Cost Reductions and New Pilot Projects in Energy Sector Support Drive to
Profitability
TORONTO, Dec. 3, 2013 /CNW/ - Redline Communications (www.rdlcom.com) Group Inc. (TSX: RDL), a leading provider of broadband wireless solutions for oilfield
networking and machine-to-machine (M2M) communications, today announced
a reorganization of its sales group for better alignment with key
vertical markets, and a streamlining of operational costs including a
reduction in overall workforce. The streamlining is part of the
Company's commitment to operational profitability.
To support growing sales to the oil and gas market the Company has
increased the number of sales personnel focused on this sector by
retraining certain existing salespeople and hiring new salespeople with
experience selling networks in the oil and gas sector. This sales
organization will operate independently of Redline's existing sales
organization which continues to sell to military, municipal governments
and service providers via a well-established global partner network.
Redline has seen strong growth in the number of pilot network
installations it uses to demonstrate the capabilities of its solution.
In the current quarter, the Company has installed three new pilot
systems - two in the Middle East and one in South America. "We have
seen that once installed, these relatively small pilot projects
typically expand into much larger implementations generating between $2
million and $5 million in lifetime revenue," said Robert Williams,
Redline's interim CEO. "Our strategy is to focus more sales resources
on this effective selling method so we can realize the more predictable
revenue growth that comes after a successful pilot installation."
In order to realize improved operational efficiencies, the Company has
reduced its workforce of full-time, part-time and contract employees by
39 people. In addition the Company has implemented a number of
initiatives which will also reduce overall spending. Once fully
implemented at the end of the fourth quarter of 2013, the combined
impact of these changes is expected to reduce total annual operating
expenses by approximately $10 million.
"We are committed to achieving our objectives for year-over-year revenue
growth and operational profitability in 2014," added Williams. "We have
invested in innovative products for the oil and gas market and we are
seeing a return on our investment in the form of an increased number of
pilots which are predictors of future revenue. The changes we have made
to staffing levels were not easy ones to make but they are necessary to
allow us to meet our profitability goals."
About Redline Communications
Redline Communications (www.rdlcom.com) is the innovator of Virtual Fiber™, a specialized wireless broadband
solution used to cost-effectively deploy and extend secure networks,
enable M2M applications, connect digital oilfields and smart grids,
facilitate and enhance public safety networks, and bring Internet
access wherever and whenever it's needed - regardless of terrain or how
remote. For more than a decade Redline has delivered powerful,
versatile and reliable wireless solutions to governments, militaries,
oil and gas companies and telecom service providers through its global
network of certified partners. For more information visit www.rdlcom.com.
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;
failure to realize expected savings from cost reduction initiatives;
significant changes in the composition of the Board of Directors or
management team that might result in increased recruitment or severance
charges; 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 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.