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Executives

Erin Haugerud – Manager, Communications and IR

Scott Koller – President and CEO

Darin McAreavey – SVP and CFO

Analysts

Darren Aftahi – Northland Securities

Marco Rodriguez – Stonegate Securities

Ty Lilga – Feltl & Company

Jim Schurr – Stifel Nicolaus

Arthur Freedman – Freedman Asset Management

Joseph Novak – Novak Knowledge

Wireless Ronin Technologies, Inc. (RNIN) Q2 2011 Earnings Call August 3, 2011 4:30 PM ET

Operator

Good day ladies and gentlemen and welcome to the Wireless Ronin Technologies Q2 2011 earnings conference call. At this time, all participants are in a listen-only mode. Later we’ll conduct a question and answer session and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touchtone telephone. As a reminder, this conference call is being recorded. I would now like to introduce your host for today’s conference, Miss Erin Haugerud. You may begin.

Erin Haugerud

Thank you and welcome everyone to our second quarter 2011 conference call. With me today at Scott Koller, President and CEO, and Darin McAreavey, Senior Vice President and CFO. Following Scott’s opening remarks, Darin will review our financial performance for the quarter, then turn the call back over to Scott for an operational update and closing remarks. Then, we will open up the call to your questions.

Today’s call will be an interactive webcast that will feature presentation slides of the second quarter 2011 financial results. To access the webcast, please go to the investor section of our corporate website at www.wirelessronin.com.

Please note that the information presented and discussed today include forward-looking statements made on the Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995. Our actual results in future periods may differ materially and you should not attribute undue certainty to our forward-looking statements. Risks and uncertainties that could cause our actual results to differ from those expressed or implied are forward-looking statements, including those set forth in the risk factor section of our annual report on Form 10-K we filed on March 22, 2011.

In addition, our comments may contain certain non-GAAP financial measures including non-GAAP operating loss per share. For additional information, including the reconciliation from GAAP results to non-GAAP measures, how the non-GAAP measures provide you with full information and why we use non-GAAP measures, please see the reconciliation section of our press release, which appears on our website at www.wirelessronin.com.

I’ll turn the call over to our President and CEO, Scott Koller. Scott.

Scott Koller

Thank you Erin. Good afternoon everyone and thank you for joining us today on today’s call to discuss Wireless Ronin’s second quarter 2011 results, which were issued in a press release after the close of market today.

Q2 marked our fifth consecutive quarter of year over year revenue growth as we continue to drive revenues and expand margins. Our improving top line and bottom line performance demonstrates the strong demand for our industry leading digital signage and marketing technology solutions. It also reflects our strategic shift from hardware centric offerings to a higher margin software and services business model.

But before I comment further about the quarter, I would now like to turn the call over to our CFO, Darin McAreavey to take you through the financial details of our results. Afterward, I will talk about our operational highlights and business outlook. Darrin.

Darin McAreavey

Thanks Scott and good afternoon everyone. As Scott mentioned, it was a record revenue quarter for Wireless Ronin. Our revenue increased 27% sequentially to a record $3.1 million as well increased 59% over the same year ago quarter. The increase was primarily attributable to the $1.8 million order received during the quarter for installations at 200 Chrysler dealerships.

Recurring revenue in Q2 generated from our hosting and support services was approximately $400,000 or 13% of total revenue. In fact, software revenue increased 184% over the same year ago period to $623,000. This demonstrates our focus on increasing our higher margin software and hosting services mix on an absolute and relative basis.

At the end of the quarter, we received purchase orders totaling approximately $1.6 million that were not recognized as revenue during Q2. We expect to fulfill these orders during Q3.

Revenue for the six month ended June 30th, increased 82% from the same period a year ago to a record $5.5 million. Gross margin in the second quarter 2011 was 46%, which was unchanged from the prior quarter and declined two points from the 48% for the second quarter of 2010. This was primarily due to a higher percentage of hardware sales during the second quarter of 2011.

