Wireless Ronin Reports First Quarter 2013 Results

Wireless Ronin Reports First Quarter 2013 Results 
MINNEAPOLIS, MN -- (Marketwired) -- 05/09/13 --  Wireless Ronin
Technologies, Inc. (NASDAQ: RNIN), a leading digital marketing
technologies solutions provider, today reported financial results for
the first quarter ended March 31, 2013.  
Q1 2013 Financial Highlights 


 
--  Recurring revenue percentage reached a record 35% of total revenue, up
    from 26% in the same year-ago quarter
--  Gross margin percentage remained strong at 53% of total revenue
--  Cash used in operating activities was $563,000, down significantly
    from $1.3 million in Q1 2012
--  Completed a $1.56 million registered direct offering

  
Q1 2013 Operational Highlights 


 
--  Released RoninCast(R) 4.0 software, designed to increase
    functionality and improve the customer experience while reducing
    installation and operation costs
--  Selected by an international food service provider with more than
    2,000 locations to deploy digital signage solutions to new franchise
    locations
--  Aligned RoninCast 4.0 software with Samsung's new open source digital
    signage platform to transform how businesses can engage their
    customers and increase sales without the cost, complication and
    limitations of traditional digital signage
--  Partnered with Custom Channels, a leading business music service
    provider, to offer a new, customized digital music solution that
    integrates with RoninCast software
--  Installed a fully automated digital menu system at Boston University's
    new 120,000 square foot main dining facility
--  Deployed interactive touch order systems and digital menu boards at
    Villanova University
--  Kohler Co. deployed RoninCast software to manage branded video wall
    content at its corporate-owned design centers

  
Recent Operational Highlights 


 
--  Entered into an exclusive licensing and services agreement with Delphi
    Display Systems, a leading manufacturer of outdoor LCD-based display
    systems for digital signage, to provide integrated technology
    solutions to the QSR and "pump topper" gas station markets. In
    consideration for the exclusive license, Delphi will pay Wireless
    Ronin a minimum of $2.0 million over five years, $750,000 of which was
 
    paid in April 2013.

  
Q1 2013 Financial Results
 Revenue in the first quarter of 2013 was
$1.4 million as compared to $1.8 million in the same year-ago
quarter. The decrease was primarily due to reduced Chrysler
development and content orders associated with iShowroom. 
Recurring revenue in the first quarter of 2013 from the company's
hosting and support services was $495,000 or 35% of total revenue
compared to $466,000 or 26% 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 first quarter of 2013 was $746,000 or 53% of
total revenue compared to $949,000 or 54% of total revenue in the
same year-ago quarter. The one point decrease in gross margin
percentage was primarily due to lower hardware margins in Q1 2013.  
Net loss in the first quarter of 2013 totaled $1.4 million or $(0.27)
per basic and diluted share, an improvement from a net loss of $1.8
million or $(0.40) per basic and diluted share in Q1 2012. The
year-over-year improvement in net loss was primarily due to decreased
operating expenses and effective cost management. 
Non-GAAP operating loss in the first quarter of 2013 totaled $1.2
million or $(0.23) per basic and diluted share, an improvement from a
non-GAAP operating loss of $1.4 million or $(0.31) per basic and
diluted share in Q1 2012. The company defines non-GAAP operating loss
as GAAP operating loss less stock-based compensation, depreciation
and amortization and severance and other one-time charges (see
further discussion of this non-GAAP term as well as a reconciliation
to GAAP operating loss, below). 
At March 31, 2013, cash and cash equivalents totaled $3.1 million,
compared to $2.3 million at end of the prior quarter. The increase
was due to the $1.4 million of net proceeds from the company's
registered direct offering completed in March 2013.  
Management Commentary
 "During the first quarter, we focused on
building recurring revenue and worked to enhance and broaden our
digital marketing technology offerings," said Scott Koller, president
and CEO of Wireless Ronin. "Along those lines, we released our fourth
generation of RoninCast software, designed to increase functionality
and improve the customer experience while reducing installation and
operation costs. 
"RoninCast 4.0 software aligns perfectly with Samsung's new open
source digital signage platform, providing significant advantages for
the end user, including lowering costs, simplifying installation,
improving uptime, and ultimately improving the ROI for our customers.
The combined offering dramatically simplifies deployment and ongoing
management, breaking down barriers and opening the field to a much
larger universe of potential users.  
"Last month, we entered into an exclusive license and service
agreement with Delphi Display Systems, a leading manufacturer of
outdoor LCD-based display systems, to provide integrated technology
solutions to the QSR market. Delphi will pay us a minimum of $2.0
million over five years, of which we received $750,000 in Q2 2013.
Delphi will leverage its sales and marketing expertise to license our
RoninCast software to its 30,000 customers in the QSR market,
enabling us to focus our resources on our growing pipeline of
opportunities in the automotive, retail and food service markets. We
believe this arrangement will be truly transformative for Wireless
Ronin by extending the sales reach for RoninCast software, while
potentially increasing our stream of recurring hosting and
maintenance revenues. 
"Altogether, these developments have set the stage for a productive
second quarter. We now provide industry-leading technology and have
world class relationships to capitalize on our growing pipeline and
the tremendous industry opportunities." 
Conference Call
 The company will hold a conference call today (May
9, 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: 1-877-941-1427
 International: 1-480-629-9664 
Conference ID#: 4613395 
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 through June 9, 2013. 
Toll-Free Replay Number: 1-877-870-5176
 International Replay Number:
1-858-384-5517
 Replay PIN: 4613395 
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
digi
tal 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 the company on Twitter (http://twitter.com/wirelessronin) and
Pinterest (http://pinterest.com/rnin/) and "like us" on Facebook
(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, and
severance 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.                                           
2013 SUPPLEME
NTARY QUARTERLY FINANCIAL DATA                                 
(In thousands, except percentages and per share amounts)                    
(Unaudited)                                                                 
                                                                            
