By: Dylan Sikes - AllPennyStocks.com News

Tuesday, July 30, 2013

Many companies have faced tough challenges in recent years, not only generating revenue and profits, but also subsequently with regards to meeting listing requirements for senior exchanges. Of course, some companies have been forced to go the bankruptcy route, effectively removing deliberations about meeting requirements. Many go the route of reverse splits or employ other means to maintain listings. Still others go the route of delisting; seeing value in the trading platform of the OTC Markets Group (OTCQX:OTCM) and saving the company – and shareholders – thousands of dollars annually. This was the path of marketing technologies solutions provider Wireless Ronin Technologies, Inc. (OTCQB:RNIN) late in May when it chose not to appeal the delisting notice from NASDAQ.

While many people on Wall Street may look down their nose at OTC companies, the tiered platform of OTC Markets Group has garnered wide acceptance for delivering high standards of transparency to the markets. To maintain an “OTCQB” standing, companies must meet certain requirements, including being fully reporting with the Security and Exchange Commission.

Wireless Ronin filed its latest quarterly report with the SEC on Tuesday for the quarter ended June 30, which showed a 69-percent rise in second-quarter revenue compared to last year’s quarter.

The Minneapolis-based company reported revenue of $2.63 million for the latest quarter, up from $1.58 million in the year prior period. Meanwhile, operating expenses were trimmed from $2.15 million to $1.89 million. Net loss for the quarter was down to $76,000, or 1 cent per share, versus $1.21 million, or 26 cents per share, in the second quarter of 2012.

Scott Koller, president and chief executive of Wireless Ronin, said that the company implemented a restructuring plan to further conserve cash and maximize efficiency. The company anticipates $1.3 million in operational cost savings annually and additional strategic financial opportunities from the efforts.

On an adjusted basis, which excludes stock-based compensation, one-time costs and gains and other special items, Wireless Ronin posted its first-ever positive quarter, with $77,000, or 1 cent per share, in profits. This compares to an adjusted net loss of $999,000, or 22 cents per share, in last year’s quarter.

Gross margin of $1.8 million improved 860 basis points to a record 69 percent of total revenue. Gross profit of 92 percent also represents an all-time high for the company.

There were plenty of drivers for the record-setting quarter. Wireless Ronin partnered with Delphi Display Systems, a maker of LCD based display systems, to provide solutions to the quick-service restaurant and gas station markets that will utilize the RoninCast 4.0 software. The new deal brought $750,000 in payment as part of a minimum $2 million purchase. World renowned Indian Motorcycle placed purchase orders totaling $267,000 to launch interactive digital signage at 35 of its dealerships. Amongst other household names, the company received a $452,000 purchase order from food service and facilities management company ARAMARK.

Further, Wireless Ronin will be drawing additional revenue through its partnership with Delphi Display, which recently penned an agreement with MedMedia Healthcare network for Delphi’s signage solution at 50 locations with plans to expand to 500 locations. Those units will be employing RoninCast 4.0.

The move to the OTCQB late in May hit shares of RNIN, stripping about 30 percent from the stock value the day of the news. Shares continued to slump, dipping as low as 55 cents in June, but are making up some ground in recent weeks. Even with today’s rise of 12 percent to 81 cents, the company is still only sporting a market capitalization of $4.8 million. With that in mind, the improved earnings report will be having investors wondering if the worst is behind the company. Granted, the quarter featured some big contracts that inflated sales, but if they are a precursor to addition deals and the company can maintain some reshaped expense habits; it just may be. Proper due diligence is, as always, encouraged.

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