INSIGNIA SYSTEMS(ISIG) - 2025 Q1 - Quarterly Results

Introduction and Company Overview This section provides an overview of Lendway's recent financial performance, strategic changes, and future outlook Announcement and CEO Commentary Lendway, Inc. reported strong financial performance for Q1 2025, driven by the spring tulip season and Bloomia's full inclusion, with positive trends expected to continue - Lendway reported strong financial performance for the quarter ended March 31, 2025, with notable improvements in both revenue and EBITDA, reflecting the strong spring tulip season[3] - The company expects positive trends to continue, driven by upcoming Easter and Mother's Day sales[3] Fiscal Year End Change Lendway's board approved changing the fiscal year end from December 31 to June 30, with a six-month transition period in 2025 - Lendway's fiscal year end has been changed from December 31 to June 30[3] - A six-month transition period from January 1, 2025, to June 30, 2025, will be reported[3] Quarter Results Overview This section summarizes Lendway's key financial achievements for the quarter, highlighting significant improvements across core metrics Key Financial Highlights Lendway reported significant financial improvements for Q1 2025, including increased net revenue, a shift to operating income, and positive net income, largely due to Bloomia's full operations Key Financial Highlights | Metric | Q1 2025 (USD) | Q1 2024 (USD) | Change/Note | | :----- | :------------ | :------------ | :---------- | | Net Revenue | $12.4 million | $8.0 million | +55% (due to full Bloomia ops) | | Gross Profit | $3.9 million (31.3% of sales) | $1.7 million (21.7% of sales) | +129% | | Operating Income (Loss) | $1.4 million | $(1.6) million | Shift from loss to income | | Net Income (Loss) from Continuing Operations | $0.6 million | $(1.5) million | Shift from loss to income | | Net Income (Loss) Attributable to Lendway | $0.4 million | $(1.2) million | Shift from loss to income | | Basic & Diluted EPS | $0.25 | $(0.67) | Shift from loss to income | | Adjusted EBITDA | $2.6 million | $1.6 million | +62.5% | | Cash & Cash Equivalents (Mar 31, 2025) | $1.3 million | N/A | N/A | | Working Capital (Mar 31, 2025) | $6.3 million | N/A | N/A | | Cash Provided by Continuing Operations | $1.7 million | $1.4 million | +21.4% | Detailed Financial Performance Analysis This section provides an in-depth analysis of Lendway's revenue, profit, and income metrics, detailing the factors contributing to changes Net Revenue Net revenue for Q1 2025 significantly increased to $12.4 million from $8.0 million, entirely from Bloomia's full quarter of operations Net Revenue | Metric | Q1 2025 (USD) | Q1 2024 (USD) | | :----- | :------------ | :------------ | | Net Revenue | $12,443,000 | $8,033,000 | - All revenue was from Bloomia, which was acquired in February 2024, resulting in three full months of revenue in 2025 compared to approximately six weeks in 2024[4] Gross Profit Gross profit rose to $3.9 million (31.3% of sales) in Q1 2025, up from $1.7 million (21.7% of sales), due to Bloomia's full operations and absence of prior year's acquisition-related costs Gross Profit | Metric | Q1 2025 (USD) | Q1 2024 (USD) | | :----- | :------------ | :------------ | | Gross Profit | $3,889,000 | $1,744,000 | | Gross Profit Margin | 31.3% | 21.7% | - In 2024, inventory was written up to fair value related to the acquisition of Bloomia, and $1.4 million of amortization costs were included in the period[6] - The first half of the calendar year historically has the highest sales and efficiencies for Bloomia[6] Operating Income (Loss) The Company achieved an operating income of $1.4 million in Q1 2025, a significant improvement from a $1.6 million loss, primarily due to Bloomia's full operating results and the absence of $1.5 million in prior year acquisition costs Operating Income (Loss) | Metric | Q1 2025 (USD) | Q1 2024 (USD) | | :----- | :------------ | :------------ | | Operating Income (Loss) | $1,432,000 | $(1,644,000) | - The improvement primarily relates to $1.5 million of costs associated with the acquisition of Bloomia in 2024 and a full quarter of operating results in 2025[7] Net Income (Loss) from Continuing Operations Net income from continuing operations turned positive at $0.6 million in Q1 2025, compared to a $1.5 million loss, driven by Bloomia's full operations and absence of prior year transaction costs, partially offset by higher interest expense Net Income (Loss) from Continuing Operations | Metric | Q1 2025 (USD) | Q1 2024 (USD) | | :----- | :------------ | :------------ | | Net Income (Loss) from Continuing Operations | $617,000 | $(1,486,000) | - The improvement is due to a full quarter of Bloomia