TORONTO, May 8, 2017 /CNW/ - 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 first quarter ended March 31, 2017.
Financial highlights for the first quarter ended March 31, 2017 (Q1 2017) include:
- Revenues of $4.3 million, down
30% over Q1 2016
- Gross margins of 57%, down 2 percentage points over Q1
2016
- Operating expenses of $3.1
million, a reduction of 32% over Q1 2016
- Adjusted EBITDA loss of $0.4
million, an improvement of $0.3
million over Q1 2016
- Net loss of $0.7 million, an
improvement of $0.2 million over Q1
2016
- Cash of $11.5 million, or Cdn.
$ 0.89/share, up $0.4 million over Q4 2016
- Order Bookings of $5.2 million,
down 24% over Q1 2016
- Order Backlog of $5.3 million,
down 7% over Q4 2016
Financial Review
Total revenue for Q1 2017 was $4.3
million, down 30% over the same period in 2016 and down 31%
over Q4 2016. New Order Bookings for Q1 2017 were $5.2 million, an increase of 18% over Q4
2016.
"Redline ended Q1 2017 showing quarter over quarter growth in
Order Bookings as our plan to diversify markets and introduce lower
priced products starts to show an impact," stated Robert Williams, Redline CEO. "However, this
growth in orders is not yet reflected in revenue growth, which is
down quarter over quarter and year over year."
Overall gross margin for Q1 2017 was 57%, up one percentage
point over Q4 2016 and down two percentage points over the same
period in 2016.
Overall operating expenses for Q1 2017 were $3.1 million, an improvement of 32% over the same
period in 2016 and an improvement of 14% quarter over quarter.
The decrease in operating expenses was largely the result of
the cost reduction initiative implemented during the fourth quarter
of 2016 to reduce compensation costs and contractual costs.
Adjusted EBITDA loss for Q1 2017 was $0.4
million, an improvement of $0.3
million over the same period in 2016, but down $0.7 million over Q4 2016.
"Until the quarter over quarter growth in Orders translates into
Revenue growth, Redline will remain focused on ongoing cost and
cash management," stated Jane Todd,
Redline CFO.
Net Loss for Q1 2017 was $0.7
million, or ($0.04) per share
as compared to a Net Loss of $0.9
million, or ($0.05) per share
in the first quarter of 2016.
At March 31, 2017, Redline held
cash of $11.5 million, up
$0.4 million from December 31, 2016.
Conference Call and Webcast – May
8th, 2017 at 8:00 a.m.
ET
A conference call and webcast to discuss the results has been
scheduled for Monday May 8, 2017 at
8:00 a.m. Eastern Time. To
participate, please dial 1-647-427-7450 approximately 10 minutes
before the conference call, and provide passcode 12983263. A
recording of the call will be available through May 16, 2017 on Redline's website or by dialing
1-416-849-0833 and entering passcode 12983263.
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.
NOTES:
|
1
|
To better assess the
health and growth of the Redline's business, the Company reports on
several non-IFRS metrics, including "Orders or Bookings", "Shipped
or Shipments", "Backlog", "EBITDA", "Adjusted EDITDA", and "EPS
excluding non-cash gain (loss) on fair market value of financial
instruments". Further information including definitions of these
measures and a reconciliation to their closest IFRS measures, if
applicable, can be found in the Company's Management Discussion and
Analysis for the three months ended March 31, 2017 ("Q1 2017
MD&A"), copies of which are available on SEDAR at
www.sedar.com. Further details on the three months ended March 31,
2017 can be found in the condensed consolidated interim statement
of financial position, condensed consolidated interim statement of
comprehensive income, condensed consolidated interim statement of
changes in equity and condensed consolidated interim 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 Interim Financial Statements of the Company
for the three months ended March 31, 2017 and the Q1 2017
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 affects 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 www.sedar.com and on the Company's
website at www.rdlcom.com. 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.
