Key recent highlights include:
-- Achieves six month year-to-date revenue of $3.5 million, up
nearly 9 percent from 2007
-- Business development efforts result in fifteen new clients
spanning multiple vertical markets
-- New product development yields additional capabilities and
expanded services, scheduled to be introduced in the third quarter
-- Selected by Chrysler LLC for iShowroom interactive program
-- Canadian KFC testing Wireless Ronin's digital signage solutions
-- Continued expansion of relationship with Thomson Reuters
-- Announces key board and management additions
MINNEAPOLIS, Aug. 7, 2008 (PRIME NEWSWIRE) -- Wireless Ronin Technologies, Inc. (Nasdaq:RNIN) today announced its financial results for the 2008 second quarter. The company reported revenue of $1.6 million for the second quarter of 2008, in comparison to $3.1 million in the second quarter of 2007, a net loss of $5.0 million compared to a net loss of $1.0 million last year, and a basic and diluted loss per share of $0.34 compared to a basic and diluted loss per share of $0.09 last year.
Wireless Ronin also reported a second quarter 2008 adjusted operating loss of $4.5 million, or $0.31 per basic and diluted share, compared to an adjusted operating loss of $1.0 million, or $0.10 per basic and diluted share in the second quarter of 2007. Adjusted operating loss is defined as the GAAP operating loss with the add-back of certain items. Reconciliation to the GAAP operating loss is contained in an attached table. Second-quarter results also included costs of approximately $0.3 million, or $0.02 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. Jeffrey Mack, Wireless Ronin's chairman, president and chief executive officer said, "I am pleased with our accomplishments in the second quarter and the progress we made toward our future growth and profitability objectives. Through the first six months of 2008 we recorded $3.5 million in revenue, a nearly 9 percent increase from 2007. This is even more impressive when you consider that last year's total was primarily driven by one customer. Net of that customer, 2008 first half revenue grew more than 250 percent from prior year levels. During the quarter we focused on creating the business platform to take advantage of the shift that we see as companies look to move from traditional signage methods to digital solutions. Our business development efforts resulted in further expansion with our large, key clients. In the second quarter our focused sales efforts resulted in the addition of fifteen new client relationships. These clients span multiple vertical markets, including quick serve restaurant, automotive, retail, hospitality and other services. While we acknowledge that near-term revenue results have been slower than anticipated, we believe that this is primarily a timing issue. Up until this point, revenue potential had been driven by a lengthier sales cycle as perspective clients moved though the pipeline. These are extended types of transactions, as we move from test to pilot and through full implementation with our clients. Our sales efforts have translated into business-in-hand with revenue acceleration now based on timing rather than potential opportunities."
First Half Results
For the first six months of 2008, the company reported revenue of $3.5 million, compared to $3.3 million in the first half of 2007, a net loss of $9.2 million compared to a net loss of $4.0 million last year, and a basic and diluted loss per share of $0.63 compared to a basic and diluted loss per share of $0.40 last year.
Wireless Ronin also reported an adjusted operating loss of $8.3 million, or $0.57 per basic and diluted share, for the first six months of 2008, compared to an adjusted operating loss of $2.9 million, or $0.29 per basic and diluted share in the same period of 2007. The six month 2008 results also included costs of approximately $0.7 million, or $0.05 per basic and diluted share, of non-cash stock option expense related to FAS123R.
Operations Detail
For the second quarter of 2008, gross margins averaged 3.9 percent, as compared to a gross margin of 38.7 percent in the second quarter of 2007. The decline was primarily the result of investments in the company's Network Operations Center to support the projected demand to host digital signage applications in 2008. Net of these investments in the NOC, second quarter adjusted gross margin would have been 20.4 percent. A reconciliation of GAAP gross margin and adjusted gross margin is presented in an attached table.
Second quarter 2008 operating expenses totaled $5.2 million, compared to $2.4 million in the prior year and $4.9 million in the prior quarter. Included in those totals was FAS 123R-related expense of $0.3 million, $0.1 million and $0.4 million, respectively.
General and administrative expense for the 2008 second quarter was $3.5 million, compared to $1.5 million during the same period last year and $3.2 million in the prior quarter. The year-over-year increase in general and administrative expense primarily reflects higher staffing levels and the additional costs associated with the company's acquisition in August 2007. Increased expenses also resulted from higher professional services fees and the previously outlined increase in FAS 123R-related expenses. The slight increase from the prior quarter is attributable to one-time severance related costs. Sales and marketing expense totaled $1.1 million in the second quarter of 2008, compared to $0.7 million in the second quarter of 2007 and $1.2 million in the prior quarter. The year-over-year increase in sales and marketing expense resulted from the further investment in building the team of sales associates, higher commission levels as well as expenses related to tradeshows and other new business activities. Cash and marketable securities at June 30, 2008, including restricted cash of $0.5 million, totaled approximately $22.3 million compared to $29.6 million at December 31, 2007. The year-to-date decline in cash reflects the funding of the company's net loss. Wireless Ronin also reported that at the end of 2008 second quarter, accounts receivable totaled $3.5 million, down from $4.1 million at the end of fiscal 2007. Accounting for most of the balance is the $2.3 million note receivable from NewSight Corporation. The note is due no later than August 15, 2008, as per the agreements that the company has previously filed with the Securities and Exchange Commission. Due to the company's loss carryforward position, it does not currently pay income taxes.
