Wireless Ronin Reports Fourth Quarter and Full Year 2012 Results

Wireless Ronin Reports Fourth Quarter and Full Year 2012 Results 
MINNEAPOLIS, MN -- (Marketwire) -- 02/26/13 --  Wireless Ronin
Technologies, Inc. (NASDAQ: RNIN), a leading digital marketing
technologies solutions provider, reported financial results for the
fourth quarter and fiscal year ended December 31, 2012.  
2012 Financial Highlights 


 
--  Revenue was $6.7 million, with the recurring revenue portion
    increasing 22% to a record $2.0 million
--  Record gross margin at 55% of total revenue
--  Achieved lowest level of operating expenses since becoming a public
    company

  
2012 Operational Highlights  


 
--  Deployed digital marketing solutions for Buffalo Wild Wings, Boston
    University, Villanova University, Burgerville and ECOtality
--  Received additional order for content development from company's
    largest automotive customer
--  Released RoninCast(R) software upgrade which extends multi-channel
    capabilities
--  Rolled-out iPad-supported interactive sales system for national
    retailer

  
Q4 2012 Financial Results
 Revenue in the fourth quarter of 2012
increased 5% to $1.6 million from $1.5 million in the same year-ago
period.  
Recurring revenue in the fourth quarter of 2012 from the company's
hosting and support services was $491,000 or 31% of total revenue
compared to $422,000 or 28% of total revenue in the same year-ago
quarter. The increase was driven by a continued expansion of support
services through the company's network operations center. 
Gross margin in the fourth quarter of 2012 was $885,000 or 55% of
total revenue compared to $446,000 or 29% of total revenue in the
same year-ago quarter. The gross margin percentage improvement was
due to a higher proportion of marketing technology solutions and
services versus hardware sales.  
Net loss in the fourth quarter of 2012 totaled $1.2 million or
$(0.24) per basic and diluted share, an improvement from a net loss
of $1.7 million or $(0.41) per basic and diluted share in Q4 2011.
Net loss for the fourth quarter of 2012 included $80,000 of non-cash
stock compensation expense versus $48,000 in the fourth quarter of
2011. 
Non-GAAP operating loss in the fourth quarter of 2012 totaled $1.0
million or $(0.21) per basic and diluted share, an improvement
 from a
non-GAAP operating loss of $1.5 million or $(0.37) per basic and
diluted share in Q4 2011. The company defines non-GAAP operating loss
as GAAP operating loss less stock-based compensation expense,
depreciation and amortization, and severance expense (see further
discussion of this non-GAAP term as well as a reconciliation to GAAP
operating loss, below). 
Full Year 2012 Financial Results
 Revenue in 2012 was $6.7 million
compared to $9.3 million in 2011. The decrease was primarily
attributable to fewer hardware orders offset by an increase in sales
of the company's marketing technology solutions and services. 
Recurring revenue in 2012 increased 22% to a record $2.0 million or
30% of total revenue as compared to $1.6 million or 17% of total
revenue in 2011. The increase was driven by a continued expansion of
support services through the company's network operations center. 
Gross margin in 2012 was $3.7 million or 55% of total revenue
compared to $4.1 million or 44% of total revenue in 2011. The gross
margin percentage improvement was due to a higher proportion of
marketing technology solutions and services versus hardware sales. 
Net loss in 2012 totaled $5.4 million or $(1.14) per basic and
diluted share, an improvement from a net loss of $6.7 million or
$(1.72) per basic and diluted share in 2011. Net loss for the full
year of 2012 included $484,000 of non-cash stock compensation expense
compared to $740,000 in 2011. 
Non-GAAP operating loss in 2012 totaled $4.5 million or $(0.95) per
basic and diluted share, an improvement from a non-GAAP operating
loss of $5.5 million or $(1.40) per basic and diluted share in 2011. 
Management Commentary
 "In 2012, we made significant progress
advancing our RoninCast software platform and diversifying our sales
pipeline, while effectively managing costs and improving operational
efficiencies," said Scott Koller, president and CEO of Wireless
Ronin. "This was evident from the several milestones we achieved for
the year, including record recurring revenue, our highest gross
margin and our lowest operating expense level as a public company. 
"During 2012, we continued to grow our customer base and marketing
technology offerings with major new wins in the QSR and food service
verticals, including Buffalo Wild Wings, Boston University, Villanova
and Burgerville. Additionally, in the current quarter, we were
selected by an international food service provider with more than
2,000 franchised locations to supply the company's digital menu board
and marketing technology systems and services. The food service
provider will market and sell the company's digital menu board and
promotional board systems to its existing franchised locations, and
plans to require new franchisees to install the company's digital
menu board and promotional board systems. The food service company
anticipates approximately 300 new franchised locations will open in
2013. A key driver in securing this major win was our recently
released RoninCast 4.0 software platform, which ensures consistent
messaging, brand positioning and advertising compliance across a
network of nationwide locations. As more locations deploy our
interactive media technology, we are highly confident in our ability
to enhance their customer experience, increase customer loyalty and
drive new business. 
"Our expectations for the New Year remain strong as we build on the
operational and financial momentum we achieved in 2012 due to our
robust pipeline of new opportunities, deployments in progress, and
contracts signed." 
Conference Call
 The company will hold a conference call today
(February 26, 2013) to discuss these 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#: 4592351 
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 March 26, 2013. 
Toll-Free Replay Number: 1-877-870-5176
 International Replay Number:
1-858-384-5517
 Replay PIN #: 4592351 
About Wireless Ronin Technologies, Inc.
 Wireless Ronin Technologies,
Inc. (WRT) (www.wirelessronin.com) is a pioneering marketing
technologies company. WRT combines interactive digital media --
signage, kiosks, mobile, social media and web -- to create 360-degree
solutions so companies can "communicate at life speed" to deliver the
right content at the right place at the right time. WRT's turnkey
approach includes strategic consulting, creative development,
installation, hosting, training and s
upport. Since launching its
cloud-based RoninCast(R) content management platform in 2003, WRT has
become the leading digital marketing provider for large-scale
deployments in retail, automotive, food service and public venues.
The company is headquartered in Minneapolis, Minnesota; it's common
stock trades on the NASDAQ as RNIN. 
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. 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          3,855    3,879    3,899    4,050    3,920  
                                                                            