REDLINE
COMMUNICATIONS GROUP INC.
|
|
|
|
|
Condensed
Consolidated Interim Statements of Financial Position
|
|
|
(Unaudited, Expressed
in U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2017
|
|
December 31,
2016
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash
|
|
$
|
11,512,743
|
|
$
|
11,147,235
|
|
Trade
receivables
|
|
5,972,166
|
|
7,837,145
|
|
Other
receivables
|
|
264,385
|
|
231,398
|
|
Inventories
|
|
5,715,046
|
|
5,513,985
|
|
Prepaid expenses and
other deposits
|
|
456,293
|
|
151,880
|
|
|
|
23,920,633
|
|
24,881,643
|
Non-current
assets:
|
|
|
|
|
|
Property, plant and
equipment
|
|
1,034,157
|
|
1,119,690
|
|
Intangible
assets
|
|
1,401,913
|
|
1,494,603
|
|
Other
assets
|
|
79,549
|
|
78,908
|
|
|
|
2,515,619
|
|
2,693,201
|
Total
Assets
|
|
$
|
26,436,252
|
|
$
|
27,574,844
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Trade and other
payables
|
|
$
|
3,788,950
|
|
$
|
3,322,059
|
|
Income tax
payable
|
|
10,741
|
|
10,741
|
|
Deferred
revenue
|
|
839,972
|
|
960,475
|
|
Borrowings
|
|
683,685
|
|
1,478,418
|
|
|
|
5,323,348
|
|
5,771,693
|
Non-current
liabilities:
|
|
|
|
|
|
Borrowings
|
|
1,353,064
|
|
1,340,165
|
|
Other
payables
|
|
228,426
|
|
247,799
|
|
|
|
1,581,490
|
|
1,587,964
|
Total
Liabilities
|
|
6,904,838
|
|
7,359,657
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
Share
capital
|
|
172,929,341
|
|
172,929,341
|
Contributed
surplus
|
|
9,053,149
|
|
8,998,245
|
Deficit
|
|
(162,451,076)
|
|
(161,712,399)
|
|
|
|
19,531,414
|
|
20,215,187
|
Total liabilities
and equity
|
|
$
|
26,436,252
|
|
$
|
27,574,844
|
REDLINE
COMMUNICATIONS GROUP INC.
|
|
|
|
|
Condensed
Consolidated Interim Statements of Comprehensive Loss
|
|
|
(Unaudited, Expressed
in U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
4,333,399
|
|
$
|
6,216,608
|
Cost of
revenue
|
|
1,874,832
|
|
2,549,091
|
Gross
profit
|
|
2,458,567
|
|
3,667,517
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
Research and
development
|
|
579,063
|
|
855,559
|
|
Administration and
finance
|
|
1,069,796
|
|
1,444,158
|
|
Sales and
marketing
|
|
1,337,922
|
|
2,073,531
|
|
Operations and
customer support
|
|
159,103
|
|
271,713
|
|
|
|
3,145,884
|
|
4,644,961
|
Loss before
undernoted items
|
|
(687,317)
|
|
(977,444)
|
|
|
|
|
|
|
Other expenses
(income):
|
|
|
|
|
|
Finance (income)
expense
|
|
10,546
|
|
(196,884)
|
|
Loss on fair market
value of financial instruments
|
|
-
|
|
16,314
|
|
Foreign exchange
loss
|
|
33,619
|
|
130,595
|
|
|
|
44,165
|
|
(49,975)
|
Loss before income
taxes
|
|
(731,482)
|
|
(927,469)
|
Income tax
expense
|
|
7,195
|
|
649
|
Net loss and total
comprehensive loss
|
|
$
|
(738,677)
|
|
$
|
(928,118)
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per
share
|
|
|
|
|
|
Basic and
diluted
|
|
$
|
(0.04)
|
|
$
|
(0.05)
|
REDLINE
COMMUNICATIONS GROUP INC.
