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Wireless Ronin Reports Third Quarter 2012 Results

Wireless Ronin Reports Third Quarter 2012 Results 
MINNEAPOLIS, MN -- (Marketwire) -- 11/08/12 --  Wireless Ronin
Technologies, Inc. (NASDAQ: RNIN), a leading digital marketing
technologies solutions provider, reported financial results for the
third quarter ended September 30, 2012.  
Q3 2012 Financial Highlights  


 
--  Revenue increased 14% sequentially to $1.8 million
--  Recurring revenue increased 14% sequentially and 37% year-over-year to
    a record $538,000
--  Achieved lowest quarterly operating expense level since going public
--  Completed $1.4 million registered direct offering to the company's two
    largest institutional investors, as well as Wireless Ronin's entire
    board of directors and executive management team

  
Q3 2012 Operational Highlights  


 
--  Engaged to deploy interactive marketing solutions to 50 Buffalo Wild
    Wings locations. The ongoing installation includes customized
    deployment of large digital messaging screens, photo booths and
    interactive touchscreen media with dynamic yet self-sustaining
    content, all managed by the RoninCast(R) enterprise software
    platform. Wireless Ronin is working closely with Buffalo Wild Wings to
    create unique content to engage both new and regular customers through
    seasonal themes, timely events, promotions and interactive concept
    applications.
--  Entered into an agreement with SmartReceipt to provide customers
    dynamic and relevant coupon offers and valuable analytics at the point
    of sale. Wireless Ronin will offer new and existing clients,
    particularly those in the QSR industry, the SmartReceipt platform as
    an enhancement to its RoninCast-powered dynamic digital menu boards,
    interactive social media and promotional displays.

