Latest Ronin Financials Show Improving Revenues, But Continuing Losses

March 12, 2012 by Dave Haynes

Wireless Ronin Technologies financial results for the fourth quarter and fiscal year ending Dec. 31, 2011, which came out late last week, show the company had a record revenue year but not enough to avoid another year finishing deep in the red.

The digital signage software company based in Minneapolis, one of few that are publicly listed and therefore required to show its books, did $9.3 million in revenue in fiscal year 2011, which represents an 8% increase year-over-year. However, net loss for the full year of 2011 totaled $6.7 million – more than $1 million better than 2010, but still a big hit.

The company successfully completed a capital raise in 2010, with gross proceeds of $3.3 million. The company’s net working capital position was $5 million at the end of the year, up from the end of Q3 because of the new financing round.

With a net loss of more than $6 million last year even my feeble match skills suggest Ronin better have an awesome 2012 or it’s update the LinkedIn profile time.

Q4 2011 Financial Results

Revenue in the fourth quarter of 2011 decreased 34% sequentially to $1.5 million from $2.3 million in the prior quarter, and decreased 48% from $2.9 million in the same year-ago period. The sequential and year-over-year quarterly decreases were primarily due to the timing of additional orders from Chrysler for the interactive kiosks featuring iShowroom.

Recurring revenue in the fourth quarter of 2011 from the company’s hosting and support services grew 8% to approximately $422,000 or 28% of total revenue from approximately $391,000 in the fourth quarter of 2010 when it represented 13% of total revenue.

Net loss totaled $1.7 million or $(0.08) per basic and diluted share, as compared to a net loss of $1.4 million or $(0.07) per basic and diluted share in the previous quarter, and a net loss of $1.7 million or $(0.09) per basic and diluted share in the same year-ago period. Net loss for the fourth quarter of 2011 included $48,000 of non-cash stock compensation expense versus $353,000 of non-cash compensation expense in the fourth quarter of 2010.

Non-GAAP operating loss totaled $1.5 million or $(0.07) per basic and diluted share, compared to a non-GAAP operating loss of $1.1 million or $(0.06) per basic and diluted share in the previous quarter, and a non-GAAP operating loss of $1.1 million or $(0.06) per basic and diluted share in the fourth quarter of 2010. The company defines non-GAAP operating loss as GAAP operating loss with the add-back of certain items. Reconciliation to GAAP operating loss on a quarterly basis is contained in a table following the unaudited financial information accompanying this release.

Management Commentary

“2011 marked our second consecutive year of record revenue,” said Scott Koller, president and CEO of Wireless Ronin. “Maybe equally important as our revenue growth in 2011 was our strategy shift to offering marketing technology solutions including interactive kiosks, iPad applications, mobile messaging, QR codes and the integration of social networks into our product. We believe these new marketing technology product offerings have uniquely positioned us to capitalize on our clients’ requirements to enable content to be rendered anytime and anywhere from a common platform. Additionally, these new technologies greatly expand the marketing solutions we can provide our existing and prospective clients and represent a significant opportunity to increase our revenue beyond traditional digital signage.”

“In fact, our sales opportunities and pipeline for these new types of offerings in our three key vertical markets, QSR, automotive and retail, are growing. We continue to receive orders from various clients in these verticals as they integrate technology as a way of creating a unique experience with their customers. We believe our joint marketing agreement with Keyser Industries, together with our strengthened balance sheet, give us the resources to pursue new clients and large scale rollouts in QSR and other verticals in 2012.”

“Operationally, we continued to make progress in 2011, marking the lowest level of cash burn in the Company’s history since its initial public offering in 2006. Our number one goal is to achieve profitability and positive cash flow. In an effort to achieve this goal, we continue to optimize our organization, improve our processes and reduce expenses.

“The demand for new marketing technologies continues to accelerate and we believe we have the elements in place to realize future revenue growth through further penetration of our key verticals.”

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