Wireless Ronin also announced several recent key management additions. Last week, the company announced the appointment of Stephen Birke, a former executive with Target Corporation, to its board of directors. Mr. Birke served more than 38 years at Target, where his positions ranged from buying to departmental merchandising manager up to vice president and general merchandising manager. In June, the company named David Kampf Vice President of Project Management. Mr. Kampf brings extensive experience in planning and managing large-scale deployments. Also in June, the company announced the addition of Daniel Radunz Vice President of the Network Operations Center. Mr. Radunz brings Wireless Ronin a heightened information technology expertise in the areas of enterprise readiness, product development and support services. "We believe that Wireless Ronin is well positioned for success in 2008 and beyond. We have made the necessary investments to create the leverage and scale that will enable us to take advantage of the anticipated future demand for digital signage. We continue to develop relationships with some marquee brand names, such as Thomson Reuters. We are proud of our announcement earlier this week that Chrysler chose us for its digital signage solutions, and that we're in test phase with KFC Canada. Wireless Ronin has a complete, state-of-the-art digital signage toolset and in the third quarter we anticipate introducing several expanded business services that we believe make our product offering best-in-class. We continue our focus on the five key markets that we believe offer the greatest potential for growth. That list consists of quick serve restaurants, automotive, gaming, retail and financial services. With 124 clients who have purchased digital signage products since our inception, nearly 6,600 global displays running RoninCast(r) solutions and doing business in 34 countries, we believe that we have established Wireless Ronin as one of the world's premier digital signage solution providers," concluded Mack. A conference call to review the second quarter, including an update regarding certain clients and the company's recent investments in its infrastructure, is scheduled for today at 3:45 p.m. (CDT). 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 55871353. The conference call archive will be available through September 7, 2008.
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) software 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. Wireless Ronin offers an array of services to support RoninCast(r) software including consulting, creative development, project management, installation, and training. The company's common stock trades 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 Quarterly Report on Form 10Q filed with the Securities and Exchange Commission, on May 9, 2008.
In addition, this release contains certain non-GAAP financial measures, including references to adjusted operating loss, adjusted gross profit and adjusted gross margin. As compared to the nearest GAAP measurement for our company, adjusted operating loss represents GAAP operating loss with the add-back of depreciation and amortization, write-off of a remaining lease obligation, termination of partnership agreement and stock-based compensation expense. As compared to the nearest GAAP measurement for our company, adjusted gross profit and adjusted gross margin represent GAAP sales and GAAP cost of sales with the add-back of deferred revenue and deferred costs, NOC revenue and expense, and the inventory lower of cost or market adjustment. The Company uses these non-GAAP financial measures as internal measurements of operating performance. These non-GAAP financial measures as the Company defines them may not be comparable to similar measurements used by other companies and are not measures of performance or liquidity presented in accordance with GAAP. The Company believes that these non-GAAP financial measures are important components of its financial results. The Company uses these non-GAAP financial measures as means of evaluating its financial performance compared with its competitors. These non-GAAP financial measures should not be used as substitute for operating loss, gross profit (loss) or gross margin. A reconciliation of adjusted operating loss to operating loss, a reconciliation of adjusted gross profit to gross profit (loss) and a reconciliation of adjusted gross margin to gross margin for each quarter of 2007 and the first and second quarters of 2008 is provided herein.
