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8-K - FORM 8-K - CREATIVE REALITIES, INC. | c17074e8vk.htm |
Exhibit 99
Wireless Ronin Reports 2011 First Quarter Results
Key highlights include:
| Sales of $2.4 million for the first quarter of 2011 represented a 123 percent increase year-over-year |
| Sales from RoninCast® software licenses for the first quarter of 2011 increased 264 percent year-over-year |
| Announcement of teaming and co-marketing agreement with Sprint 4G |
| Expansion of sales to Chrysler and its dealer network |
| Awarded digital menu board pilot with Johnny Rockets |
| Renewal of $2.5 million line-of-credit with Silicon Valley Bank to March 2012 |
MINNEAPOLIS May 12, 2011 Wireless Ronin Technologies, Inc. (NASDAQ: RNIN), a leader in
digital signage solutions, today announced its financial results for the first quarter of 2011.
First Quarter Results
Wireless Ronin reported revenue of $2.4 million for the first quarter of 2011, a 123 percent
increase from $1.1 million in the first quarter of 2010. The year-over-year increase in revenue was
primarily attributable to sales with Chrysler and its dealership network. Additionally, the
increase was due to an approximate 600 percent increase in orders from ARAMARK, which included its
newest food concept, Grille Works. Also, the Companys recurring hosting and support revenue for
the first three months of 2011 totaled $0.4 million.
Scott W. Koller, president and chief executive officer of Wireless Ronin Technologies, said, We
had several key wins during the first quarter that continue to position the Company for long-term
success. Our newly formed relationship with Sprint provides a nationwide extension of our sales
team to focus on retail digital signage solutions. In addition, winning the pilot with Johnny
Rockets once again demonstrates our leadership in providing a digital menu board solution to the
food service industry.
The Company reported a first quarter net loss of $2.3 million, or $0.12 per basic and diluted
share, compared to a net loss of $2.8 million, or $0.16 per basic and diluted share, in the
year-ago period. The improvement in the year-over-year net loss was driven primarily by the
increase in gross margin dollars, partially offset by a year-over-year increase in operating
expenses. The first quarter 2011 and 2010 results also included costs of approximately $0.3
million, or $0.02 per basic and diluted share, of non-cash stock compensation expense for each
period.
Non-GAAP operating loss totaled $1.8 million, or $0.09 per basic and diluted share, in the first
quarter of 2011 compared to a non-GAAP operating loss of $2.4 million, or $0.14 per basic and
diluted share, in the first quarter of 2010. 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 unaudited financial information accompanying
this release.
For the first quarter of 2011, gross margin averaged 46 percent, compared to a gross margin of 39
percent in the first quarter of 2010. The year-over-year increase was due to a 264 percent increase
in sales of RoninCast® software and a 35 percent increase in recurring hosting fees
during the first three months of 2011 when compared to the same period in 2010.
Cash and cash equivalents in combination with restricted cash at March 31, 2011, totaled
approximately $5.6 million compared to $7.1 million at the end of 2010. The decline in cash from
the prior year-end reflected the continued funding of the Companys losses during the first quarter
2011. In January 2011, the Company renewed the $2.5 million line of credit with Silicon Valley
Bank, extending the agreement to March 2012.
A conference call to review first quarter results is scheduled for May 12, 2011, at 3:30 p.m. CT. A
live interactive webcast of Wireless Ronins earnings conference call can be accessed on the
investor section of its corporate website at www.wirelessronin.com. Alternatively, a live
broadcast of the call may be heard by dialing (877) 368-6111 inside the United States or Canada, or
by calling (631) 291-4139 from international locations. An operator will direct you to the
Wireless Ronin conference call. A webcast replay of the call will be archived on Wireless Ronins
corporate website. An archive of the call is also accessible via telephone approximately two hours
following the end of the live call by dialing (800) 642-1687 domestically and (706) 645-9291
internationally with conference ID 62212643.
About Wireless Ronin Technologies, Inc.
Wireless Ronin Technologies (www.wirelessronin.com) has developed RoninCast® software as a
complete solution designed to address the evolving digital signage marketplace. RoninCast® software
enables clients to manage digital signage networks from a central location and provides turnkey
digital signage solutions. The RoninCast® software suite facilitates customized distribution with
network management, playlist creation and scheduling, and database integration. Wireless Ronin
offers an array of services to support RoninCast® software including consulting, creative
development, project management, installation, training, and support and hosting through our
network operations center (NOC). The companys common stock trades on the NASDAQ Capital Market
under the symbol RNIN.
