2008 first quarter highlights include: * Investments in operational infrastructure to support large-scale, world-wide RoninCast(r) digital signage installations * Continued progress in developing client relationships, including KFC and Chrysler * Sales of $1.9 million, up from $0.2 million last year and $1.6 million in the prior quarter
MINNEAPOLIS, May 1, 2008 (PRIME NEWSWIRE) -- Wireless Ronin Technologies, Inc. (Nasdaq:RNIN), a Minneapolis-based digital signage solutions provider, today announced its 2008 first quarter financial results. The company reported sales of $1.9 million in the first quarter of 2008, compared to sales of $0.2 million in the same period of 2007 and up 20 percent from sales of $1.6 million in the prior quarter. Results for the 2008 first quarter and 2007 fourth quarter include the impact from the acquisition of McGill Digital Solutions, now Wireless Ronin Technologies (Canada) Inc., completed August 16, 2007.
The company also reported a 2008 first quarter net loss of $4.2 million, or $0.29 per basic and diluted share. This compares to a net loss of $3.1 million, or $0.31 per basic and diluted share, in the first quarter of 2007, and a net loss of $3.7 million, or $0.25 per basic and diluted share, in the prior quarter. The increase in both the year-over-year and sequential net loss was primarily the result of higher operating expense levels. The increase in year-over-year operating expenses was partially offset by a rise in gross profit, which stemmed from the sales gains, as well as a slight increase in interest income. The reduction in the 2008 first quarter per share net loss from the prior year was due to the increase in the weighted average common shares outstanding, which resulted from the company's follow-on equity offering, completed in June 2007.
Wireless Ronin also reported a first quarter 2008 adjusted operating loss of $3.8 million, or $0.26 per basic and diluted share, compared to an adjusted operating loss of $1.9 million, or $0.19 per basic and diluted share in the first quarter of 2007. Adjusted operating loss is defined as the GAAP operating loss with the add-back of certain non-cash items. Reconciliation to the GAAP operating loss is contained in an attached table. First quarter 2008 results also included approximately $0.4 million, or $0.03 per basic and diluted share, of non-cash stock-based compensation expense related to FAS123R. The company adopted FAS123R for reporting purposes in the first quarter of 2006.
Jeffrey Mack, Wireless Ronin Technologies, Inc. chairman, president and chief executive officer, said: "In the first quarter, we were happy with the strong year-over-year and sequential growth in sales revenue, and we believe that this illustrates continued demand for RoninCast solutions, despite a challenging economic environment. But more importantly, during the quarter we continued to invest in our business in anticipation of future installations and large-scale customer roll-outs. We believe that we continue to make the necessary investments in our technology infrastructure and have created a process that will make us successful as we seek to take advantage of the opportunities we see to manage large, world-wide digital signage solutions. While these investments have put short-term pressure on our operating margins, we believe that these investments will provide long-term shareholder value. We are confident as we step off into 2008 and excited by the opportunities for growth that we see."
Other Items
In the 2008 first quarter, gross margin averaged 20.6 percent, compared to gross margin of 47.4 percent in the first quarter of 2007. The decline was primarily the result of investments in infrastructure and expenditures on new customer opportunities made to support anticipated future installations. Additionally, first quarter gross margin was impacted by investments to the company's Network Operations Center to support the projected demand to host digital signage applications in 2008. Net of these investments in the NOC, first quarter adjusted gross margin would have been 24.3 percent. A reconciliation of GAAP gross margin and adjusted gross margin is presented in an attached table.
General and administrative expense in the 2008 first quarter totaled $3.2 million, compared to $1.8 million in the same period in 2007. The year-over-year rise was chiefly due to higher staffing levels, increased costs associated with being a public company and the increased expense base that resulted from the acquisition of McGill Digital Solutions.
Sales and marketing expense in the 2008 first quarter totaled $1.2 million, compared to $0.6 million in the same period in 2007. The year-over-year increase was driven by investments that Wireless Ronin continued to make over the course of 2007 to augment its sales and marketing team, as well as the additional expenses from the previously referenced acquisition of McGill Digital Solutions.
Due to the company's loss carryforward position, it does not currently pay income taxes.
