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Wireless Ronin Achieves 69% Revenue Growth in Second Quarter 2013

Wireless Ronin Achieves 69% Revenue Growth in Second Quarter 2013 
MINNEAPOLIS, MN -- (Marketwired) -- 07/30/13 --  Wireless Ronin
Technologies, Inc. (OTCQB: RNIN), a leading digital marketing
technologies solutions provider, reported financial results for the
second quarter ended June 30, 2013.  
Q2 2013 Financial Highlights vs. Same Year-Ago Quarter  


 
--  Achieved company's first positive non-GAAP operating income quarter
    (net loss down to record low $76,000)
--  Revenue up 69% to $2.6 million
--  Gross margin increased 860 basis point to a record 69%
--  Gross profit up 92% to record $1.8 million

  
Q2 2013 Operational Highlights 


 
--  Received $267,000 in purchase orders from Indian Motorcycle, a
    subsidiary of Polaris Industries, a $7.4 billion NYSE company, for 35
    dealerships to launch interactive digital signage solutions.
--  Received a $452,000 purchase order from ARAMARK, the award-winning
    food service and facilities management provider, to install
    approximately 230 screens and associated hardware and software.
--  Partnered 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. Under an exclusive RoninCast(R) 4.0 licensing and
    services agreement, Wireless Ronin received an initial $750,000 of the
    $2.0 million minimum due from Delphi over the next five years.
--  Exclusive partner Delphi Display Systems was selected by MedMedia
    Healthcare Network to install Delphi's turnkey digital signage
    solution featuring RoninCast software at 50 locations in Southern
    California, with plans to scale to 500 over the next 12-18 months.
--  Won 2013 DSA Industry Excellence Award for Wireless Ronin's
    installation at Burgerville, a quick service restaurant chain with 39
    locations in the Pacific Northwest. The award recognizes the best
    projects using digital signage, mobile, self-service and interactive
    kiosk technologies.