  
Q3 2012 Financial Results
 Third quarter 2012 revenue increased 14%
sequentially to $1.8 million from $1.6 million in the prior quarter,
and decreased 23% from $2.3 million in the same year-ago period. The
sequential increase was primarily attributable to orders received
from ARAMARK for deployments of Wireless Ronin's products and
services to several new colleges and universities. The year-over-year
decrease was primarily due to lower orders received for the company's
marketing technology
 solutions in the food services and retail
verticals. 
Third quarter 2012 recurring revenue increased 14% to a record
$538,000 or 30% of total revenue from $473,000 or 30% of total
revenue in the previous quarter, and increased 37% from the same
year-ago quarter.  
Third quarter 2012 gross profit was $896,000 or 51% of total revenue,
compared to $945,000 or 61% of total revenue in the previous quarter,
and $1.1 million or 49% of total revenue in the year-ago quarter. The
year-over-year improvement in the company's gross margin percentage
was due to a higher proportion of services revenue compared to higher
hardware sales in the same year-ago period.  
Third quarter 2012 net loss totaled $1.2 million or $(0.05) per basic
and diluted share, unchanged from the previous quarter and an
improvement from a net loss of $1.4 million or $(0.07) per basic and
diluted share in the same year-ago quarter. Net loss for the third
quarter of 2012 included $99,000 of non-cash stock compensation
expense versus $117,000 in the previous quarter, and $169,000 in the
year-ago quarter.  
Non-GAAP operating loss in the third quarter of 2012 totaled $1.0
million or $(0.04) per basic and diluted share, which was unchanged
from the previous quarter and an improvement from a non-GAAP
operating loss of $1.1 million or $(0.06) per basic and diluted share
in the same year-ago period. The company defines non-GAAP operating
loss as GAAP operating loss with the add-back of certain items.
Reconciliation to GAAP operating loss on a quarterly basis is
presented in a table, below. 
Management Commentary
 "Sequential improvement in our Q3 results
reflects our continued focus on building our recurring revenue base
and driving expense optimization," said Scott Koller, president and
CEO of Wireless Ronin. "We achieved several milestones in the
quarter, including record recurring revenue and the lowest quarterly
operating expense level since our company went public.  
"We continue to diversify our customer base and marketing technology
offerings with recent deployments in the QSR and food service
verticals, including Buffalo Wild Wings, Boston University, and
Villanova University. During the quarter, we transitioned the
successful pilot program with Buffalo Wild Wings into an ongoing
installation across 50 of its more than 830 locations. Altogether,
these deployments validate Wireless Ronin's capabilities beyond
traditional digital menu boards, and show how we can be a valuable
partner for organizations looking to enhance their customers'
experience, increase customer loyalty and drive new business. 
"The $270,000 annual hosting renewal order from ARAMARK in Q3 was
followed by $773,000 in Q4 orders from an existing automotive
customer for content development and maintenance. These purchase
orders demonstrate our digital marketing solutions bring value to the
end-user experience, ultimately driving sales for our customers and
providing predicable recurring revenue for Wireless Ronin."  
Conference Call
 The company will hold a conference call today
(Thursday, November 8, 2012) to discuss these financial results. The
company's president and CEO, Scott Koller, and SVP and CFO, Darin
McAreavey, will host the call starting at 4:30 p.m. Eastern time
(3:30 p.m. Central time). A question and answer session will follow
management's presentation.  
To participate in the call, dial the appropriate number 5-10 minutes
prior to the start time, ask for the Wireless Ronin conference call
and provide the conference ID: 
Dial-In number: 1-877-941-2068
 International: 1-480-629-9712 
Conference ID#: 4568757 
The presentation will be webcast live and available for replay via
the Investors section of the company's website at
www.wirelessronin.com. Please go to the website at least 15 minutes
early to register, download, and install any necessary audio
software. If you have any difficulty connecting with the conference
call or webcast, please contact Liolios Group at 1-949-574-3860.  
A replay of the call will be available after 7:30 p.m. Eastern time
on the same day and until December 8, 2012. 
Toll-Free Replay Number: 1-877-870-5176
 International Replay Number:
1-858-384-5517
 Replay PIN#: 4568757 
About Wireless Ronin Technologies, Inc.
 Wireless Ronin Technologies,
Inc. (WRT) (NASDAQ: RNIN) (www.wirelessronin.com) is a marketing
technologies company with leading expertise in current and emerging
digital media solutions including signage, interactive kiosks,
mobile, social media and web, that enable clients to transform how
they engage their customers. WRT provides marketing technology
solutions and services to clients, helping increase revenue and
improve operating efficiencies to execute marketing initiatives.
Since launching RoninCast(R) digital signage software in 2003, WRT
has led the digital signage industry by bringing leading edge
technology, services and support to its clients. WRT offers an array
of services to support its clients' marketing technology needs
including consulting, creative development, project management,
installation, training, and support and hosting. The company's common
stock trades on the NASDAQ Capital Market under the symbol "RNIN."
Follow us on Twitter (https://twitter.com/wirelessronin) an
d
Pinterest (http://pinterest.com/rnin/) and like us on Facebook
(https://www.facebook.com/WirelessRonin) under Wireless Ronin. 
Non-GAAP Financial Measures 
 In addition to disclosing financial
measures prepared in accordance with Generally Accepted Accounting
Principles (GAAP), this press release and the accompanying tables
