Redline Communications anounces profitable 2010 results

Mar. 31, 2011 (Canada NewsWire Group) --

Company reports Financial Results for Three and Twelve Months ended December 31, 2010

TORONTO, March 31 /CNW/ - Redline Communications Group Inc. (TSX: RDL) ("Redline" or the "Company"), a leading provider of specialized broadband wireless systems, today announced continued revenue growth and profits in its financial results for the three and twelve months ended December 31, 2010.  After a year of significant restructuring, the Company has delivered top line growth and profitable earnings.

Financial highlights for the year ended December 31, 2010 include:

• Revenue of $54.4 million, an increase of 43% over the $38.0 million reported for the year ended December 31, 2009
• Gross margin of 54%, an increase from 48% reported in 2009
• EBITDA¹ of $5.4 million and net income of $4.2 million excluding one-time costs.  Including one-time costs, EBITDA¹ is $2.2 million and Net Income is $1.0 million, as compared to an EBITDA¹ loss of $9.3 million and a net loss of $10.9 million in 2009
• Operating expenses of $27.2 million, a decrease of $0.4 from 2009. 2010 operating expenses include one-time costs of $3.2 million for financial restatement and restructuring costs and $1.9 million relating to negative foreign exchange impact
• Cash balance of $6.0 million, an increase of $1.3 million over December 31, 2009
• Earnings per share of $0.05 as compared to $(0.52) in 2009

Financial highlights for the three months ended December 31, 2010 include

• Revenue of $15.7 million, an increase of 47% over the $10.7 million for same period in 2009.
• Gross margin of 52%, an increase from 48% reported in the same period in 2009
• EBITDA¹ of $1.0 million and Net Income of $0.5 million, up from an EBITDA loss of $2.1 million and net loss of $2.5 million in the same period in 2009
• Operating expenses of $7.2 million, unchanged from the same period in 2009
• Earnings per share of $0.02 as compared to loss per share of $(0.12) during the same period in 2009

"We are pleased to see that our turnaround efforts have resulted in a profitable year - it's a testament to the loyalty of our customers and partners and the efforts of our entire staff" said Eric Melka, CEO of Redline.  "We're also excited about having more new products on the horizon, a growing 4G industry and an even stronger market presence as we move into 2011.

"Eric and his new team have done an exceptional job since they came aboard about one year ago. They've turned the company profitable in very short time, improving the bottom line from a more than a $10 million loss in 2009 to a profit in 2010." said Philippe de Gaspé Beaubien, Redline Chairman. "His leadership and their unwavering focus on Stability, Profitability and Viability are clearly paying dividends and we're very proud of the team's accomplishments."

All amounts reported in this press release are in US dollars unless otherwise stated.  For further details on the December 31, 2010 results, see the consolidated balance sheet, consolidated statement of operations and deficit and consolidated statement of cash flows reproduced at the end of this press release. The selected financial information included in this release is qualified in its entirety by, and should be read together with the Consolidated Financial Statements of the Company for the year ended December 31, 2010 and the Company's Management Discussion and Analysis for the year ended December 31, 2010 ("2010 MD&A"), copies of which are available on SEDAR at www.sedar.com.

About Redline Communications
Redline Communications (www.rdlcom.com), 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  how  their  oil  wells  are  operating; and  enterprises  to bring business  grade  access  to  buildings,  and the  military  to  create  secure  networks in  any location.  For  over  10  years Redline  has  been  delivering  reliable wireless  solutions to thousands of customers in over 100 countries, with  the  strong combination  of  high  capacity,  speed,  range and  reliability.  Redline products are marketed and supported through an exclusive network of value added resellers in the Americas; the Middle East and Africa.

NOTES:

1  EBITDA is conventionally measured as net income before discontinued operations, as reported in accordance with GAAP, plus interest expense, taxes, depreciation and amortization (all elements being as reported in the GAAP financial statements). Stated directly, EBITDA is the entity's revenue less its operating costs before the costs of consuming capital assets, financing, and taxes. As such, EBITDA is a measure of income, specifically directed at an entity's operating performance without the effects of its finance strategy or the recognition of certain costs for its tangible and intangible capital assets. EBITDA has application beyond financial reporting and is often the operating performance measure used in debt covenants and executive compensation plans.  For a reconciliation of EBITDA to Canadian GAAP, please see the "Results of Operations" section of the 2010 MD&A.

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

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 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 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; 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 Annual 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.

Redline Communications
Bruce MacInnis
bmacinnis@rdlcom.com
Tel: +1-905-479-8344