WIRELESS RONIN TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2008 2007
------------ ------------
(unaudited) (audited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 8,575,185 $ 14,542,280
Marketable securities --
available-for-sale 13,279,757 14,657,635
Accounts receivable, net of
allowance of $71,995 and $84,685 3,460,190 4,135,402
Income tax receivable 167,379 231,328
Inventories 676,528 539,140
Prepaid expenses and other
current assets 941,227 817,511
------------ ------------
Total current assets 27,100,266 34,923,296
Property and equipment, net 2,164,371 1,780,390
Intangible assets, net of accumulated
amortization 2,800,005 3,174,804
Restricted cash 450,000 450,000
Other assets 38,287 40,217
------------ ------------
TOTAL ASSETS $ 32,552,929 $ 40,368,707
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of capital lease
obligations $ 74,073 $ 100,023
Accounts payable 1,300,960 1,387,327
Deferred revenue 1,226,912 1,252,485
Accrued purchase price consideration 999,974 999,974
Accrued liabilities 1,306,230 869,759
------------ ------------
Total current liabilities 4,908,149 4,609,568
Capital lease obligations, less
current maturities 32,304 70,960
------------ ------------
Total liabilities 4,940,453 4,680,528
------------ ------------
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 -- --
Common stock, 50,000,000 shares
authorized; 14,754,454 and
14,537,705 shares issued and
outstanding at June 30, 2008 and
December 31, 2007, respectively 147,545 145,377
Additional paid-in capital 79,961,526 78,742,311
Accumulated deficit (52,676,790) (43,520,098)
Accumulated other comprehensive income 180,195 320,589
------------ ------------
Total shareholders' equity 27,612,476 35,688,179
------------ ------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 32,552,929 $ 40,368,707
============ ============
WIRELESS RONIN TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ------------------------
2008 2007 2008 2007
----------- ----------- ----------- -----------
(unaudited) (audited) (unaudited) (audited)
Sales
Hardware $ 496,087 $ 2,484,133 $ 1,259,380 $ 2,520,238
Software 203,937 290,097 302,228 352,839
Services and
other 896,199 280,633 1,968,129 378,222
----------- ----------- ----------- -----------
Total sales 1,596,223 3,054,863 3,529,737 3,251,299
Cost of sales
Hardware 450,910 1,685,579 1,085,930 1,735,708
Services and
other 1,083,431 187,445 1,983,207 240,579
----------- ----------- ----------- -----------
Total cost
of sales 1,534,341 1,873,024 3,069,137 1,976,287
----------- ----------- ----------- -----------
Gross
profit 61,882 1,181,839 460,600 1,275,012
Operating
expenses:
Sales and
marketing
expenses 1,110,004 653,526 2,329,798 1,278,175
Research and
development
expenses 589,549 257,858 1,043,909 507,289
General and
admini-
strative
expenses 3,480,262 1,519,218 6,666,969 3,275,807
Termination
of
partner-
ship
agreement -- -- -- 653,995
----------- ----------- ----------- -----------
Total
operating
expenses 5,179,815 2,430,602 10,040,676 5,715,266
----------- ----------- ----------- -----------
Operating
loss (5,117,933) (1,248,763) (9,580,076) (4,440,254)
Other income
(expenses):
Interest
expense (6,560) (9,634) (13,757) (20,515)
Interest
income 169,424 278,686 441,508 431,984
Other (4,367) -- (4,367) (1,491)
----------- ----------- ----------- -----------
Total
other
income
(expense) 158,497 269,052 423,384 409,978
----------- ----------- ----------- -----------
Net loss $(4,959,436) $ (979,711) $(9,156,692) $(4,030,276)
=========== =========== =========== ===========
Basic and
diluted loss
per common
share $ (0.34) $ (0.09) $ (0.63) $ (0.40)
=========== =========== =========== ===========
Basic and
diluted
weighted
average
shares
outstanding 14,577,825 10,446,571 14,561,003 10,141,126
=========== =========== =========== ===========
WIRELESS RONIN TECHNOLOGIES, INC
2008 SUPPLEMENTARY QUARTERLY FINANCIAL DATA
Supplementary Data
-------------------------- 2007
Statement
of Operations Q1 Q2 Q3
Sales $ 196,436 $ 3,054,863 $ 1,123,933
Cost of Sales 103,263 1,873,024 709,765
Operating Expenses 3,284,664 2,430,602 3,245,593
Interest Expense 10,881 9,634 11,758
Other (151,807) (278,686) (460,659)
Net Loss $(3,050,565) $ (979,711) $(2,382,524)
FASB 123R 596,020 136,339 148,544
(included in operating
Expenses)
Weighted avg shares 9,832,288 10,446,571 14,369,262
Reconciliation Between
GAAP and Adjusted
Operating Loss
--------------------------
GAAP Operating Loss $(3,191,491) $(1,248,763) $(2,831,425)
Adjustments:
Depreciation and
