TORONTO – March 7, 2018 – 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 fiscal year ended December 31, 2017.
Financial highlights for the fourth quarter ended December 31, 2017 include:
- Revenues of $8.3 million, up 31% over Q4 2016
- Gross margins of 56%, unchanged from Q4 2016
- Operating expenses of $3.9 million, an increase of 8% over Q4 2016
- Net profit of $0.8 million, an improvement of $0.9 million over Q4 2016
- Adjusted EBITDA of $1.0 million, an improvement of $0.7 million over Q4 2016
- Cash of $12.0 million, up $0.9 million over Q3 2017
- Bookings of $5.6 million, up 27% over Q4 2016
- Order Backlog of $6.1 million, down 33% over Q3 2017
Financial highlights for the fiscal year ended December 31, 2017 include:
- Revenues of $22.8 million, unchanged from 2016
- Gross margins of 54%, down 1 percentage point over 2016
- Operating expenses of $13.7 million, a reduction of 21% over 2016
- Net loss of $1.6 million, an improvement of $3.2 million over 2016
- Adjusted EBITDA loss of $0.4 million, an improvement of $3.0 million over 2016
- Cash of $12.0 million as of December 31, 2017, up $0.8 million over 2016
- Bookings of $25.4 million, up 18% over 2016
- Order Backlog of $6.1 million, up 8% over 2016
Total revenue for the fourth quarter and year ended December 31, 2017 was $8.3 million and $22.8 million respectively, with fourth quarter revenue up 31% over the same period in 2016 and annual revenue relatively unchanged year over year. Revenue in the fourth quarter 2017 was up 60% over the prior quarter.
Adjusted EBITDA for the fourth quarter 2017 was $1.0 million, up $0.7 million over the Adjusted EBITDA of $0.3 million for the same period in 2016, largely due to higher revenues compared to the same period in 2016. The adjusted EBITDA loss for the year ended December 31, 2017 was $0.4 million, an improvement of $3.0 million over the same period in 2016, attributed to lower expenses.
“Redline ended 2017 on a positive note. Revenue growth quarter over quarter coupled with stable gross margins has resulted in a profitable fourth quarter,” stated Robert Williams, Redline CEO.
Order Bookings for the fourth quarter and year ended December 31, 2017 were $5.6 million and $25.4 million respectively, up 27% and 18% over the same periods in 2016. The increase in Order Bookings year over year can be largely attributed to stronger spending from energy sector clients in the second half of 2017.
“We are seeing increasing demand from both new and existing clients across multiple vertical markets and in multiple geographies,” added Williams. “Sales of our traditional RDL-3000 product remain strong, our new iLTE™ product is being well received particularly in the mining sector and our operating costs have been managed effectively. We believe that our strategy of revenue diversification and ongoing cost management will continue to produce improved results going forward.”
Overall gross margin for the fourth quarter and year ended December 31, 2017 was 56% and 54% respectively, unchanged and down one percentage point over the same periods in 2016.
Overall operating expenses for the fourth quarter and year ended December 31, 2017 were $3.9 million and $13.7 million, up 8% and down 21% respectively over the same periods in 2016. The increase in operating expenses in the fourth quarter 2017 over the same period in 2016 was the result of a bad debt expense. The decrease in operating expenses in the year ending December 31, 2017 was primarily a result of reduced compensation and contractual costs.
Net Profit for the fourth quarter of 2017 was $0.8 million, or $0.05 per share as compared to a Net Loss of $0.1 million, or ($0.01) per share in the fourth quarter of 2016. For the full year 2017, Redline reported a Net Loss of $1.6 million, or ($0.09) per share, as compared to a Net Loss of $4.8 million, or ($0.28) per share in 2016.
At December 31st, 2017, Redline held cash of $12.0 million, up $0.9 million from September 30, 2017, and up $0.8 million from December 31, 2016.
The Redline Board of Directors also announced today that Joan Ritchie, who has held the position of Interim Chief Financial Officer, since September 5, 2017 has been appointed Chief Financial Officer.
Conference Call and Webcast – March 8th, 2018 at 10:00 a.m. ET
A conference call and webcast to discuss the results has been scheduled for Thursday March 8, 2018 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 4379546. A recording of the call will be available through March 17, 2018 on Redline’s website or by dialing 1-416-849-0833 and entering the same passcode.
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.
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