– Management to Host Conference Call Today, Monday, April 11 at 8:30 a.m. ET –
TORONTO, April 11, 2016 /CNW/ - Redknee Solutions Inc. (TSX: RKN), a leading provider of real-time monetization and subscriber management software, today reported preliminary financial results for the second quarter of fiscal 2016 ended March 31, 2016 ("Q2 2016"). (All figures are in U.S. dollars.)
For Q2 2016, the Company expects to report:
- Revenue of $39.0 million to $41.0 million;
- Adjusted EBITDA loss of $1.5 to $3.0 million;
- Order backlog increased for the second consecutive quarter to $175.0 million to $177.0 million (compared with $157.2 million for Q2 2015);
- Positive cash flow from operating activities of $1.0 million to $2.0 million,
"We are disappointed by the preliminary second quarter results, which came in below our internal expectations as delays in customer purchasing decisions continue to impact our software license revenue in the short term," said Lucas Skoczkowski, CEO of Redknee. "We continue to be encouraged by the growth of our order backlog, which has reached record levels. Contributing to this growth in backlog is our $15 million contract win with a Tier 1 Asia Pacific operator in which we displaced a competitor, as well as other multi-million contracts for our software and services. We expect to see growth in revenues in the coming quarters, as backlog translates into revenue. Our solutions remain critical to our customers' ability to maximize the value of their networks. We are making good progress on the restructuring program stemming from our acquisitions and remain focused on maximizing our profitability and cash generation."
The Company is progressing with its previously announced cost structure optimization, which commenced as planned following the integration of the acquisition of Orga Systems in July of last year. The Company has eliminated duplicate functions and closed certain offices, with the majority of these having been acquired in our NSN BSS acquisition. We expect these steps to generate annualized savings of $20 million to $25 million in fiscal 2017.
The lenders under the Company's credit facility have amended the facility's financial covenants such that the anticipated financial results for Q2 2016 will not breach the covenants, and have reduced the availability under its revolving line of credit to $20.0 millionfrom $40.0 million. Redknee's available liquidity as at March 31, 2016 remains strong at $64.0 million, including $44.0 million of cash.
Redknee expects to report its full Q2 2016 financial results on Monday, May 9, 2016 after markets close. The Company emphasizes that its actual results for Q2 2016 may vary from the preliminary results presented in this press release, and such variations may be material. These preliminary results are subject to completion of the Company's customary quarterly closing and review procedures.
Award of $15 Million Software and Services Contract with Tier 1 Asia Pacific Service Provider
Redknee has been awarded a contract valued at $15 million by a Tier 1 communications services provider (CSP) in the Asia Pacific Region to deliver the latest version of Redknee Unified and to replace a competitor's legacy postpaid billing system. Redknee Unified, Redknee's award-winning monetization and subscriber management platform, will enhance this service provider's competitive position by shortening time to market and creating differentiation with service offerings and targeted campaigns, as it continues to pursue its long-term growth strategy.
"This strategic win demonstrates how Redknee's flexible and scalable solution can enhance competitiveness and foster innovation among leading CSPs in some of the most competitive markets in the world," said Mr. Skoczkowski. "We look forward to working with this major service provider to transform its business."
The company will host a conference call to discuss this announcement.
Date: Today, Monday, April 11, 2016
Time: 8:30 a.m. ET
Dial-In Number: 1 (888) 231-8191
International: 1 (647) 427-7450
Conference ID#: 88626730
The conference call will be webcast live and available for replay via either the Investors section of Redknee's website (www.redknee.com) or http://bit.ly/25PWBFR.
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization.
If you have any difficulty connecting with the conference call, please contact NATIONAL | Equicom at 1 (416) 586-1955.
A replay of the call will be available until 12:00 midnight (ET) Monday, April 18, 2016.
Toll-Free Replay Number: 1 (855) 859-2056
International Replay Number: 1 (416) 849-0833
Replay PIN: 88626730
Media Enquiries: firstname.lastname@example.org
Redknee monetizes today's digital world for communications service providers. Our market-leading portfolio of monetization and subscriber management solutions includes real-time billing, charging, policy and customer care modules and is available on premise, cloud-based, or as Software-as-a-Service. With a central focus on driving customer success, Redknee's products power growth and innovation for operators globally. Established in 1999, Redknee Solutions Inc. (TSX: RKN) can be found on the Toronto Stock Exchange. For more information about Redknee, please go to www.redknee.com
For additional information please contact:
+1 905 625 2190
NATIONAL | Equicom
T: (416) 848-1427