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Wireless Ronin Reports Record Revenue For Fiscal Year 2010

Stocks in this article: RNIN

A conference call to review fourth quarter and full year 2010 results and to provide an update regarding customers within the Company's key vertical markets is scheduled for March 2, 2011, 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 website at www.wirelessronin.com . Alternatively, a live broadcast of the call may be heard by dialing (877) 368-6111 inside the United States or Canada, or by calling (631) 291-4139 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 website. An archive of the call is also accessible via telephone approximately two hours following the end of the live call by dialing (800) 642-1687 domestically and (706) 645-9291 internationally with conference ID 41020102.

About Wireless Ronin Technologies, Inc.

Wireless Ronin Technologies ( www.wirelessronin.com ) has developed RoninCast® software as a complete solution designed to address the evolving digital signage marketplace. RoninCast® software enables clients to manage digital signage networks from a central location and provides turnkey digital signage solutions. The RoninCast® software suite facilitates customized distribution with network management, playlist creation and scheduling, and database integration. Wireless Ronin offers an array of services to support RoninCast® software including consulting, creative development, project management, installation, training, and support and hosting through our network operations center (NOC). The company's common stock trades on the NASDAQ Capital Market under the symbol "RNIN".

The Wireless Ronin Technologies, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3208

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 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 Risk Factors section of the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 26, 2010.

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, severance expense 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, senior management's 2011 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 either recurring non-cash items or non-recurring one-time charges. By continuing operations we mean the ongoing results of our business excluding certain 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 performance's impact on earnings from performance's impact 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. These events are unplanned and arise outside the ordinary course of continuing operations. For example, we implemented significant workforce reductions and other changes to our management team during 2008 and 2009.  We do not expect restructuring-related charges to regularly recur in the future. The other one-time charges relate to unplanned costs, and therefore, 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.
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share information)
     
     
  December 31, 2010 December 31, 2009
   (audited)   (audited) 
ASSETS    
CURRENT ASSETS    
Cash and cash equivalents   $ 7,064  $ 12,273
Accounts receivable, net of allowance of $35 and $51  2,522  1,096
Inventories   272  185
Prepaid expenses and other current assets   275  151
Total current assets   10,133  13,705
Property and equipment, net   1,019  1,242
Restricted cash   50  380
Other assets  40  20
TOTAL ASSETS   $ 11,242  $ 15,347
     
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
CURRENT LIABILITIES    
Current maturities of capital lease obligations  $ 37  $ -- 
Accounts payable   1,563  976
Deferred revenue   488  362
Accrued liabilities   571  251
Total current liabilities  2,659  1,589
Capital lease obligations, less current maturities  40  -- 
TOTAL LIABILITIES  2,699  1,589
     
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; 19,233 and 17,614 shares issued and outstanding at December 31, 2010 and December 31, 2009, respectively   192  176
Additional paid-in capital   91,138  88,371
Accumulated deficit   (82,278)  (74,395)
Accumulated other comprehensive loss  (509)  (394)
Total shareholders' equity   8,543  13,758
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 11,242  $ 15,347
         
         
         
WIRELESS RONIN TECHNOLOGIES, INC.        
CONSOLIDATED STATEMENTS OF OPERATIONS        
(In thousands, except per share amounts)        
         
         
         
  Three Months Ended December 31,  Twelve Months Ended December 31, 
  2010 2009 2010 2009
   (unaudited)   (unaudited)   (audited)   (audited) 
Sales        
Hardware   $ 1,179  $ 634  $ 3,195  $ 1,878
Software   517  209  1,394  710
Services and other   1,208  694  3,978  2,421
Total sales   2,904  1,537  8,567  5,009
         
Cost of sales        
Hardware   829  447  2,161  1,547
Software  35  16  109  21
Services and other   717  506  2,312  2,018
Total cost of sales (exclusive of depreciation and amortization shown separately below)  1,581  969  4,582  3,586
Gross profit   1,323  568  3,985  1,423
         
