TORONTO, May 6, 2015 /CNW/ - Redline Communications
(www.rdlcom.com) Group Inc. (TSX: RDL), a leading provider of
mission-critical networks, today announced unaudited operating
results¹ for the three months ended March
31, 2015 (Q1 2015).
Q1 2015 Financial Highlights
- $9.6M Revenue, up 36%
- 61% Gross Margin
- $1.3M Adjusted EBITDA²
- $1.1M Net Profit
- $15.3M Cash
- $6.1M new Order Bookings²
- $13.3M Order Backlog²
Total revenue for Q1 2015 was $9.6
million, up 36% over the same period in 2014 driven by an
increase in the number of large oil and gas network deployments
that occurred in the quarter.
Overall operating expenses were $4.8
million for Q1 2015, up 13% over the $4.3 million for the same period last year. The
increase is primarily the result of higher compensation costs
associated with an increase of staff associated with our LTE
development. The increase was offset by a $0.3 million decrease in overall costs associated
with the year over year improvement of the U.S. dollar as compared
with the Canadian dollar. Overall gross margin for Q1 2015 was 61%,
consistent with the 61% reported in the same period in 2014.
Adjusted EBITDA for Q1 2015 was $1.3
million or 14% of revenue, an increase of $1.1 million over the Adjusted EBITDA of
$0.2 million or 2.8% of revenue
reported in the same period in 2014. The difference can be largely
attributed to increased revenue.
"Redline delivered strong year-over-year revenue growth this
quarter", said George Kypreos,
Redline CFO. "That revenue growth, our ongoing operating
expense management, and our strong gross margins have also combined
to produce a much improved EBITDA."
Net profit for Q1 2015 was $1.1
million or $0.06 per share, a
$0.5 million improvement over the net
profit of $0.6 million, or
($0.04) per share reported in the
same period in 2014. As of March 31,
2015 the Company ended the quarter with $15.3 million of cash, a decrease of $1.1 million over the $16.4 million as at December 31, 2014. The decrease was largely
attributable to working capital requirements.
Order Bookings for the three months ended March 31, 2015 were $6.1
million, down 31% over the same period in 2014. The
Order Backlog at March 21, 2015 was a
healthy $13.3 million.
"In Q1 we received orders from customers in all markets
including expansion orders from several of our energy sector
clients in South America and the
Middle East, and more recently our
first order for our new LTE product" said Robert Williams, Redline CEO. "Interest in
Redline systems continues to be strong across the globe and across
all markets but ongoing turmoil in the US energy sector has delayed
decision-making for new networks in several customer organizations.
While this has affected our US bookings in the quarter, we
currently don't anticipate any long-term impact from this
shift."
In addition to Order Bookings, Redline tracks pilot projects in
the Energy sector as a leading indicator of future Order Bookings
for this sector. The Company added 4 new pilot projects in Q1 2015
bringing the total of ongoing oil and gas pilot programs to 27, up
from 15 at this time in 2014. These projects vary in size and scope
and give prospective customers the opportunity to evaluate
Redline's solutions in a real field setting.
The Company had 17,035,460 common shares outstanding as of
March 31, 2015.
Conference Call and Webcast – May 7th,
2015 at 10:00 a.m. ET
A conference call and webcast to discuss the Company's financial
results have been scheduled for May 7,
2015 at 10:00 a.m. Eastern
Time. To participate in the call, please dial 1-647-427-7450
approximately 10 minutes before the conference call, and provide
passcode 37760454. A recorded webcast of the call will be available
on Redline's website
at http://www.rdlcom.com/en/about/investors/webcasts through
July 31, 2015.
About Redline Communications
Redline Communications (www.rdlcom.com) is the creator of
powerful wide-area wireless networks for the most challenging
applications and locations. Used by oil and gas companies to manage
their assets, militaries for secure battlefield communications,
municipalities to remotely monitor highways, utilities and other
infrastructures, and telecom service providers to deliver premium
services, Redline's powerful and versatile networks reliably and
securely deliver voice, data, M2M and video communications for
mission-critical applications.
For more information visit www.rdlcom.com.
