TORONTO – August 9, 2017 – Redline Communications (www.rdlcom.com) Group Inc. (TSX: RDL), a leading provider of wide-area wireless networks for the most challenging applications and locations, today announced operating results (in US dollars unless otherwise noted) for the three months ended June 30, 2017 (Q2 2017).
Q2 2017 Financial Highlights:
- Revenues of $4.9 million, essentially unchanged from Q2 2016
- Gross margins of 52%, up 3 percentage points over Q2 2016
- Operating expenses of $3.2 million, a reduction of 36% over Q2 2016
- Net loss of $0.7 million, an improvement of $1.9 million over Q2 2016
- Adjusted EBITDA loss of $0.4 million, an improvement of $1.8 million over Q2 2016
- Cash of $11.5 million, or Cdn. $ 0.87/share, unchanged from Q1 2017
- Order Bookings of $6.1 million, essentially unchanged from Q2 2016
- Order Backlog of $6.3 million, up 20% over Q1 2017
Total revenue for Q2 2017 was $4.9 million, up 14% over Q1 2017 and essentially unchanged from the same period in 2016. New Order Bookings for Q2 2017 were $6.1 million, up 16% over Q1 2017 and unchanged from the same period in 2016.
“Redline has seen four consecutive quarters of Bookings growth, fueled by an increase in orders for our recently announced commercial product portfolio with its cost-reduced Enterprise radio, and by our first significant order for our new LTE product,” stated Robert Williams, Redline CEO. “This growth in orders has translated into double-digit increases in Revenues and Backlog compared to Q1 2017. We are pleased that our investments in new products and initiatives to reduce costs are starting to produce results.”
Overall gross margin for Q2 2017 was 52%, up three percentage points over the same period in 2016 but down five percentage points over Q1 2017, reflecting a shift in product mix in Q2 2017 to more revenue from the Company’s lower margin commercial product portfolio.
Overall operating expenses for Q2 2017 were $3.2 million, unchanged from the previous quarter and an improvement of 36% over the same period in 2016. The year-over-year decrease in operating costs is attributed to cost reduction initiatives implemented during the fourth quarter of 2016 to reduce compensation costs and contractual costs.
“Our attention to working capital and cost management has allowed us to introduce more competitively priced products while protecting our bottom line,” stated Jane Todd, Redline CFO. “We remain committed to closely managing our business as we continue to implement our strategic initiatives.”
Net Loss for Q2 2017 was $0.7 million, or ($0.04) per share, an improvement of 9% over Q1 2017 and an improvement of 73% as compared to a Net Loss of $2.5 million, or ($0.15) per share in the same period in 2016.
Adjusted EBITDA loss for Q2 2017 was $0.4 million, essentially unchanged from Q1 2017, and an improvement of $1.8 million, or 82% over the same period in 2016.
At June 30, 2017, Redline held cash of $11.5 million, unchanged from Q1 2017 and up $0.4 million from December 31, 2016.
The Redline Board of Directors also announced today that Jane Todd, Chief Financial and Operating Officer, has decided to leave the company to pursue another career opportunity. Jane joined the Company in the capacity as Chief Financial and Operating Officer in May 2016. The Board has appointed Joan Ritchie, VP Finance and Organizational Development, as Interim Chief Financial Officer. Jane has agreed to stay with Redline for a period of time to support an orderly transition.
Conference Call and Webcast – August 10th, 2017 at 10:00 a.m. ET
A conference call and webcast to discuss the results has been scheduled for Thursday August 10, 2017 at 10:00 a.m. Eastern Time. To participate, please dial 1-647-427-7450 approximately 10 minutes before the conference call, and provide passcode 56370080. A recording of the call will be available through August 18, 2017 on Redline’s website or by dialing 1-416-849-0833 and entering the same passcode.
About Redline Communications
Redline Communications (www.rdlcom.com) is the creator of powerful wide-area wireless networks for mission-critical applications in challenging locations. Redline networks are used by oil and gas companies to manage onshore and offshore assets, by militaries for secure battlefield communications, by municipalities to remotely monitor infrastructure, and by telecom service providers to deliver premium services. Hundreds of businesses worldwide rely on Redline to engineer, plan and deliver ruggedized, secure and reliable networks for their M2M, voice, data and video communications needs - in locations that include the deserts of the Middle East, the rainforests of South America, and the frozen Alaskan slopes. For more information visit www.rdlcom.com.
Chief Financial & Operating Officer
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+1 (416) 657-2400