Published on August 15th, 2011 | by Alexis Argent0
Redline Communications Announces Financial Results For The Three And Six Months Ended June 30, 2011
Redline Communications Group Inc., (“Redline” or the “Company”), a leading provider of specialized broadband wireless systems, today announced continued positive operating income for the three and six months ended June 30, 2011.
Financial highlights for the three and six months ended June 30, 2011 include:
- Revenues were stable or higher at $12.7 million for the quarter and $26.2 million for the six months ended June 30, 2011, as compared to $13.1 million and $25.3 million for the same periods in 2010.
- Gross margin increased to 59.6% for the quarter and to 60.7% for the six months ended June 30, 2011 as compared to 50.9% and 56.4% for the same periods in 2010.
- A private placement of $8.3 million Cdn of senior secured convertible debentures was completed in June 2011.
- Income before other expenses was $890 thousand for the quarter and $2.1 million for the six months ended June 30, 2011. After factoring in other expenses including the non-cash fair market value loss on the debentures, net income was $60 thousand for the quarter and $1.2 million for the six months ended June 30, 2011.
- Operating expenses were lower at $6.7 million for the quarter and $13.5 million for the six months ended June 30, 2011, as compared to $7.0 million and $13.7 million during the same periods in 2010.
- Cash, investments, and restricted investments increased to $7.1 million from $6.1 million at the end of December 2010.
Despite the turmoil in the Middle East, revenues for the second quarter of 2011 were stable at $12.7 million, a decrease of 2.7% from $13.1 million reported in the second quarter of 2010. Revenue for the second quarter of 2011 was negatively impacted by approximately $1.9 million as a result of the deferral of a large customer contract in the Middle East.
In June 2011 the Company announced the completion of a private placement of senior secured convertible debentures with aggregate gross proceeds of $8.3 million Cdn.
Also in June 2011 the Company announced that it had reached an agreement in principle to settle the proposed class action lawsuit, commenced in Ontario in September 2010, against the Company, certain of its current and former directors and officers, and its former auditors.
Income before other expenses was $890 thousand for the quarter. Other expenses included a non-cash fair market value adjustment on the debentures of $580 thousand. The adjustment relates to the difference in fair market value from June 10, 2011, the date the debentures were issued, and June 30, 2011. The share price on June 10, 2011 was $0.45 Cdn., and on June 30, 2011 was $0.51 Cdn. Other expenses also included finance costs of $110 thousand and foreign exchange losses of $140 thousand. Net income for the quarter after other expenses was $60 thousand.
Comments from CEO
“We have successfully executed our turnaround plan and delivered consistent and significant improvements in the Company`s net income throughout fiscal 2010 and into the first two quarters of fiscal 2011,” said Eric Melka, Redline CEO. “Looking forward, as we combine our strong gross margin, disciplined cost controls and vertically-focused sales efforts around larger opportunities, we feel that Redline is poised for a very bright future.”
About Redline Communications
Redline Communications, founded in 1999, is a publicly-traded company on the Toronto Stock Exchange that manufactures powerful and versatile wireless broadband systems used to cost?effectively deploy distributed applications and services and to power 4G networks. Service Providers use Redline products to power their 4G networks; municipalities to quickly and easily deploy or extend their video surveillance networks; oil and gas companies to monitor and control their oil fields and operations; enterprises to bring business-grade access to buildings; and the Military to create secure networks in any location. For over 10 years Redline has combined power, versatility and reliability to deliver exceptional wireless solutions to thousands of customers in over 100 countries. Redline products are marketed and supported through an exclusive network of value-added resellers around the world.
For more information, please visit our Redline Product Page.