Forward-Looking Statements
This release contains certain forward-looking statements of expected future developments, as
defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements
reflect managements expectations and are based on currently available data; however, actual
results are subject to future risks and uncertainties, which could materially affect actual
performance. Risks and uncertainties that could affect such performance include, but are not
limited to, the following: estimates of future expenses, revenue and profitability; the pace at
which the company completes installations and recognizes revenue; trends affecting financial
condition and results of operations; ability to convert proposals into customer orders; the ability
of customers to pay for products and services; the revenue recognition impact of changing customer
requirements; customer cancellations; the availability and terms of additional capital; ability to
develop new products; dependence on key suppliers, manufacturers and strategic partners; industry
trends and the competitive environment; and the impact of losing one or more senior executives or
failing to attract additional key personnel. These and other risk factors are discussed in detail
in the Risk Factors section of the Companys Annual Report on Form 10-K filed with the Securities
and Exchange Commission on March 22, 2011.
Investor Contact
Darin P. McAreavey
Senior Vice President and Chief Financial Officer
dmcareavey@wirelessronin.com
952.564.3525
Senior Vice President and Chief Financial Officer
dmcareavey@wirelessronin.com
952.564.3525
Media Contact
Erin E. Haugerud
Manager of Communications and Investor Relations
ehaugerud@wirelessronin.com
952.564.3535
Manager of Communications and Investor Relations
ehaugerud@wirelessronin.com
952.564.3535
Non-GAAP Financial Measures
In addition to disclosing financial measures prepared in accordance with Generally Accepted
Accounting Principles (GAAP), this press release and the accompanying tables contain the following
non-GAAP financial measures: non-GAAP operating loss and non-GAAP operating loss per common share.
The presentation of this financial information is not intended to be considered in isolation or as
a substitute for, or superior to, the financial information prepared and presented in accordance
with GAAP.
Non-GAAP operating loss and non-GAAP operating loss per share. We define non-GAAP operating loss as
the GAAP operating loss less stock-based compensation expense, depreciation and amortization,
severance expense and other one-time charges. We define non-GAAP operating loss per share as
non-GAAP operating loss divided by the weighted average basic and diluted shares outstanding. Our
management utilizes a number of different financial measures, both GAAP and non-GAAP, in making
operating decisions, in forecasting and planning, and in analyzing and assessing our companys
overall performance. Our annual financial plan is prepared and reviewed both on a GAAP and non-GAAP
basis. We budget and forecast for revenue and expenses on GAAP and non-GAAP bases, and assess
actual results on GAAP and non-GAAP bases against our annual financial plan. Our board of directors
and management utilize these financial measures (both GAAP and non-GAAP) to determine our
allocation of resources. In addition, and as a consequence of the importance of these non-GAAP
financial measures in managing our business, we use non-GAAP financial measures in the evaluation
process to establish management compensation. For example, senior managements 2011 bonus program
is partially based upon the achievement of non-GAAP operating income (loss). Our management
believes that these non-GAAP financial measures provide meaningful supplemental information
regarding our performance by excluding the items mentioned above. We consider the use of non-GAAP
operating loss per share helpful in assessing the ongoing performance of the continuing operations
of our business, as it excludes recurring non-cash items and non-recurring one-time charges. Our
rationale for the items we omit from our non-GAAP measures is as follows:
Stock-based compensation. We exclude non-cash stock-based compensation expense because of varying
available valuation methodologies, subjective assumptions and the variety of award types that
companies can use under FASB ASC 718-10. Stock-based compensation expense is a recurring expense
for our company and is expected to be in the future as we have a history of granting stock options
and other equity instruments as a means of incentivizing and rewarding our employees.
Depreciation and amortization expense. Depreciation and amortization are non-cash charges that are
impacted by our accounting methods and book value of assets. By excluding these non-cash charges,
our management, together with our investors, are provided with supplemental metrics to evaluate
cash earnings, distinguishing performances impact on earnings from performances impact on cash.