Cash and marketable securities at March 31, 2008, including restricted cash of $0.5 million, totaled approximately $26.1 million compared to $13.2 million at March 31, 2007, reflecting proceeds from the company's follow-on equity offering in June 2007.
Wireless Ronin also reported that at the end of 2008 first quarter, accounts receivable totaled $3.5 million, up from $1.1 million at the end of the first quarter of 2007. Accounting for most of the increase was the $2.3 million note receivable from NewSight Corporation. The note is due no later than May 30, 2008, as per the agreements that the company has previously filed with the Securities and Exchange Commission.
"We believe that Wireless Ronin is well positioned for success in 2008 and beyond. We are making the necessary investments to enable us to take advantage of anticipated future demand for digital signage and we continue to develop relationships with some marquee brand names, like Chrysler, Ford, KFC, Thomson Reuters and Teva. We have a complete, state-of-the-art digital signage toolset and we are focused on the five key markets that we believe offer the greatest potential for growth. That list consists of quick serve restaurants, automotive, gaming, retail and financial services. With 109 clients who have purchased digital signage products since our inception and with more than 6,400 global displays running RoninCast solutions, we believe that we have established Wireless Ronin as one of the world's premier digital signage solution providers," concluded Mack.
A conference call to review the first quarter, including an update regarding certain clients, is scheduled for today at 3:45 p.m. (CDT). A live webcast of Wireless Ronin's earnings conference call can be accessed on the Investor section of its corporate website at www.wirelessronin.com. Alternatively, a live broadcast of the call may be heard by dialing (888) 633-9563 inside the United States or Canada, or by calling (706) 679-6372 from international locations. An operator will direct you to the Wireless Ronin conference call. A webcast replay of the call will be archived on Wireless Ronin's corporate Web site. An archive of the call is also accessible via telephone by dialing (800) 642-1687 domestically and (706) 645-9291 internationally with pass code 44209427. The conference call archive will be available through June 4, 2008.
About Wireless Ronin Technologies, Inc.
Wireless Ronin Technologies (www.wirelessronin.com) is the developer of RoninCast(r), a complete software solution designed to address the evolving digital signage marketplace. RoninCast(r) software provides clients with the ability to manage a digital signage network from one central location. The software suite allows for customized distribution with network management, playlist creation and scheduling, and database integration. Wireless Ronin offers an array of services to support RoninCast(r) software including consulting, creative development, project management, installation, and training. The company's common stock trades on the NASDAQ Global Market under the symbol "RNIN".
The Wireless Ronin Technologies, Inc. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3208
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 and are based on currently available data; however, actual results are subject to future risks and uncertainties, which could materially affect actual performance. Risks and uncertainties that could affect such performance include, but are not limited to, the following: estimates of future expenses, revenue and profitability; the pace at which the Company completes installations and recognizes revenue; trends affecting financial condition and results of operations; ability to convert proposals into customer orders; the ability of customers to pay for products and services; the revenue recognition impact of changing customer requirements; customer cancellations; the availability and terms of additional capital; ability to develop new products; dependence on key suppliers, manufacturers and strategic partners; industry trends and the competitive environment; and the impact of losing one or more senior executives or failing to attract additional key personnel. These and other risk factors are discussed in detail in the Company's Annual Report on Form 10-KSB filed with the Securities and Exchange Commission, on March 13, 2008.
In addition, this release contains certain non-GAAP financial measures, including references to adjusted operating loss, adjusted gross profit and adjusted gross margin. As compared to the nearest GAAP measurement for our company, adjusted operating loss represents GAAP operating loss with the add-back of depreciation and amortization, write-off of a remaining lease obligation, termination of partnership agreement and stock-based compensation expense. As compared to the nearest GAAP measurement for our company, adjusted gross profit and adjusted gross margin represent GAAP sales and GAAP cost of sales with the add-back of deferred revenue and deferred costs, NOC revenue and expense, and the inventory lower of cost or market adjustment. The Company uses these non-GAAP financial measures as internal measurements of operating performance. These non-GAAP financial measures as the Company defines them may not be comparable to similar measurements used by other companies and are not measures of performance or liquidity presented in accordance with GAAP. The Company believes that these non-GAAP financial measures are important components of its financial results. The Company uses these non-GAAP financial measures as means of evaluating its financial performance compared with its competitors. These non-GAAP financial measures should not be used as substitute for operating loss, gross profit (loss) or gross margin. A reconciliation of adjusted operating loss to operating loss, a reconciliation of adjusted gross profit to gross profit (loss) and a reconciliation of adjusted gross margin to gross margin for each quarter of 2007 and the first quarter of 2008 is provided herein.
