INSIGNIA SYSTEMS(ISIG) - 2025 Q2 - Quarterly Results

Executive Summary & Company Overview Lendway, Inc. reported strong Q2 and H1 2025 financial results, including record sales and profit growth, and announced a fiscal year-end change Announcement & Management Commentary Lendway, Inc. announced Q2 and H1 2025 financial results, with management highlighting record Mother's Day sales, market share growth, strong performance, and a fiscal year-end change - Lendway, Inc. announced its financial results for the three and six months ended June 30, 2025[1] - Chairman and Co-CEO Mark Jundt reported record-breaking Mother's Day sales and meeting unprecedented customer demand[4] - Co-CEO Dan Philp stated the company exceeded its market share growth goal, leading to record revenue and a more diverse customer base[4] - Lendway's board of directors approved a change in fiscal year end from December 31 to June 30, with a six-month transition period from January 1, 2025, to June 30, 2025[4] Key Financial Highlights (Q2 & H1 2025) Lendway reported significant financial improvements for both the three and six months ended June 30, 2025, including increased net revenue, gross profit, and a shift from net loss to net income, alongside growth in Adjusted EBITDA and cash from operations Key Financial Highlights for Q2 2025 vs Q2 2024 | Metric | Q2 2025 ($ millions) | Q2 2024 ($ millions) | Change ($ millions) | | :-------------------------------- | :---------- | :---------- | :------- | | Net Revenue | $23.2 million | - | - | | Gross Profit | $5.4 million (23.3% of sales) | - | - | | Operating Income | $2.5 million | $0.2 million | +$2.3 million | | Net Income from Continuing Operations | $1.3 million | $(0.6) million | +$1.9 million | | Net Income Attributable to Lendway | $1.0 million ($0.58/diluted share) | $(0.5) million ($(0.29)/diluted share) | +$1.5 million | | Adjusted EBITDA | $2.6 million | $2.0 million | +$0.6 million | | Cash & Cash Equivalents (as of June 30, 2025) | $0.9 million | - | - | | Working Capital (as of June 30, 2025) | $1.1 million | - | - | | Cash Provided by Operating Activities | $6.3 million | $3.5 million | +$2.8 million | Key Financial Highlights for H1 2025 vs H1 2024 | Metric | H1 2025 ($ millions) | H1 2024 ($ millions) | Change ($ millions) | | :-------------------------------- | :---------- | :---------- | :------- | | Net Revenue | $35.6 million | - | - | | Gross Profit | $9.3 million (26.1% of sales) | - | - | | Operating Income | $3.9 million | $(1.5) million | +$5.4 million | | Net Income from Continuing Operations | $1.9 million | $(2.1) million | +$4.0 million | | Net Income Attributable to Lendway | $1.5 million ($0.82/diluted share) | $(1.7) million ($(0.95)/diluted share) | +$3.2 million | | Adjusted EBITDA | $5.3 million | $3.6 million | +$1.7 million | | Cash Provided by Continuing Operations | $8.0 million | $5.0 million | +$3.0 million | Financial Performance Analysis Lendway's Q2 and H1 2025 financial performance showed significant improvements across net revenue, gross profit, operating income, and net income Net Revenue Net revenue significantly increased for both the three and six months ended June 30, 2025, driven by the timing of the Easter holiday, stronger Mother's Day sales, and the full period inclusion of Bloomia's revenues in the six-month comparison Net Revenue Performance | Period | June 30, 2025 ($ millions) | June 30, 2024 ($ millions) | Change (%) | | :------------------- | :-------------- | :-------------- | :----- | | Three Months Ended | $23.2 million | $16.9 million | +37.3% | | Six Months Ended | $35.6 million | $25.0 million | +42.4% | - The increase in three-month net revenue was primarily due to the shift of the Easter holiday into Q2 2025 and increased stems sold for Mother's Day[6] - The increase in six-month net revenue was primarily due to the timing of the Bloomia acquisition, reflecting a full six months of revenue in 2025 compared to a partial period in 2024, and stronger Mother's Day sales[7] Gross Profit Gross profit increased in absolute terms for both periods, but gross profit as a percentage of sales saw a slight decrease in Q2 2025 (excluding prior year's one-time amortization) and an increase in H1 2025, primarily due to higher bulb costs impacting margins Gross Profit Performance | Period | June 30, 2025 ($ millions) | % of Sales (%) | June 30, 2024 ($ millions) | % of Sales (%) | | :------------------- | :-------------- | :--------- | :-------------- | :--------- | | Three Months Ended | $5.4 million | 23.3% | $3.9 million | 23.1% | | Six Months Ended | $9.3 million | 26.1% | $5.7 million | 22.6% | - Excluding a one-time amortization of $0.2 million in Q2 2024 related to the Bloomia acquisition, gross profit as a percent of revenue decreased primarily due to higher bulb costs[8] - Gross profit in H1 2024 included $1.5 million of one-time fair value of inventory amortization. Excluding this, gross profit as a percent of revenue decreased primarily due to higher bulb costs[9] Operating Income (Loss) Operating income significantly improved for both the three and six months ended June 30, 2025, primarily driven by higher sales and the absence of significant acquisition-related and one-time costs incurred in the prior year Operating Income (Loss) Performance | Period | June 30, 2025 ($ millions) | June 30, 2024 ($ millions) | Change ($ millions) | | :------------------- | :-------------- | :-------------- | :------- | | Three Months Ended | $2.5 million | $0.2 million | +$2.3 million | | Six Months Ended | $3.9 million | $(1.5) million | +$5.4 million | - The improvement in Q2 2025 operating income was due to higher sales and the absence of $0.7 million in Bloomia acquisition costs and $0.4 million in other one-time costs from the prior year[10] - The improvement in H1 2025 operating income was primarily due to $2.2 million in acquisition costs and $1.5 million in fair value inventory amortization costs associated with the Bloomia acquisition in the prior year, and the timing of the acquisition[11] Net Income (Loss) from Continuing Operations Lendway transitioned from a net loss to net income from continuing operations for both the three and six months ended June 30, 2025, primarily due to the significant improvement in operating income and a higher tax benefit in the three-month period Net Income (Loss) from Continuing Operations | Period | June 30, 2025 ($ millions) | June 30, 2024 ($ millions) | Change ($ millions) | | :------------------- | :-------------- | :-------------- | :------- | | Three Months Ended | $1.3 million | $(0.6) million | +$1.9 million | | Six Months Ended | $1.9 million | $(2.1) million | +$4.0 million | - The improvement in Q2 2025 was due to improved operating income and a higher tax benefit[12] - The improvement in H1 2025 was primarily due to improved operating income[13] Net Income (Loss) Attributable to Lendway Lendway reported a positive net income attributable to shareholders for both periods in 2025, reversing losses from the prior year, driven by improved operating income and tax benefits Net Income (Loss) Attributable to Lendway | Period | June 30, 2025 ($ millions) | EPS (Diluted, $) | June 30, 2024 ($ millions) | EPS (Diluted, $) | Change (Net Income, $ millions) | | :------------------- | :-------------- | :------------ | :-------------- | :------------ | :------------------ | | Three Months Ended | $1.0 million | $0.58 | $(0.5) million | $(0.29) | +$1.5 million | | Six Months Ended | $1.5 million | $0.82 | $(1.7) million | $(0.95) | +$3.2 million | - The improvement in Q2 2025 was due to improved operating income and a higher tax benefit[14] Adjusted EBITDA Adjusted EBITDA increased for both Lendway and its subsidiary Bloomia, reflecting higher gross profit driven by increased sales and the timing of the Bloomia acquisition Lendway Adjusted EBITDA Lendway's Adjusted EBITDA increased for both the three and six months ended June 30, 2025, primarily due to higher gross profit from increased sales and the timing of the Bloomia acquisition Lendway Adjusted EBITDA Performance | Period | June 30, 2025 ($ millions) | June 30, 2024 ($ millions) | Change ($ millions) | | :------------------- | :-------------- | :-------------- | :------- | | Three Months Ended | $2.6 million | $2.0 million | +$0.6 million | | Six Months Ended | $5.3 million | $3.6 million | +$1.7 million | - The increase in Adjusted EBITDA was due to higher gross profit related to higher sales[16] - For the six months, the increase was also influenced by the timing of the Bloomia acquisition[16] Bloomia Adjusted EBITDA Bloomia's Adjusted EBITDA increased for the six months ended June 30, 2025, driven by higher gross profit from increased sales