                                                                            
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                  $ (0.46) $ (0.29) $ (0.28) $ (0.37) $ (1.40) 
                                                                            
                                                                            
 
                                                                          
Supplementary Data                                                        
                                                  2012                    
                              ------------------------------------------- 
Statement of Operations          Q1       Q2       Q3       Q4     TOTAL  
                              -------  -------  -------  -------  ------- 
Sales                         $ 1,773  $ 1,557  $ 1,769  $ 1,605  $ 6,704 
                                                                          
Cost of sales - exclusive of                                              
 depreciation and amortization    824      612      873      720    3,029 
                                                                          
Operating expenses              2,773    2,151    2,075    2,075    9,074 
                                                                          
Interest expense                    5        1        1        1        8 
                                                                          
Other income, net                  (1)       0        0        0       (1)
                                                                          
                              -------  -------  -------  -------  ------- 
Net loss                      $(1,828) $(1,207) $(1,180) $(1,191) $(5,406)
                              =======  =======  =======  =======  ======= 
                                                                          
Share based payment expense       349      132      111       84      676 
(included in operating                                                    
 expenses & interest expense)                                             
                                                                          
Weighted average shares         4,603    4,626    4,685    4,992    4,732 
                                                                          
                                                                          
Reconciliation Between GAAP                                               
 and Non-GAAP Operating Loss                                              
                                                                          
GAAP operating loss           $(1,824) $(1,206) $(1,179) $(1,190) $(5,399)
                                                                          
Adjustments:                                                              
  Depreciation and                                                        
   amortization                    80       75       68       63      286 
  Stock-based compensation                                                
   expense                        161      132      111       80      484 
  Severance                       137        -        -        -      137 
                                                                          
                              -------  -------  -------  -------  ------- 
Total operating expense                                                   
 adjustment                       378      207      179      143      907 
                              -------  -------  -------  -------  ------- 
                                                                          
Non-GAAP operating loss       $(1,446) $  (999) $(1,000) $(1,047) $(4,492)
                              =======  =======  =======  =======  ======= 
Non-GAAP operating loss per                                      
         
 common share                 $ (0.31) $ (0.22) $ (0.21) $ (0.21) $ (0.95)

 
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: the
adequacy of funds for future operations; 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 cautionary statement set forth in the company's current report
on Form 8-K filed with the Securities and Exchange Commission on
January 4, 2013. 


