Redline Communications Reports 2021 Second Quarter Results

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Q2 2021 Revenue grows by 27% sequentially with gross margin of 61%

TORONTO – August 11, 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 second quarter ended June 30, 2021.

Revenue for the second quarter ended June 30, 2021 (“Q2 2021”) was $4.7 million, up 15% from Q2 2020 and up 27% from Q1 2021. Order Bookings1 for Q2 2021 were $5.3 million, up 15% compared to same quarter in the previous period and up 60% quarter over quarter. Order Backlog1 for the quarter ended June 30, 2021 was $11.8 million, up 4% from Q1 2021.

“In Q2 20201, Redline saw an increase in orders from customers across all core vertical markets,” stated Ronan McGrath, Redline’s acting CEO and member of the Board of Directors. “Pent up demand from ongoing sales efforts during COVID-19 restrictions is now being turned into orders and shipments as the impact of the global pandemic diminishes,” he added. “The Middle East and South America, both key markets for Redline, were especially active in the quarter with orders coming from a broad range of customers. I am pleased with the continued success of our strategy of driving revenue through our distribution channels since 2019, when it was 14% of revenues, increasing to 25% in 2020 and now at 30% year to date. Driving sales through our distribution channels is also key in reducing the amount of inventory on hand.”

Key financial highlights for the three months ended June 30, 2021 (“Q2 2021”) include:

Key financial highlights for the six months ended June 30, 2021 include:

1 See Definitions of non-GAAP measures below

Financial and Business Review

Due to consistent sequential build of higher margin from recurring revenue streams over the previous ten quarters, the company achieved gross margins of 61% in the quarter, an increase of 3 percentage points compared to Q2 2021.

Operating expenses for Q2 2021 were $3.9 million, down 2% over Q2 2020. The decline year-over-year was mainly driven by lower severance costs incurred in the current year, compared to the same period in the prior year, combined with government grants in support of R&D activities. 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 $0.4 million which is recorded within other income.

Net loss for Q2 2021 was $0.7 million, an improvement of $0.2 million over Q2 2020. Adjusted EBITDA loss for Q2 2021 was $0.7 million, as compared to a loss of $1.1 million in Q2, 2020.

Cash Balance, at the end of Q2 2021 was $2.7 million, a decrease of $2.6 million compared to Q4 2020. The decline is cash balances is the result of operating losses and increases in working capital. As at August 5, 2021 the cash balance is in excess of $3.0 million.

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 USD$460K for the period between August 2020 and March 31, 2021 received by Redline in Q2 2021 and going forward, payments to Redline from the fund will be made quarterly.

Conference Call and Webcast – August 12, 2021 at 10:00 a.m. ET

A conference call and webcast to discuss the results has been scheduled for Thursday, August 12, 2021 at 10:00 a.m. Eastern Time. To participate, please dial 1-416-764-8659 approximately 10 minutes before the conference call and provide passcode 90193733. A recording of the call will be available through August 19, 2021 on Redline’s website or by dialing 1-416-764-8677 and entering the passcode 193733.

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:

Ronan McGrath
Interim 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 and six months ended June 30, 2021 (“Q2 2021 MD&A”), copies of which are available on SEDAR at Further details on the three and six months ended June 30, 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 and six months ended June 30, 2021 and the Q2 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.