Operating expenses:        
Sales and marketing expenses   506  523  2,329  2,520
Research and development expenses   678  538  2,864  2,167
General and administrative expenses   1,625  1,482  5,963  6,218
Depreciation and amortization expense  165  188  684  771
Total operating expenses   2,974  2,731  11,840  11,676
Operating loss   (1,651)  (2,163)  (7,855)  (10,253)
         
Other income (expenses):        
Interest expense   (19)  --   (58)  (6)
Interest income   6  9  30  76
Total other income (expense)  (13)  9  (28)  70
Net loss   $ (1,664)  $ (2,154)  $ (7,883)  $ (10,183)
Basic and diluted loss per common share   $ (0.09)  $ (0.13)  $ (0.44)  $ (0.67)
Basic and diluted weighted average shares outstanding   18,669  16,513  17,901  15,274
                     
                     
WIRELESS RONIN TECHNOLOGIES, INC.
2010 SUPPLEMENTARY QUARTERLY FINANCIAL DATA
(In thousands, except percentages and per share amounts)
(Unaudited)
                     
Supplementary Data
  2009 2010
Statement of Operations Q1 Q2 Q3 Q4 TOTAL Q1 Q2 Q3 Q4 Total
Sales  $ 1,433  $ 963  $ 1,076  $ 1,537  $ 5,009  $ 1,075  $ 1,916  $ 2,672  $ 2,904  $ 8,567
                     
Cost of sales 1,160  743  714  969  3,586 651 1,002 1,348 1,581 4,582
                     
Operating expenses 3,216  2,889  2,840  2,731  11,676 3,185 2,970 2,711 2,974 11,840
                     
Interest expense 3  2  1  --   6 2 16 21 19 58
                     
Other income, net (43)  (16)  (8)  (9)  (76) (10) (8) (6) (6) (30)
                     
Net loss  $ (2,903)  $ (2,655)  $ (2,471)  $ (2,154)  $ (10,183)  $ (2,753)  $ (2,064)  $ (1,402)  $ (1,664)  $ (7,883)
                     
Share based payment expense 187  183  152  176  698 153 178 218 369 918
(included in operating expenses & interest expense)                    
                     
Weighted average shares  14,850  14,854  14,929  16,513  15,274  17,653  17,675  17,734  18,669  17,901
                     
                     
Reconciliation Between GAAP and Non-GAAP Operating Loss
                     
GAAP operating loss  $ (2,943)  $ (2,669)  $ (2,478)  $ (2,163)  $ (10,253)  $ (2,761)  $ (2,056)  $ (1,387)  $ (1,651)  $ (7,855)
                     
Adjustments:                    
 Depreciation and amortization  199  193  191  188  771  176  171  172  165  684
 Termination partnership agreement  --   (50)  --   100  50  --   --   --   --   -- 
 Stock-based compensation expense  187  183  152  176  698  151  162  202  353  868
 Severance  237  210  --   --   447  --   --   --   --   -- 
                     
Total operating expense adjustment  623  536  343  464  1,966  327  333  374  518  1,552
                     
Non-GAAP operating loss  $ (2,320)  $ (2,133)  $ (2,135)  $ (1,699)  $ (8,287)  $ (2,434)  $ (1,723)  $ (1,013)  $ (1,133)  $ (6,303)
Non-GAAP operating loss per common share  $ (0.16)  $ (0.14)  $ (0.14)  $ (0.10)  $ (0.54)  $ (0.14)  $ (0.10)  $ (0.06)  $ (0.06)  $ (0.35)
CONTACT: Investor Contact
         
         Darin P. McAreavey
         Senior Vice President and Chief Financial Officer
         dmcareavey@wirelessronin.com
         952.564.3525
         
         Media Contact
         
         Erin E. Haugerud
         Manager of Communications and Investor Relations
         ehaugerud@wirelessronin.com
         952.564.3535

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