NOTES:
|
1
|
All amounts reported
in this press release are in US dollars unless otherwise
stated.
|
2
|
To better assess the
health and growth of the Redline's business, the Company reports on
several key metrics, including "Orders or Bookings", "Backlog",
"EBITDA", "Adjusted EBITDA", "EPS excluding the non-cash expense
relating to the fair market adjustment on financial instruments",
and "Amortized Deferred Revenue". Further information
including definitions of these categories can be found in the
Company's Management Discussion and Analysis for the three months
ended March 31, 2015 ("Q1 2015 MD&A"), copies of which are
available on SEDAR at www.sedar.com. Further details on the three
month results ended March 31, 2015 can be found in the condensed
consolidated interim statement of financial position, condensed
consolidated interim statement of comprehensive loss, 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, 2015
and the Q1 2015 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.redlinecommunications.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,
2015
|
|
December 31,
2014
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash
|
|
|
$
|
15,342,680
|
|
$
|
16,364,077
|
|
Trade
receivables
|
|
|
13,176,958
|
|
12,163,006
|
|
Other
receivables
|
|
|
904,757
|
|
780,313
|
|
Inventories
|
|
|
6,197,518
|
|
5,479,981
|
|
Prepaid expenses and
other deposits
|
|
|
652,698
|
|
595,174
|
|
|
|
|
36,274,611
|
|
35,382,551
|
Non-current
assets:
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
|
1,542,023
|
|
1,590,011
|
|
Intangible
assets
|
|
|
2,030,006
|
|
1,943,678
|
|
Other
assets
|
|
|
70,754
|
|
77,250
|
|
|
|
|
3,642,783
|
|
3,610,939
|
Total
Assets
|
|
|
$
|
39,917,394
|
|
$
|
38,993,490
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Trade and other
payables
|
|
|
6,392,523
|
|
6,307,092
|
|
Income tax
payable
|
|
|
155,063
|
|
155,063
|
|
Deferred
revenue
|
|
|
1,581,202
|
|
1,467,123
|
|
Borrowings
|
|
|
3,984,931
|
|
4,311,077
|
|
|
|
|
12,113,719
|
|
12,240,355
|
Non-current
liabilities
|
|
|
|
|
|
|
Other
payables
|
|
|
416,846
|
|
478,311
|
|
Other financial
liability
|
|
|
-
|
|
159
|
|
Convertible debenture
(principal and interest)
|
|
|
243,806
|
|
265,614
|
|
Fair market value
adjustment on convertible debenture
|
|
|
78,201
|
|
91,040
|
|
|
|
|
738,853
|
|
835,124
|
Total
Liabilities
|
|
|
12,852,572
|
|
13,075,479
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
Share
capital
|
|
|
172,617,023
|
|
172,617,023
|
Warrant
|
|
|
310,000
|
|
310,000
|
Contributed
surplus
|
|
|
8,250,813
|
|
8,167,450
|
Deficit
|
|
|
(154,113,014)
|
|
(155,176,462)
|
|
|
|
|
27,064,822
|
|
25,918,011
|
Total liabilities
and equity
|
|
|
$
|
39,917,394
|
|
$
|
38,993,490
|
REDLINE
COMMUNICATIONS GROUP INC.
|
|
|
|
|
|
|
Condensed
Consolidated Interim Statements of Comprehensive Income
|
|
|
|
|
(Unaudited, expressed
in U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
|
|
2015
|
|
2014
|
Revenue
|
|
|
|
$
|
9,618,664
|
|
$
|
7,087,941
|
Cost of
revenue
|
|
|
|
3,753,012
|
|
2,798,948
|
Gross
profit
|
|
|
|
5,865,652
|
|
4,288,993
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
Research and
development
|
|
|
|
733,742
|
|
836,394
|
|
Administration and
finance
|
|
|
|
1,608,610
|
|
1,347,254
|
|
Sales and
marketing
|
|
|
|
2,188,763
|
|
1,786,321
|
|
Operations and
customer support
|
|
|
|
296,258
|
|
294,228
|
|
|
|
|
|
4,827,373
|
|
4,264,197
|
Profit before
undernoted items
|
|
|
|
1,038,279
|
|
24,796
|
|
|
|
|
|
|
|
|
Other expenses
(gains)
|
|
|
|
|
|
|
|
Finance
expense
|
|
|
|
27,387
|
|
37,267
|
|
Gain on fair market
value of financial instruments
|
|
|
|
(5,318)
|
|
(584,340)
|
|
Foreign exchange
gain
|
|
|
|
(47,628)
|
|
(28,682)
|
|
|
|
|
|
(25,559)
|
|
(575,755)
|
Profit before income
taxes
|
|
|
|
1,063,838
|
|
600,551
|
Income tax
expense
|
|
|
|
390
|
|
25,921
|
Net profit and total
comprehensive income
|
|
|
|
$
|
1,063,448
|
|
$
|
574,630
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
Basic
|
|
|
|
$
|
0.06
|
|
$
|
0.04
|
|
Diluted
|
|
|
|
$
|
0.06
|
|
$
|
0.04
|
REDLINE
COMMUNICATIONS GROUP INC.
