Key 2009 second quarter highlights include:
* Announced a strategic partnership with NEC Display Solutions of America, Inc. * Continued improvement in gross margin to 23% in second quarter of 2009 compared to 19% in first quarter of 2009. * Further reduction in cash burn to $1.8 million in second quarter of 2009 compared to $2.4 million in first quarter of 2009. * Revenue significantly impacted by collapse of automotive industry and the general economic downturn in early 2009.
MINNEAPOLIS, Aug. 6, 2009 (GLOBE NEWSWIRE) -- Wireless Ronin Technologies, Inc. (Nasdaq:RNIN), a leader in digital signage solutions, today announced its financial results for the second quarter of 2009.
Second Quarter Results
The Company reported revenue of $1.0 million for the second quarter of 2009, a 40 percent decrease from $1.6 million in the second quarter of 2008. The Company also reported a second quarter net loss of $2.7 million, or $0.18 per basic and diluted share, compared to a net loss of $5.0 million, or $0.34 per basic and diluted share, in the year-ago quarterly period. The significant decline in revenue for the second quarter of 2009 compared to the same period in the prior year is primarily attributable to the collapse in the automotive industry. During the second quarter of 2009, the Company recognized less than $50,000 of revenue from customers in this vertical market compared to approximately $0.6 million or 38 percent of total revenues in the second quarter of 2008. The year-over-year improvement in the net loss for the 2009 second quarter was primarily the result of the reductions in workforce and other cost cutting measures taken over the previous nine months. Second quarter 2009 results also included costs of approximately $183,000, or $0.01 per basic and diluted share, of non-cash stock compensation expense related to FAS123R compared to approximately $306,000, or $0.02 per basic and diluted share, in 2008. Revenue for the first half of 2009 totaled $2.4 million compared to $3.5 million in the same period a year-ago. The Company's net loss for the first half of 2009 totaled $5.6 million, or $0.37 per basic and diluted share, compared to $9.2 million, or $0.63 per basic and diluted share, in the prior year.
Non-GAAP operating loss was $2.1 million or $0.14 per basic and diluted share in the second quarter of 2009 compared to a non-GAAP operating loss of $4.1 million or $0.28 per basic and diluted share in the first quarter of 2008. Non-GAAP operating loss is defined as the GAAP operating loss with the add-back of certain items. These items include severance charges totaling $210,000, or $0.01 per basic and diluted share during the second quarter of 2009, compared to $353,000 or $0.02 per basic and diluted share recorded in the second quarter of 2008. Reconciliation to the GAAP operating loss on a quarterly and six month basis is contained in a table following the financial statements accompanying this release.
James C. (Jim) Granger, president and chief executive officer of Wireless Ronin Technologies, said, "While we are not satisfied with our revenue generation in the first half of this year, we believe that our recently announced strategic partnership agreement with NEC Display Solutions of America, Inc. has great significance for Wireless Ronin and will create future growth opportunities. We are now able to substantially expand our sales reach by extending our software into the hands of NEC sales personnel across the United States and Canada. We believe there will be a strong demand from NEC customers requiring a robust, customized solution only offered by our full RoninCast(r) offering. We will be working closely with NEC over the coming months to provide the necessary training and support for their sales team for them to be able to identify these opportunities."
For the second quarter of 2009, gross margin averaged 23 percent, compared to a gross margin of four percent in the second quarter of 2008. The increase was primarily the result of a shift in revenue from the sale of hardware to the sale of software and services, which yields a higher percentage margin of profitability. An incremental increase in the Company's recurring software maintenance and hosting fees has also contributed to the increase in gross profit margins.
Cash and marketable securities, including restricted cash at June 30, 2009, totaled approximately $9.8 million compared to $11.7 million at March 31, 2009, and $14.0 million at the end of 2008. The decline in cash and marketable securities reflects the continued funding of the Company's losses during the first half of 2009. "Despite the challenges we face in this economic environment, I am very pleased with the continued improvement in our quarterly cash burn rate and the efficiencies we have built within our organization. In the second quarter, we continued to see dramatic improvement in our cash utilization, which included approximately $0.5 million of one-time severance payments. Our operations continue to be impacted by the global recession as most businesses are extending the timing of any large scale digital signage deployments. However, we remain confident that when our current customers and prospects decide to proceed with rolling out a digital signage solution for their mission critical applications that Wireless Ronin will be their vendor of choice," said Darin McAreavey, vice president and chief financial officer.