 
                                                                            
                     WIRELESS RONIN TECHNOLOGIES, INC.                      
                        CONSOLIDATED BALANCE SHEETS                         
                  (In thousands, except share information)                  
                                                                            
                                                December 31,   December 31, 
                                                    2012           2011     
                                               -------------  ------------- 
                                                                            
                    ASSETS                                                  
CURRENT ASSETS                                                              
  Cash and cash equivalents                    $       2,252  $       5,478 
  Accounts receivable, net of allowance of $49                              
   and $50                                             1,358          1,347 
  Inventories                                            158            170 
  Prepaid expenses and other current assets              111            193 
                                               -------------  ------------- 
    Total current assets                               3,879          7,188 
Property and equipment, net                              415            651 
Restricted cash                                           50             50 
Other assets                                              20             40 
                                               -------------  ------------- 
    TOTAL ASSETS                               $       4,364  $       7,929 
                                               =============  ============= 
                                                                            
                                                                            
     LIABILITIES AND SHAREHOLDERS' EQUITY                                   
CURRENT LIABILITIES                                                         
  Current maturities of capital lease                                       
   obligations                                 $           -  $          41 
  Line of credit - bank                                  400              - 
  Accounts payable                                       584            870 
  Deferred revenue                                       596            687 
  Accrued liabilities                                    527            569 
                                               -------------  ------------- 
    Total current liabilities                          2,107          2,167 
                                               -------------  ------------- 
                                                                            
COMMITMENTS AND CONTINGENCIES                                               
                                                                            
SHAREHOLDERS' EQUITY                                                        
                                                                            
  Capital stock, $0.01 par value, 26,667                                    
   shares authorized                                                        
    Preferred stock, 16,667 shares authorized,                              
     no shares issued and outstanding as of                                 
     December 31, 2012 and December 31, 2011               -              - 
    Common stock, 10,000 shares authorized;                                 
     5,004 and 4,594 shares issued and                                      
     outstanding at December 31, 2012 and                                   
     December 31, 2011, respectively                      50             46 
  Additional paid-in capital                          97,128         95,231 
  Accumulated deficit                                (94,422)       (89,016)
  Accumulated other comprehensive loss                  (499)          (499)
                                               -------------  ------------- 
    Total shareholders' equity                         2,257          5,762 
                                               -------------  ------------- 
    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $       4,364  $       7,929 
                                               =============  ============= 
                                                                            

 
                                                                            
                                                                            
                     WIRELESS RONIN TECHNOLOGIES, INC.                      
                   CONSOLIDATED STATEMENTS OF OPERATIONS                    
                  (In thousands, except per share amounts)                  
                                                                            
                            Three Months Ended        Twelve Months Ended   
                               December 31,              December 31,       
                         ------------------------  ------------------------ 
                             2012         2011         2012         2011    
                         -----------  -----------  -----------  ----------- 
                         (unaudited)  (unaudited)   (audited)    (audited)  
Sales                                                                       
  Hardware               $       394  $       358  $     1,540  $     3,845 
  Software                        44           88          339        1,150 
  Services and other           1,167        1,076        4,825        4,279 
                         -----------  -----------  -----------  ----------- 
    Total sales                1,605        1,522        6,704        9,274 
                                                                            
Cost of sales                                                               
  Hardware                       236          340          943        2,704 
  Software                         2           17           67          141 
  Services and other             482          719        2,019        2,363 
                         -----------  -----------  -----------  ----------- 
    Total cost of sales                                                     
     (exclusive of                                                          
     depreciation and                                                       
     amortization shown                                                     
     separately below)           720        1,076        3,029        5,208 
                         -----------  -----------  -----------  ----------- 
    Gross profit                                                            
     (exclusive of                                                          
     depreciation and                                                       
     amortization shown                                                     
     separately below)           885          446        3,
675        4,066 
                                                                            
Operating expenses:                                                         
  Sales and marketing                                                       
   expenses                      353          382        1,550        2,090 
  Research and                                                              
   development expenses          378          368        1,795        2,116 
  General and                                                               
   administrative                                                           
   expenses                    1,281        1,255        5,443        6,105 
  Depreciation and                                                          
   amortization expense           63           90          286          467 
                         -----------  -----------  -----------  ----------- 
    Total operating                                                         
     expenses                  2,075        2,095        9,074       10,778 
                         -----------  -----------  -----------  ----------- 
    Operating loss            (1,190)      (1,649)      (5,399)      (6,712)
                                                                            
Other income (expenses):                                                    
  Interest expense                (1)          (6)          (8)         (30)
  Interest income                  -            1            1            4 
                         -----------  -----------  -----------  ----------- 
    Total other loss              (1)          (5)          (7)         (26)
                         -----------  -----------  -----------  ----------- 
    Net loss             $    (1,191) $    (1,654) $    (5,406) $    (6,738)
                         ===========  ===========  ===========  =========== 
Basic and diluted loss                                                      
 per common share        $     (0.24) $     (0.41) $     (1.14) $     (1.72)
                         ===========  ===========  ===========  =========== 
Basic and diluted                                                           
 weighted average shares                                                    
 outstanding                   4,992        4,050        4,732        3,920 
                         -----------  -----------  -----------  ----------- 

  
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 
 
 
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