Supplementary Data                                                          
                                           2012                       2013  
                       -------------------------------------------  ------- 
Statement of                                                                
 Operations               Q1       Q2       Q3       Q4     TOTAL      Q1   
                       -------  -------  -------  -------  -------  ------- 
Sales                  $ 1,773  $ 1,557  $ 1,769  $ 1,605  $ 6,704  $ 1,407 
                                                                            
Cost of sales -                                                             
 exclusive of          
                                                     
 depreciation and                                                           
 amortization              824      612      873      720    3,029      661 
                                                                            
Operating expenses       2,773    2,151    2,075    2,075    9,074    2,151 
                                                                            
Interest expense             5        1        1        1        8        7 
                                                                            
Other income, net           (1)       0        0        0       (1)       0 
                       -------  -------  -------  -------  -------  ------- 
Net loss               $(1,828) $(1,207) $(1,180) $(1,191) $(5,406) $(1,412)
                       =======  =======  =======  =======  =======  ======= 
                                                                            
Share based payment                                                         
 expense                   349      132      111       84      676      169 
(included in operating                                                      
 expenses & interest                                                        
 expense)                                                                   
                                                                            
Weighted average                                                            
 shares                  4,603    4,626    4,685    4,992    4,732    5,240 
                                                                            
                                                                            
Reconciliation Between                                                      
 GAAP and Non-GAAP                                                          
 Operating Loss                                                             
                                                                            
GAAP operating loss    $(1,824) $(1,206) $(1,179) $(1,190) $(5,399) $(1,405)
                                                                            
Adjustments:                                                                
  Depreciation and                                                          
   amortization             80       75       68       63      286       61 
  Stock-based                                                               
   compensation                                                             
   expense                 161      132      111       80      484      159 
  Severance                137        -        -        -      137        - 
                       -------  -------  -------  -------  -------  ------- 
Total operating                                                             
 expense adjustment        378      207      179      143      907      220 
                       -------  -------  -------  -------  -------  ------- 
                                                                            
Non-GAAP operating                                                          
 loss                  $(1,446) $  (999) $(1,000) $(1,047) $(4,492) $(1,185)
                       =======  =======  =======  =======  =======  ======= 
Non-GAAP operating                                                          
 loss per common share $ (0.31) $ (0.22) $ (0.21) $ (0.21) $ (0.95) $ (0.23)

 
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; the impact of the
company's financial condition upon customer and prospective customer
relationships, 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 Annual Report on Form 10-K filed with the Securities
and Exchange Commission on March 1, 2013.  