On a GAAP basis, our Q2 net loss totaled $1.4 million or $0.07 per basic and diluted share. This is an improvement from our net loss of $2.3 million or $0.12 per basic and diluted share in the previous quarter as well as an improvement from our net loss of $2.1 million or $0.12 per basic and diluted share in the same year ago quarter. The improvement was driven by $500,000 of additional gross margin dollars when comparing Q2 to each of the two prior periods.

Net loss for the second quarter of 2011 included $178,000 of non-cash stock compensation expense. Excluding non-cash charges, our Q2 non-GAAP operating loss totaled $1.1 million or $0.06 per basic and diluted share, representing a $700,000 improvement from our loss of $1.8 million or $0.09 per basic and diluted share in the previous quarter and a $600,000 improvement from a loss of $1.7 million or $0.10 per basic and diluted share in the same year ago quarter.

Now turning to the balance sheet, our networking capital position was $4.6 million at the end of the quarter compared to $5.6 million at the end of March 31, 2011. As we mentioned on our last call in January, we renewed our $2.5 million line of credit with Silicon Valley Bank into March of 2012. We also drew down $500,000 on that line in Q2.

This completes my financial summary. For a more detailed and complete analysis of our Q2 results, I would like to direct everyone to our Form 10-Q, which we expect to file Friday, August 5th, and will be available at www.SEC.gov and via our website.

I’m also happy to answer any questions you have during the Q&A session of today’s presentation. Now, for an overview of our operational activity and development, I’d like to turn the call back over to Scott. Scott.

Scott Koller

Thank you Darin. Our strong financial performance in the second quarter resulted from our continued and aggressive focus on revenue growth and margin expansion. Additionally, new client wins reflect the continued adoption of our leading digital signage and marketing technology solutions.

In fact, we had several key wins during the quarter including the $1.8 million purchase order from Chrysler, as Darin mentioned. We also received orders for our I Showroom branded tower application to be installed in more than 150 Chrysler/Fiat studio locations following a strong initial rollout in February.

I Showroom runs on interactive and promotional screens, visually and interactively assisting Fiat customers and sales specialists alike through the vehicle design and buying process. Wireless Ronin provides the hardware, RoninCast software, content development and 24/7/365 support through its customer support center.

In fact, in April, we received a 2011 Digital Screen Media Association industry Excellence Award for our I Showroom application deployed at Chrysler Group dealerships. In each of several categories, a panel of judges selected one winning project, best demonstrating the integration of two or more technologies.

I Showroom is a robust data driven sales support system that provides and matches buyer preferences to vehicle features, allowing the customers to create a wish list and view matching vehicles in dealer inventory. We believe the award validates our industry leading digital signage software and technology solutions.

Subsequent to the quarter’s end, we teamed up with the Alteris Group, a marketing company that delivers a range of video and digital media technologies to jointly offer Ford and Lincoln dealerships a service menu board solution.

Ford Motor Company want to allow each Ford and Lincoln dealership, totaling 5,000 nationwide the flexibility to display key pricing information while maintaining a corporate control of the primary advertising messages in each dealership.

RoninCast is the ideal solution for Ford because it facilitates both flexibility and control to address Ford’s needs. We are excited to report that we have already received orders under this partnership. We are encouraged by the role our automotive solution plays in this marketplace and we expect to see further adoption in this important vertical.

Our sales opportunities have never been stronger, particularly in QSR. We are currently working with six of the top 20 QSR’s, primarily at corporately owned locations. We expect the QSR opportunity to increase when the FDA announces its anticipated new regulations for nutritional disclosure on menu boards.

Our centralized digital solution will make operating in accordance with these new regulations less costly for independent franchise owners.

Along these lines, I’d like to provide an update on the FDA’s proposed regulations that would require restaurant chains with 20 or more locations operating under the same brand, to provide detailed nutritional information to consumers, including displaying calorie information on menus, menu boards and drive through displays.

Comments were due to the FDA on July 5th, with the final regulation set to be issued by the end of the year. It will be a minimum of six months and up to a year from the effective date for companies to comply. The compliance deadlines could be set as early as mid-2012.