contain the following non-GAAP financial measures: non-GAAP operating
loss and non-GAAP operating loss per common share. The presentation
of this financial information is not intended to be considered in
isolation or as a substitute for, or superior to, the financial
information prepared and presented in accordance with GAAP. 
Non-GAAP operating loss and non-GAAP operating loss per share. We
define non-GAAP operating loss as the GAAP operating loss less
stock-based compensation expense, depreciation and amortization,
severance expense and other one-time charges. We define non-GAAP
operating loss per share as non-GAAP operating loss divided by the
weighted average basic and diluted shares outstanding. Our management
utilizes a number of different financial measures, both GAAP and
non-GAAP, in making operating decisions, in forecasting and planning,
and in analyzing and assessing our company's overall performance. Our
annual financial plan is prepared and reviewed both on a GAAP and
non-GAAP basis. We budget and forecast for revenue and expenses on
GAAP and non-GAAP bases, and assess actual results on GAAP and
non-GAAP bases against our annual financial plan. Our board of
directors and management utilize these financial measures (both GAAP
and non-GAAP) to determine our allocation of resources. In addition,
and as a consequence of the importance of these non-GAAP financial
measures in managing our business, we use non-GAAP financial measures
in the evaluation process to establish management compensation. For
example, our senior management's bonus program is partially based
upon the achievement of non-GAAP operating income (loss). Our
management believes that these non-GAAP financial measures provide
meaningful supplemental information regarding our performance by
excluding the items mentioned above. We consider the use of non-GAAP
operating loss per share helpful in assessing the ongoing performance
of the continuing operations of our business, as it excludes
recurring non-cash items and non-recurring one-time charges. Our
rationale for the items we omit from our non-GAAP measures is as
follows:  
Stock-based compensation. We exclude non-cash stock-based
compensation expense because of varying available valuation
methodologies, subjective assumptions and the variety of award types
that companies can use under FASB ASC 718-10. Stock-based
compensation expense is a recurring expense for our company and is
expected to be in the future as we have a history of granting stock
options and other equity instruments as a means of incentivizing and
rewarding our employees.  
Depreciation and amortization expense. Depreciation and amortization
are non-cash charges that are impacted by our accounting methods and
book value of assets. By excluding these non-cash charges, our
management, together with our investors, are provided with
supplemental metrics to evaluate cash earnings, distinguishing the
impact of our performance on earnings from the impact of our
performance on cash. Management believes that the review of these
supplemental metrics in conjunction with other GAAP metrics, such as
capital expenditures, is useful for management and investors in
understanding our business. Depreciation is a recurring expense for
our company and is expected to continue to be in the future as we
continue to make further investments in our infrastructure through
the acquisition of property, plant and equipment. Due to the
exclusion of these non-cash items, investors should not use this
metric as a measure of evaluating our liquidity. Instead, to evaluate
our liquidity, investors should refer to the Consolidated Statements
of Cash Flow and the Liquidity and Capital Resources section
contained within Management's Discussion and Analysis in our most
recently filed periodic reports. 
Severance and other one-time charges. We exclude severance and other
one-time charges that are the result of other, unplanned events as
one means of measuring operating performance. Included in these
expenses are items such as severance costs associated with the
termination of employees as part of an unplanned restructuring, a
non-acquisition-related restructuring and other charges. Because
these events are unplanned and arise outside the ordinary course of
continuing operations, by providing this information, we believe our
management and our investors may more fully understand the financial
results of what we consider to be organic continuing operations. 
There are a number of limitations related to the use of non-GAAP
operating loss and non-GAAP operating loss per share versus operating
income and loss per share calculated in accordance with GAAP. First,
these non-GAAP financial measures exclude stock-based compensation
and depreciation expenses that are recurring. Both stock-based
expenses and depreciation have been, and will continue to be for the
foreseeable future, a significant recurring expense with an impact
upon our company notwithstanding the lack of immediate impact upon
cash. Second, stock-based awards are an important part of our
employees' compensation and impact their performance. Third, there is
no assurance we will avoid further personnel changes and, therefore,
may recognize additional severance and other one-time charges
associated with a future restructuring. Fourth, there is no assurance
the components of the costs that we exclude in our calculation of
non-GAAP operating loss do not differ from the components that our
peer companies exclude when they report their results of operations.
Our management compensates for these limitations by providing
specific information regarding the GAAP amounts excluded from these
non-GAAP financial measures and evaluating these non-GAAP financial
measures together with their most directly comparable financial
measures calculated in accordance with GAAP. The accompanying tables
have more details on these non-GAAP financial measures, including
reconciliations between these financial measures and their most
directly comparable GAAP equivalents. 


