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Redline Communications Reports 2019 Fourth Quarter and Year End ResultsTORONTO, March 30, 2020 /CNW/ - Redline Communications (www.rdlcom.com) 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 fourth quarter and the year ended December 31, 2019. Key financial highlights for the three months ended December 31, 2019 ("Q4 2019") versus Q4 2018 include:
Key financial highlights for the year ended December 31, 2019 versus 2018 include:
Financial and Business Review Revenue for the fourth quarter and year ended December 31, 2019 was $5.0 million and $23.7 million, down 33% and 13%, respectively, over the same periods in 2018. In both time frames, the revenue decrease was driven largely by lower sales to oil & gas customers in South America, partially offset by an increase in sales in the Middle East. Order Bookings for the fourth quarter and year ended December 31, 2019 were $6.3 million and $24.0 million, down 42% and 28%, respectively, over the same periods in 2018. The decrease was primarily due to large multi-year contracts with oil & gas and military customers signed in late 2018 not repeated in 2019. "We are focused on diversifying our product development towards industrial applications of 5G in our iLTE products as well as our next generation of Virtual Fiber supporting our core markets – oil & gas, mining and utilities where our rugged products are well suited," stated Stephen Sorocky, Redline CEO. "This won't happen overnight, and these are uncertain times, but we are seeing early signs of market momentum. We are pleased to see new customer additions and repeat orders from existing clients, including in the energy sector. As all companies today, we are closely monitoring the impacts of the COVID-19 pandemic and the recent decline in oil prices on our business and we are proactively taking measures to mitigate any effects upon our business. We continue to support our customers operations while ensuring the safety of our staff." Gross margin for the fourth quarter and year ended December 31, 2019 was 59% and 55%, 4 percentage point and 3 percentage point improvements, respectively, over the same periods in 2018. The improvements reflect the Company's success in lowering supply chain costs. Overall operating expenses for the fourth quarter of 2019 were $4.1 million, essentially unchanged over the same period in 2018 and over Q3 2019. Overall operating expenses for 2019 were $16.6 million, up 12% over 2018, primarily a result of increase in personnel costs (mainly in research and development,) and severance costs ($0.8 million) associated with organizational changes implemented by the new executive team. Additionally, the Company has closed its Santa Clara office in 2019 as the technical capability there has been transferred to the Markham engineering team. Net loss for the Q4 2019 was $1.3 million, or ($0.08) per share, as compared to net profit of $0.2 million, or $0.01 per share, for Q4 2018. Net loss for 2019 was $3.7 million, or ($0.22) per share, as compared to net loss of $0.4 million, or ($0.02) per share, for 2018. Adjusted EBITDA loss for Q4 2019 was $0.9 million, as compared to Adjusted EBITDA of 0.2 million for Q4 2018. Adjusted EBITDA loss for 2019 was $2.3 million, as compared to Adjusted EBITDA of 0.3 million for 2018. Conference Call and Webcast – March 31, 2020 at 10:00 a.m. ET A conference call and webcast to discuss the results has been scheduled for Tuesday, March 31, 2020 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 8782527. A recording of the call will be available through April 6, 2020 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 www.rdlcom.com.
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 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.
SOURCE Redline Communications Group Inc. |