Wireless Ronin Reports 2008 Fourth Quarter and Full Year Results
Key 2008 fourth quarter highlights include:
||Generates fourth quarter 2008 revenue of $1.9 million, up 18 percent from $1.6
million in 2007
||Implements total workforce reductions of 40 percent and reduces other expenses to
align costs with sales and committed projects
||Incurs one-time impairment charges totaling $3.0 million
||Excluding one-time adjustments, expenses decline by $1.0 million during the quarter
MINNEAPOLIS February 17, 2009 Wireless Ronin Technologies, Inc. (NASDAQ: RNIN), a leader
in digital signage solutions, today announced its financial results for the 2008 fourth
quarter and full year.
Fourth Quarter Results
The company reported revenue of $1.9 million for the fourth quarter of 2008, an 18 percent
increase from $1.6 million in the fourth quarter of 2007. The company also reported a fourth
quarter 2008 net loss of $6.9 million compared to a net loss of $3.7 million in the year-ago
quarterly period, and a basic and diluted loss per share of $0.47 compared to a basic and
diluted loss per share of $0.25 last year. The year-over-year increase in the net loss for
the 2008 fourth quarter was primarily the result of the impairment of the network equipment
held for sale asset of $1.8 million, an impairment charge on intangible assets of $1.3
million and severance cost of $274,000 related to the fourth quarter 2008 workforce
reductions. Fourth quarter 2008 results also included costs of approximately $411,000, or
$0.03 per basic and diluted share, of non-cash stock compensation expense related to FAS123R
compared to approximately $286,000, or $0.02 per basic and diluted share, in 2007.
Adjusted operating loss was $2.8 million or $0.19 per basic and diluted share in the fourth
quarter of 2008 compared to an adjusted operating loss of $3.3 million or $0.23 per basic and
diluted share in the fourth quarter of 2007. Adjusted 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 and full year basis is contained in a table following the financial statements
accompanying this release.
For the fourth quarter of 2008, gross margin averaged 12 percent, compared to a gross margin
of 25 percent in the fourth quarter of 2007. The 2008 gross margin was impacted by a
one-time lower of cost or market inventory adjustment of approximately $65,000 and a
continued net loss from the companys Network Operations Center, or NOC. Excluding these
costs, adjusted gross margin would have been 25 percent for the fourth quarter of 2008.
The company previously included depreciation and amortization in general and administrative
expense. It now shows depreciation and amortization as a separate line on the statement of
operations to better reflect the infrastructure investments made to date.
Our fourth quarter revenue was in line with our expectations, but its clear that many
companies, including Wireless Ronin, face challenges with regard to the economy. Many
businesses are extremely cautious in making capital expenditures and this has created
significant headwinds for us, said Jim Granger, Wireless Ronin Technologies president and
CEO. However, we remain confident in our ability to take advantage of the eventual shift to
the digital signage marketplace. Wireless Ronin is a recognized leader in this industry and
we continue to demonstrate significant value to our current and prospective clients. To
better align our internal resources with sales levels and project commitments we took
additional steps to reduce costs. One step in this process was to further reduce our
headcount. This action has decreased our expense rate and, in the long-term, makes Wireless
Ronin a more efficient organization.
Full Year Results
For the full year 2008, the company reported revenue of $7.4 million, a 23 percent increase
from $6.0 million in 2007. The company also reported a full year net loss of $20.7 million
compared to a net loss of $10.1 million in 2007, and a basic and diluted loss per share of
$1.41 compared to a basic and diluted loss per share of $0.82 last year. The increase in net
loss for 2008 was primarily attributable to higher operating expenses to support anticipated
growth opportunities, investments in the companys Network Operations Center for customer
testing and program pilots, the impairment of the network equipment held for sale and the
impairment charge on intangible assets. The 2008 results also included costs of approximately
$1,313,000, or $0.09 per basic and
diluted share, of non-cash stock compensation expense related to FAS123R compared to
approximately $1,167,000 or $0.09 per basic and diluted share, in 2007.
Adjusted operating loss was $14.6 million or $1.00 per basic and diluted share for the full
year 2008 compared to an adjusted operating loss of $8.6 million or $0.70 per basic and
diluted share for the full year 2007.