Financials: Wireless Ronin Still Deep In Red, But Losses Getting Smaller

August 10, 2012 by Dave Haynes

Wireless Ronin had its latest SEC-required opening of the kimono session Thursday, reporting quarterly reults and getting on a conference call with analysts.

In short, it’s an ongoing struggle and the interesting thing is the analysts are getting kinda cranky and pushy, something I’ve not noticed in reading transcripts from earlier reports.

The execs tell the analysts things are still a little scratchy and the sales cycle still long, but it’s a matter of staying focused on execution.

Right, I understand that, replies the analyst. And my concern I guess along with that question is of course we’re setting here at $0.75 and you’re coming up in October to maybe being delisted and that was the purpose of my question, because I don’t think we’re going to have something meaningful or otherwise you’re going to go – going to see delisted. So, that is part of my concern. And the other one is that, I don’t know your last part $900,000 for the quarter or drain on cash. And what was that from the year, from the quarter before. How much did you lose the quarter before? I don’t have that right in front of me.

The 75 cents refers to share price dipping and staying below $1. Shares have traded as high as $1.50 in the last 12 months, and were moving at $10+ five years ago. When shares trade below $1 for 30 days, NASDAQ starts a six-month process that can lead to a company losing its listing on the exchange unless the share values rise up again.

Ouch.

I don’t have a business degree so I can’t begin to explain GAAP and non-GAAP and stuff like that, but even simpletons like me can see the company continues to operate in the red, and the cash on hand pile is getting smaller. However, the company has also dramatically lowered its burn rate.

The press release spin:

Q2 2012 Highlights

• Recurring revenue increased 19% year-over-year to a record $475,000
• Gross profit was a record 61% of total revenue 
• Achieved lowest quarterly non-GAAP loss in the company’s history
• Partnered with Thomson Reuters to deliver Thomson Reuters Knowledge Direct Digital Signage?an integrated solution powered by RoninCast® software?to retail financial services locations worldwide
• Released new version of the company’s flagship RoninCast software platform, which was a key driver of recent wins and new pilot programs, including Nissan Canada and Burgerville

Here’s what the CFO says:

Revenue in Q2, 2012 decreased 12% sequentially to $1.6 million from the prior quarter and decreased 49% from the same year-ago period. As Scott mentioned, the decrease in both periods was primarily due to the reduced orders for the iShowroom branded tower application as Chrysler continue to install from previously purchased inventory.

Although we experienced a year-over-year decline in key half quarters, both Chrysler and individual Fiat dealership, in the first half of 2012. We believe that we will receive additional orders for interactive Branded Tower Salon featuring iShowroom as Chrysler is nearing full deployment of the May 2011 order for 400 dealership.

At the end of Q2, we had recognized a total of 900,000 of purchase orders for which revenue will be recognized in future quarters. Recurring revenue in Q2, 2012 increased 2% sequentially to a record $475,000 or 31% of total revenue, and increased 19% from the same year-ago period.

Gross profit totaled $945,000 or record 61% of revenue compared to $949,000 or 54% of revenue in previous quarter and $1.4 million or 46% of revenue in Q2 of 2011. Net loss totaled $1.2 million or $0.05 per basic and diluted share, this was an improvement from the net loss of $1.8 million or $0.08 per basic and diluted share in the previous quarter. And a net loss of $1.4 million or $0.07 per basis and diluted share in the same year-ago period.

Q2, 2012 net loss included a $132,000 of non-cash stock compensation expense versus $161,000 in the previous quarter and $178,000 in Q2 of 2011. For the quarter our non-GAAP operating loss totaled $999,000 or $0.04 per basic and diluted share. This was the lowest quarterly non-GAAP loss since going public.

This compared to a non-GAAP operating loss of $1.5 million or $0.06 per basic and diluted share in the previous quarter and a loss of $1.1 million or $0.06 per basic and diluted share in the same year-ago period. We’re encouraged by these improving results and we will continue to push ourselves to optimize our organization, improve our processes and grow revenue.

Now turning to the balance sheet. Our net working capital position was $2.7 million at the end of Q2, 2012 compared to $3.6 million at the end of the prior quarter.