|
|
|
|
|
Condensed
Consolidated Interim Statements of Changes in Equity
|
|
|
|
(Unaudited, expressed
in U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
capital
|
Share
purchase
loan
|
Warrant
|
Contributed
surplus
|
Deficit
|
Total
|
Balance at
January 1, 2014
|
$
|
168,903,267
|
$
|
(365,780)
|
$
|
310,000
|
$
|
8,911,025
|
$
|
(157,656,002)
|
$
|
20,102,510
|
|
Net profit
|
-
|
-
|
-
|
-
|
574,630
|
574,630
|
|
Exercise of
options
|
545,031
|
-
|
-
|
(218,567)
|
-
|
326,464
|
|
Repurchase and
cancellation of options
|
-
|
-
|
-
|
(201,793)
|
-
|
(201,793)
|
|
Share-based
payments
|
-
|
-
|
-
|
31,634
|
-
|
31,634
|
Balance at
March 31, 2014
|
$
|
169,448,298
|
$
|
(365,780)
|
$
|
310,000
|
$
|
8,522,299
|
$
|
(157,081,372)
|
$
|
20,833,445
|
Balance at
January 1, 2015
|
$
|
172,617,023
|
$
|
-
|
$
|
310,000
|
$
|
8,167,450
|
$
|
(155,176,462)
|
$
|
25,918,011
|
|
Net profit
|
-
|
-
|
-
|
-
|
1,063,448
|
1,063,448
|
|
Share-based
payments
|
-
|
-
|
-
|
83,363
|
-
|
83,363
|
Balance at
March 31, 2015
|
$
|
172,617,023
|
$
|
-
|
$
|
310,000
|
$
|
8,250,813
|
$
|
(154,113,014)
|
$
|
27,064,822
|
REDLINE
COMMUNICATIONS GROUP INC.
|
|
|
|
Condensed
Consolidated Interim Statements of Cash Flows
|
|
|
|
(Unaudited, expressed
in U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
2015
|
2014
|
Cash flows from
operating activities:
|
|
|
|
|
Net profit
|
|
$
|
1,063,448
|
$
|
574,630
|
|
|
|
|
|
|
Adjustments to
reconcile net profit to net cash from operating
activities
|
|
|
|
|
|
Finance
expense
|
|
27,387
|
37,267
|
|
|
Depreciation and
amortization of non-current assets
|
|
205,783
|
109,788
|
|
|
(Gain) Loss on
disposal of assets
|
|
(9,950)
|
10,692
|
|
|
Recognition of share
based payments
|
|
83,363
|
31,634
|
|
|
Foreign exchange loss
on cash held in foreign currency
|
|
368,517
|
182,768
|
|
|
Foreign exchange gain
on borrowings
|
|
(392,606)
|
(238,656)
|
|
|
Gain on fair market
value of Debenture
|
|
(5,318)
|
(584,340)
|
|
|
|
|
1,340,624
|
123,783
|
|
Change in non-cash
operating assets and liabilities
|
|
|
|
|
|
Decrease in deferred
cost of revenue
|
|
-
|
40,059
|
|
|
Increase in deferred
revenue
|
|
114,079
|
17,903
|
|
|
Change in other
non-cash operating assets and liabilities
|
|
(1,882,995)
|
862,619
|
Cash from (used in)
operating activities
|
|
(428,292)
|
1,044,364
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
Acquisition of
property, plant and equipment
|
|
(47,271)
|
(17,533)
|
|
Proceeds on sale of
property, plant and equipment
|
|
9,950
|
13,500
|
|
Acquisition of
intangible assets
|
|
(196,852)
|
(20,000)
|
Cash used in
investing activities
|
|
(234,173)
|
(24,033)
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
Finance
income
|
|
9,585
|
9,460
|
|
Proceeds from
exercise of options
|
|
-
|
326,464
|
Cash from financing
activities
|
|
9,585
|
335,924
|
Foreign exchange loss
on cash held in foreign currency
|
|
(368,517)
|
(182,768)
|
(Decrease) increase
in cash
|
|
(1,021,397)
|
1,173,487
|
Cash, beginning of
the period
|
|
16,364,077
|
13,473,246
|
Cash, end of the
period
|
|
$
|
15,342,680
|
$
|
14,646,733
|
SOURCE Redline Communications Group Inc.