Insignia Systems, Inc. Reports POPS Revenue Increase of 160% - Reaffirms POPS Revenue Guidance for Year.

Business Editors

MINNEAPOLIS--(BUSINESS WIRE)--July 12, 2001

Insignia Systems, Inc. (Nasdaq:ISIG) today reported net sales of $4,625,223 for the second quarter ended June 30, 2001, an increase of 52%, compared to net sales of $3,047,996 for the second quarter of 2000. The net loss for the second quarter of 2001 was $(99,173) or $(.01) per share, compared to a net loss of $(248,896) or $(.03) per share for the second quarter of 2000. Insignia Point-of-Purchase Services (POPS) revenue for the second quarter of 2001 was $3,055,771, an increase of 160%, compared to second quarter 2000 POPS revenue of $1,177,486.

For the six months ended June 30, 2001 net sales were $9,772,723, an increase of 65%, compared to net sales of $5,926,222 for the first half of 2000. The net income for the first half of 2001 was $201,954, or $.02 per share, compared to a net loss of $(502,703), or $(.05) per share, for the same period of 2000. POPS revenue for the first six months of 2001 was $6,832,632, an increase of 200%, compared to the first six months of 2000 POPS revenue of $2,276,393.

CEO Scott Drill commented, "We are pleased to be able to reaffirm POPS revenue guidance of $14,500,000 for the year despite a difficult economy which has undoubtedly made our year-to-year quarterly POPS revenue growth less than what it would have otherwise been. We are also pleased that the rest of our business has performed at a level consistent with plan. As mentioned in our first quarter release, the second quarter for POPS is our weakest due to seasonality. We expect to resume sequential revenue growth in the current quarter and anticipate it will accelerate in the fourth quarter."

Drill went on to say, "There have been a number of developments which are noteworthy. First, we have recently renewed retail agreements with Bruno's, Lowes, Metro, A&P, U Save Supermarkets and Pathmark, which represent a total of 991 stores. Second, we have signed new retail agreements with Thriftway, Quality Food Centers, Rosauers, Shoppers Food Warehouse, Cosentino's, Bozzutos, Ingles and Piggly Wiggly Alabama, representing potentially 697 stores. Piggly Wiggly Alabama services 240 independents of which over 100 have committed to our program. Third, these additions to our network are offset by the closing of 187 Grand Union, ABCO and Laneco stores. Also, there are five divisions of Kroger representing 514 stores which have contractual conflicts due to an exclusivity clause they have in their contracts with News American Marketing In-Store (NAMIS). This exclusivity clause is what our counterclaims center on in our legal conflict with NAMIS. If Kroger's contractual conflict remains unresolved, we will lose the 514 stores by mid-September. We are optimistic that we will renew our relationship with these stores when the NAMIS contract expires. The net result of the aforementioned new signings, closings and Kroger is that store count is essentially flat since mid-January. However, we are in various stages of discussion with several new retail chains and are optimistic we will be announcing new agreements during the current quarter. Fortunately, the Kroger contract conflict issue is an isolated situation and we don't believe we have this kind of exposure with other retail chains in our network. Meanwhile, the brands enthusiasm for our POPS program continues to build as we consistently deliver high sales lifts which are averaging approximately 50%."

Drill continued, "In a separate news release, we have announced the hiring of Larry Mortimer as Executive Vice President of Sales and Business Development for POPS. Larry has 10 years of successful industry experience at ActMedia and NAMIS where ultimately he managed revenue of $300,000,000 after the acquisition of ActMedia by NAMIS. Larry's addition is going to be extremely valuable to us because of his experience and his contacts on both the retail and brand sides of our business. We are more confident than ever that we'll achieve our vision of becoming a major player in the in-store promotion industry."

This press release, as it relates to expectations regarding future sales and profitability, contains forward-looking statements regarding future performance of the Company. The Company's actual results could differ materially from these forward-looking statements as a result of a number of factors, including (i) risks and uncertainty in the market for in-store signage, (ii) reliance on licensed proprietary rights, and (iii) the Company's ability to continue to enhance its current products and develop new products that keep pace with technological developments and evolving industry standards. The Company wishes to caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made.

Insignia Systems, Inc. is an innovative developer and marketer of in-store promotional products, programs and services to retailers and consumer goods manufacturers. Through its Point-Of-Purchase Services (POPS) business, Insignia currently serves retail supermarket chains, operating more than 6,600 stores in 49 states, and more than 125 consumer goods manufacturers, including such nationally known and respected companies as Best Foods, ConAgra Foods, Dole, Del Monte, General Mills, Heinz, Keebler, Kellogg's, Kraft, Nestle, Pillsbury, Procter & Gamble and Sara Lee. For additional information, contact 888-474-7677 or visit Insignia's Web site at www.insigniasystems.com, or the Insignia POPS Web site at www.insigniapops.com.

                        INSIGNIA SYSTEMS, INC.
                         RESULTS OF OPERATIONS
                              (Unaudited)

                       Three Months Ended         Six Months Ended
                            June 30,                   June 30,
                      ------------------------ -----------------------
                           2001        2000         2001      2000
                           ----        ----         ----      ----
                             (Unaudited)             (Unaudited)

Net Sales             $ 4,625,223  $3,047,996  $ 9,772,723 $5,926,222

Net Income (Loss)     $   (99,173) $ (248,896) $   201,954 $ (502,703)

Net Income (Loss)
 Per Share            $     (0.01) $    (0.03) $       .02 $    (0.05)


Shares used in
 calculation of
 net income(loss)
 per share:
   Basic               10,401,404   9,675,421   10,381,673  9,541,161
   Diluted             10,401,404   9,675,421   11,648,003  9,541,161