A conference call to review second quarter and full year results, and further discuss our new strategic partnership with NEC Display Solutions of America, Inc, is scheduled for today at 3:30 p.m. (CT). A live webcast of Wireless Ronin's earnings conference call can be accessed on the Investor section of its corporate web site at www.wirelessronin.com. Alternatively, a live broadcast of the call may be heard by dialing (877) 419-6596 inside the United States or Canada, or by calling (719) 325-4862 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 approximately two hours following the end of the live call by dialing (888) 203-1112 domestically and (719) 457-0820 internationally with pass code 6603144. The conference call archive will be available through September 6, 2009.
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 and is the only complete, turnkey solution in the digital signage marketplace. 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.globenewswire.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 Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission, on May 8, 2009.
WIRELESS RONIN TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share information)
June 30, Dec. 31,
2009 2008
-------- --------
(unaudited) (audited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 9,469 $ 5,294
Marketable securities -- available-for-sale -- 8,301
Accounts receivable, net of allowance of
$76 and $92 728 1,823
Income tax receivable 13 12
Inventories 275 462
Prepaid expenses and other current assets 119 265
-------- --------
Total current assets 10,604 16,157
Property and equipment, net 1,581 1,918
Restricted cash 378 450
Other assets 27 35
-------- --------
TOTAL ASSETS $ 12,590 $ 18,560
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of capital lease
obligations $ 32 $ 71
Accounts payable 771 1,068
Deferred revenue 67 181
Accrued liabilities 702 1,067
-------- --------
TOTAL LIABILITIES 1,572 2,387
-------- --------
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 -- --
Common stock, 50,000 shares authorized;
14,947 and 14,850 shares issued and
outstanding at June 30, 2009 and
December 31, 2008, respectively 149 148
Additional paid-in capital 81,071 80,650
Accumulated deficit (69,770) (64,212)
Accumulated other comprehensive loss (432) (413)
-------- --------
Total shareholders' equity 11,018 16,173
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 12,590 $ 18,560
======== ========
WIRELESS RONIN TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts, unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2009 2008 2009 2008
-------- -------- -------- --------
Sales
Hardware $ 263 $ 496 $ 766 $ 1,260
Software 230 204 396 302
Services and other 470 896 1,234 1,968
-------- -------- -------- --------
Total sales 963 1,596 2,396 3,530
Cost of sales
Hardware 267 451 718 1,086
Software -- -- -- --
Services and other 476 1,083 1,185 1,983
-------- -------- -------- --------
Total cost of sales
(exclusive of
depreciation and
amortization shown
separately below) 743 1,534 1,903 3,069
-------- -------- -------- --------
Gross profit 220 62 493 461
Operating expenses:
Sales and marketing
expenses 603 1,110 1,434 2,330
Research and development
expenses 548 590 939 1,044
General and administrative
expenses 1,545 3,143 3,340 6,079
Depreciation and
amortization expense 193 337 392 588
-------- -------- -------- --------
Total operating
expenses 2,889 5,180 6,105 10,041
-------- -------- -------- --------
Operating loss (2,669) (5,118) (5,612) (9,580)
Other income (expenses):
Interest expense (2) (7) (5) (14)
Interest income 16 165 59 437
-------- -------- -------- --------
Total other income 14 158 54 423
-------- -------- -------- --------
Net loss $ (2,655) $ (4,960) $ (5,558) $ (9,157)
======== ======== ======== ========
Basic and diluted loss
per common share $ (0.18) $ (0.34) $ (0.37) $ (0.63)
======== ======== ======== ========
Basic and diluted weighted
average shares
outstanding 14,854 14,578 14,852 14,561
======== ======== ======== ========
WIRELESS RONIN TECHNOLOGIES, INC.