Management believes that the review of these supplemental metrics in conjunction with other GAAP
metrics, such as capital expenditures, is useful for management and investors in understanding our
business. Depreciation is a recurring expense for our company and is expected to continue to be in
the future as we continue to make further investments in our infrastructure through the acquisition
of property, plant and equipment. Due to the exclusion of these non-cash items, investors should
not use this metric as a measure of evaluating our liquidity. Instead, to evaluate our liquidity,
investors should refer to the Consolidated Statements of Cash Flow and the Liquidity and Capital
Resources section contained within Managements Discussion and Analysis in our most recently filed
periodic reports.
Severance and other one-time charges. We exclude severance and other one-time charges that are the
result of other, unplanned events as one means of measuring operating performance. Included in
these expenses are items such as severance costs associated with the termination of employees as
part of an unplanned restructuring, a non-acquisition-related restructuring and other charges.
These events are unplanned and arise outside the ordinary course of continuing operations. For
example, we implemented significant workforce reductions and other changes to our management team
during 2008 and 2009. We do not expect restructuring-related charges to regularly recur in the
future. The other one-time charges relate to unplanned costs, and therefore, by providing this
information, we believe our management and our investors may more fully understand the financial
results of what we consider to be organic continuing operations.
There are a number of limitations related to the use of non-GAAP operating loss and non-GAAP
operating loss per share versus operating income and loss per share calculated in accordance with
GAAP. First, these non-GAAP financial measures exclude stock-based compensation and depreciation
expenses that are recurring. Both stock-based expenses and depreciation have been, and will
continue to be for the foreseeable future, a significant recurring expense with an impact upon our
company notwithstanding the lack of immediate impact upon cash. Second, stock-based awards are an
important part of our employees compensation and impact their performance. Third, there is no
assurance we will avoid further personnel changes and, therefore, may recognize additional
severance and other one-time charges associated with a future restructuring. Fourth, there is no
assurance the components of the costs that we exclude in our calculation of non-GAAP operating loss
do not differ from the components that our peer companies exclude when they report their results of
operations. Our management compensates for these limitations by providing specific information
regarding the GAAP amounts excluded from these non-GAAP financial measures and evaluating these
non-GAAP financial measures together with their most directly comparable financial measures
calculated in accordance with GAAP. The accompanying tables have more details on these non-GAAP
financial measures, including reconciliations between these financial measures and their most
directly comparable GAAP equivalents.
WIRELESS RONIN TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share information)
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share information)
March 31, | December 31, | |||||||
2011 | 2010 | |||||||
(unaudited) | (audited) | |||||||
ASSETS |
||||||||
CURRENT ASSETS |
||||||||
Cash and cash equivalents |
$ | 5,543 | $ | 7,064 | ||||
Accounts receivable, net of allowance of $35 |
1,937 | 2,522 | ||||||
Inventories |
446 | 272 | ||||||
Prepaid expenses and other current assets |
292 | 275 | ||||||
Total current assets |
8,218 | 10,133 | ||||||
Property and equipment, net |
955 | 1,019 | ||||||
Restricted cash |
50 | 50 | ||||||
Other assets |
41 | 40 | ||||||
TOTAL ASSETS |
$ | 9,264 | $ | 11,242 | ||||
LIABILITIES AND SHAREHOLDERS EQUITY |
||||||||
CURRENT LIABILITIES |
||||||||
Current maturities of capital lease obligations |
$ | 38 | $ | 37 | ||||
Accounts payable |
1,443 | 1,563 | ||||||