 
                                                                            
                     WIRELESS RONIN TECHNOLOGIES, INC.                      
                        CONSOLIDATED BALANCE SHEETS                         
                (In thousands, except per share information)                
                                                                            
                                                                            
                                                   March 31,   December 31, 
                                                     2013          2012     
                                             
    ------------  ------------ 
                                                  (unaudited)               
                     ASSETS                                                 
CURRENT ASSETS                                                              
  Cash and cash equivalents                      $      3,060  $      2,252 
  Accounts receivable, net of allowance of $64                              
   and $49                                                891         1,358 
  Inventories                                             107           158 
  Prepaid expenses and other current assets               148           111 
                                                 ------------  ------------ 
    Total current assets                                4,206         3,879 
Property and equipment, net                               372           415 
Restricted cash                                            50            50 
Other assets                                               20            20 
                                                 ------------  ------------ 
    TOTAL ASSETS                                 $      4,648  $      4,364 
                                                 ============  ============ 
                                                                            
                                                                            
      LIABILITIES AND SHAREHOLDERS' EQUITY                                  
CURRENT LIABILITIES                                                         
  Line of credit - bank                          $        400  $        400 
  Accounts payable                                        570           584 
  Deferred revenue                                        668           596 
  Accrued liabilities                                     607           527 
                                                 ------------  ------------ 
    Total current liabilities                           2,245         2,107 
                                                 ------------  ------------ 
                                                                            
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                                 
     March 31, 2013 and December 31, 2011                   -             - 
    Common stock, 10,000 shares authorized;                                 
     5,886 and 5,004 shares issued and                                      
     outstanding at March 31, 2013 and December                             
     31, 2012, respectively                                59            50 
  Additional paid-in capital                           98,677        97,128 
  Accumulated deficit                                 (95,834)      (94,422)
  Accumulated other comprehensive loss                   (499)         (499)
                                                 ------------  ------------ 
    Total shareholders' equity                          2,403         2,257 
                                                 ------------  ------------ 
    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $      4,648  $      4,364 
                                                 ------------  ------------ 
                                                                            
                                                                            
                                                                            
                     WIRELESS RONIN TECHNOLOGIES, INC.                      
                   CONSOLIDATED STATEMENTS OF OPERATIONS                    
                  (In thousands, except per share amounts)                  
                                                                            
                                                                            
                                                     Three Months Ended     
                                                          March 31,         
                                                 -------------------------- 
                                                     2013          2012     
                                                 ------------  ------------ 
                                                  (unaudited)   (unaudited) 
Sales                                                                       
  Hardware                                       $        292  $        338 
  Software                                                 74           102 
  Services and other                                    1,041         1,333 
                                                 ------------  ------------ 
    Total sales                                         1,407         1,773 
                                                                            
Cost of sales                                                               
  Hardware                                                192           189 
  Software                                                  8            31 
  Services and other                                      461           604 
                                                 ------------  ------------ 
    Total cost of sales (exclusive of                                       
     depreciation and amortization shown                                    
     separately below)                                    661           824 
                                                 ------------  ------------ 
    Gross profit                                          746           949 
                                                                            
Operating expenses:                                                         
  Sales and marketing expenses                            362           458 
  Research and development expenses                       318           559 
  General and administrative expenses                   1,410         1,676 
  Depreciation and amortization expense                    61            80 
                                                 ------------  ------------ 
    Total operating expenses                            2,151         2,773 
                                                 ------------  ------------ 
    Operating loss                                     (1,405)       (1,824)
                                                                            
Other income (expenses):                                                    
  Interest expense                   
                      (7)           (5)
  Interest income                                           -             1 
                                                 ------------  ------------ 
    Total other expense                                    (7)           (4)
                                                 ------------  ------------ 
    Net loss                                     $     (1,412) $     (1,828)
                                                 ============  ============ 
Basic and diluted loss per common share          $      (0.27) $      (0.40)
                                                 ============  ============ 
Basic and diluted weighted average shares                                   
 outstanding                                            5,240         4,603 
                                                 ------------  ------------ 

  
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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