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.