter were incurred primarily in connection with the News America lawsuit described in Note 2 to the financial statements. We currently expect the amount of additional legal fees that will be incurred in connection with the ongoing lawsuit to be significant throughout the remainder of 2009 as trial preparation continues and as the trial is conducted. Also, if the Company is required to pay a significant amount in settlement or damages, it will have a material adverse effect on its operations and financial condition. In addition, a negative outcome of this litigation could affect long-term competitive aspects of the Companys business.
The Company has financed its operations with proceeds from public and private stock sales and sales of its services and products. At March 31, 2009, working capital was $7,944,000 compared to $6,396,000 at December 31, 2008. During the three months ended March 31, 2009, cash and cash equivalents decreased $2,878,000 from $11,052,000 at December 31, 2008 to $8,174,000 at March 31, 2009. During the three months ended March 31, 2009 the Company invested $1,100,000 of its cash and cash equivalents in certificates of deposit with twenty-six week maturities which are classified as short-term investments at March 31, 2009.
Net cash used in operating activities during the three months ended March 31, 2009 was $1,787,000. The decrease in cash and cash equivalents from operating activities primarily resulted from net income of $1,317,000 which was more than offset by $2,981,000 of reductions in accrued liabilities and accounts payable. The reductions in accrued liabilities and accounts payable were primarily the payment in January 2009 of accrued commissions, retailer payments and legal fees which had accrued during 2008 and were payable after December 31, 2008.
Net cash of $1,117,000 was used in investing activities during the three months ended March 31, 2009, due to the purchase of $1,100,000 of short-term investments (certificates of deposit with twenty-six week maturities) and $17,000 of expenditures for property and equipment. Capital expenditures for each of the remaining quarters of 2009 are expected to be higher due to planned capital equipment expenditures.
Net cash of $26,000 was provided by financing activities during the three months ended March 31, 2009 as a result of $49,000 of proceeds from the issuance of common stock from the employee stock purchase plan which was partially offset by the payment of $23,000 of principal on long-term liabilities.
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