Creative Realities, Inc. (CREX) Q4 2011 Earnings Report, Transcript and Summary

Good afternoon. Welcome to Wireless Ronin Technologies’ Fiscal 2011 Year End Earnings Call. My name is Craig and I will be your conference this afternoon. Before we begin today’s call, I would like to remind everyone that this call will be available for replay through April 8, 2012 starting later this evening. A webcast replay of this will also be available via the link provided in today’s press release as well as available on the Company’s website at www.wirelessronin.com. I would now like to turn the call over to Brenda Seiler, Wireless Ronin’s Marketing Communications. Brenda?

Thank you and welcome, everyone, to Wireless Ronin’s Fiscal 2011 Year End Earnings Call. With me today are 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 year and turn the call back over to Scott for operational update, then we will open up the call to your questions. To access today’s webcast, please go to the Investors section of our corporate website at www.wirelessronin.com. Please note that the information presented and discussed today includes forward-looking statements made under 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 certainties to our forward-looking statements. Risk and uncertainties that could cause our actual results to differ from those expressed or implied by forward-looking statements, including those set forth in the Risk Factors section of the annual report of 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 reconciliation from GAAP results to non-GAAP measures, how the non-GAAP measures provides useful 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. Now, I’ll turn the call over to our President and CEO, Scott Koller. Scott?

Thank you, Brenda. Good afternoon, everyone, and thank you for joining us on today’s call to discuss our fiscal 2011 results. 2011 was an exciting year for Wireless Ronin and marked our third consecutive year of revenue growth. It also marked a year of transformation for Wireless Ronin. With a stronger more diversified technology offering and a stronger executive team and board of directors, I believe we have laid the foundation for a successful 2012. But before I comment further, I’d like to turn the call over to our CFO, Darin McAreavey, who will walk you through the financial results. Afterward, I will talk about operational highlights and business outlook. Darin?

Thanks, Scott, and good afternoon, everyone. Revenue for 2011 increased 8% to a record $9.3 million from 2010. The increase was primarily attributable to Chrysler’s deployments of our iShowroom-branded tower application into Chrysler and Fiat dealerships. Since the inception of the program, we have now received orders for 578 dealerships. We believe that Chrysler will continue to roll out additional interactive kiosks between the iShowroom application with further dealership adoption of 2012. Total revenue generated at 2011 from Chrysler and Fiat dealerships was up 28% to $5.1 million from 2010. Revenue in 2011 was also driven by orders from ARAMARK, which were up 48% to $1.7 million from 2010. We continue to expand the number of grow-work installations with several new colleges and universities. Upon the completion, the installation for orders received through December 31, 2011, the total number of ARAMARK locations being managed through our network increased more than 175% to approximately 250 sites compared to 90 sites at the end of 2010.

In Q4, we initiated the rollout of our RoninCast system to 40 sites of a major retailer with more than 390 stores across North America. We were chosen based on our proven ability to streamline the sales process with a comprehensive solution that provides client satisfaction and delivers a high ROI. To enhance the various test points within the sales cycle, the retailer engaged Wireless Ronin to develop interactive experiences, manage to do a network Apple iPad devices for sales consultants, customer-facing, in-store touchscreen kiosks and a consumer Web interface. Integrating marketing and sales support communications across various customer touch points was one of our main objectives for this client and this is what we excel at. Our innovative and highly engaging retail solutions turn regular store environments into powerful customer experiences that can take a brand to new levels. We are especially excited about this project as it is a great example of our marketing technologies, capabilities, in action and provides conformation that the market is looking for these types of multichannel digital solutions. We believe this type of deployment represents a springboard to more wins in 2012. During 2011, we also grew the number of sites deploying Thomson Reuters Infopoint digital signage to 440 locations and look forward to new opportunities with Thomson Reuters in 2012. This expansion with Thomson Reuters, as well as several other clients, including Chrysler, ARAMARK, SNAP Fitness, and Johnny Rockets, brings the total number of media players supported by Wireless Ronin's technology to more than 7,000. As we look to 2012, we see our sales opportunities and pipeline in our three key verticals, QSR, Automotive and Retail, growing. And we continue to receive orders from various clients in these vertical as they integrate technology to create a unique experience for their customers. Additionally, we continue to make traction on our pilot work in our QSR vertical, particularly as we anticipate the FDA announcement for its new nutritional disclosure regulations for QSR menu boards in 2012. We are confident that our centralized digital solution will create operating efficiencies and promote higher compliance for QSRs under the FDA regulations. Also in 2011, we significantly enhanced our leadership team adding four key new board members with relevant industry and financial experience as well as bringing on a new Senior Vice President of Sales, Jane Johnson and Ben Nelson as Senior Vice President of Product Development and Chief Technology Officer. Their collective experience, knowledge, and enthusiasm, will guide Wireless Ronin to continue success. Jane is working closely with our new marketing partner, Keyser Industries, a provider of many boards to McDonald's in the U.S. and a number of other important QSRs. Our combined companies can help our clients offer a more integrated marketing approach that can provide a superior ROI by enhancing the customer experience and driving lift. We believe our joint marketing agreement with Keyser Industries, together with our strength and balance sheet gives us the resources to pursue new clients and large scale rollouts in QSR and other verticals. In summary, our improving financial results reflect our commitment to achieving profitability. We continuously push ourselves to optimize our organization and prove our processes and reduce expenses. The growing demand for new marketing technologies continues to accelerate and we believe we now have the key elements in place to realize future revenue growth through further penetration of our verticals. As we reflect on 2011 and look forward to the success of 2012, I am reminded of what we accomplished during my first year as CEO. We developed and successfully launched a new strategic plan, taking our product line far past traditional digital signage systems and into an array of different marketing technologies. This shift in strategic direction has already paid dividends as we have continued to grow revenue while we target new opportunities outside our historic core competencies. Wireless Ronin continues to show our commitment to profitability and wants our investors to know we are focused on revenue growth while making sure that our expenses are aligned to meet our clients' commitments and in line with our anticipated revenue. As outlined by Darin, revenue continued to grow with Chrysler up 28% and ARAMARK up 48% year-over-year. We believe our pilot programs and pipeline will yield other key accounts that will contribute to revenue in 2012. And we strengthen our executive team during the year adding key executive like Jane Johnson and Ben Nelson and new board members, including Michael Howe, Howard Liszt, Kent Lillemoe and Oz Tangun. Together, the executive team and board of directors have worked as a cohesive team and are committed to delivering continued success. Before we open the call to your questions, I would like to express on the behalf of the entire leadership team our appreciation for continued support we received from our partners, clients, employees and shareholders. Now with that, we're ready to open the call for your questions. Operator, please provide the appropriate instructions.

