Wireless Ronin Reports Third Quarter and Nine-Month 2013 Results

Wireless Ronin Reports Third Quarter and Nine-Month 2013 Results 
MINNEAPOLIS, MN -- (Marketwired) -- 11/07/13 --   Wireless Ronin
Technologies, Inc. (OTCQB: RNIN), a leading digital marketing
technologies solutions provider, reported financial results for the
three and nine months ended September 30, 2013.  
Q3 2013 Operational Highlights 


 
--  Received a follow-on order from Indian Motorcycle, a wholly-owned
    subsidiary of Polaris Industries (NYSE: PII), to install digital
    marketing technology at 35 additional dealerships in the U.S. The
    order is part of Indian Motorcycle's initiative to install Wireless
    Ronin's technology throughout Indian's expanding nationwide dealer
    network. With this order, Wireless Ronin has now been contracted to
    install its solutions at 70 dealerships.
--  Signed an agreement with MENAFEX to install digital marketing
    solutions at a MOOYAH franchise location in Dubai, representing an
    expansion of the company's international presence.
--  Deployed a custom-designed, 60-foot wide LED display with Thomson
    Reuters in the lobby of a major retail financial institution in
    Midtown Manhattan.
--  ARAMARK installed updated RoninCast technology at 169 universities,
    with the total number of ARAMARK sites Wireless Ronin currently
    hosting and supporting at more than 428.
--  Released RoninCast(R) 4.2, which expanded on the functionality of
    Wireless Ronin's interactive flagship software platform, allowing
    mobile devices to control content of digital media displays in real
    time.

  
Q3 2013 Financial Results
 Revenue in the third quarter of 2013 was
$1.5 million compared to $1.8 million in the same year-ago quarter.
The decrease was primarily due to a decline in kiosk orders received
from individual Fiat dealerships, partially offset by a follow-on
order from Polaris Industries' Indian Motorcycle subsidiary.  
Recurring revenue in the third quarter of 2013 from the company's
hosting and support services was $483,000 (32% of total revenue)
compared to $537,000 (30% of total revenue) in the same year-ago
quarter.  
Gross margin in the third quarter of 2013 was $764,000 (50% of total
revenue) compared to $896,000 (51% of total revenue) in the same
year-ago quarter.  
Total operating expenses in the third quarter of 2013 decreased 10%
to $1.9 million from $2.1 million in the third quarter of 2012.  
Net loss in the third quarter of 2013 totaled $1.2 million or $(0.20)
per basic and diluted share, as compared to a net loss of $1.2
million or $(0.25) per basic and diluted share in the same year-ago
quarter.  
Non-GAAP operating loss totaled $814,000 or $(0.14) per basic and
diluted share, as compared to a non-GAAP operating loss of $1.0
million or $(0.21) per basic and diluted share in Q3 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 September 30, 2013, cash and cash equivalents totaled $1.1
million, compared to $2.2 million at end of the prior quarter. During
the third quarter of 2013, the company repaid the $400,000 it had
borrowed under its line of credit with Silicon Valley Bank. 
First Nine Months 2013 Financial Results
 Revenue in the first nine
months of 2013 increased 10% to $5.6 million from $5.1 million in the
first nine months of 2012. The increase was primarily due to the
Delphi license and new orders from Polaris Industries' Indian
Motorcycle subsidiary and ARAMARK. 
Recurring revenue in the first nine months of 2013 decreased slightly
to $1.47 million (26% of total revenue) from to $1.48 million (29% of
total revenue) in the same year-ago period.  
Gross margin in the first nine months of 2013 was $3.3 million (59%
of total revenue) compared to $2.8 million (55% of total revenue) in
the same year-ago period.  
Total operating expenses for the first nine months of 2013 decreased
14% to $6 million from $7 million in the same year-ago period.  
Net loss in the first nine months of 2013 totaled $2.6 million or
$(0.46) per basic and diluted share, improving from a net loss of
$4.2 million or $(0.91) per basic and diluted share in the first nine
months of 2012. The improvement was primarily due to increased sales
and reduced costs. 
Non-GAAP operating loss in the first nine months of 2013 totaled $1.9
million or $(0.34) per common share, an improvement from a non-GAAP
operating loss of $3.4 million or $(0.74) per basic and diluted share
in the same year-ago period.  
Management Commentary 
 "Our performance this quarter was in line
with our expectations and reflects our continued focus on adding new
customers and diversifying our revenue base," said Scott Koller,
president and CEO of Wireless Ronin. "Given the large project nature
of our business which can vary quarter-to-quarter, we believe it's
important to take a longer term view and compare our first nine
months of 2013 to the same year-ago period.  
"Our continued execution was evident from the topline growth and
gross margin expansion on the nine-month basis, as well as our lowest
operating expense level as a public company. The success of our
efforts to broaden and diversify our customer base was demonstrated
by new customer wins in Q3 with MENAFEX and a major financial
institution through our relationship with Thomson Reuters, and the
continued roll out at 35 additional Indian Motorcycle dealerships. 
"The follow-on order from Indian Motorcycles reveals this
high-profile customer's confidence in our uniquely powerful digital
marketing technology. In the highly competitive motorsports market,
Wireless Ronin's solutions differentiate their offerings and helps
drive significant ROI. We look forward to working with Indian through
their nationwide rollout, providing them with unparalleled digital
marketing technologies that help drive customer engagement, and
ultimately, sales. 
"We continue to make tremendous progress advancing our
industry-leading technology, demonstrated by our second major
software upgrade and release this year. We believe RoninCast 4.2 will
drive broader adoption by existing customers and generate new major
customer wins like Indian Motorcycle. In fact, based on our financial
and operational performance to-date, we are on track to realize
year-over-year growth in revenue and gross margin dollars in 2013."  
Conference Call
 The company will hold a conference call today
(November 7, 2013) to discuss these results and provide a new
customer update. 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: 4644950 
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 10 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 December 7, 2013. 
Toll-Free Replay Number: 1-877-870-5176
 International Replay Number:
1-858-384-5517
 Replay PIN: 4644950 
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-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 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) 
                               =======  =======  =======  =======  =======  
                                                                            
