Wireless Ronin Technologies, Inc. ( RNIN)

Q3 2010 Earnings Call

October 28, 2010 04:30 am ET

Executives

Erin Haugerud - Manager of Communication and IR

Jim Granger - CEO

Darin McAreavey - Vice President & CFO

Scott Koller - President & CFO

Analysts

Darren Aftahi - Northland Securities

Dick Ryan - Dougherty

Presentation

Operator

Good day ladies and gentlemen and welcome to Wireless Ronin Technologies third quarter 2010 earnings conference call. At this time all participants are in a listen-only mode. Later we'll conduct the question-and-answer session and instructions will be given at that time. (Operator Instructions). As a reminder this conference call is being recorded. I would now like to hand the conference over to Ms. Erin Haugerud, Manager of Communication and Investor Relations. Ma'am you may begin.

Erin Haugerud

Thank you and welcome everyone to our 2010 third quarter conference call. With me today are Jim Granger our Chief Executive Officer; Darin McAreavey, Vice President and Chief Financial Officer; and Scott Koller, President and Chief Operating Officer. After Jim's opening remarks; Darin's detailed financial review and Scott's sales update, we will open up the call to your questions.

Before we begin, please not that the information presented and discussed today include forward-looking statements which are made under the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Our actual results and future periods may differ materially and you should not attribute undue certainty to our forward-looking statements.

Risks and uncertainties that could cause our actual results to differ from those expressed or implied by forward-looking statements, include those set forth in the risk factor section of the annual report on Form 10-K we filed on March 26, 2010.

In addition, our comments may contain certain non-GAAP financial measures including non-GAAP operating loss per share. For additional information, including reconciliation from GAAP results to non-GAAP measures, how the non-GAAP measures provide useful information and why we use non-GAAP measures, please see the reconciliation section of our press release, which appears on our website at wirelessronin.com.

Now I would like to turn the call over to Jim.

Jim Granger

Thanks Erin and good afternoon everyone and thanks for joining us for today's call. But we are obviously very pleased with the results of the third quarter, which again illustrates that our business model works.

First we continue to receive additional orders from our key marquee customers; Chrysler, Thomson Reuters, YUM! and ARAMARK, resulting in an increase of revenues to 2.7 million, a 148% increase for the third quarter on a year-over-year basis. Secondly, gross margins hit an all time high up 50% in the third quarter. Thirdly, we are starting to see real movement and traction with large scale rollouts.

First, Chrysler has begun the roll out of its retail branded tower salon concept featuring iShowroom to the dealers. Today Wireless Ronin has received $1.2 million worth of orders to install over 400 screens to 100 locations and we clearly anticipate additional orders in the near future.

Secondly, with the roll-out of our rolling cash offering services for all 2,000 Snap Fitness locations which is the fastest growing franchisor of compact, state of the art 24/7 fitness centers.

And fourth, during the quarter we recorded the lowest quarterly non-GAAP operating loss of $1 million in the company's history. Now both Darin and Scott will provide some additional commentary on these items during their remarks.

I continue to applaud the successful leadership efforts of Scott Koller, Darin McAreavey and their team along with all the WRT employees for their perseverance and dedication. If current trends hold, I believe their hard work will soon be rewarded in achieving a non-GAAP EBITDA breakeven quarter. Now let me see early signs of larger scale roll out commencing. We can share the true scalability of the business models to our shareholders.

I would now like to turn the call over to Darin for an update on our financials for the third quarter.

Darin McAreavey

Thanks Jim and good afternoon everyone. We reported revenue of 2.7 million for the third quarter of fiscal 2010 and 148% increase from 1.1 million in last year's third quarter. As of September 30, 2010 we had received purchase orders totaling approximately 1.7 million that had not been recognized as revenue.

The increase in our year-over-year revenue continue to be generated primarily from our marquee customers Chrysler, Thomson Reuters, YUM! and ARAMARK. Also as Jim mentioned during the third quarter 2010 Snap Fitness awarded Wireless Ronin the 2000 site software and services contract.

At September 2010, we received a 1.2 million order from Chrysler topped to the total of 100 dealers with Chrysler's retail branded tower salon featuring the iShowroom application. During the third quarter, we also recognized total revenue of approximately $700,000 from ARAMARK which is the largest amount of quarterly revenue recognizing this customer in Wireless Ronin's history.

During the third quarter we also successfully completed the installation of 37 new locations which more than doubled the total number of ARAMARK sites managed by our network operations center or NOC. Our recurring host in the service revenue during the third quarter of 2010 totaled 352,000 representing an increase of 189% from the same period in the prior year.

Since the majority of our third quarter orders including Snap Fitness, Chrysler and ARAMARK who received and/or process during the last month through third quarter. But the additional hosting and service revenue for these installs will be reflected starting next quarter which will further increase our recurring revenue.

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