Key recent highlights include:
* Year-to-date revenue of $4.4 million through the third quarter,
up 128 percent from $1.9 million in 2006
* Maintains year-to-date 2007 gross margin levels near 40 percent
goal
* Continues expansion of key customer relationships
* Integrates McGill Digital Solutions to expand vertical market
footprint
MINNEAPOLIS, Nov. 8, 2007 (PRIME NEWSWIRE) -- Wireless Ronin Technologies, Inc. (Nasdaq:RNIN) today announced its financial results for the 2007 third quarter. The company reported revenue of $1.1 million for the third quarter of 2007, in comparison to $1.0 million in the third quarter of 2006, a net loss of $2.4 million compared to a net loss of $2.2 million last year, and a basic and diluted loss per share of $0.17 compared to a basic and diluted loss per share of $2.53 last year. The increase in the net loss for the 2007 third quarter was primarily attributable to only slightly increased year-over-year revenue that was outpaced by expense growth over the same period. Third-quarter results also benefited from an increase in interest income resulting from investment of the net proceeds of the company's initial public offering and the June follow-on equity offering. Also included in the 2006 third quarter loss was $1.6 million of interest expense, which was eliminated for the 2007 reporting period. Third-quarter results also included costs of approximately $149,000, or $0.01 per basic and diluted share, of non-cash stock option expense related to FAS123R. The company adopted FAS123R for reporting purposes in the first quarter of 2006.
"With three quarters of 2007 under our belt, we believe that we have built a solid foundation for this company to be successful going forward," said Jeffrey Mack, president and CEO. "Wireless Ronin is a strong company with a unique and highly differentiated technology platform, driven by state-of-the-art proprietary software. The strength of the balance sheet and our cash reserves give us a firm financial platform to continue to pursue the significant market potential in front of us. We have made significant investments in building a high-quality sales team. We are encouraged as the company's pipeline continues to grow, and also by the year-over-year growth through the first nine months of 2007 and our ability to maintain gross margin levels of nearly 40 percent. Though we were disappointed last month when we saw the need to lower our revenue expectations for 2007, I am confident in our future success as I look at the opportunities in front of us to expand within key vertical markets, specifically retail, automotive and quick-serve restaurants."
Year-to-Date Results
For the first nine months of 2007, the company reported revenue of $4.4 million compared to $1.9 million in the first three quarters of 2006, a net loss of $6.4 million compared to a net loss of $6.3 million last year, and a basic and diluted loss per share of $0.55 compared to a basic and diluted loss per share of $7.79 last year. The increase in net loss during 2007 was primarily attributable to the increase in year-over-year revenue as well as the decline in interest expense, as the company's debt has been virtually eliminated. Offsetting these benefits were a substantial increase in sales and marketing expense to support growth opportunities as well as higher general and administrative expense associated with being a public company. The decline in basic and diluted loss per share was due primarily to the increase in shares outstanding. The 2007 results also included costs of approximately $881,000, or $0.08 per basic and diluted share, of non-cash stock option expense related to FAS123R.
"With an opportunity pipeline in excess of $300 million, we believe we are well-positioned to be successful in 2008 and in gaining further momentum toward achieving our profitability objectives," concluded Mack. "There continues to be significant enthusiasm for our core product, RoninCast(r), among current and prospective customers, but we do not believe it is appropriate to give 2008 revenue projections at this time, due to the unpredictable nature of our sales cycles and the implementation delays we discussed last month. At the end of the day, we believe that the digital signage industry is in its infancy with tremendous growth potential across multiple vertical markets. Our confidence in our future success is the result of the opportunities that lie ahead of us and our ability to capitalize on them, yet we prefer to take a more cautious approach in predicting that momentum. As a result, we intend not to provide revenue guidance for the foreseeable future."
Operations Detail
For the third quarter of 2007, year-to-date gross margins averaged 38.6 percent, compared to a gross margin of 60.1 percent through the first three quarters of 2006. Gross margin levels in 2007 continue to re-build from 2006 as a greater percentage of higher-margin software revenue continues to get added into the product mix.
Third quarter 2007 operating expenses totaled $3.2 million, compared to $1.2 million in the prior year. Included in those totals was FAS 123R-related expense of approximately $881,000 and $621,000, respectively.
General and administrative expense for the 2007 third quarter was $2.2 million compared to $0.7 million during the same period last year, primarily reflecting higher staffing levels and additional expenses as a result of the McGill acquisition. Increased expenses also resulted from higher professional services fees, and FAS 123R-related expenses.
Sales and marketing expense totaled $0.7 million in the third quarter of 2007, compared to $0.3 million in the third quarter of 2006. The year-over-year increase in sales and marketing expense resulted from the further investment in building the team of sales associates, higher commission costs as well as expenses related to tradeshows, marketing and other new business generation activities.
Cash and marketable securities at September 30, 2007 totaled approximately $33.8 million compared to $15.5 million at December 31, 2006, reflecting the addition of the proceeds from the company's recent follow-on equity offering. Due to the company's loss carryforward position, it does not currently pay income taxes.