Deferred revenue |
308 | 488 | ||||||
Accrued liabilities |
795 | 571 | ||||||
Total current liabilities |
2,584 | 2,659 | ||||||
Capital lease obligations, less current maturities |
31 | 40 | ||||||
TOTAL LIABILITIES |
2,615 | 2,699 | ||||||
COMMITMENTS AND CONTINGENCIES |
||||||||
SHAREHOLDERS EQUITY |
||||||||
Capital stock, $0.01 par value, 66,667 shares authorized
outstanding |
| | ||||||
Common stock, 50,000 shares authorized; 19,288 and 19,233 shares
issued and outstanding at March 31, 2011 and December 31, 2010, |
193 | 192 | ||||||
Additional paid-in capital |
91,529 | 91,138 | ||||||
Accumulated deficit |
(84,544 | ) | (82,278 | ) | ||||
Accumulated other comprehensive loss |
(529 | ) | (509 | ) | ||||
Total shareholders equity |
6,649 | 8,543 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY |
$ | 9,264 | $ | 11,242 | ||||
WIRELESS RONIN TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts, unaudited)
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts, unaudited)
Three Months Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
Sales |
||||||||
Hardware |
$ | 1,053 | $ | 203 | ||||
Software |
255 | 70 | ||||||
Services and other |
1,089 | 802 | ||||||
Total sales |
2,397 | 1,075 | ||||||
Cost of sales |
||||||||
Hardware |
729 | 135 | ||||||
Software |
29 | 8 | ||||||
Services and other |
546 | 508 | ||||||
Total cost of sales (exclusive of depreciation and
amortization shown separately below) |
1,304 | 651 | ||||||
Gross profit |
1,093 | 424 | ||||||
Operating expenses: |
||||||||
Sales and marketing expenses |
763 | 731 | ||||||
Research and development expenses |
573 | 795 | ||||||
General and administrative expenses |
1,870 | 1,483 | ||||||
Depreciation and amortization expense |
144 | 176 | ||||||
Total operating expenses |
3,350 | 3,185 | ||||||
Operating loss |
(2,257 | ) | (2,761 | ) | ||||
Other income (expenses): |
||||||||
Interest expense |
(11 | ) | (2 | ) | ||||
Interest income |
2 | 10 | ||||||
Total other income (expense) |
(9 | ) | 8 | |||||
Net loss |
$ | (2,266 | ) | $ | (2,753 | ) | ||
Basic and diluted loss per common share |
$ | (0.12 | ) | $ | (0.16 | ) | ||
Basic and diluted weighted average shares outstanding |
19,275 | 17,653 | ||||||
WIRELESS RONIN TECHNOLOGIES, INC.
2011 SUPPLEMENTARY QUARTERLY FINANCIAL DATA
(In thousands, except percentages and per share amounts)
(Unaudited)
2011 SUPPLEMENTARY QUARTERLY FINANCIAL DATA
(In thousands, except percentages and per share amounts)
(Unaudited)
2010 | 2011 | |||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | TOTAL | Q1 | |||||||||||||||||||
Supplementary Data |
||||||||||||||||||||||||
Statement
of Operations Sales |
$ | 1,075 | $ | 1,916 | $ | 2,672 | $ | 2,904 | $ | 8,567 | $ | 2,397 | ||||||||||||
Cost of sales |
651 | 1,002 | 1,348 | 1,581 | 4,582 | 1,304 | ||||||||||||||||||
Operating expenses |
3,185 | 2,970 | 2,711 | 2,974 | 11,840 | 3,350 | ||||||||||||||||||
Interest expense |
2 | 16 | 21 | 19 | 58 | 11 | ||||||||||||||||||
Other income, net |
(10 | ) | (8 | ) | (6 | ) | (6 | ) | (30 | ) | (2 | ) | ||||||||||||
Net loss |
$ | (2,753 | ) | $ | (2,064 | ) | $ | (1,402 | ) | $ | (1,664 | ) | $ | (7,883 | ) | $ | (2,266 | ) | ||||||
Share based payment expense (included in operating expenses & interest expense) |
153 | 178 | 218 | 369 | 918 | 353 | ||||||||||||||||||
Weighted average shares |
17,653 | 17,675 | 17,734 | 18,669 | 17,901 | 19,275 | ||||||||||||||||||
Reconciliation Between GAAP and
Non-GAAP Operating Loss |
||||||||||||||||||||||||
GAAP operating loss |
$ | (2,761 | ) | $ | (2,056 | ) | $ | (1,387 | ) | $ | (1,651 | ) | $ | (7,855 | ) | $ | (2,257 | ) | ||||||
Adjustments: |
||||||||||||||||||||||||
Depreciation and amortization |
176 | 171 | 172 | 165 | 684 | 144 | ||||||||||||||||||
Stock-based compensation expense |
151 | 162 | 202 | 353 | 868 | 345 | ||||||||||||||||||
Total operating expense adjustment |
327 | 333 | 374 | 518 | 1,552 | 489 | ||||||||||||||||||
Non-GAAP operating loss |
$ | (2,434 | ) | $ | (1,723 | ) | $ | (1,013 | ) | $ | (1,133 | ) | $ | (6,303 | ) | $ | (1,768 | ) | ||||||
Non-GAAP operating loss per common share |
$ | (0.14 | ) | $ | (0.10 | ) | $ | (0.06 | ) | $ | (0.06 | ) | $ | (0.35 | ) | (0.09 | ) |