  
Q2 2013 Financial Results
 Revenue in the second quarter of 2013
increased 69% to $2.6 million from $1.6 million in the same year-ago
quarter. The increase was due to the $750,000 prepaid license
received from Delphi as well as new orders from Polaris Industries'
Indian Motorcycle subsidiary and ARAMARK.  
Recurring revenue in the second quarter of 2013 from the company's
hosting and support services increased to $489,000 (19% of total
revenue) from $474,000 (30% of total revenue) in the same year-ago
quarter. The increase in recurring revenue dollars resulted from the
continued extension of support services to more nodes delivered by
the company's network operations center. 
Gross margin in the second quarter of 2013 was a record $1.8 million
(69% of total revenue) compared to $945,000 (61% of total revenue) in
the same year-ago quarter. The increase in gross margin was primarily
due to the $750,000 software license sale to Delphi Display Systems
in the quarter.  
Net loss in the second quarter of 2013 totaled a record low $76,000
or $(0.01) per basic and diluted share, as compared to a net loss of
$1.2 million or $(0.26) per basic and diluted share in the same
year-ago quarter. The year-over-year improvement was primarily due to
increased sales and lower costs. 
Non-GAAP operating income was a record $77,000 or $0.01 per common
share, as compared to a non-GAAP operating loss of $1.0 million or
$(0.22) per basic and diluted share in Q2 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 June 30, 2013, cash and cash equivalents totaled $2.2 million,
compared to $3.1 million at end of the prior quarter.  
First Six Months 2013 Financial Results
 Revenue in the first six
months of 2013 increased 21% to $4.0 million from $3.3 million in the
first six months of 2012. The increase was due to the Delphi license
and new orders from Polaris Industries' Indian Motorcycle subsidiary
and ARAMARK. 
Recurring revenue in the first half of 2013 increased to $984,000
(24% of total revenue) from $941,000 (28% of total revenue) in the
same year-ago period. The dollar increase resulted from continued
adoption of support services delivered by the company's network
operations center. 
Gross margin in the first half of 2013 was $2.6 million (64% of total
revenue) compared to $1.9 million (57% of total revenue) in the same
year-ago period. The increase was primarily due to the $750,000
software license sale to Delphi Display Systems. 
Net loss in the first half of 2013 was a record low $1.5 million or
$(0.27) per basic and diluted share, improving from a net loss of
$3.0 million or $(0.66) per basic and diluted share in the first six
months of 2012. The improvement was primarily due to increased sales
and reduced costs. 
Non-GAAP operating loss in the first half of 2013 was $1.1 million or
$(0.20) per common share, an improvement from a non-GAAP operating
loss of $2.4 million or $(0.53) per basic and diluted share in the
same year-ago period.  
Management Commentary 
 "In Q2, we achieved our first positive
non-GAAP operating income quarter, driven by strong topline results
and effective cost controls," said Scott Koller, president and CEO of
Wireless Ronin. "Sales to both new and existing customers like Indian
Motorcycle and ARAMARK, as well as the license sale to Delphi helped
us to realize record gross margin and gross profit. These wins
demonstrate our successful transition from a hardware centric company
to a marketing technology solutions company, which includes the
adoption of higher margin software and services business model. New
orders from long-term customers like ARAMARK highlight the ongoing
opportunities we enjoy for upgrading and expanding upon these
existing deployments.  
"Indian has begun to install our interactive digital marketing
solution at 35 dealerships as well as in the lobby of its Wyoming,
Minnesota manufacturing facility. We anticipate Polaris will further
its expansion to additional Indian dealerships throughout the
remainder of 2013. We believe our success and experience in the
automotive industry will support our efforts to expand upon this
initial entry into the power sports market. We've also begun to gain
traction with our new marketing partner and licensee, Delphi Display
Systems. They are currently installing digital signage solutions at
50 MedMedia Healthcare Network locations, with plans to install at
500 additional locations over the next 12 to 18 months.  
"Among many alternatives, Delphi chose to partner with us because of
the robust capabilities and well-architected HTML5-based platform of
our RoninCast 4.0 software, as well as our shared vision for
providing a true omnichannel, customer-engagement experience. The
exclusive license we granted Delphi, which also provides for
additional recurring service revenue, represents the fruition of a
key aspect of our growth strategy that leverages our
enterprise-software capabilities as a 'force-multiplier' in order to
rapidly expand our market presence without additional capital
expenditures. 
"On July 29, 2013, we also implemented a restructuring plan designed
to conserve our cash resources and to further align our ongoing
expenses with our business by focusing sales efforts on
high-potential customers and prospects, preserving the research and
development staff required to maintain and enhance our RoninCast(R)
software, and consolidated certain positions. 
"We expect this restructuring to reduce annual operating costs by
approximately $1.3 million, which we believe will provide us with
additional runway to continue pursuing strategic and financial
alternatives.  
"Our expectations remain high as we build upon the momentum we've
established and see a widening pipeline of growth opportunities,
particularly within our existing customer and partner relationships.
As global demand for new marketing technologies continues to build,
we are well positioned with industry-leading solutions and a marquee
customer base. We believe these key factors will help us expand our
market share and further penetrate our target markets." 
Conference Call
 The company will hold a conference call Thursday
(August 1, 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: 1-877-941-4774
 International: 1-480-629-9760 
Conference ID#: 4627785 
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 September 1, 2013. 
Toll-Free Replay Number: 1-877-870-5176
 International Replay Number:
1-858-384-5517
 Replay PIN: 4627785 
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 will be "Communicating at Life Speed(R)" 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 support. 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; its common
stock trades on the OTCQB 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, 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-ti
me charges
associated with a future restructuring, including the charges we
expect to recognize in connection with the restructuring we
implemented on July 29, 2013. 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 SUPPLEMENTARY QUARTERLY FINANCIAL DATA  
  (In thousands, except per share amounts)   
                (Unaudited)                  

 
                                                                            
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) 
                          ========  ========  ========  ========  ========  
                                                                            
                               349       132       111        84       676  
Share based payment                                                         
 expense (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) 
                                                                            
                                                                            
 
                                                       
Supplementary Data                                     
                                      2013             
                          ---------------------------- 
Statement of Operations      Q1        Q2       TOTAL  
                          --------  --------  -------- 
Sales                     $  1,407  $  2,626  $  4,033 
                                                       
Cost of sales - exclusive                              
 of depreciation and                                   
 amortization                  661       807     1,468 
                                                       
Operating expenses           2,151     1,889     4,040 
                                                       
Interest expense                 7         6        13 
                                                       
Other income, net                0         0         0 
                                                       
                          --------  --------  -------- 
Net loss                  $ (1,412) $    (76) $ (1,488)
                          ========  ========  ======== 
                                                       
                               169        88       257 
Share based payment                                    
 expense (included in                                  
 operating expenses &                                  
 interest expense)                                     
                                                       
Weighted average shares      5,240     5,888     5,565 
                                                       
                                                       
Reconciliation Between                                 
 GAAP and Non-GAAP                                     
 Operating Loss                                        
                                                       
GAAP operating loss       $ (1,405) $    (70) $ (1,475)
                                                       
Adjustments:                                           
  Depreciation and                                     
   amortization                 61        59       120 
  Stock-based compensation                             
   expense                     159        88       247 
  Severance                      -         -         - 
                                                       
                          --------  --------  -------- 
Total operating expense                                
 adjustment                    220       147       367 
                          --------  --------  -------- 
                                                       