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) 
                                                                            
                                                                            
 
                                                                 
Supplementary Data                                               
                                             2013                
                              ---------------------------------- 
Statement of Operations          Q1       Q2       Q3     TOTAL  
                              -------  -------  -------  ------- 
Sales                         $ 1,407  $ 2,626  $ 1,534  $ 5,567 
                                                                 
Cost of sales - exclusive of                                     
 depreciation and amortization    661      807      770    2,238 
                                                                 
Operating expenses              2,151    1,889    1,912    5,952 
                                                                 
Interest expense                    7        6        6       19 
                                                                 
Other income, net                   0        0        0        0 
                                                                 
                              -------  -------  -------  ------- 
Net loss                      $(1,412) $   (76) $(1,154) $(2,642)
                              =======  =======  =======  ======= 
                                                                 
Share based payment expense       169       88       94      351 
(included in operating                                           
 expenses & interest expense)                                    
                                                                 
Weighted average shares         5,240    5,888    5,912    5,683 
                                                                 
                                                                 
Reconciliation Between GAAP                                      
 and Non-GAAP Operating Loss                                     
                                                                 
GAAP operating loss           $(1,405) $   (70) $(1,148) $(2,623)
                                                                 
Adjustments:                                                     
  Depreciation and                                               
   amortization                    61       59       48      168 
  Stock-based compensation                                       
   expense                        159       88       94      341 
  Severance                         -        -      192      192 
                                                                 
                              -------  -------  -------  ------- 
Total operating expense                                          
 adjustment                       220      147      334      701 
                              -------  -------  -------  ------- 
                                                                 
Non-GAAP operating loss       $(1,185) $    77  $  (814) $(1,922)
                              =======  =======  =======  ======= 
Non-GAAP operating loss per                                      
 common share                 $ (0.23) $  0.01  $ (0.14) $ (0.34)

 
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 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 Current Report on Form
 8-K filed with the Securities
and Exchange Commission on May 23, 2013.  