amortization 66,366 74,507 124,844
Old Building Remaining
Lease Oblig.W/O -- -- 191,207
Termination partnership
agreement 653,995 -- --
Stock-based compensation
expense 596,020 136,339 148,544
----------- ----------- -----------
Total Operating Expense
Adjustment 1,316,381 210,846 464,595
----------- ----------- -----------
Adjusted Operating Loss $(1,875,110) $(1,037,917) $(2,366,830)
=========== =========== ===========
$ (0.19) $ (0.10) $ (0.16)
Reconciliation Between
GAAP and Adjusted
Gross Margin
--------------------------
GAAP Sales 196,436 3,054,863 1,123,933
Deferred customer
revenue -- -- 89,775
Network Operating Center -- -- (6,510)
----------- ----------- -----------
Adjusted Revenue 196,436 3,054,863 1,207,198
GAAP Cost of Sales 103,263 1,873,024 709,765
Deferred customer costs -- -- --
Inventory adjustment -- -- --
Network Operating Center -- (33,375) (74,127)
----------- ----------- -----------
Adjusted Cost of Sales 103,263 1,839,649 635,638
Adjusted Non-GAAP Gross
Profit 93,173 1,215,214 571,560
=========== =========== ===========
GAAP Gross Profit Margin 47.4% 38.7% 36.8%
Adjusted Non-GAAP Gross
Profit Margin 47.4% 39.8% 47.3%
Supplementary Data
-------------------------- 2007
Statement
of Operations Q4 TOTAL
Sales $ 1,609,681 $ 5,984,913
Cost of Sales 1,206,315 3,892,367
Operating Expenses 4,446,711 13,407,570
Interest Expense 7,974 40,247
Other (377,732) (1,268,884)
Net Loss $(3,673,587)$(10,086,387)
FASB 123R 286,268 1,167,171
(included in operating
Expenses)
Weighted avg shares 12,314,178 12,314,178
Reconciliation Between
GAAP and Adjusted
Operating Loss
--------------------------
GAAP Operating Loss $(4,043,345)$(11,315,024)
Adjustments:
Depreciation and
amortization 385,981 651,698
Old Building Remaining
Lease Oblig.W/O -- 191,207
Termination partnership
agreement 50,000 703,995
Stock-based compensation
expense 286,268 1,167,171
----------- -----------
Total Operating Expense
Adjustment 722,249 2,714,071
----------- -----------
Adjusted Operating Loss $(3,321,096) $(8,600,953)
=========== ===========
$ (0.27) $ (0.70)
Reconciliation Between
GAAP and Adjusted
Gross Margin
--------------------------
GAAP Sales 1,609,681 5,984,913
Deferred customer
revenue 808,291 898,066
Network Operating Center (11,630) (18,140)
----------- ------------
Adjusted Revenue 2,406,342 6,864,839
GAAP Cost of Sales 1,206,315 3,892,367
Deferred customer costs 476,679 476,679
Inventory adjustment (73,018) (73,018)
Network Operating Center (98,806) (206,308)
----------- ------------
Adjusted Cost of Sales 1,511,170 4,089,720
Adjusted Non-GAAP Gross
Profit 895,172 2,775,119
=========== ============
GAAP Gross Profit Margin 25.1% 35.0%
Adjusted Non-GAAP Gross
Profit Margin 37.2% 40.4%
Supplementary Data
-------------------------- 2008
Statement
of Operations Q1 Q2 TOTAL
Sales $ 1,933,514 $ 1,596,223 3,529,737
Cost of Sales 1,534,796 1,534,341 3,069,137
Operating Expenses 4,860,861 5,179,815 10,040,676
Interest Expense 7,197 6,560 13,757
Other (272,084) (165,057) (437,141)
Net Loss (4,197,256) (4,959,436) (9,156,692)
FASB 123R 395,218 305,911 701,129
(included in operating
Expenses)
Weighted avg shares 14,544,181 14,577,825 14,561,003
Reconciliation Between
GAAP and Adjusted
Operating Loss
--------------------------
GAAP Operating Loss $(4,462,143) $(5,117,933) (9,580,076)
Adjustments:
Depreciation and
amortization 250,946 336,715 587,661
Old Building Remaining
Lease Oblig.W/O -- -- --
Termination partnership
agreement -- -- --
Stock-based compensation
expense 395,218 305,911 701,129
----------- ----------- ------------
Total Operating Expense
Adjustment 646,164 642,626 1,288,790
----------- ----------- ------------
Adjusted Operating Loss $(3,815,979) $(4,475,307) $ (8,291,286)
=========== =========== ============
$ (0.26) $ (0.31) $ (0.57)
Reconciliation Between
GAAP and Adjusted
Gross Margin
--------------------------
GAAP Sales 1,933,514 1,596,223 3,529,737
Deferred customer
revenue -- 79,730 79,730
Network Operating Center (95,664) (39,036) (134,700)
----------- ----------- ------------
Adjusted Revenue 1,837,850 1,636,917 3,474,767
GAAP Cost of Sales 1,534,796 1,534,341 3,069,137
Deferred customer costs 47,826 50,538 98,364
Inventory adjustment -- -- --
Network Operating Center (190,955) (281,100) (472,055)
----------- ----------- ------------
Adjusted Cost of Sales 1,391,667 1,303,779 2,695,446
Adjusted Non-GAAP Gross
Profit 446,183 333,139 779,322
=========== =========== ============
GAAP Gross Profit Margin 20.6% 3.9% 13.0%
Adjusted Non-GAAP Gross
Profit Margin 24.3% 20.4% 22.4%