Redline Communications Reports 2021 First Quarter Results

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TORONTO – May 12, 2021 – Redline Communications ( Group Inc. (TSX: RDL), the creator of powerful wide-area wireless networks for mission-critical applications in challenging locations, today announced operating results (in US dollars unless otherwise noted) for the first quarter ended March 31, 2021.

Revenue for the first quarter ended March 31, 2021 (“Q1 2021”) was $3.7 million, down 17% from Q1 2020. The decline was primarily the result of business impacts associated with COVID-19 including, but not limited to, access to customer sites, delays in customer purchasing decisions and longer supplier lead times. However, the sales pipeline indicates that there is pent-up demand from customers to expand and upgrade current installations to support mission-critical applications, including industrial LTE mobile network infrastructure.

Order Bookings1 for Q1 2021 were $3.3 million, down 44% compared to same quarter in the previous period. Order Backlog for the quarter ended March 31, 2021 was $11.3 million, down 4% from Q4 2020.

“In the quarter, we were pleased to announce the $14M CDN investment by the Canadian Government’s Strategic Innovation Fund (SIF) which will help finance accelerated development of our innovative industrial 5G network solutions. While Bookings and revenue were impacted by COVID, including a delayed shipment of a $1.6M order, our pipeline continues to grow, especially for industrial LTE solutions” stated Stephen Sorocky, Redline’s CEO. “We are building on Bookings received for our industrial LTE products in Q4 2020, accelerating development, and expanding channel partnerships to meet the demand coming from current and prospective customers in our pipeline. We were pleased to receive our first order for a limited release of our next generation virtual fiber product, the RDL 3200 , scheduled for shipment in June and which will serve as a reference for this exciting evolution of our product line”.

Key financial highlights for the three months ended March 31, 2021 (“Q1 2021”) include:

1 See Definitions of non-GAAP measures below

Financial and Business Review

Due to consistent sequential strength in building recurring revenue streams over the previous eight quarters, the company achieved record gross margins of 69% in the quarter, resulting in an increase of 6 percentage points compared to Q1 2020.

Operating expenses for Q1 2021 were $3.9 million, down 5% over Q1 2020. The decline year-over-year was mainly driven by decreases in Administrative and General expenses along with decreased costs related to sales, marketing and travel, as COVID-19 has prompted the suspension of nearly all business travel. These decreases are partially offset by increases in the Research and Development and Operations functions as the company moves forward with new product development and new product launches.

In the quarter, the Company continued to participate in the Canada Emergency Wage Subsidy (“CEWS”) program recognizing a benefit of $0.3 million which is recorded within other income.

Net loss for Q1 2021 was $1.2 million, a decrease of $0.2 million over Q1 2020. Adjusted EBITDA loss for Q1 2021 was $1.1 million, as compared to $1.0 million in Q1, 2020.

Cash Balance, net of borrowings, at the end of Q1 2021 was $4.3 million, a decrease of $1.0 million over Q4 2020.

On March 31, 2021 Redline announced that the Canadian Government had approved an investment into Redline via their Strategic Innovation Fund (SIF). This investment brings up to CDN $14 million into the Company, earmarked for the development of an innovative industrial 5G network solution. Under the terms of the agreement, the fund will reimburse 41.52% of eligible R&D costs (labor, equipment and materials) incurred by Redline. The first investment submission of approximately $460K for the period between August 2020 and March 31, 2021 was submitted to the fund just after the close of Q1. This first payment is expected to be received by Redline in Q2 2021 and going forward, payments to Redline from the fund will be made quarterly.

“Although bookings declined in the quarter due to deployment delays caused by COVID-19 lockdowns and restrictions globally, growing recurring revenues helped to reduce the financial impact to operations and we are pleased with the growing proportion of our pipeline associated with our mobility solutions,” stated CFO Philip Jones. “The SIF funding program provides low-cost capital for us to accelerate product development with capital efficiency so that we can capture growing customer demand for industrial data infrastructure to support mission critical IoT applications.”