There is no practical difference between six and 12 months for companies preparing to comply with these new requirements. To roll out compliant menus in six to 12 months will require immediate and dedicated efforts by restaurants and signage providers.

In June, we launched our website showcasing our new marketing technology strategy, helping creatively transform the customer experience by offering innovative ways to reach customers and delivery a meaningful and measurable return on investment.

Enhancing customer value by providing an array of marketing technology solutions is the backbone of our plan. The goal is to leverage a coordinated marketing effort through an array of different technologies specifically designed and orchestrated for a particular client’s business.

We take a comprehensive approach, creating cohesive solutions that include digital signage, interactive kiosks, mobile, social media and web, to provide customers with business intelligence and data analytics. These drive effective business decisions that impact both top line results and bottom line margins.

Our focus is to maximize the profitability of in person interactions and to extend the customer’s relationship with our clients to increase the number and profitability of interactions. We received strong validation for our approach, giving us confidence that the strategic direction we have developed will differentiate Wireless Ronin and line our solutions with our customer’s marketing technology needs.

Also during the quarter, we made two key additions to our Board of Directors; Michael Howe and Oz Tangun. Michael and Oz have played important roles in establishing this strategy as prior independent consultants to the company. We expect their proactive approach to Board service and industry expertise will continue to be a positive influence on the company.

Michael’s invaluable experience as CEO of Arby’s, and Mini Clinic, helps him shape and will now oversee implementation of our marketing technology strategy. Oz’s long history with Wireless Ronin and his extensive Wall Street experience will guide us in matters of capital structure and investor communications as we continue to build long term shareholder value.

Additionally, with the company gaining momentum, it is important for us to engage a team of experienced, industrial relations professionals to communicate Wireless Ronin’s message to shareholders and prospective investors.

Last month, we announced our engagement of Liolios Group, a company with a proven track record of assisting emerging growth companies like us, in building quality, long term relationships with investors, analysts, money managers and institutions. We’re excited about the IR program Liolios has presented and we’re looking forward to the additional exposure its efforts will bring to our developing story.

We are dedicated to enhancing Wireless Ronin’s credibility by meting both client and investor expectations. We have an impressive list of loyal, blue chip customers that we believe will continue to expand our pipeline and accelerate our growth.

As we work hard to grow our business, our key customers and partners continue to express confidence in our ability to meet their expectations both today and into the future. Further, we continue to push ourselves to optimize our organization, improve our processes and reduce expenses, and we are committed to continuously improving our RoninCast product line through innovation and development.

In summary, our record quarterly results and the state of our business reflect strong positioning as well as favorable trends around the rapidly digital signage and marketing technologies industry. Our clients need to reach customers and achieve a measurable return on investment using new marketing technologies and this bodes well for our overall business outlook.

As this momentum builds, we believe Wireless Ronin is strategically positioned with industry leading technologies to capture market share and drive recurring revenue. We are now at an exciting inflection point in our business and we are confident our strategy will deliver increasing value for our shareholders.

Before we open the call to your questions, I’d like to express on behalf of the entire management team, our gratitude and appreciation for the continued support we receive from our partners, customers, employees and shareholders. Together, we’ve made tremendous progress in the second quarter with so much to look forward to in the quarters to come.

Now with that, we’re ready to open the call to your questions. Operator, please provide the appropriate instructions.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions) Our first question comes from Darren Aftahi of Northland Securities. Your line is open.

Darren Aftahi – Northland Securities

Hey guys. Thanks for taking my questions.

Scott Koller

Hey Darren.

Darin McAreavey

Hey Darren.

Darren Aftahi – Northland Securities

So a couple of things. First, on the $1.6 backlog, maybe just a little idea is terms of revenue type and then perhaps vertical and then I’ve got two more follow ups.

Darin McAreavey

I can answer that if you want Scott. This is Darin. Yeah, I mean the majority of that would still be Chrysler related. We did have a portion of it, probably in that $200,000 to $300,000 related to some hardware related on the on $1.8 million order that we did have that will recognized here in the third quarter.

