Redline Communications Issues Preliminary Q3 Results, Date for Earnings Release and Conference Call

TORONTO, Oct. 29, 2013 /CNW/ - Redline Communications (www.rdlcom.com Group Inc. TSX: RDL) today reported preliminary results1 for the third quarter ended September 30, 2013 and issued notice for its Q3 conference call date.

Based on its preliminary review, Redline reports that revenue for the third quarter ended September 30, 2013 is expected to be approximately $7 million, with gross margins greater than 65%. Redline also expects to report third quarter bookings² of approximately $6.4 million, an order backlog² greater than $20 million, and net cash (adjusted for $3 million drawn on operating line) of approximately $14 million.

As discussed in prior conference calls, variable timing on shipments and installations on large customer orders adds general lumpiness to quarterly revenue recognition. In addition, slower than expected customer processes to implement new technologies and approve Redline as a vendor have resulted in delayed order signing.

"We are seeing strong growth in our sales pipeline and we are not losing business to competitors, but our customers' buying processes are moving more slowly than we had anticipated," said Robert Williams, Interim CEO of Redline Communications. "While our excitement about the potential in the energy market is greater than ever, our year to date bookings in energy are just over $15 million and total bookings are approximately $30 million. As such, we don't expect to realize 2013 bookings at the level communicated on May 15th, 2013, when we anticipated energy bookings in 2013 would grow by more than 35%, contributing $30 million to $35 million, or about 60% of our total expected order bookings for the year."

The Company noted that these 2013 third quarter results are preliminary and unaudited and subject to the Company's completion of its customary quarterly closing and review procedures, as well as a review by the Company's independent registered public accounting firm.

Full financial results for the third quarter ended September 30, 2013 will be released following the close of trading on the Toronto Stock Exchange November 14th, 2013.   A conference call and webcast to discuss the results has been scheduled for the following day, November 15th, 2013 at 10:00 a.m. Eastern Time.

To participate, please dial 1-647-427-7450 or 1-888-231-8191 approximately 10 minutes before the conference call, and provide passcode 90027350.  A recording of the call will be available through November 30, 2013. To listen to the rebroadcast please dial 1-416-849-0833 or 1-855-859-2056 and enter passcode 90027350.  A webcast of the call will also be available on Redline's website at http://www.rdlcom.com/en/about/investors/webcasts.

Redline Communications will not provide additional information regarding its quarterly results and/or updated full-year expectations until it reports its finalized third quarter results as planned on November 14, 2013. These preliminary results are based on Redline's initial analysis of the company's results, and are subject to change as the company completes its normal quarterly earnings processes.

About Redline Communications
Redline Communications (www.rdlcom.com) the innovator of Virtual Fiber™, a specialized wireless broadband system used by companies and governments worldwide to cost-effectively deploy distributed services and applications.  Redline Virtual Fiber™ solutions are used to facilitate and enhance public safety networks, deploy and extend secure networks, connect digital oil fields and smart grids, and bring dedicated Internet access wherever and whenever it's needed. Redline has been delivering powerful, versatile and reliable wireless systems to governments, the military, oil and gas, and the telecom industry for over a decade through its global network of certified partners. 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 uses non-IFRS measures to assess its operating performance.  These include but are not limited to "Orders or Bookings," "Shipped or Shipments," "Backlog," "EBITDA," "Adjusted EBITDA," "Income before non-operating items," "EPS excluding the non-cash expense relating to the fair market adjustment on the Debenture," and "Amortized Deferred Revenue."  Securities regulations require that companies caution readers that earnings and other measures adjusted to a basis other than IFRS do not have standardized meanings and are unlikely to be comparable to similar measures used by other companies.  Accordingly, they should not be considered in isolation.  Further information including definitions of these categories can be found in the Company's Management Discussion and Analysis for the three months and nine months ended September 30, 2013 ("Q3 2013 MD&A"), copies of which will be available on SEDAR at www.sedar.com after November 14, 2013. 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 and nine months ended September 30, 2013 and the Q3 2013 MD&A, to be available on SEDAR at www.sedar.com after November 14, 2013.

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.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 Contact(s)
Lynda Partner
Chief Communications Officer
+1-613-618-3200
lpartner@rdlcom.com

George Kypreos
Chief Financial Officer
+1-905-479-8344
gkypreos@rdlcom.com

Cory Pala
Investor Relations
+1-416-657-2400
cory.pala@evestor.com

Twitter:@rdlcom
Press Kit: http://redline.mobilitypr.com


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