 
                                                                                
                
WIRELESS RONIN TECHNOLOGIES, INC.                                               
                
2012 SUPPLEMENTARY QUARTERLY FINANCIAL DATA                                     
                
(In thousands, except percentages and per share amounts)                        
                
(Unaudited)                                                                     
                
                                                                                
                                               
                                             
Supplementary Data                                                          
                                                2011                        
                          ------------------------------------------------  
Statement of Operations      Q1        Q2        Q3        Q4       TOTAL   
                          --------  ---
-----  --------  --------  --------  
Sales                     $  2,397  $  3,054  $  2,301  $  1,522  $  9,274  
                                                                            
Cost of sales - exclusive                                                   
 of depreciation and                                                        
 amortization                1,304     1,662     1,166     1,076     5,208  
                                                                            
Operating expenses           3,350     2,824     2,509     2,095    10,778  
                                                                            
Interest expense                11         7         6         6        30  
                                                                            
Other income, net               (2)       (1)        -        (1)       (4) 
                                                                            
                          --------  --------  --------  --------  --------  
Net loss                  $ (2,266) $ (1,438) $ (1,380) $ (1,654) $ (6,738) 
                          ========  ========  ========  ========  ========  
                                                                            
Share based payment                                                         
 expense                       353       180       173        55       761  
(included in operating                                                      
 expenses & interest                                                        
 expense)                                                                   
                                                                            
Weighted average shares     19,275    19,393    19,495    20,250    19,602  
                                                                            
                                                                            
Reconciliation Between                                                      
 GAAP and Non-GAAP                                                          
 Operating Loss                                                             
                                                                            
GAAP operating loss       $ (2,257) $ (1,432) $ (1,374) $ (1,649) $ (6,712) 
                                                                            
Adjustments:                                                                
  Depreciation and                                                          
   amortization                144       122       111        90       467  
  Stock-based                                                               
   compensation expense        345       178       169        48       740  
  Severance                      -         -         -         -         -  
                                                                            
                          --------  --------  --------  --------  --------  
Total operating expense                                                     
 adjustment                    489       300       280       138     1,207  
                          --------  --------  --------  --------  --------  
                                                                            
Non-GAAP operating loss   $ (1,768) $ (1,132) $ (1,094) $ (1,511) $ (5,505) 
                          ========  ========  ========  ========  ========  
Non-GAAP operating loss                                                     
 per common share         $  (0.09) $  (0.06) $  (0.06) $  (0.07) $  (0.28) 
                                                                            
 
Supplementary Data                                              
                                          2012                  
                         -------------------------------------- 
Statement of Operations     Q1        Q2        Q3       TOTAL  
                         --------  --------  --------  -------- 
Sales                    $  1,773  $  1,557  $  1,769  $  5,099 
                                                                
Cost of sales - exclusive                                       
 of depreciation and                                            
 amortization                 824       612       873     2,309 
                                                                
Operating expenses          2,773     2,151     2,075     6,999 
                                                                
Interest expense                5         1         1         7 
                                                                
Other income, net              (1)        0         0        (1)
                                                                
                         --------  --------  --------  -------- 
Net loss                 $ (1,828) $ (1,207) $ (1,180) $ (4,215)
                         ========  ========  ========  ======== 
                                                                
Share based payment                                             
 expense                      349       132       122       603 
(included in operating                                          
 expenses & interest                                            
 expense)                                                       
                                                                
Weighted average shares    23,017    23,128    23,426    23,211 
                                                                
                                                                
Reconciliation Between                                          
 GAAP and Non-GAAP                                              
 Operating Loss                                                 
                                                                
GAAP operating loss      $ (1,828) $ (1,206) $ (1,179) $ (4,213)
                                                 
               
Adjustments:                                                    
  Depreciation and                                              
   amortization                80        75        68       223 
  Stock-based                                                   
   compensation expense       161       118        99       378 
  Severance                   137         -         -       137 
                                                                
                         --------  --------  --------  -------- 
Total operating expense                                         
 adjustment                   378       193       167       738 
                         --------  --------  --------  -------- 
                                                                
Non-GAAP operating loss  $ (1,450) $ (1,013) $ (1,012) $ (3,475)
                         ========  ========  ========  ======== 
Non-GAAP operating loss                                         
 per common share        $  (0.06) $  (0.04) $  (0.04) $  (0.15)

 
Forward-Looking Statements
 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
regarding continued operating improvement and other matters 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 servic
es; 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 risk factors section of the company's Annual Report
on Form 10-K filed with the Securities and Exchange Commission on
March 21, 2012. 


 
                                                                            
                     WIRELESS RONIN TECHNOLOGIES, INC.                      
                   CONSOLIDATED STATEMENTS OF OPERATIONS                    
                  (In thousands, except per share amounts)                  
                                                                            
                            Three Months Ended         Nine Months Ended    
                               September 30,             September 30,      
                         ------------------------  ------------------------ 
                             2012         2011         2012         2011    
                         -----------  -----------  -----------  ----------- 
                         (unaudited)  (unaudited)  (unaudited)  (unaudited) 
Sales                                                                       
  Hardware               $       512  $       942  $     1,146  $     3,487 
  Software                       113          184          295        1,062 
  Services and other           1,144        1,175        3,658        3,203 
                         -----------  -----------  -----------  ----------- 
    Total sales                1,769        2,301        5,099        7,752 
                                                                            
