Redline Updates Second Half of Fiscal 2007 Revenue Guidance


    All figures in U.S. Dollars unless specified

    TORONTO, Jan. 4 /CNW/ - Redline Communications Group Inc. ("Redline" or
"the Company"), (TSX/AIM: RDL) a leading provider of standards-based WiMAX and
broadband wireless infrastructure products, today updated its revenue guidance
for the second half of fiscal 2007.
    For its fiscal 2007 fourth quarter, Redline now expects revenue of
approximately $13 million, which would result in revenue of just below
$27 million in the second half of 2007, an increase of close to 40% over the
second half of fiscal 2006. Redline had previously projected second half
fiscal 2007 revenue of $31 to $33 million.
    Fourth-quarter revenue was partially affected by slower-than-expected
rollouts of certain new product lines, which affected the Company's ability to
reach the required volume production to fulfill customer orders during the
quarter. These issues have since been resolved, and the Company expects to
complete the orders over 2008. In addition, revenue was affected by orders
that were received but not shipped due to customer delays in finalizing
financing arrangements.
    In fiscal 2008, Redline expects continued revenue growth of 50%
year-over-year and to achieve profitability in the fourth quarter. Management
will provide a more detailed outlook with its fiscal 2007 earnings release and
conference call in mid-February.

    Forward-Looking Statements

    Certain statements in this press release may contain words such as
"could", "expects", "may", "anticipates", "believes", "intends", "estimates",
"targets", "envisions", "seeks" and other similar language and are considered
forward-looking statements or information under applicable securities
legislation. These statements are based on Redline's current expectations,
estimates, forecasts and projections about the operating environment,
economies and markets in which Redline operates. These statements are subject
to important assumptions, risks and uncertainties, which are difficult to
predict and the actual outcome may be materially different. Redline has made
various assumptions in the preparation of its financial outlook in this press
release, including the following company specific assumptions: An ability to
ramp sales in new WiMAX product lines and in a private label product line in
its RedCONNEX business; the continued network and deployment expansion by its
largest customers, especially in the Middle East and the Americas; the
continued ability to have more WiMAX customers convert to commercial networks,
and the ability to add new WiMAX customers, using both its 802.16-2004 and
802.16-2005 solutions; improvement in Redline's product costs due to favorable
supplier pricing, offset by higher costs associated with initial customer
deployments in emerging markets; increased employee costs relative to expected
cost of living adjustments and employee bonuses; and the effective execution
of Redline's strategy, including the execution of Redline's supply chain
strategy. Redline has also made certain macroeconomic and general industry
assumptions in the preparation of its financial guidance including: a modest
decrease in the growth rate of the gross domestic product of global economies
which is lower than the growth rate in 2007; global service provider capital
expenditures in 2008 reflecting mid to high single digit growth as compared to
high single digit growth in 2007; global growth rate to remain stable with
investments in next generation products and services to offset declines in
purchases of legacy equipment; and a moderate impact as a result of expected
industry consolidation among service providers in various geographic regions,
particularly in emerging markets; and the impact of the rise in the Canadian
dollar in 2007 and 2008 compared to the US dollar and other world currencies.
The above assumptions, although considered reasonable by Redline at the date
of this press release, may prove to be inaccurate and consequently Redline's
actual results could differ materially from its expectations set out in this
press release.
    Further, actual results or events could differ materially from those
contemplated in forward-looking statements as a result of the following (i)
risks and uncertainties relating to Redline's business including: significant
competition, competitive pricing practice, cautious capital spending by
customers, industry consolidation, rapidly changing technologies, evolving
industry standards, frequent new product introductions and 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 our
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; Redline's potential inability to attract or retain the personnel
necessary to achieve its business objectives or to maintain an effective risk
management strategy; (ii) risks and uncertainties relating to Redline's
liquidity, financing arrangements and capital including: any inability of
Redline to manage cash flow fluctuations to fund working capital requirements
or achieve its business objectives in a timely manner or obtain additional
sources of funding; or any negative impact on Redline's ability to make future
acquisitions, raise capital, issue debt and retain employees arising from
stock price volatility and any declines in the market price of Redline's
publicly traded securities. For additional information with respect to certain
of these and other factors, see Redline's final prospectus (at page 83 under
the heading "Risk Factor") which is available on Redline's website at or through Unless otherwise
required by applicable securities laws, Redline disclaims any intention or
obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.

    About Redline Communications

    Redline Communications ( is a leading
provider of standards-based wireless broadband solutions. Redline's RedMAX(TM)
WiMAX Forum Certified(TM) systems and award-winning RedCONNEX(TM) family of
broadband wireless infrastructure products enable service providers and other
network operators to cost-effectively deliver high-bandwidth services
including voice, video and data communications. Redline is committed to
maintaining its wireless industry leadership with the continued development of
WiMAX and other advanced wireless broadband products. With more than 75,000
installations in 80 countries, and a global network of over 140 partners,
Redline's experience and expertise helps service providers, enterprises and
government organizations roll out wireless broadband networks to support
advanced communications.

    NOTE: All registered and unregistered trademarks mentioned in this
    release are the property of their respective owners.

    %SEDAR: 00025950E

For further information:

For further information: Redline Communications, Tom Hearne, Carolyn
Anderson,,, Tel: (905) 479-8344; Equicom Group, Craig
Armitage, Vanessa Beresford,,, Tel: (416) 815-0700; Canaccord Adams, Chris
Bowman, Tel: +44 (0)20 7050 6500

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