Wireless Ronin sales see big jump, but still far from profitable
March 3, 2011 by Dave Haynes
Wireless Ronin‘s new execs had a mountain to climb when they took over at the publicly-listed DS software company in 2009, and to their credit, they seem to slowly be clawing their way up. But they better hurry up.
The Minneapolis company has announced its financial results for Q4 2010, as well as for 2010 as a whole, and they appear to be doing much, much better in terms of revenues versus expenses. Which is great. Problem is, they are still losing a pile of money, and the accumulated deficit is now north of $70 million.
Wireless Ronin reported revenue of $2.9 million for the fourth quarter of fiscal 2010, an 89 percent increase from $1.5 million in the fourth quarter of fiscal 2009. As of December 31, 2010, the Company had received purchase orders totaling approximately $1.1 million for which it had not recognized revenue. The increase in revenue for the fourth quarter of 2010 over the prior year resulted primarily from orders received from Chrysler for its Branded Tower program for 200 of its dealers.
The Company reported a fourth quarter net loss of $1.7 million, or $0.09 per basic and diluted share, compared to a net loss of $2.2 million, or $0.13 per basic and diluted share, one year ago. The improvement in the year-over-year net loss resulted from significant gross margin dollar improvement. Fourth quarter 2010 results also included costs of approximately $0.4 million, or $0.02 per basic and diluted share, of non-cash stock compensation expense compared to approximately $0.2 million, or $0.01 per basic and diluted share, in the fourth quarter of 2009.
Non-GAAP operating loss for the fourth quarter 2010 totaled $1.1 million, or $0.06 per basic and diluted share, compared to a non-GAAP operating loss of $1.7 million, or $0.10 per basic and diluted share, in the fourth quarter of 2009. Non-GAAP operating loss is defined as the GAAP operating loss with the add-back of certain items. Reconciliation to the GAAP operating loss on a quarterly basis is contained in a table following the audited financial information accompanying this release.
For the fourth quarter of 2010, gross margin averaged 46 percent, compared to a gross margin of 37 percent in the fourth quarter of fiscal 2009 and down from 50 percent from the third quarter of fiscal 2010. The sequential decline was due primarily to additional costs incurred to fulfill the 200 dealer deployment of the Chrysler Branded Towers in those dealerships and related volume pricing. The Company continues to believe its gross margin will improve as its recurring hosting and support revenue base grows.
Cash and marketable securities on hand is now down to $7.1 million. CFO Darin McAreavey says the near term objective is a non-GAAP EBITDA break-even quarter. “We believe that our November 2010 capital raise and continued access to our $2.5 million line-of-credit with Silicon Valley Bank provide us adequate working capital to fund our operations through 2011.”
Revenue for the full year 2010 totaled $8.6 million, compared to $5.0 million for 2009. The big bump in sales owes heavily to Chrysler. The Company’s net loss in 2010 totaled $7.9 million, compared to $10.2 million in 2009.