Penniless Ronin’s Hole Gets Deeper
As of 30th September 2008, Wireless Ronin’s cash and marketable securities totaled approximately USD 18 million – at their current burn rate that gives them three and a half quarters (less than 12 months of course) before they finally run out of cash.
We listened to their Q3 earnings conference call yesterday and wow were the analysts grilling them in a big way! Our biggest takeaway – err, okay now you know their is a pun coming, Ed – was Ronin’s perceived relationship with KFC.
For some while now Ronin has been touting deals with the likes of KFC and Chrysler when in fact all they are is pilot projects with some hope BUT no certainty of a larger rollout.
In the conference call Ronin finally admitted that neither pilot was funded by the corporate parent – i.e. each rollout was in fact dependent upon getting individual franchisees and dealers to buy in with real money.
It’s not hard to figure out how they burn USD 1.1M in cash every month when with a quick calculation, even AFTER the recent 22% staff layoff, they are still only able to generate USD 60K in revenue per employee – can you believe that they still have 125 staff and contractors?
Wireless Ronin reported revenue of USD 1.9 million for the third quarter of 2008 and a third quarter 2008 net loss of USD 4.6 million compared to a net loss of USD 2.4 million in the year-ago quarterly period.
We are not sure how you can lose just over 2 dollars (yes, USD 2.42) for every dollar of product you sell and consider that sort of business a going concern.
Wireless Ronin (Nasdaq: RNIN) stock now trades at a market capitalization just about USD 1 million above the cash on hand.
See all of our coverage of Wireless Ronin here.
November 11th, 2008 at 17:39 @777
Where do you get your facts? Were you on the same call that I heard? They announced a formal market test with KFC in January for 24 stores. Now they are up to 78 and all of those additional systems have been paid for in-full. How is that a failed KFC program?
November 11th, 2008 at 18:17 @803
Dear Ms Anonymous, read the post again we never said the KFC program was a failure, we quote “Our biggest takeaway was Ronin’s perceived relationship with KFC” – the January announcement was a little unclear as to how the rollout was funded, we quote again “For some while now Ronin has been touting deals with the likes of KFC and Chrysler when in fact all they are is pilot projects with some hope BUT no certainty of a larger rollout”
Bottom line KFC head office is NOT funding the roillout – it is indeed down to the individual owners and franchisees.
We never said it was a failure, by all reports it’s not a bad rollout (feel free someone to send us some pictures) but its definitely not a ‘CORPORATE’ deal