WIRELESS RONIN TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2008 2007
---- ----
(unaudited) (audited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 11,436,844 $ 14,542,280
Marketable securities --
available-for-sale 14,220,141 14,657,635
Accounts receivable, net of allowance
of $93,533 and $84,685 3,472,996 4,135,402
Income tax receivable 146,766 231,328
Inventories 621,703 539,140
Prepaid expenses and other current
assets 836,104 817,511
------------ ------------
Total current assets 30,734,554 34,923,296
Property and equipment, net 2,052,143 1,780,390
Intangible assets, net of accumulated
amortization 2,911,620 3,174,804
Restricted cash 450,000 450,000
Other assets 38,057 40,217
------------ ------------
TOTAL ASSETS $ 36,186,374 $ 40,368,707
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of capital lease
obligations $ 80,392 $ 100,023
Accounts payable 1,302,009 1,387,327
Deferred revenue 1,211,439 1,252,485
Accrued purchase price consideration 999,974 999,974
Accrued liabilities 805,614 869,759
------------ ------------
Total current liabilities 4,399,428 4,609,568
Capital lease obligations, less current
maturities 52,055 70,960
------------ ------------
Total liabilities 4,451,483 4,680,528
------------ ------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Capital stock, $0.01 par value, 66,666,666
shares authorized Preferred stock,
16,666,666 shares authorized, no shares
issued and outstanding at March 31, 2008
and December 31, 2007 -- --
Common stock, 50,000,000 shares
authorized; 14,544,260 and 14,537,705
shares issued and outstanding at
March 31, 2008 and December 31, 2007,
respectively 145,443 145,377
Additional paid-in capital 79,137,714 78,742,311
Accumulated deficit (47,717,354) (43,520,098)
Accumulated other comprehensive income 169,088 320,589
------------ ------------
Total shareholders' equity 31,734,891 35,688,179
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 36,186,374 $ 40,368,707
============ ============
WIRELESS RONIN TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
---------
2008 2007
---- ----
Sales
Hardware $ 763,293 $ 36,105
Software 98,291 62,742
Services and other 1,071,930 97,589
------------ ------------
Total sales 1,933,514 196,436
Cost of sales
Hardware 635,020 50,129
Software -- --
Services and other 899,776 53,134
------------ ------------
Total cost of sales 1,534,796 103,263
------------ ------------
Gross profit 398,718 93,173
Operating expenses:
Sales and marketing expenses 1,219,794 624,649
Research and development expenses 454,360 249,431
General and administrative expenses 3,186,707 1,756,589
Termination of partnership agreement -- 653,995
--------------------------
Total operating expenses 4,860,861 3,284,664
------------ ------------
Operating loss (4,462,143) (3,191,491)
Other income (expenses):
Interest expense (7,197) (10,881)
Loss on debt modification -- --
Interest income 272,084 153,298
Other -- (1,491)
--------------------------
Total other income (expense) 264,887 140,926
------------ ------------
Net loss $ (4,197,256) $ (3,050,565)
============ ============
Basic and diluted loss per common share $ (0.29) $ (0.31)
============ ============
Basic and diluted weighted average
shares outstanding 14,544,181 9,832,288
============ ============
WIRELESS RONIN TECHNOLOGIES, INC
2008 SUPPLEMENTARY QUARTERLY FINANCIAL DATA
Supplementary Data
------------------
Income (Loss) 2007
Statement Q1 Q2 Q3 Q4
Sales $ 196,436 $ 3,054,863 $ 1,123,933 $ 1,609,681
Cost of Sales 103,263 1,873,024 709,765 1,206,315
Operating
Expenses 3,284,664 2,430,602 3,245,593 4,446,711
