Ronin still losing money, but the bleeding is slowing

August 7, 2009 by Dave Haynes

Wireless Ronin released its quarterly results on Thursday, showing the company is still losing lotsa money, but that the new CEO is starting to get the house in a little better order.

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. 

The release also addresses the burn rate on the IPO cash Ronin has being using to stay afloat.

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. 

Ronin reports it is getting out of the hardware margin business (if I am reading it right they actually lost $4K on hardware sales this past quarter) and focusing more on revenues from SaaS and managed/provided services.

The company is pinning big hopes on a partnership with NEC, thinking its sales staff will peddle the Ronin product. THAT’s a tough one, as there aren’t a lot of genuine success stories on that type of partnership. Sounds great, but the follow-through rarely happens. I guess we’ll all see.

Ronin still has 84 people on payroll or sub-contracted. Wow.

A transcript of a conf call on the latest numbers is here.