Non-GAAP operating loss   $ (1,185) $     77  $ (1,108)
                          ========  ========  ======== 
Non-GAAP operating loss                                
 per common share         $  (0.23) $   0.01  $  (0.20)

 
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, estimated cost savings
associated with the restructuring 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 t
hat 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)                
                                                                            
                                                                            
                                                   June 30,    December 31, 
                                                     2013          2012     
                                                 ------------  ------------ 
                                                  (unaudited)               
                     ASSETS                                                 
CURRENT ASSETS                                                              
  Cash and cash equivalents                      $      2,204  $      2,252 
  Accounts receivable, net of allowance of $64                              
   and $49                                              1,438         1,358 
  Inventories                                              85           158 
  Prepaid expenses and other current assets               158           111 
                                                 ------------  ------------ 
    Total current assets                                3,885         3,879 
  Property and equipment, net                             316           415 
  Restricted cash                                          50            50 
  Other assets                                             20            20 
                                                 ------------  ------------ 
    TOTAL ASSETS                                 $      4,271  $      4,364 
                                                 ============  ============ 
                                                                            
                                                                            
      LIABILITIES AND SHAREHOLDERS' EQUITY                                  
CURRENT LIABILITIES                                                         
  Line of credit - bank                          $        400  $        400 
  Accounts payable                                        615           584 
  Deferred revenue                                        378           596 
  Accrued liabilities                                     464           527 
                                                 ------------  ------------ 
    Total current liabilities                           1,857         2,107 
                                                                            
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 June                            
     30, 2013 and December 31, 2012                         -             - 
    Common stock, 50,000 shares authorized;                                 
     5,894 and 5,004 shares issued and                                      
     outstanding at June 30, 2013 and December                              
     31, 2012, respectively                                59            50 
  Additional paid-in capital                           98,764        97,128 
  Accumulated deficit                                 (95,910)      (94,422)
  Accumulated other comprehensive loss                   (499)         (499)
                                                 ------------  ------------ 
    Total shareholders' equity                          2,414         2,257 
                                                 ------------  ------------ 
    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $      4,271  $      4,364 
                                                 ============  ============ 
                                                                            
                                                                            
                                                                            
                     WIRELESS RONIN TECHNOLOGIES, INC.                      
                   CONSOLIDATED STATEMENTS OF OPERATIONS                    
                  (In thousands, except per share amounts)                  
                                                                            
                            Three Months Ended         Six Months Ended     
                                 June 30,                  June 30,         
                         ------------------------  ------------------------ 
                             2013         2012         2013         2012    
                         -----------  -----------  -----------  ----------- 
                         (unaudited)  (unaudited)  (unaudited)  (unaudited) 
Sales                                                                       
  Hardware               $       578  $       296  $       870  $       634 
  Software                       922           80          996          182 
  Services and other           1,126        1,181        2,167        2,514 
                         -----------  -----------  -----------  ----------- 
    Total sales                2,626        1,557        4,033        3,330 
                                                                            
Cost of sales                                                               
  Hardware                       358          179          550          368 
  Software                         3           13           11           44 
  Services and other             446          420          907        1,024 
                         -----------  -----------  -----------  ----------- 
    Total cost of sales                                                     
     (exclusive of                                                          
     depreciation and                                                       
     amortization shown                                                     
     separately below)           807          612        1,468        1,436 
                         -----------  -----------  -----------  ----------- 
    Gross profit               1,819          945        2,565        1,894 
            
                                                                
Operating expenses:                                                         
  Sales and marketing                                                       
   expenses                      381          400          743          858 
  Research and                                                              
   development expenses          205          396          523          955 
  General and                                                               
   administrative                                                           
   expenses                    1,244        1,280        2,654        2,956 
  Depreciation and                                                          
   amortization expense           59           75          120          155 
                         -----------  -----------  -----------  ----------- 
    Total operating                                                         
     expenses                  1,889        2,151        4,040        4,924 
                         -----------  -----------  -----------  ----------- 
    Operating loss               (70)      (1,206)      (1,475)      (3,030)
                                                                            
Other income (expenses):                                                    
  Interest expense                (6)          (1)         (13)          (6)
  Interest income                  -            -            -            1 
                         -----------  -----------  -----------  ----------- 
    Total other expense           (6)          (1)         (13)          (5)
                         -----------  -----------  -----------  ----------- 
  Net loss               $       (76) $    (1,207) $    (1,488) $    (3,035)
                         ===========  ===========  ===========  =========== 
Basic and diluted loss                                                      
 per common share        $     (0.01) $     (0.26) $     (0.27) $     (0.66)
                         ===========  ===========  ===========  =========== 
Basic and diluted                                                           
 weighted average shares                                                    
 outstanding                   5,888        4,626        5,565        4,617 
                         ===========  ===========  ===========  =========== 

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