TORONTO, May 7, 2018 Redline Communications (www.rdlcom.com) Group Inc. (TSX: RDL), the creator of powerful wide-area wireless networks for mission-critical applications in challenging locations, today announced operating results (in US dollars unless otherwise noted) for the first quarter ended March 31, 2018.

Financial highlights for the first quarter ended March 31, 2018 include:

• Revenues of $5.7 million, up 32% over Q1 2017
• Gross margins of 52%, down 5 percentage points over Q1 2017
• Operating expenses of $3.4 million, up 8% over Q1 2017
• Net loss of $0.4 million, an improvement of $0.3 million over Q1 2017
• Adjusted EBITDA loss of $0.2 million, an improvement of $0.1 million over Q1 2017
• Cash of $11.1 million, down $0.8 million from Q4 2017
• Bookings of $7.3 million, up 39% over Q1 2017
• Order Backlog of $7.9 million, up 30% from Q4 2017

Financial Review

"Our Order Bookings for the first quarter of 2018 were $7.3 million up 39% over the same period in 2017 and has contributed to a 30% growth in backlog, "stated Robert Williams, Redline CEO. "The increase in Order Bookings reflects a welcome mix of sales to new and existing customers in all geographies served by Redline and includes continued momentum from the O&G sector. We're also pleased that we received several meaningful orders from the mining sector for our new iLTETM product line, the result of a concentrated sales and marketing campaign." 

Total revenue for the quarter ended March 31, 2018 was $5.7 million, up 32% over the same period in 2017, largely driven by increased revenue from energy and telecom customers.

Overall gross margin for the first quarter of 2018 was 52%, down five percentage point over the same period in 2017 as a result of an expected shift in product sales to include more sales of lower margin commercial products to customers in the telecom service provider market.

Overall operating expenses for the first quarter of 2018 were $3.4 million, up 8% over the same period in 2017.  The increase in operating expenses was mainly a result of increased personnel costs, including recruitment, salary increases and severance.

Adjusted EBITDA loss for the first quarter of 2018 was $0.2 million, an improvement of $0.1 million over the same period in 2017. Net loss for the first quarter of 2018 was $0.4 million, or ($0.02) per share, an improvement of $0.3 million over the net loss of $0.7 million, or ($0.04) per share reported in the first quarter of 2017.

At March 31st, 2018, Redline held cash of $11.1 million, down $0.8 million from December 31, 2017. The decrease is largely attributed to a scheduled Cdn. $1.0 million payment against the Company's Ontario Loan, reducing the amount of the loan outstanding to $1.4 million.

Conference Call and Webcast – May 8th, 2018 at 10:00 a.m. ET

A conference call and webcast to discuss the results has been scheduled for Tuesday, May 8, 2018 at 10:00 a.m. Eastern Time. To participate, please dial 1-647-427-7450 approximately 10 minutes before the conference call, and provide passcode 7679416. A recording of the call will be available through May 18, 2018 on Redline's website or by dialing 1-416-849-0833 and entering the same passcode.

About Redline Communications
Redline Communications (www.rdlcom.com) is the creator of powerful wide-area wireless networks for mission-critical applications in challenging locations. Redline networks are used by oil and gas companies to manage onshore and offshore assets, by militaries for secure battlefield communications, by municipalities to remotely monitor infrastructure, and by telecom service providers to deliver premium services. Hundreds of businesses worldwide rely on Redline to engineer, plan and deliver ruggedized, secure and reliable networks for their M2M, voice, data and video communications needs - in locations that include the deserts of the Middle East, the rainforests of South America, and the frozen Alaskan slopes. 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; 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.rdlcom.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.

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