2009 SUPPLEMENTARY QUARTERLY FINANCIAL DATA
(In thousands, except percentages and per share amounts)
(Unaudited)
Supplementary
Data
------------- 2008
----------------------------------------------------
Statement of
Operations Q1 Q2 Q3 Q4 TOTAL
Sales $ 1,934 $ 1,596 $ 1,950 $ 1,902 $ 7,382
Cost of sales 1,535 1,534 1,847 1,673 6,589
Operating
expenses 4,861 5,180 4,854 7,210 22,105
Interest
expense 7 7 5 4 23
Other income,
net (272) (165) (122) (84) (643)
---------------------------------------------------
Net loss $ (4,197) $ (4,960) $ (4,634) $ (6,901) $(20,692)
===================================================
Stock
compensation
expense
(included
in operating
expenses) 395 306 201 411 1,313
Weighted average
shares 14,544 14,578 14,764 14,768 14,664
2009
---------------------
Statement of Operations Q1 Q2
Sales $ 1,433 $ 963
Cost of sales 1,160 743
Operating expenses 3,216 2,889
Interest expense 3 2
Other income, net (43) (16)
---------------------
Net loss $ (2,903) $ (2,655)
=====================
Stock compensation expense (included
in operating expenses) 187 183
Weighted average shares 14,850 14,854
Reconciliation
Between GAAP
and Non-GAAP
Operating Loss 2008
--------------- ---------------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
GAAP operating
loss $ (4,462) $ (5,118) $ (4,751) $ (6,981) $(21,312)
Adjustments:
Depreciation
and
amortization 251 337 296 342 1,226
Old building
remaining
lease
obligation
write-off -- -- -- 56 56
Termination
partnership
agreement -- -- -- 50 50
Stock-based
compensation
expense 395 306 201 411 1,313
Impairment
of network
equipment
held for sale -- -- -- 1,766 1,766
Impairment of
intangible
assets -- -- -- 1,265 1,265
Severance 120 353 286 274 1,033
---------------------------------------------------
Total operating
expense
adjustment 766 996 783 4,164 6,709
----------------------------------------------------
Non-GAAP
operating
loss $ (3,696) $ (4,122) $ (3,968) $ (2,817) $(14,603)
===================================================
Non-GAAP
operating
loss per
common share $ (0.25) $ (0.28) $ (0.27) $ (0.19) $ (1.00)
2009
---------------------
Q1 Q2
GAAP operating loss $ (2,943) $ (2,669)
Adjustments:
Depreciation and amortization 199 193
Old building remaining lease
obligation write-off -- --
Termination partnership agreement -- (50)
Stock-based compensation expense 187 183
Impairment of network equipment
held for sale -- --
Impairment of intangible assets -- --
Severance 237 210
---------------------
Total operating expense adjustment 623 536
---------------------
Non-GAAP operating loss $ (2,320) $ (2,133)
=====================
Non-GAAP operating loss per common share $ (0.16) $ (0.14)
Reconciliation
Between GAAP
and Non-GAAP
Gross Profit
Margin 2008
-------------- ---------------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
GAAP sales $ 1,934 $ 1,596 $ 1,950 $ 1,902 $ 7,382
Deferred
customer
revenue -- 80 -- -- 80
Network
operations
center (96) (39) (99) (100) (334)
---------------------------------------------------
Non-
GAAP
sales 1,838 1,637 1,851 1,802 7,128
GAAP cost of
sales 1,535 1,534 1,847 1,673 6,589
Deferred
customer
costs 48 51 -- -- 99
Inventory
adjustment -- -- -- (65) (65)
Network
operations
center (191) (281) (318) (257) (1,047)
---------------------------------------------------
Non-GAAP
cost of
sales 1,392 1,304 1,529 1,351 5,576
Non-GAAP gross
profit $ 446 $ 333 $ 322 $ 451 $ 1,552
===================================================
GAAP gross
profit margin 20.6% 3.9% 5.3% 12.0% 10.7%
Non-GAAP gross
profit margin 24.3% 20.3% 17.4% 25.0% 21.8%
2009
---------------------
Q1 Q2
GAAP sales $ 1,433 $ 963
Deferred customer revenue -- --
Network operations center (71) (121)
---------------------
Non-GAAP sales 1,362 842
GAAP cost of sales 1,160 743
Deferred customer costs -- --
Inventory adjustment -- --
Network operations center (169) (167)
---------------------
Non-GAAP cost of sales 991 576
Non-GAAP gross profit $ 371 $ 266
=====================
GAAP gross profit margin 19.1% 22.8%
Non-GAAP gross profit margin 27.2% 31.6%