operations in 2025 and $1.5 million of transaction costs in the prior year, partially offset by higher interest expense[8] Net Income (Loss) Attributable to Lendway Net income attributable to Lendway was $0.4 million ($0.25 EPS) in Q1 2025, a significant improvement from a $1.2 million loss ($0.67 EPS), driven by Bloomia's full operations and absence of prior year transaction costs, despite higher interest expense Net Income (Loss) Attributable to Lendway | Metric | Q1 2025 (USD) | Q1 2024 (USD) | | :----- | :------------ | :------------ | | Net Income (Loss) Attributable to Lendway | $449,000 | $(1,163,000) | | Basic and Diluted EPS | $0.25 | $(0.67) | - The improvement is due to a full quarter of Bloomia operations in 2025 and $1.5 million of transaction costs in the prior year, partially offset by higher interest expense[9] Adjusted EBITDA Adjusted EBITDA increased to $2.6 million in Q1 2025 from $1.6 million, primarily due to Bloomia's full operating income inclusion in the 2025 period Adjusted EBITDA | Metric | Q1 2025 (USD) | Q1 2024 (USD) | | :----- | :------------ | :------------ | | Adjusted EBITDA | $2,641,000 | $1,594,000 | - The increase is due to a full quarter of Bloomia operating income included in the 2025 period versus approximately six weeks in the 2024 period[10] Bloomia Adjusted EBITDA Bloomia generated $3.0 million of Adjusted EBITDA in Q1 2025, reflecting its seasonal business with strongest sales and earnings historically in the first two quarters Bloomia Adjusted EBITDA | Metric | Q1 2025 (USD) | Acquisition to March 31, 2024 (USD) | | :----- | :------------ | :---------------------------------- | | Bloomia Adjusted EBITDA | $2,981,000 | $2,202,000 | - The seasonal Bloomia business historically has its strongest sales and earnings in the first two quarters of the year[11] Financial Position This section outlines Lendway's balance sheet, detailing changes in cash, working capital, and total debt Balance Sheet Overview As of March 31, 2025, Lendway's cash and working capital decreased to $1.3 million and $6.3 million respectively, primarily due to debt repayments, while total debt decreased to $40.6 million Balance Sheet Overview | Metric | March 31, 2025 (USD) | December 31, 2024 (USD) | Change | | :----- | :------------------- | :---------------------- | :----- | | Cash and Cash Equivalents | $1,308,000 | $1,759,000 | -$451,000 | | Working Capital | $6,274,000 | $11,026,000 | -$4,752,000 | | Total Debt | $40,562,000 | $42,090,000 | -$1,528,000 | - The decrease in cash and cash equivalents is primarily due to debt repayments in the three months ended March 31, 2025[12] - Total debt includes a $3.5 million note payable to a related party[12] About the Company This section provides a brief profile of Lendway, Inc., highlighting its focus on specialty agriculture investments and its majority ownership of Bloomia Company Profile Lendway, Inc. (Nasdaq: LDWY) is a specialty agriculture company focused on managing ag investments, and is the majority owner of Bloomia, a major U.S. fresh-cut tulip producer - Lendway, Inc. is a specialty ag company focused on making and managing its ag investments in the U.S. and internationally[13] - The Company is the majority owner of Bloomia, one of the largest producers of fresh-cut tulips in the United States[13] Forward-Looking Statements This section includes a cautionary statement regarding forward-looking statements, outlining inherent risks and uncertainties that could impact actual results Cautionary Statement The press release contains forward-looking statements subject to known and unknown risks and uncertainties that could cause actual results to differ materially from expectations - Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results or performance to be materially different[14] - Factors that could cause actual results to differ materially include the ability to integrate Bloomia, competition, customer concentration, changes in interest rates, compliance with credit agreements, economic conditions, and ability to attract and retain personnel[15] - The Company assumes no responsibility to update forward-looking statements, other than as required by law[15] Condensed Consolidated Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements, including statements of operations and selected balance sheet data Statements of Operations and Comprehensive Income (Loss) The unaudited condensed consolidated statements of operations show significant profitability improvement for Q1 2025, with net income attributable to Lendway of $449,000 compared to a prior year loss of $1,163,000 Statements of Operations and Comprehensive Income (Loss) | Metric | Three Months Ended March 31, 2025 (USD) | Three Months Ended March 