Redline Communications Reports Q3 2015 Results
TORONTO – November 9, 2015 – Redline Communications (www.rdlcom.com) Group Inc. (TSX: RDL) a leading provider of mission-critical wireless networks, today announced unaudited operating results¹ for the three months ended September 30, 2015 (Q2 2015).
Q3 2015 Financial Highlights:
Total revenue for Q3 2015 was $6.4 million, down 30% over the same period in 2014. Order bookings for Q3 2015 were $9.5 million, up 12% over the same period in 2014 and up 7% sequentially over Q2 2015. The order backlog at September 30, 2015 was $16.1 million, an increase of $3.2 million sequentially from Q2 2015.
“Ongoing low oil prices and subsequent delays in purchasing have negatively impacted overall sales to the energy sector and therefore overall company revenues in Q3 2015,” said Robert Williams, Redline CEO. “While the oil and gas market continues to be an area of focus for the company, we have increased our emphasis on sales to non-energy sector customers. This has resulted in a quarter-over-quarter increase in total order bookings, driven largely by orders from non-energy sector customers, and this sector diversity is expected to continue.”
Overall gross margin for Q3 2015 was 47%, down 3 percentage points from 50% reported in the same period in 2014. Lower gross margins in Q3 2015 are attributed largely to a one-time inventory write-down charge of $0.4 million that reduced gross margins by 6 percentage points. Overall operating expenses were $4.6 million for Q3 2015, up 2% over $4.5 million for the same period last year. At the end of September 2015, the Company undertook a minor restructuring, reducing the number of employees and contractors. This restructuring is expected to reduce annual costs by $2.0 million, or $0.5 million per quarter starting in the fourth quarter of 2015.
Adjusted EBITDA loss for Q3 2015 was $1.3 million, compared to Adjusted EBITDA of $0.4 million reported in the same period in 2014. Net loss for Q3 2015 was $1.7 million, or ($0.10) per share, compared to a net loss of $0.1 million, or ($0.01) per share reported in the same period in 2014. As of September 30, 2015 the Company had $12.9 million of cash, or $0.75 per common share, a decrease of $3.5 million from $16.4 million at December 31, 2014.