News

Digital signage firm Wireless Ronin sees 69% revenue spurt in Q2

August 1, 2013

Digital marketing technologies solutions provider Wireless Ronin Technologies Inc. has reported financial results for the second quarter ended June 30, 2013.

"In Q2, we achieved our first positive non-GAAP operating income quarter, driven by strong topline results and effective cost controls," said Scott Koller, president and CEO of Wireless Ronin. "Sales to both new and existing customers like Indian Motorcycle and ARAMARK, as well as the license sale to Delphi helped us to realize record gross margin and gross profit. These wins demonstrate our successful transition from a hardware-centric company to a marketing technology solutions company, which includes the adoption of higher-margin software and services business model. New orders from long-term customers like ARAMARK highlight the ongoing opportunities we enjoy for upgrading and expanding upon these existing deployments."

Q2 2013 financial highlights vs. same year-ago quarter

WRT said it achieved the company's first positive non-GAAP operating income quarter (net loss down to a record low $76,000), with revenue up 69 percent to $2.6 million. The company's gross margin increased 860 basis point to a record 69 percent, with gross profit up 92 percent to a record $1.8 million.

Q2 2013 operational highlights

• Received $267,000 in purchase orders from Indian Motorcycle, a subsidiary of Polaris Industries, a $7.4 billion NYSE company, for 35 dealerships to launch interactive digital signage solutions.
• Received a $452,000 purchase order from food service and facilities management provider ARAMARK to install approximately 230 screens and associated hardware and software.
• Partnered with Delphi Display Systems, a manufacturer of outdoor LCD-based display systems for digital signage, to provide integrated technology solutions to the QSR and "pump topper" gas station markets. Under an exclusive RoninCast 4.0 licensing and services agreement, Wireless Ronin received an initial $750,000 of the $2 million minimum due from Delphi over the next five years.
• Exclusive partner Delphi Display Systems was selected by MedMedia Healthcare Network to install Delphi's turnkey digital signage solution featuring RoninCast software at 50 locations in Southern California, with plans to scale to 500 over the next 12-18 months.
• Won 2013 DSA Industry Excellence Award for Wireless Ronin's installation at Burgerville, a quick-service restaurant chain with 39 locations in the Pacific Northwest. The award recognizes the best projects using digital signage, mobile, self-service and interactive kiosk technologies.

Q2 2013 Financial Results

Revenue in the second quarter of 2013 increased 69 percent to $2.6 million from $1.6 million in the same year-ago quarter. The increase was due to the $750,000 prepaid license received from Delphi as well as new orders from Indian Motorcycle and ARAMARK.

Recurring revenue in the second quarter of 2013 from the company's hosting and support services increased to $489,000 (19 percent of total revenue) from $474,000 (30 percent of total revenue) in the same year-ago quarter. The increase in recurring revenue dollars resulted from the continued extension of support services to more nodes delivered by the company's network operations center.

Gross margin in the second quarter of 2013 was a record $1.8 million (69 percent of total revenue) compared to $945,000 (61 percent of total revenue) in the same year-ago quarter. The increase in gross margin was primarily due to the $750,000 software license sale to Delphi Display Systems in the quarter.

Net loss in the second quarter of 2013 totaled a record low $76,000 or $(0.01) per basic and diluted share, as compared to a net loss of $1.2 million or $(0.26) per basic and diluted share in the same year-ago quarter. The year-over-year improvement was primarily due to increased sales and lower costs.

Non-GAAP operating income was a record $77,000 or $0.01 per common share, as compared to a non-GAAP operating loss of $1.0 million or $(0.22) per basic and diluted share in Q2 2012. The company defines non-GAAP operating loss as GAAP operating loss less stock-based compensation, depreciation and amortization and severance and other one-time charges.

At June 30, 2013, cash and cash equivalents totaled $2.2 million, compared to $3.1 million at end of the prior quarter.

First six months 2013 financial results

Revenue in the first six months of 2013 increased 21 percent to $4.0 million from $3.3 million in the first six months of 2012. The increase was due to the Delphi license and new orders from Indian Motorcycle and ARAMARK.

Recurring revenue in the first half of 2013 increased to $984,000 (24 percent of total revenue) from $941,000 (28 percent of total revenue) in the same year-ago period. The dollar increase resulted from continued adoption of support services delivered by the company's network operations center.

Gross margin in the first half of 2013 was $2.6 million (64 percent of total revenue) compared to $1.9 million (57 percent of total revenue) in the same year-ago period. The increase was primarily due to the $750,000 software license sale to Delphi Display Systems.

Net loss in the first half of 2013 was a record low $1.5 million or $(0.27) per basic and diluted share, improving from a net loss of $3.0 million or $(0.66) per basic and diluted share in the first six months of 2012. The improvement was primarily due to increased sales and reduced costs.

Non-GAAP operating loss in the first half of 2013 was $1.1 million or $(0.20) per common share, an improvement from a non-GAAP operating loss of $2.4 million or $(0.53) per basic and diluted share in the same year-ago period.

"On July 29, 2013, we also implemented a restructuring plan designed to conserve our cash resources and to further align our ongoing expenses with our business by focusing sales efforts on high-potential customers and prospects, preserving the research and development staff required to maintain and enhance our RoninCast software, and consolidated certain positions," Koller said. "We expect this restructuring to reduce annual operating costs by approximately $1.3 million, which we believe will provide us with additional runway to continue pursuing strategic and financial alternatives.

"Our expectations remain high as we build upon the momentum we've established and see a widening pipeline of growth opportunities, particularly within our existing customer and partner relationships. As global demand for new marketing technologies continues to build, we are well positioned with industry-leading solutions and a marquee customer base. We believe these key factors will help us expand our market share and further penetrate our target markets."

Learn more about digital signage software.