A conference call to review the third-quarter results and to provide further information regarding the company's active proposals and opportunity pipeline is scheduled for today at 4:00 p.m. (CST). A live webcast of Wireless Ronin's earnings conference call can be accessed on the Investor section of its corporate website at www.wirelessronin.com. Alternatively, a live broadcast of the call may be heard by dialing (888) 633-9563 inside the United States or Canada, or by calling (706) 679-6372 from international locations. An operator will direct you to the Wireless Ronin conference call. A webcast replay of the call will be archived on Wireless Ronin's corporate Web site. An archive of the call is also accessible via telephone by dialing (800) 642-1687 domestically and (706) 645-9291 internationally with pass code 21385471. The conference call archive will be available through November 22, 2007.
About Wireless Ronin Technologies, Inc.
Wireless Ronin Technologies (www.wirelessronin.com) is the developer of RoninCast(r), a complete software solution designed to address the evolving digital signage marketplace. RoninCast(r) provides clients with the ability to manage a digital signage network from one central location. The software suite allows for customized distribution with network management, playlist creation and scheduling, and database integration. An array of services is offered by Wireless Ronin to support RoninCast(r) including consulting, creative development, project management, installation, and training. The company's common stock is traded on the NASDAQ Global Market under the symbol "RNIN".
The Wireless Ronin Technologies, Inc. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3208
This release contains certain forward-looking statements of expected future developments, as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect management's expectations and are based on currently available data; however, actual results are subject to future risks and uncertainties, which could materially affect actual performance. Risks and uncertainties that could affect such performance include, but are not limited to, the following: estimates of future expenses, revenue and profitability; the pace at which the Company completes installations and recognizes revenue; trends affecting financial condition and results of operations; ability to convert proposals into customer orders; the ability of customers to pay for products and services; the revenue recognition impact of changing customer requirements; customer cancellations; the availability and terms of additional capital; ability to develop new products; dependence on key suppliers, manufacturers and strategic partners; industry trends and the competitive environment; and the impact of losing one or more senior executives or failing to attract additional key personnel. These and other risk factors are discussed in detail in the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission, on August 10, 2007.
In addition, this release contains certain non-GAAP financial measures, including references to adjusted operating loss. As compared to the nearest GAAP measurement for our company, adjusted operating loss represents operating loss with the add-back of depreciation and amortization, termination of partnership agreement and stock-based compensation expense. The Company uses adjusted operating loss as internal measurement of operating performance. Adjusted operating loss as the Company defines it may not be comparable to similar measurements used by other companies and is not a measure of performance or liquidity presented in accordance with GAAP. The Company believes that adjusted operating loss is an important component of its financial results because it is a widely used measurement within the Company's industry to evaluate performance. The Company uses adjusted operating loss as a means of evaluating its financial performance compared with its competitors. This non-GAAP measurement should not be used as a substitute for operating loss. A reconciliation of adjusted operating loss to operating loss for the three and nine months ended September 30, 2007 and 2006 is provided herein.
WIRELESS RONIN TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2007 2006
------------ ------------
(unaudited) (audited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 28,049,486 $ 8,273,388
Marketable securities
-- available-for-sale 5,324,175 7,193,511
Accounts receivable, net 3,383,717 1,128,730
Income Taxes Receivable 290,769 --
Inventories 660,470 255,850
Prepaid expenses and other
current assets 245,232 148,024
------------ ------------
Total current assets 37,953,849 16,999,503
------------ ------------
PROPERTY AND EQUIPMENT, net 1,662,243 523,838
------------ ------------
OTHER ASSETS
Goodwill 2,240,823 --
Restricted cash 450,000 --
Deposits 39,994 22,586
------------ ------------
Total other assets 2,730,817 22,586
TOTAL ASSETS $ 42,346,909 $ 17,545,927
============ ============
LIABILITIES AND
SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of
long-term obligations $ 116,391 $ 106,311
Accounts payable 1,874,749 948,808
Deferred revenue 531,699 202,871
Accrued liabilities 940,297 394,697
------------ ------------
Total current liabilities 3,463,136 1,652,687