 
                                                                            
                     WIRELESS RONIN TECHNOLOGIES, INC.                      
                        CONSOLIDATED BALANCE SHEETS                         
                (In thousands, except per share information)                
                                                                            
                                              September 30,   December 31,  
                                                  2013            2012      
                                             --------------  -------------- 
                                               (unaudited)                  
                   ASSETS                                                   
CURRENT ASSETS                                                              
  Cash and cash equivalents                  $        1,103  $        2,252 
  Accounts receivable, net of allowance of                                  
   $64 and $49                                        1,371           1,358 
  Inventories                                           126             158 
  Prepaid expenses and other current assets             184             111 
                                             --------------  -------------- 
    Total current assets                              2,784           3,879 
  Property and equipment, net                           269             415 
  Restricted cash                                        50              50 
  Other assets                                           20              20 
                                             --------------  -------------- 
    TOTAL ASSETS                             $        3,123  $        4,364 
                                             ==============  ============== 
                                                                            
                                                                            
    LIABILITIES AND SHAREHOLDERS' EQUITY                                    
CURRENT LIABILITIES                                                         
  Line of credit - bank                      $            -  $          400 
  Accounts payable                                      469             584 
  Deferred revenue                                      775             596 
  Accrued liabilities                                   519             527 
                                             --------------  -------------- 
    Total current liabilities                         1,763           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 September 30, 2013 and                                  
     December 31, 2012, respectively                     59              50 
  Additional paid-in capital                         98,864          97,128 
  Accumulated deficit                               (97,064)        (94,422)
  Accumulated other comprehensive loss                 (499)           (499)
                                             --------------  -------------- 
    Total shareholders' equity                        1,360           2,257 
                                             --------------  -------------- 
    TOTAL LIABILITIES AND SHAREHOLDERS'                                     
     EQUITY                                  $        3,123  $        4,364 
                                             ==============  ============== 
                                                                            
                                                                            
                                                                            
                     WIRELESS RONIN TECHNOLOGIES, INC.                      
                   CONSOLIDATED STATEMENTS OF OPERATIONS                    
                  (In thousands, except per share amounts)                  
                                                                            
                            Three Months Ended         Nine Months Ended    
                               September 30,             September 30,      
                         ------------------------  ------------------------ 
                             2013         2012         2013         2012    
                         -----------  -----------  -----------  ----------- 
                         (unaudited)  (unaudited)  (unaudited)  (unaudited) 
Sales                                                                       
  Hardware               $       523  $       512  $     1,393  $     1,146 
  Software                        87          113        1,083          295 
  Services and other             924        1,144        3,091        3,658 
                         -----------  -----------  -----------  ----------- 
    Total sales                1,534        1,769        5,567        5,099 
                                                                            
Cost of sales                                                               
  Hardware                       345          339          895          707 
  Software                         1           21           12           65 
  Services and other             424          513        1,331        1,537 
                         -----------  -----------  -----------  ----------- 
    Total cost of sales                                                     
     (exclusive of                                                          
     depreciation and                                                       
     amortization shown                                                     
     separately below)           770          873        2,238        2,309 
                         -----------  -----------  -----------  ----------- 
    Gross profit                 764          896        3,329        2,790 
                                                                            
Operating expenses:                                                         
Sales and marketing                                                         
 expenses                        371          339        1,114        1,197 
Research and development                                                    
 expenses                        271          462          794        1,417 
General and                                                                 
 administrative expenses       1,222        1,206        3,876        4,162 
Depreciation and                                                            
 amortization expense             48           68          168          223 
                         -----------  -----------  -----------  ----------- 
  Total operating                                                           
   expenses                    1,912        2,075        5,952        6,999 
                         -----------  -----------  -----------  ----------- 
  Operating loss              (1,148)      (1,179)      (2,623)      (4,209)
                                                                            
Other income (expenses):                                                    
  Interest expense                (6)          (1)         (19)          (7)
  Interest income                  -            -            -            1 
                         -----------  -----------  -----------  ----------- 
    Total other expense           (6)          (1)         (19)          (6)
                         -----------  -----------  -----------  ----------- 
    Net loss             $    (1,154) $    (1,180) $    (2,642) $    (4,215)
                         ===========  ===========  ===========  =========== 
Basic and diluted loss                                                      
 per common share        $     (0.20) $     (0.25) $     (0.46) $     (0.91)
                         ===========  ===========  ===========  =========== 
Basic a
nd diluted                                                           
 weighted average shares                                                    
 outstanding                   5,912        4,685        5,683        4,642 
                         ===========  ===========  ===========  =========== 

  
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