And then there’s a lot of obviously content, service related work that we’re doing for our showroom learning. So those would be the bigger chunks. Chrysler, about $1.6 million was roughly about 800 and then we had a couple other larger projects included in that, one being Mall of America.

Darren Aftahi – Northland Securities

Okay, great. And then as I kind of look at your progress on the top line, do you guys still feel comfortable? I know you said in the past kind of $4 million is a breakeven level. It looks like if you net out what you’ve borrowed, your cash burn is a little over $2 million this quarter. You’ve got a little over $3 million left. Do you feel like you’re fully funded with the revolver and cash on the balance sheet that you can kind of get to where you need to on breakeven? And maybe give us an update in terms of whether you still think that $4 million is the number to get you to breakeven.

Darin McAreavey

Yeah, I mean obviously again, we’re focused more on working capital. You can see where we only from a working capital perspective, we’re down $1 million, but I’ve got a $1.8 million receivable with Chrysler right now. So that’s why I focus more on working capital and again, we’ve got the line of credit.

So we feel that we’re adequately funded right now. We’re focused on – we’re seeing acceleration of the business. The top line is growing. The non-GAAP EBITDA losses is obviously improving sequentially here and so we’re just focused on execution right now.

Darren Aftahi – Northland Securities

And will you realize that receivable, all of it in the third quarter?

Darin McAreavey

Well, $1.6 million of the $1.8 million was recognized in Q2 so the hardware that I referenced earlier in your initial question that will be recognized in Q3. It was all build.

Darren Aftahi – Northland Securities

Great. Got you. Fantastic. I’ll jump back in the queue. Thanks.

Darin McAreavey

Thanks Darren.

Operator

Thank you. Our next question comes from Marco Rodriguez of Stonegate Securities. Your line is open.

Marco Rodriguez – Stonegate Securities

Good afternoon guys. Thanks for taking my question.

Scott Koller

Hey Marco.

Marco Rodriguez – Stonegate Securities

I just wanted to follow up, maybe clarify something here on that last question. So the $1.6 million that you recognize in revenue in Q1, the receivable, has that been collected already in Q2?

Darin McAreavey

It was actually Q2. We received the order at the end of ...

Marco Rodriguez – Stonegate Securities

(Inaudible)

Darin McAreavey

I’m sorry, what was that Marco?

Marco Rodriguez – Stonegate Securities

I apologize. Have it been already collected in Q3?

Darin McAreavey

No. It’s in our $3.3 million of receivables at the end of the quarter.

Marco Rodriguez – Stonegate Securities

Okay. Okay.

Darin McAreavey

We’re under net 60 terms with Chrysler.

Marco Rodriguez – Stonegate Securities

Okay. Okay. And then I was wondering if you could provide a breakout of revenues by your major clients.

Darin McAreavey

Yeah, I’ve got it right in front of me here. So of the $3.1 million we did, Chrysler was $1.9 million of that. Fiat, because we get individual dealer enrollment forms, I broke that out separately as $420,000 of that number. Airmark was $200,000. Thompson Reuters was a little over $100,000, and it falls off pretty quickly after that.

Marco Rodriguez – Stonegate Securities

Okay.

Darin McAreavey

So those are the bigger chunks.

Marco Rodriguez – Stonegate Securities

Sure. Sure. And then I was wondering if you could talk a little bit about your services in other revenue. Was kind of flat year over year and down sequentially. Can you kind of talk about what’s driving that right now?

Darin McAreavey

Obviously the mix is between our ongoing hosting and recurring which was $400,000 of the number and then the balance is just going to be the level of work we get with Chrysler. We actually have I would say more content, learning related work in the first quarter, less so in the second, although we’re currently set up where we’ve got a blanket PO with Chrysler right now, so we’re fully expecting additional orders related to services related work here in the third and fourth quarter this year.

So I think it’s just really the ebbs and flows of the timing of when that work comes in and I would say it was stronger in the first, less so in the second and we’re expecting to pick back up here in the third and fourth.