|
|
|
|
|
Condensed
Consolidated Interim Statements of Changes in Equity
|
|
|
(Unaudited, Expressed
in U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
capital
|
Warrant
|
Contributed
surplus
|
Deficit
|
Total
|
Balance at
January 1, 2016
|
|
$
|
172,662,177
|
$
|
310,000
|
$
|
8,457,415
|
$
|
(156,926,961)
|
$
|
24,502,631
|
|
Net loss
|
|
-
|
-
|
-
|
(928,118)
|
(928,118)
|
|
Conversion of
debenture
|
|
267,164
|
-
|
-
|
-
|
267,164
|
|
Share-based
payments
|
|
-
|
-
|
46,521
|
-
|
46,521
|
Balance at
March 31, 2016
|
|
$
|
172,929,341
|
$
|
310,000
|
$
|
8,503,936
|
$
|
(157,855,079)
|
$
|
23,888,198
|
Balance at
January 1, 2017
|
|
$
|
172,929,341
|
$
|
-
|
$
|
8,998,245
|
$
|
(161,712,399)
|
$
|
20,215,187
|
|
Net loss
|
|
-
|
-
|
-
|
(738,677)
|
(738,677)
|
|
Share-based
payments
|
|
-
|
-
|
54,904
|
-
|
54,904
|
Balance at
March 31, 2017
|
|
$
|
172,929,341
|
$
|
-
|
$
|
9,053,149
|
$
|
(162,451,076)
|
$
|
19,531,414
|
REDLINE
COMMUNICATIONS GROUP INC.
|
|
|
|
|
Condensed
Consolidated Interim Statements of Cash Flows
|
|
|
|
|
(Unaudited, Expressed
in U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
|
2017
|
2016
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
Net loss
|
|
$
|
(738,677)
|
|
$
|
(928,118)
|
|
Adjustments to
reconcile net loss to net cash from operating
activities:
|
|
|
|
|
|
|
Finance (income)
expense
|
|
10,546
|
|
(196,884)
|
|
|
Depreciation and
amortization of non-current assets
|
|
203,807
|
|
260,813
|
|
|
Recognition of share
based payments
|
|
54,904
|
|
46,521
|
|
|
Foreign exchange gain
on cash held in foreign currency
|
|
(17,018)
|
|
(102,963)
|
|
|
Foreign exchange loss
on borrowings
|
|
36,750
|
|
201,226
|
|
|
Loss on fair market
value of financial instruments
|
|
-
|
|
16,314
|
|
|
|
|
(449,688)
|
|
(703,091)
|
|
Change in non-cash
operating assets and liabilities:
|
|
|
|
|
|
|
Increase in deferred
cost of revenue
|
|
-
|
|
(33,318)
|
|
|
Decrease in deferred
revenue
|
|
(120,503)
|
|
(336,361)
|
|
|
Change in other
non-cash operating assets and liabilities
|
|
1,773,395
|
|
(432,114)
|
Cash from (used in)
operating activities
|
|
1,203,204
|
|
(1,504,884)
|
|
|
|
|
|
Cash flows used in
investing activities:
|
|
|
|
|
|
Acquisition of
property, plant and equipment
|
|
(17,076)
|
|
(83,860)
|
|
Acquisition of
intangible assets
|
|
(8,508)
|
|
(80,220)
|
Cash used in
investing activities
|
|
(25,584)
|
|
(164,080)
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
Finance
income
|
|
15,578
|
|
3,775
|
|
Repayment of
borrowings
|
|
(844,708)
|
|
-
|
Cash from (used in)
financing activities
|
|
(829,130)
|
|
3,775
|
Foreign exchange gain
on cash held in foreign currency
|
|
17,018
|
|
102,963
|
Increase (decrease)
in cash
|
|
365,508
|
|
(1,562,226)
|
Cash, beginning of
the period
|
|
11,147,235
|
|
14,548,954
|
Cash, end of the
period
|
|
$
|
11,512,743
|
|
$
|
12,986,728
|
SOURCE Redline Communications Group Inc.