Conference Call and Webcast – May 13, 2021 at 10:00 a.m. ET

A conference call and webcast to discuss the results has been scheduled for Thursday, May 13, 2021 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 8884985. A recording of the call will be available through May 20, 2021 on Redline’s website or by dialing 1-416-849-0833 and entering the same passcode.

About Redline Communications

Redline Communications (TSX: RDL) designs and manufactures powerful wide-area wireless networks for mission-critical applications in challenging locations. Redline networks are used by oil & gas companies onshore and offshore, mining companies on surface and underground operations, by municipalities to remotely monitor infrastructure, and by specialized 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 IoT, 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

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Redline Contacts:

Stephen Sorocky
Chief Executive Officer
[email protected]

Philip Jones
Chief Financial Officer
+1 (905) 479-8344
[email protected]



1  To better assess the health and growth of the Redline’s business, the Company reports certain non-IFRS metrics, including “Bookings”, “Order Backlog”,“Adjusted EBITDA” and “Adjusted EBITDA Margin”. Further information including definitions of these measures and a reconciliation to their closest IFRS measure, if applicable, can be found in the Company’s Management Discussion and Analysis for the three months ended March 31, 2021 (“Q1 2021 MD&A”), copies of which are available on SEDAR at Further details on the three months ended March 31, 2021 can be found in the condensed consolidated statement of financial position, statement of comprehensive loss, statement of changes in equity and statement of cash flows reproduced at the end of this press release. The selected financial information included in this release is qualified in its entirety by, and should be read together with the condensed consolidated financial statements of the Company for the three months ended March 31, 2021 and the Q1 2021 MD&A.


Forward Looking Statements

Certain statements in this release may constitute forward-looking statements or forward-looking information within the meaning of applicable securities laws. In some cases, forward-looking statements can be identified by terms such as “could”, “expect”, “may”, “will”, “anticipate”, “believe”, “intend”, “estimate”, “plan”, “potential”, “project” or other expressions concerning matters that are not historical facts. Readers are cautioned not to place undue reliance upon any such forward-looking statements. Such forward-looking statements are not promises or guarantees of future performance and involve both known and unknown risks and uncertainties that may cause the actual results, performance, achievements or developments of Redline to differ materially from the results, performance, achievements or developments expressed or implied by such forward-looking statements. Forward-looking statements, by their nature, are based on certain assumptions regarding expected growth, management’s current plans, estimates, projections, beliefs, opinions and business prospects and opportunities (collectively, the “Assumptions”). While the Company considers these Assumptions to be reasonable, based on the information currently available, they may prove to be incorrect.

Many risks, uncertainties and other factors could cause the actual results of Redline to differ materially from the results, performance, achievements or developments expressed or implied by such forward-looking statements. These risks, uncertainties and other factors include but are not limited to the following: significant competition, competitive pricing practices, cautious capital spending by customers, industry consolidations, rapidly changing technologies, evolving industry standards, frequent new product introductions, short product life cycles and other trends and industry characteristics affecting the telecommunications industry; any material, adverse effects on Redline’s performance if its expectations regarding market demand for particular products prove to be wrong; any negative developments associated with Redline’s suppliers and contract manufacturing agreements including the Company’s reliance on certain suppliers for key components; potential penalties, damages or cancelled customer contracts from failure to meet delivery and installation deadlines and any defects or errors in Redline’s current or planned products; fluctuations in foreign currency exchange rates; potential higher operational and financial risks associated with Redline’s efforts to expand internationally; a failure to protect Redline’s intellectual property rights, or any adverse judgments or settlements arising out of disputes regarding intellectual property; changes in regulation of the wireless industry or other aspects of the industry; any failure to successfully operate or integrate strategic acquisitions, or failure to consummate or succeed with strategic alliances; and Redline’s potential inability to attract or retain the personnel necessary to achieve its business objectives or to maintain an effective risk management strategy (collectively, the “Risks”).

For additional information on these Risks, see Redline’s most recently filed Annual Information Form (“AIF”) and Annual MD&A, which are available on SEDAR at and on the Company’s website at Redline assumes no obligation to update or revise any forward-looking statements or forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by law. All forward looking statements contained in this release are expressly qualified in their entirety by this cautionary statement.