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© Redline Communications Inc. 2012. All rights reserved. 1 | 1 | rdlcom.com Fall 2013 An Introduction to Redline Communications Rob Williams, CEO

Redline Communications - Investor Update - November 2013

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Page 1: Redline Communications - Investor Update - November 2013

© Redline Communications Inc. 2012. All rights reserved.

1 | 1 | rdlcom.com

Fall 2013

An Introduction to Redline Communications

Rob Williams, CEO

Page 2: Redline Communications - Investor Update - November 2013

© Redline Communications Inc. 2012. All rights reserved.

2 | 2 | rdlcom.com Forward-Looking Statements

From time to time Redline makes written and oral statements that constitute forward-looking information within the meaning of applicable securities laws (“forward- looking statements”). Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Business, or developments in Redline’s industry, to differ materially from the anticipated results, performance, achievements or developments expressed or implied by such forward-looking statements. Forward-looking statements include all disclosure regarding possible events, conditions or results of operations that are based on assumptions about future economic conditions and courses of action. Forward- looking statements may also include, without limitation, any statement relating to future events, conditions or circumstances. Redline cautions you not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made.

These statements may include, but are not limited to, comments about: our objectives and priorities for the future, our strategies, expectations for our financial condition, the outlook for our operations, and external factors that may impact results, including global economies and industry trends. Forward-looking statements are based on management’s current plans, estimates, projections, beliefs and opinions, and Redline does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change. We caution that this list is not exhaustive of all possible factors. Other factors could adversely affect our results. For more information, please see the discussion on the principal risks that could affect our results, which is included in our most recent MD&A and in our latest annual information form, available on SEDAR at www. sedar.com. The assumptions behind our outlook are also discussed in our public filings.

Page 3: Redline Communications - Investor Update - November 2013

© Redline Communications Inc. 2012. All rights reserved.

3 | 3 | rdlcom.com

Designs, builds and manufactures high-performance, rugged, high-speed wireless network equipment

Enables Machine-to-Machine (M2M) communication for industrial applications

Software-defined radio platform

Very large and diversified customer base in wide geographic regions in Energy, Industrial, Military, Public Safety, Telecom

Redline

Page 4: Redline Communications - Investor Update - November 2013

© Redline Communications Inc. 2012. All rights reserved.

4 | 4 | rdlcom.com

Publicly traded on Toronto Stock Exchange - RDL

135 employees in 15 countries, offices in Canada, USA, Europe and Middle East

90% of revenue comes from outside Canada, customers in 70 countries in energy, telecom service provider, municipal governments, military

$30M¹ in revenues in 2012, approximately 40% from Energy Sector

Redline

¹ net of WIMAX

Page 5: Redline Communications - Investor Update - November 2013

© Redline Communications Inc. 2012. All rights reserved.

5 | 5 | rdlcom.com

Oil and Gas industry requires reliable, secure, high speed networks in

some of the toughest places on the planet

Redline has a unique differentiated solution for this market

Key Market – Oil and Gas

Page 6: Redline Communications - Investor Update - November 2013

© Redline Communications Inc. 2012. All rights reserved.

6 | 6 | rdlcom.com

Oilfield Challenges

Large geography lightly populated with people and machines, harsh environment

Very expensive operations

Complex communications needs: M2M, access to internet and corporate systems, video for collaboration and surveillance for safety

Typically no wireless carriers except satellite, fiber is very expensive, other terrestrial wireless systems fail to deliver

Page 7: Redline Communications - Investor Update - November 2013

© Redline Communications Inc. 2012. All rights reserved.

7 | 7 | rdlcom.com

Mobile Drilling Rig

Battery Tank RTU - Remote Terminal Unit PLC - Programmable Logic Controller

Emergency Response

Work Vehicle CWE - Collaborative Work Environment

Process Domain

Video Monitoring

To HQ Central Control Room SCADA Systems

SMART OILFIELD Well Pad

Field Office

Well Head Automation

Mobile Field Connectivity

Operational Video Surveillance

Micro Seismic Applications

Asset Tracking via RF-ID

Energy Management

Collaborative Working Env.

Smart Drilling

SCADA Wi-Fi

Powerful and Versatile Wireless

Page 8: Redline Communications - Investor Update - November 2013

© Redline Communications Inc. 2012. All rights reserved.

8 | 8 | rdlcom.com

Page 9: Redline Communications - Investor Update - November 2013

© Redline Communications Inc. 2012. All rights reserved.

9 | 9 | rdlcom.com

Mobile Rapid Alignment System

Drilling Rigs

Mobile Field Offices

Maintenance Vehicles

Long-Range Mobile Broadband

Page 10: Redline Communications - Investor Update - November 2013

© Redline Communications Inc. 2012. All rights reserved.

10 | 10 | rdlcom.com

Rugged, Reliable and Secure Wireless

Lowest meantime between failure, widest temperature range Highly secure, FIPS 140-2 certified, approved for Military use

Page 11: Redline Communications - Investor Update - November 2013

© Redline Communications Inc. 2012. All rights reserved.

11 | 11 | rdlcom.com

LTE vs Redline in an Oil Field Network

5.8 GHz Band, 10 Mhz Channel

Speed 5.3 Mbps Down, 2.6 Mbps Up

LTE

14 Towers 7 Towers

1,200 KM2 Coverage 1,200 KM2 Coverage

5.8 GHz Band, 10 Mhz Channel

Speed 5.3 Mbps Down, 5.3 Mbps Up

Redline

Page 12: Redline Communications - Investor Update - November 2013

© Redline Communications Inc. 2012. All rights reserved.

12 | 12 | rdlcom.com

MILITARY:

PUBLIC SAFETY AND WELL-BEING:

TELECOM SERVICE PROVIDERS:

ENERGY :

Customers

ORASCOM

DEA

Page 13: Redline Communications - Investor Update - November 2013

© Redline Communications Inc. 2012. All rights reserved.

13 | 13 | rdlcom.com

Sell and manage directly, install with local partners

Strategic Partners include Cisco, Honeywell, ABB and other Systems Integrators

Revenue comes from:

+ product sales

+ professional services

+ recurring support revenue

+ functionality upgrades via software

Each oilfield can support $2M to $5M of Redline revenue over several years, currently 21 fields in various stages of deployment plus many fields in pilots

Redline Business Model

Page 14: Redline Communications - Investor Update - November 2013

© Redline Communications Inc. 2012. All rights reserved.

14 | 14 | rdlcom.com

-

2

4

6

8

10

12

Q1 Q2 Q3 Q4 Q1 Q2 Q3

2012 2013

Mill

ion

s

Reported Revenue (net of WiMAX)

Normalized Revenue

0%

20%

40%

60%

80%

Q1 Q2 Q3 Q4 Q1 Q2 Q3

2012 2013

Gross margin %

Page 15: Redline Communications - Investor Update - November 2013

© Redline Communications Inc. 2012. All rights reserved.

15 | 15 | rdlcom.com

Energy Revenue

0

2

4

6

8

10

12

14

16

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Backlog

2012 2013 Backlog

Mill

ion

s

Energy Revenue

Page 16: Redline Communications - Investor Update - November 2013

© Redline Communications Inc. 2012. All rights reserved.

16 | 16 | rdlcom.com

EBITDA

-3

-2

-1

0

1

2

3

4

5

Q1 Q2 Q3 Q4 Q1 Q2 Q3

2012 2013

Adjusted EBITDA

-

2

4

6

8

10

12

14

16

18

20

Dec 12 Sept 13

Mill

ion

s

Cash