Interest
Expense 10,881 9,634 11,758 7,974
Other (151,807) (278,686) (460,659) (377,732)
Net Loss $ (3,050,565) $ (979,711) $ (2,382,524) $ (3,673,587)
FASB 123R
(included in
operating
Expenses) 596,020 136,339 148,544 286,268
Weighted avg
shares 9,832,288 10,446,571 14,369,262 12,314,178
Reconciliation Between GAAP and Adjusted Operating Loss
-------------------------------------------------------
GAAP Operating
Loss $ (3,191,491) $ (1,248,763) $ (2,831,425) $ (4,043,345)
Adjustments:
Depreciation
and
amortization 66,366 74,507 124,844 385,981
Old Building
Remaining
Lease
Oblig.W/O -- -- 191,207 --
Termination
partnership
agreement 653,995 -- -- 50,000
Stock-based
compensation
expense 596,020 136,339 148,544 286,268
------------------------------------------------------
Total
Operating
Expense
Adjustment 1,316,381 210,846 464,595 722,249
------------------------------------------------------
Adjusted
Operating
Loss $ (1,875,110) $ (1,037,917) $ (2,366,830) $ (3,321,096)
======================================================
$ (0.19) $ (0.10) $ (0.16) $ (0.27)
Reconciliation Between GAAP and Adjusted Gross Margin
-----------------------------------------------------
GAAP Sales 196,436 3,054,863 1,123,933 1,609,681
Deferred
customer
revenue -- -- 89,775 808,291
Network
Operating
Center -- -- (6,510) (11,630)
------------------------------------------------------
Adjusted
Revenue 196,436 3,054,863 1,207,198 2,406,342
GAAP Cost
of Sales 103,263 1,873,024 709,765 1,206,315
Deferred
customer
costs -- -- -- 476,679
Inventory
adjustment -- -- -- (73,018)
Network
Operating
Center -- (33,375) (74,127) (98,806)
------------------------------------------------------
Adjusted
Cost of
Sales 103,263 1,839,649 635,638 1,511,170
Adjusted
Non-GAAP
Gross Profit 93,173 1,215,214 571,560 895,172
======================================================
GAAP Gross
Profit Margin 47.4% 38.7% 36.8% 25.1%
Adjusted
Non-GAAP
Gross Profit
Margin 47.4% 39.8% 47.3% 37.2%
Supplementary Data
------------------
2007 2008
Income (Loss) Statement TOTAL Q1
Sales $ 5,984,913 $ 1,933,514
Cost of Sales 3,892,367 1,534,796
Operating Expenses 13,407,570 4,860,861
Interest Expense 40,247 7,197
Other (1,268,884) (272,084)
Net Loss $(10,086,387) $ (4,197,256)
FASB 123R
(included in operating Expenses) 1,167,171 395,218
Weighted avg shares 12,314,178 14,544,181
Reconciliation Between GAAP and Adjusted Operating Loss
-------------------------------------------------------
GAAP Operating Loss $(11,315,024) $ (4,462,143)
Adjustments:
Depreciation and amortization 651,698 250,946
Old Building Remaining Lease Oblig.W/O 191,207 --
Termination partnership agreement 703,995 --
Stock-based compensation expense 1,167,171 395,218
------------ ------------
Total Operating Expense Adjustment 2,714,071 646,164
------------ ------------
Adjusted Operating Loss $ (8,600,953) $ (3,815,979)
============ ============
$ (0.70) $ (0.26)
Reconciliation Between GAAP and Adjusted Gross Margin
-----------------------------------------------------
GAAP Sales 5,984,913 1,933,514
Deferred customer revenue 898,066 0
Network Operating Center (18,140) (95,664)
------------ ------------
Adjusted Revenue 6,864,839 1,837,850
GAAP Cost of Sales 3,892,367 1,534,796
Deferred customer costs 476,679 47,826
Inventory adjustment (73,018) 0
Network Operating Center (206,308) (190,955)
------------ ------------
Adjusted Cost of Sales 4,089,720 1,391,667
Adjusted Non-GAAP Gross Profit 2,775,119 446,183
============ ============
GAAP Gross Profit Margin 35.0% 20.6%
Adjusted Non-GAAP Gross Profit Margin 40.4% 24.3%