and the timing of its acquisition Bloomia Adjusted EBITDA Performance (Six Months Ended) | Period | June 30, 2025 ($ millions) | June 30, 2024 ($ millions) | Change ($ millions) | | :------------------- | :-------------- | :-------------- | :------- | | Six Months Ended | $6.1 million | $4.9 million | +$1.2 million | - The increase in Bloomia's Adjusted EBITDA was due to higher gross profit related to higher sales and the timing of the acquisition[17] Financial Position Lendway's balance sheet as of June 30, 2025, reflects reduced debt, increased stockholders' equity, and seasonal working capital fluctuations Balance Sheet Highlights As of June 30, 2025, Lendway's cash and cash equivalents decreased due to debt repayments, while working capital also saw a seasonal decrease. Total debt significantly reduced, and stockholders' equity increased Selected Balance Sheet Data (as of June 30, 2025 vs December 31, 2024) | Metric | June 30, 2025 ($ millions) | December 31, 2024 ($ millions) | Change ($ millions) | | :---------------------- | :-------------- | :---------------- | :------- | | Cash and cash equivalents | $0.9 million | $1.8 million | $(0.9) million | | Working capital | $1.1 million | $11.0 million | $(9.9) million | | Total assets | $96.1 million | $99.9 million | $(3.8) million | | Total debt | $34.1 million | $42.1 million | $(8.0) million | | Total liabilities | $81.3 million | $88.1 million | $(6.8) million | | Stockholders' equity | $14.8 million | $11.9 million | +$2.9 million | - The decrease in cash and cash equivalents was primarily due to debt repayments in the six months ended June 30, 2025[18] - Working capital is near its trough at June 30 due to the seasonality of the business, compared to its peak at December 31[18] - Total debt decreased by $8.0 million due to repayments in the quarter[18] About Lendway, Inc. Lendway, Inc. is a specialty agricultural company focused on managing ag investments in the U.S. and internationally, holding a majority ownership in Bloomia, a major U.S. fresh-cut tulip producer - Lendway, Inc. (Nasdaq: LDWY) is a specialty ag company[19] - The company focuses on making and managing ag investments in the U.S. and internationally[19] - Lendway is the majority owner of Bloomia, one of the largest producers of fresh-cut tulips in the United States[19] Cautionary Statement Regarding Forward-Looking Statements This section warns that forward-looking statements involve risks and uncertainties that could cause actual results to differ materially, listing factors like integration, competition, and economic conditions - The press release contains "forward-looking statements" subject to risks and uncertainties that may cause actual results to differ materially[20] - Key factors that could cause actual results to differ include the ability to integrate and operate the newly acquired Bloomia business, competition, changes in interest rates, compliance with credit agreement requirements, economic and market conditions, and reliance on key employees[21] - Readers are cautioned not to place undue reliance on these statements, which are based on current information and subject to rapid changes[20] Consolidated Financial Statements This section presents detailed consolidated statements of operations, comprehensive income (loss), and selected balance sheet data for Lendway, Inc Consolidated Statements of Operations and Comprehensive Income (Loss) This section presents detailed consolidated statements of operations and comprehensive income (loss) for Lendway, Inc. for the three and six months ended June 30, 2025, and 2024 Consolidated Statements of Operations and Comprehensive Income (Loss) | Metric | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue, net | $23,179,000 | $16,920,000 | $35,622,000 | $24,953,000 | | Gross profit | $5,391,000 | $3,906,000 | $9,280,000 | $5,650,000 | | Operating income (loss) | $2,485,000 | $165,000 | $3,917,000 | $(1,479,000) | | Net income (loss) from continuing operations | $1,319,000 | $(598,000) | $1,936,000 | $(2,084,000) | | Net income (loss) attributable to Lendway, Inc. | $1,047,000 | $(515,000) | $1,496,000 | $(1,678,000) | | Diluted earnings per share | $0.58 | $(0.29) | $0.82 | $(0.95) | Selected Balance Sheet Data This section provides key balance sheet figures for Lendway, Inc. as of June 30, 2025, and December 31, 2024, detailing