Redline Communications Announces Preliminary Fourth Quarter 2010 Results

TORONTO, Feb. 28 /CNW/ - Redline Communications Group Inc. (TSX: RDL) ("Redline" or the "Company"), a developer and manufacturer of specialized broadband wireless systems, today announced preliminary financial results for the fourth quarter ended December 31st, 2010.

Based on its preliminary review, Redline expects to report that its financial results for the three-month period ended December 31st, 2010, will include total revenue of approximately US$16.4 million, compared to US$10.7 million during the same period last year.

The Company expects net income for the fourth quarter of approximately US$0.1 million, or US$0.01 per share, compared to a net loss of US$2.5 million, or US$0.12 per share during the same period in 2009. 

The Company noted that these 2010 fourth quarter results are preliminary and unaudited and therefore subject to the Company's completion of its customary quarterly closing and review procedures, as well as an audit by the Company's independent registered public accounting firm.

Despite strong revenues for the fourth quarter 2010, Redline expects that the political and social instability in the Middle East will likely impact its revenues for the first quarter of 2011, given that this market accounted for a significant portion of revenues in 2010. 

Eric Melka, Redline's CEO stated "We believe that the challenging sales environment in the Middle East will continue at least through the second quarter 2011. We are actively monitoring the situation and will continue to invest in growth opportunities in other markets, however, those efforts are not expected to show immediate results."

Redline will report final fourth quarter 2010 results on March 25, 2011 at which time it will provide further comments on the quarter and the year, including an update on the challenges in the Middle East.

About Redline Communications

Redline Communications (www.rdlcom.com) manufactures powerful and versatile wireless broadband products used to cost-effectively deploy distributed applications and services.  Municipalities use Redline products to quickly and easily deploy or extend their video surveillance networks; oil and gas companies to monitor how their oil wells are operating; service providers and enterprises to bring business grade access to buildings. Redline's radio products are the most deployed commercial radio for the US military. For over 10 years, Redline has been delivering reliable wireless solutions with the strong combination of high capacity, speed, range and reliability. Redline products are marketed and supported locally through an exclusive network of value added resellers in the Americas; the Middle East, and Africa.

Forward-Looking Statements
Certain statements in this release, including the estimate of future revenues, sales, provided above, 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.

SOURCE Redline Communications Group Inc.

For further information:

Redline Communications
Lynda Partner
lpartner@rdlcom.com
+1 613-618-3200


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