31, 2024 (USD) | | :----- | :-------------------------------------- | :-------------------------------------- | | Revenue, net | $12,443,000 | $8,033,000 | | Cost of goods sold | $8,554,000 | $6,289,000 | | Gross profit | $3,889,000 | $1,744,000 | | Sales, general and administrative expenses | $2,457,000 | $3,388,000 | | Operating income (loss) | $1,432,000 | $(1,644,000) | | Net income (loss) from continuing operations | $617,000 | $(1,486,000) | | Net income (loss) attributable to Lendway, Inc. | $449,000 | $(1,163,000) | | Basic and diluted earnings per share | $0.25 | $(0.67) | | Shares used in calculation of net income (loss) per share: Basic and diluted | 1,770,000 | 1,743,000 | Selected Balance Sheet Data Selected balance sheet data as of March 31, 2025, indicates decreased cash and working capital, increased total assets, decreased total debt, and increased stockholders' equity compared to December 31, 2024 Selected Balance Sheet Data | Metric | March 31, 2025 (USD) | December 31, 2024 (USD) | | :----- | :------------------- | :---------------------- | | Cash and cash equivalents | $1,308,000 | $1,759,000 | | Working capital | $6,274,000 | $11,026,000 | | Total assets | $100,514,000 | $99,985,000 | | Total debt | $40,562,000 | $42,090,000 | | Total liabilities | $87,946,000 | $88,091,000 | | Stockholders' equity | $12,568,000 | $11,894,000 | - Working capital represents current assets less current liabilities[18] Non-GAAP Financial Measures This section explains Lendway's use of non-GAAP financial measures, specifically Adjusted EBITDA, and provides reconciliations to GAAP measures Adjusted EBITDA Reconciliation Lendway provides Adjusted EBITDA as a non-GAAP measure to offer supplemental information on operating performance, excluding non-recurring items like acquisition costs and non-cash inventory write-offs, for management's evaluation - Adjusted EBITDA is a non-GAAP financial measure provided as supplemental information, not a substitute for GAAP measures[19] - It excludes amounts from discontinued operations, acquisition-related costs, and non-cash step-up inventory write-off to provide a clearer view of core operating results[20] Adjusted EBITDA Reconciliation | Metric | Three Months Ended March 31, 2025 (USD) | Three Months Ended March 31, 2024 (USD) | | :----- | :-------------------------------------- | :-------------------------------------- | | Net income (loss) from continuing operations | $617,000 | $(1,486,000) | | Interest expense, net | $970,000 | $225,000 | | Income tax expense (benefit) | $156,000 | $(347,000) | | Depreciation and amortization | $835,000 | $300,000 | | EBITDA | $2,578,000 | $(1,308,000) | | Acquisition and integration-related costs | $24,000 | $1,542,000 | | Non-cash step-up inventory write-off | — | $1,360,000 | | Severance | $39,000 | — | | Adjusted EBITDA | $2,641,000 | $1,594,000 | Bloomia Adjusted EBITDA Reconciliation The reconciliation of Bloomia Adjusted EBITDA to total Company Adjusted EBITDA highlights Bloomia's significant contribution, with management excluding Lendway corporate overhead for investment evaluation - Management excludes Lendway corporate overhead when evaluating its investment in Bloomia[22] Bloomia Adjusted EBITDA Reconciliation (Q1 2025) | Metric | Bloomia (Q1 2025) (USD) | Lendway Overhead (Q1 2025) (USD) | Total (Q1 2025) (USD) | | :----- | :---------------------- | :------------------------------- | :-------------------- | | Income (loss) from continuing operations before income taxes | $1,117,000 | $(344,000) | $773,000 | | Depreciation and amortization | $831,000 | $4,000 | $835,000 | | Interest expense, net | $970,000 | — | $970,000 | | EBITDA | $2,918,000 | $(340,000) | $2,578,000 | | Acquisition and integration-related costs | $24,000 | — | $24,000 | | Severance | $39,000 | — | $39,000 | | Adjusted EBITDA | $2,981,000 | $(340,000) | $2,641,000 | Bloomia Adjusted EBITDA Reconciliation (Acquisition to Mar 31, 2024) | Metric | Bloomia (Acquisition to Mar 31, 2024) (USD) | Lendway Overhead (Acquisition to Mar 31, 2024) (USD) | Total (Acquisition to Mar 31, 2024) (USD) | | :----- | :--------------------------------------- | :----------------------------------------------- | :--------------------------------------- | | Loss from continuing operations before income taxes | $(1,347,000) | $(486,000) | $(1,833,000) | | Depreciation and amortization | $296,000 | $4,000 | $300,000 | | Interest expense (income), net | $351,000 | $(126,000) | $225,000 | | EBITDA | $(700,000) | $(608,000) | $(1,308,000) | | Acquisition and integration-related costs | $1,542,000 | — | $1,542,000 | | Non-cash step-up inventory write-off | $1,360,000 | — | $1,360,000 | | Adjusted EBITDA | $2,202,000 | $(608,000) | $1,594,000 |