assets, liabilities, and equity Selected Balance Sheet Data | Metric | June 30, 2025 ($) | December 31, 2024 ($) | | :---------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $906,000 | $1,759,000 | | Working capital (1) | $1,098,000 | $11,026,000 | | Total assets | $96,102,000 | $99,985,000 | | Total debt | $34,083,000 | $42,090,000 | | Total liabilities | $81,265,000 | $88,091,000 | | Stockholders' equity | $14,837,000 | $11,894,000 | - Working capital represents current assets less current liabilities[24] Non-GAAP Financial Measures Reconciliation This section reconciles non-GAAP financial measures like EBITDA and Adjusted EBITDA to GAAP net income, providing insights into core operating performance Reconciliation of EBITDA and Adjusted EBITDA This section reconciles net income (loss) from continuing operations to EBITDA and Adjusted EBITDA, highlighting adjustments for non-recurring items - Non-GAAP financial measures like EBITDA and Adjusted EBITDA are provided as supplemental information and are not substitutes for GAAP measures[25] - These measures exclude non-recurring transactions such as acquisition-related costs and non-cash step-up inventory write-offs to provide a clearer view of core operating performance[26] Reconciliation of Net Income (Loss) from Continuing Operations to EBITDA and Adjusted EBITDA | Metric | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :---------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) from continuing operations | $1,319,000 | $(598,000) | $1,936,000 | $(2,084,000) | | Interest expense (income), net | $935,000 | $964,000 | $1,905,000 | $1,189,000 | | Income tax (benefit) expense | $(469,000) | $(201,000) | $(313,000) | $(548,000) | | Depreciation and amortization | $848,000 | $808,000 | $1,683,000 | $1,108,000 | | EBITDA | $2,633,000 | $973,000 | $5,211,000 | $(335,000) | | Acquisition and integration-related costs | — | $652,000 | $24,000 | $2,194,000 | | Non-cash step-up inventory write-off | — | $162,000 | — | $1,522,000 | | Severance | — | — | $39,000 | — | | One-time waste costs | — | $270,000 | — | $270,000 | | Non-operating (income) expense | — | $(36,000) | — | $(36,000) | | Adjusted EBITDA | $2,633,000 | $2,021,000 | $5,274,000 | $3,615,000 | Reconciliation of Bloomia Adjusted EBITDA This section reconciles Bloomia's adjusted EBITDA to the total company's adjusted EBITDA, isolating Bloomia's performance by excluding Lendway corporate overhead - Management excludes Lendway corporate overhead when evaluating its investment in Bloomia[28] Reconciliation of Bloomia Adjusted EBITDA to Total Company Adjusted EBITDA (Six Months Ended June 30, 2025) | Metric | Bloomia ($) | Lendway Overhead ($) | Total ($) | | :------------------------------------------------ | :---------- | :--------------- | :---------- | | Income (loss) from continuing operations before income taxes | $2,426,000 | $(803,000) | $1,623,000 | | Depreciation and amortization | $1,677,000 | $6,000 | $1,683,000 | | Interest expense, net | $1,894,000 | $11,000 | $1,905,000 | | EBITDA | $5,997,000 | $(786,000) | $5,211,000 | | Acquisition and integration-related costs | $24,000 | — | $24,000 | | Severance | $39,000 | — | $39,000 | | Adjusted EBITDA | $6,060,000 | $(786,000) | $5,274,000 | Reconciliation of Bloomia Adjusted EBITDA to Total Company Adjusted EBITDA (Acquisition to Six Months Ended June 30, 2024) | Metric | Bloomia ($) | Lendway Overhead ($) | Total ($) | | :------------------------------------------------ | :---------- | :--------------- | :---------- | | Loss from continuing operations before income taxes | $(1,517,000) | $(1,115,000) | $(2,632,000) | | Depreciation and amortization | $1,108,000 | — | $1,108,000 | | Interest expense (income), net | $1,315,000 | $(126,000) | $1,189,000 | | EBITDA | $906,000 | $(1,241,000) | $(335,000) | | Acquisition and integration-related costs | $2,194,000 | — | $2,194,000 | | Non-cash step-up inventory write-off | $1,522,000 | — | $1,522,000 | | One-time waste costs | $270,000 | — | $270,000 | | Non-operating income | $(36,000) | — | $(36,000) | | Adjusted EBITDA | $4,856,000 | $(1,241,000) | $3,615,000 | - Management uses EBITDA, Adjusted EBITDA, and Bloomia Adjusted EBITDA to evaluate historical and prospective financial performance, measure operational profitability, and assess compliance with credit agreement covenants[29]