Scott Koller

Yeah Marco, to add to that, if you think about fourth and first quarter when it comes to launching a new product line and updating I Showroom to enhance the new automobiles coming out, that’s when we get the bulk of the work with Chrysler for the content and services side of it for updating I Showroom and other e-learning initiatives.

Marco Rodriguez – Stonegate Securities

Okay. And then can you talk a little bit about the gross margin in that segment as well? It kind of came down sequentially a fair amount.

Darin McAreavey

Yeah, we try to manage it the best we can. We obviously have access to contract labor so just again with the ebbs and flows of the business, but we do have a fixed cost structure so when we have less billable work, it obviously has negative impact to the margins and that’s what we saw in the second quarter.

Marco Rodriguez – Stonegate Securities

And last question I have, you gave some nice commentary with regard to the QSR market. I was wondering if you have any other commentary with regard to seeing anybody trying to get ahead of these regulations, get ahead of the game if you will, or is it kind of just status quo if you will.

Scott Koller

No, I don’t think status quo is the right nomenclature for that. In fact, I think the activity in that space is greater than we’ve ever seen from a standpoint of looking at the technology three years ago and how it may address this problem or this operational issue they have with getting calorie information up on the board, to really understanding that getting the content from point A to point B and having it play when we want to is not the major hurdle they have to tackle.

We have clients now looking more at how they effectively day par break away from traditional day pars, understanding that they may have breakfast, lunch and dinner, but they may also have a late night crowd or a snack crowd from the 2:00 to 5:00 o’clock arena.

So I think what we’ve seen our customers do is in the belief that they can get content from point A to point B and get it to play when and where they want to is there. Now they’re looking on how to optimize from traditional menu boards and really optimize the technology to its fullest capability.

So the activity in that area has never been stronger. It’s never been more aggressive. But, driving it at the same time is the calorie information. Most of those folks, if not all of them will have to address the calorie information in static or digital, so they’ll be replacing menu boards regardless of what route they choose to go.

Marco Rodriguez – Stonegate Securities

And so would you characterize – obviously I understand that it’s changing quite significantly from two years ago versus today, but how would you characterize the activity versus this time last year or even at the tail end of fiscal 10?

Scott Koller

Much more activity than even last year. Even in ‘09 when there was a lot of RP’s for people starting to put their toe to the technology and see what might apply to their brand, but the activity has never really been more aggressive than we’re seeing right now.

The difference, I think the biggest difference is (inaudible) are actually looking for vendors and then they’re stating actual timelines on when they’ll roll out the technology, when three years ago, it was they’ll test the technology and determine how it fits their brand. So I think it’s much more aggressive and much more objective in the way they’re looking at it.

Marco Rodriguez – Stonegate Securities

Okay, great. Thanks a lot guys.

Scott Koller

Thanks.

Operator

Thank you. Our next question comes from Ty Lilga of Feltl & Company. Your line is open.

Ty Lilga – Feltl & Company

Hey guys.

Scott Koller

Hey Ty.

Ty Lilga – Feltl & Company

A couple of questions. First of all, with the new strategy, I was wondering if you were starting to get some visibility on some future content revenue. Outside of Chrysler, do you have anything you think could happen in the next couple quarters?

Scott Koller

Absolutely. We’ve had – our content continues to be a differentiator for the ability of our content engineering group working with the brand itself and their ad agencies and taking their vision, their logo, their story, and turning it into a piece of content we can manage remotely is a very strong asset of this company, and has really driven some success at other pilots that was outside even the scope of the technology.

So we’re really proud of that group and we do know that that will open up different streams of content revenue for us as we deliver that content in an array of different methods. So absolutely, we see the opportunity there.

Ty Lilga – Feltl & Company

How long would the typical sales cycle be on winning a deal like that? Does it take a certain amount of time to happen or could it come up fairly quickly if a client decided they wanted to go ahead with the content development?