Thank you very much. Ladies and gentlemen, at this time we will begin the question-and-answer session. (Operator instructions) And our first question does come from the line of Nick Mara with Sidoti & Company. Nick Mara - Sidoti & Company: Hey, guys. How are you doing?

Hey, Mara. How are you doing? Nick Mara - Sidoti & Company: Good. With the iShowroom for Chrysler it seems like some of the revenues from work that's being done it keeps getting pushed back. You know when you might start collecting on some of that?

Nick Mara - Sidoti & Company: (Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities.

(Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities. Nick Mara - Sidoti & Company: (Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities.

(Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities. Nick Mara - Sidoti & Company: (Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities.

(Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities. Nick Mara - Sidoti & Company: (Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities.

(Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities. Nick Mara - Sidoti & Company: (Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities.

(Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities.

(Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities.

(Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities. Nick Mara - Sidoti & Company: (Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities.

(Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities.

(Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities.

(Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities. Ty Lilga - Feltl & Company: (Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities.

(Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities.

(Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities. Ty Lilga - Feltl & Company: (Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities.

(Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities. Ty Lilga - Feltl & Company: (Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities.

(Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities.

(Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities. Ty Lilga - Feltl & Company: (Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities.

(Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities. Ty Lilga - Feltl & Company: (Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities.

(Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities. Ty Lilga - Feltl & Company: (Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities.

(Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities. Ty Lilga - Feltl & Company: (Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities.

(Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities.

(Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities. Ty Lilga - Feltl & Company: (Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities.

(Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities.

(Operator instructions) And our next question does come from the line of Don McKiernan with Landolt Securities.

Thank you. Wondering if, if the QSR space, if there's been any decision making by any of these QSRs to go with a competitor?

Well, I think there was some public knowledge earlier, that Dairy Queen went with another competitor. But the ones that we've been in pilot with, and the ones we've been working with, no.

Okay. Is that the only one out there, Dairy Queen, that you're aware of or?

Yeah. That's the only one that, that we can say that we were not chosen.

Okay.

With the ones that we're working with right now and piloting with right now.

Well, you would think that by now, of course, sounds like a broken record the last couple of quarters, but something, some decision making would be made and things would be moving forward, but I guess we'll have to continue to wait, so.

I can add a little to that. The, the, the urgency with the calorie information to get on the menu board has subsided just a tad. The FDA has not come out with their final ruling. We don't know when they're going to. They haven't given any guidance when they'll come out with the final ruling. However, in an election year it's our gut feel that it may not come out in this year prior to the election, but at the same time they continue to say that they were coming out with some kind of mandate for the calorie count. It just hasn't come out and we've been waiting since probably, with the rest of the industry, since August.

Right, right. Okay. Thanks and good luck this year.

All right, thank you.

And our next question does come from the line of Tom Pierce with Feltl & Company. Tom Pierce - Feltl & Company: Hi, guys.

Hey, Tom. Tom Pierce - Feltl & Company: You, I think, Scott, just got back from the Digital Signage Expo and I know you guys were in the running with Starbucks for an award and I'm just curious if you got one?

Yes, we did get an award and we should be able to share that soon, but, yes, we did. Tom Pierce - Feltl & Company: Very good. So Starbucks walked away with the trophy or did you both get one?

We both get one. And we just want to thank Starbucks for letting us work on that particular initiative with them because it was very-, it's been a rewarding initiative and the store celebrated last night, which was good for Starbucks. Tom Pierce - Feltl & Company: And that was in the Time Square?

Yes. Tom Pierce - Feltl & Company: Yeah, okay. Thank you. That's all.

Thank you.

Thanks, Tom.

(Operator instructions) And at this time I'm not showing any further questions in the queue. I would like to turn the call back over to management for any closing comments.

We want to thank our investors and everybody involved for their continued support and we appreciate it. Thank you very much.

Thank you. Ladies and gentlemen, that will conclude the conference for today. We do thank you for your participation. You may now disconnect your lines at this time.