------------ ------------
LONG-TERM LIABILITIES
Capital lease obligations,
less current maturities 89,056 155,456
------------ ------------
Total long-term liabilities 89,056 155,456
------------ ------------
Total liabilities 3,552,192 1,808,143
------------ ------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Capital stock, $0.01 par value,
66,666,666 shares authorized
Preferred stock, 16,666,666 shares
authorized, no shares issued and
outstanding at September 30, 2007
and December 31, 2006 -- --
Common stock, 50,000,000 shares
authorized; 14,457,705 and
9,825,621 shares issued and
outstanding at September 30,
2007 and December 31, 2006,
respectively 144,577 98,256
Additional paid-in capital 78,200,843 49,056,509
Accumulated deficit (39,846,513) (33,433,713)
Accumulated other comprehensive
income (loss) 295,810 16,732
------------ ------------
Total shareholders' equity 38,794,717 15,737,784
------------ ------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 42,346,909 $ 17,545,927
============ ============
WIRELESS RONIN TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- -------------------------
2007 2006 2007 2006
----------- ----------- ----------- -----------
Sales
Hardware $ 429,578 $ 395,468 $ 2,949,816 $ 963,550
Software 119,179 539,700 472,018 841,246
Services and
other 575,176 48,020 953,398 112,618
----------- ----------- ----------- -----------
Total sales 1,123,933 983,188 4,375,232 1,917,414
Cost of sales
Hardware 263,961 309,298 1,999,669 705,769
Software 1,007 -- 1,007 --
Services and
other 444,797 22,033 685,376 59,495
----------- ----------- ----------- -----------
Total cost
of sales 709,765 331,331 2,686,052 765,264
----------- ----------- ----------- -----------
Gross profit 414,168 651,857 1,689,180 1,152,150
Operating
expenses:
Sales and
marketing
expenses 715,016 278,973 1,993,191 1,057,790
Research and
development
expenses 319,945 193,343 827,234 623,883
General and
administrative
expenses 2,210,632 740,856 5,486,439 2,482,784
Termination of
partnership
agreement -- -- 653,995 --
----------- ----------- ----------- -----------
Total
operating
expenses 3,245,593 1,213,172 8,960,859 4,164,457
----------- ----------- ----------- -----------
Operating
loss (2,831,425) (561,315) (7,271,679) (3,012,307)
Other income
(expenses):
Interest expense (11,758) (1,602,425) (32,273) (2,949,621)
Loss on debt
modification -- -- -- (367,153)
Interest income 467,740 2,346 899,724 8,834
Other (7,081) 1,403 (8,572) 1,962
----------- ----------- ----------- -----------
448,901 (1,598,676) 858,879 (3,305,978)
----------- ----------- ----------- -----------
Net loss $(2,382,524) $(2,159,991) $(6,412,800) $(6,318,285)
=========== =========== =========== ===========
Basic and di-
luted loss per
common share $ (0.17) $ (2.53) $ (0.55) $ (7.79)
=========== =========== =========== ===========
Basic and di-
luted weighted
average shares
outstanding 14,369,262 854,169 11,565,993 811,174
=========== =========== =========== ===========
WIRELESS RONIN TECHNOLOGIES, INC
2007 SUPPLEMENTARY QUARTERLY FINANCIAL DATA
Supplementary Data
Income (Loss) Statement
2006
-----------------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
----------- ----------- ----------- -----------
Sales $ 601,566 $ 332,660 $ 983,188 $ 1,227,975
Cost of
Sales 227,190 206,743 331,331 780,003
Operating
Expenses 1,656,819 1,294,466 1,213,172 1,753,999
Interest
Expense 479,083 868,113 1,602,425 7,174,595
Loss on
debt modi-
fication 171,954 195,199 -- --
Other (837) (6,210) (3,749) (11,170)
Net
Loss $(1,932,643) $(2,225,651) $(2,159,991) $(8,469,452)
FASB 123R
(included
in operating
Expenses) 373,568 156,105 91,735 165,806
2006
------------
TOTAL
------------
Sales $ 3,145,389
Cost of Sales 1,545,267
Operating Expenses 5,918,456
Interest Expense 10,124,216
Loss on debt modification 367,153
Other (21,966)
Net Loss $(14,787,737)
FASB 123R (included in operating Expenses) 787,214
2007
--------------------------------------------------
First Second Third
Quarter Quarter Quarter TOTAL
----------- ----------- ----------- -----------
Sales $ 196,436 $ 3,054,863 $ 1,123,933 $ 4,375,232
Cost of Sales 103,263 1,873,024 709,765 2,686,052
Operating Expenses 3,284,664 2,430,602 3,245,593 8,960,859
Interest Expense 10,881 9,634 11,758 32,273
Loss on debt
modification -- -- -- --
Other (151,807) (278,686) (460,659) (891,152)
Net Loss $(3,050,565) $ (979,711) $(2,382,524) $(6,412,800)
FASB 123R
(included in
operating
Expenses) 596,020 136,339 148,544 880,903
Reconciliation Between GAAP and Adjusted Operating Loss
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ ------------------------
2007 2006 2007 2006
----------- ----------- ----------- -----------
GAAP Operating
Loss $(2,831,425) $ (561,315) $(7,271,679) $(3,012,307)
Adjustments:
Depreciation and
amortization 124,844 318,629 265,617 629,588
Old Building
Remaining Lease
Oblig.W/O 191,207 -- 191,207 --
Termination
partnership
agreement -- -- 653,995 --
Stock-based
compensation
expense 148,544 91,735 880,903 621,408
----------- ----------- ----------- -----------
Total Operating
Expense Adjustment 464,595 410,364 1,991,722 1,250,996
----------- ----------- ----------- -----------
Adjusted
Operating Loss $(2,366,830) $ (150,951) $(5,279,957) $(1,761,311)
=========== =========== =========== ===========