Redline Communications Reports 2022 First Quarter End Results
Quarterly Revenues up 15% Year over Year to $4.3 Million
TORONTO, May 12, 2022 /CNW/ - Redline Communications Group Inc. (TSX: RDL), a leading provider of mission-critical data infrastructure for remote & harsh environments, today announced operating results for the first quarter ended March 31, 2022.
All figures are unaudited and in US Dollars unless otherwise noted.
Financial and Business Review
Gross margin of 54% in Q1 2022, up from the 48% achieved in Q4 2021, mainly as the result of a decrease in the inventory provision required in Q1 2022. Gross margin was down 15% compared to Q1 2021 as a result of both inventory provisions recorded and sales mix achieved in the current quarter.
Total operating expenses for Q1 2022 were $4.3 million, down $0.1 million from Q4 2021 and up $0.4 million compared to Q1 2021 due to non-recurring professional fees associated with the Aviat transaction (announced April 13, 2022) that were in incurred in Q1 2022.
Adjusted EBITDA loss for Q1 2022 was $1.7 million, an increase of $0.3 million from Q4 2021 due to the Aviat transaction costs and $0.6 million from Q1 2021 due to the Aviat transaction costs but also a lower gross profit compared to the prior year due to the product sales mix.
Due to the transaction in progress between Redline Communications Group Inc. and Aviat Networks Inc. (announced on April 13, 2022), Redline will not be holding an earnings call to discuss the Q1 2022 results.
About Redline Communications
Forward Looking Statements
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.