Scott Koller

Yeah, to put that in context, nowhere near the sales cycle we’ve experienced in rolling out a network. So incrementally being able to integrate say a QR or a text campaign into a loyalty program or to be able to – any other type of content that’s going to host a micro site and/or do some type of limited time offer promotion or marketing initiative on Facebook or some kind of social media outlet.

Turnaround time and best sales cycle is much faster than deploying a digital signage network, so I would expect the sales cycle to be much more traditional in that and not the digital signage pilot program that we have gone through.

These aren’t really pilot program type initiatives. This is we need a piece of content deployed, and it’s really timely type initiatives.

Ty Lilga – Feltl & Company

Is it – would it be fair to say at this point you’ve given the pitch to all your clients and that maybe you’re bouncing some ideas back and forth about kind of broadening your engagement with them?

Scott Koller

Absolutely. When we set out prior to launching it, and we had finished the strategy, as hard as you may try to develop a strategy as open minded as you can, it’s still in a conference room and in a bit of a vacuum, so you really feel like you’ve put the bullet proof vest together, but you haven’t let any customers really take a shot at it.

So we spent most of April, May and June going out to all of our key customers showing the direction we’re going and the feedback was really positive. Two general comments; one was absolutely heading in the right direction. We have issues when it comes to promotion. Our marketing initiative, a limited time offer on making these silos of social, mobile web and signage and source signage talk, and that one comment was we’re heading in the right direction.

The other one was, it just really affirmed to them that they had picked the right technology partner to begin with. So I think they liked our approach and they liked our looking at solving more than one problem for them.

Ty Lilga – Feltl & Company

All right. And just last question, I think you guys were anticipating some further orders from Snap Fitness in the second half of the year. Do you have a sense of when those might go through?

Scott Koller

Yeah, we continue to do the installs for Snap Fitness. I don’t have a total running count but we – I’m assuming by the end of the Q3 or by the end of the year, there will be 1,000 locations installed. I know we’re 500 plus strong right now.

But the installs have been – they’re throttled by Snap as they put – they’re doing the installs themselves, so it’s throttled by Snap. But no, we continue to install Snap stores and I am confident we’ll have 1,000 installed by the end of the year.

Ty Lilga – Feltl & Company

Okay. All right. Well thank you.

Scott Koller

Thanks Ty.

Operator

Thank you. Our next question comes from Jim Schurr from Stifel Nicolaus. Your line is open.

Jim Schurr – Stifel Nicolaus

Hi guys, how are you.

Scott Koller

Great. How you doing Jim?

Jim Schurr – Stifel Nicolaus

Great. Good thanks. Quick question here. It looks like everything is, with our existing clients is going very, very well and service and the whole ten yards there, but knowing to get to the next level where we all want to be as shareholders, we need of course to keep working on some new business. And my question kind of goes with two places. I know that for a long time we’ve been talking about KFC and possibly a bank. Are our conversations – are we still keeping dialogue with those folks? Are we still moving ahead or what’s your thoughts on those?

Scott Koller

Absolutely Jim. The opportunity with the bank, we’ve actually done some additional installs. I think we’re up to 58 to 60 installs, so the opportunity is still alive and present and continues to be bantered back and forth with them on a weekly basis. So it’s still very much alive and well. And again, the target there is, there’s another close to 3,000 locations.

KFC continues to be there and all QSR’s are – I mean between QSR and automotive, 99.9% of our time is spent right there focusing on not only our current clients where we continue to see growth, but new clients. We understand new client adoption and leveraging our success of getting the pilots is only part of it. We need to leverage that into a roll out.

So absolutely, the number one primary focus of this company is revenue and performance right now and it’s going to take our current clients and new clients to help us achieve that objective.

Jim Schurr – Stifel Nicolaus

Okay. And so like compared to last year that you folks are getting a lot of bids and a lot of that type of – a lot more excitement now than you did in the past so to speak.

Scott Koller

Yes sir. It’s a continuing – it’s hard in a call to give you a gauge of the momentum, but again, as I mentioned before, the objectives of our clients right now are much more pointed. They’re much more timeline based.