Cost of sales                                                               
  Hardware                       339          575          707        2,364 
  Software                        21           29           65          124 
  Services and other             513          562        1,537        1,644 
                         -----------  -----------  -----------  ----------- 
    Total cost of sales                                                     
     (exclusive of                                                          
     depreciation and                                                       
     amortization shown                                                     
     separately below)           873        1,166        2,309        4,132 
                         -----------  -----------  -----------  ----------- 
    Gross profit                 896        1,135        2,790        3,620 
                                                                            
Operating expenses:                                                         
  Sales and marketing                                                       
   expenses                      339          431        1,197        1,708 
  Research and                                                              
   development expenses          462          555        1,417        1,748 
  General and                                                               
   administrative                                                           
   expenses                    1,206        1,412        4,162        4,850 
  Depreciation and                                                          
   amortization expense           68          111          223          377 
                         -----------  -----------  -----------  ----------- 
    Total operating                                                         
     expenses                  2,075        2,509        6,999        8,683 
                         -----------  -----------  -----------  ----------- 
    Operating loss            (1,179)      (1,374)      (4,209)      (5,063)
                                                                            
Other income (expenses):                                                    
  Interest expense                (1)          (6)          (7)         (24)
  Interest income                  -            -            1            3 
                         -----------  -----------  -----------  ----------- 
    Total other expense           (1)          (6)          (6)         (21)
                         -----------  -----------  -----------  ----------- 
    Net loss             $    (1,180) $    (1,380) $    (4,215) $    (5,084)
                         ===========  ===========  ===========  =========== 
Basic and diluted loss                                                      
 per common share        $     (0.05) $     (0.07) $     (0.18) $     (0.26)
                         ===========  ===========  ===========  =========== 
Basic and diluted                                                           
 weighted average shares                                                    
 outstanding                  23,426       19,495       23,211       19,389 
                         ===========  ===========  ===========  =========== 
                                                                            
                                                                            
                                                                            
                                                                            
                     WIRELESS RONIN TECHNOLOGIES, INC.                      
                        CONSOLIDATED BALANCE SHEETS                         
                  (In thousands, except share information)                  
                                                                            
                                                                            
                                               September 30,   December 31, 
                                                    2012           2011     
                                               -------------  ------------- 
                                                (unaudited)                 
                    ASSETS                                                  
CURRENT ASSETS                                                              
  Cash and cash equivalents                    $       3,465  $       5,478 
  Accounts receivable, net of allowance of $49                              
   and $50                                             1,154          1,347 
  Inventories                                            194            170 
  Prepaid expenses and other current assets              155            193 
                                               -------------  ------------- 
    Total current assets                               4,968          7,188 
Property and equipment, net                              464            651 
Restricted cash                                           50             50 
Other assets                                              21             40 
                                               -------------  ------------- 
    TOTAL ASSETS                               $       5,503  $       7,929 
                                               =============  ============= 
                                                                            
                                                                            
     LIABILITIES AND SHAREHOLDERS' EQUITY                                   
CURRENT LIABILITIES                                                         
  Current maturities of capital lease                                       
   obligations                                 $           -  $          41 
  Accounts payable                                       840            870 
  Deferred revenue
                                       603            687 
  Accrued liabilities                                    677            569 
                                               -------------  ------------- 
    Total current liabilities                          2,120          2,167 
                                                                            
COMMITMENTS AND CONTINGENCIES                                               
                                                                            
SHAREHOLDERS' EQUITY                                                        
                                                                            
  Capital stock, $0.01 par value, 66,667                                    
   shares authorized                                                        
  Preferred stock, 16,667 shares authorized,                                
   no shares issued and outstanding as of                                   
   September 30, 2012 and December 31, 2011                -              - 
  Common stock, 50,000 shares authorized;                                   
   24,977 and 22,969 shares issued and                                      
   outstanding at September 30, 2012 and                                    
   December 31, 2011, respectively                       250            230 
  Additional paid-in capital                          96,863         95,047 
  Accumulated deficit                                (93,231)       (89,016)
  Accumulated other comprehensive loss                  (499)          (499)
                                               -------------  ------------- 
    Total shareholders' equity                         3,383          5,762 
                                               -------------  ------------- 
    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $       5,503  $       7,929 
                                               =============  ============= 

  
Company Contact:
Darin P. McAreavey
Senior Vice President and Chief Financial Officer
dmcareavey@wirelessronin.com
952-564-3525  
Investor Relations Contact:
Matt Glover or Michael Koehler
Liolios Group, Inc.
RNIN@liolios.com
949-574-3860