There’s no longer really the experiment whether content can be delivered from point A to point B and managed centrally. The conversation is how do we best maximize that technology now by effective day parting, by breaking away from the traditional day part of breakfast, lunch and dinner.

There are a variety of different day parts. Even if every single item on our menu board needs to be up 24/7, it doesn’t mean that all of them have to be emphasized the same way. The crowd is very much different in that sack hour from 2:00 to 5:00 than it is at lunchtime.

So I see our clients maximizing the technology now as they prepare to roll out, instead of trying to test to see if companies like our can get content from point A to point B. Does that make sense?

Jim Schurr – Stifel Nicolaus

Absolutely. Well, you hit everything good. Congratulations on this quarter, the great progress your team is making and keep up the good work.

Scott Koller

Thank you Jim.

Operator

Thank you. We have a question from Arthur Freedman from Freedman Asset Management. Your line is open.

Arthur Freedman – Freedman Asset Management

Yeah, hi guys. How are you doing? Congratulations.

Scott Koller

Thank you.

Arthur Freedman – Freedman Asset Management

I just have one quick question. I was looking at the sales and cost of sales and I was wondering, are you able to share with us just in terms of these three categories, hardware, software and services, just the margins for each of those, just give a sense?

Darin McAreavey

Yeah, hold on here. I’ve got that in front of me. So we’re still averaging roughly 30% on our hardware and again, primarily the media player that we resell that we’re adding a lot of value to, so we command that type of a margin. Software is right around 90%. Then our services, we’re roughly 43% for the quarter.

Arthur Freedman – Freedman Asset Management

All right. I just wanted to mention everyone on the call that on a few in the last few months, recent trips around the country to Ohio area and like the east coast, I noticed that digital is just – it’s not like centralized. It’s like here and there but it’s appearing in the sense as I look at the environment – it’s appearing more and more. It’s just an observation.

Scott Koller

We would echo that. You see an awful lot more whether it’s interactive, non-interactive or a kiosk type application. The adoption of it is definitely growing.

Arthur Freedman – Freedman Asset Management

All right. I just wanted to mention that. It’s not a question, but it’s just an observation. I was curious. Great job guys. Thank you very much.

Darin McAreavey

Thank you.

Scott Koller

Thank you Arthur. Thank you.

Operator

Thank you. Our next question comes from Joseph Novak of Novak Knowledge. Your line is open.

Joseph Novak – Novak Knowledge

You haven’t said anything about competition and how you’re dealing with that. I know that there’s a lot of competition out there for digital signage.

Scott Koller

Yeah, there is a lot of competition and one of the key elements and the key drivers to the strategic planning we did earlier in the year and rolled out was dealing exactly with that competition. Our space has an awful lot of apples to apples comparison.

At the end of the shareholder meeting, I sort of described that if you go from booth to booth to booth at a trade show, it will be I have digital signage, but mine is better or I have a network operations center, but mine is better, or content.

And the reason we went down the path we did was to get beyond the apple to apple. We termed it beyond the shiny apple because we’re just trying to sell a shinier apple there. That’s the only differentiation we have, and by addressing and talking to our clients, there are other needs that when they launch any kind of promotion, any kind of initiative, any kind of limited time offer, that it’s not just going into in store signage.

It’s not just going in that environment. It has to go to social. It has to go to the web and it has to go mobile, and that’s the day and age we’re in and if we can come in and help them orchestrate any or all of those technologies in one fell swoop, we’re adding a tremendous amount of value there.

So the competition is there. There’s people that continue to work on driving content from point A to point B. What we’ve really worked hard on, on the differentiation side is that point B may vary greatly whether it’s a tablet, a micro site, a smart phone, in store signage, or what not. It can vary greatly. So we worked awfully hard on that differentiating factor for the company.

Joseph Novak – Novak Knowledge

That sounds encouraging. Thank you.

Scott Koller

No, thank you.

Operator

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Source: Wireless Ronin Technologies' CEO Discusses Q2 2011 Results - Earnings Call Transcript
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