TORONTO, November 26 /PRNewswire/ -- Redknee , a leading provider of business-critical software and services for communications service providers, including end-to-end converged billing, real-time charging, rating and personalization, today announced its results for the fourth quarter and fiscal year ended September 30, 2009.

Highlights - Revenue grew to $53.3 million (2008: $50.7 million) - Gross margin increases to 78% (2008: 70%) - EBITDA profit of $6.5M (2008: loss of $4.2M) - Operating income of $4.2M (2008: operating loss of $3.9M) - Basic earnings per share of $0.06 (2008: loss per share of $0.08) - Cash and investments at $25.8M (September 30, 2008: $15.3M) - Recurring revenues increased to 41% of total revenue (2008: 31% of total revenue) - Six new customers across the Americas, APAC, and EMEA - Successful admission to trading on the Toronto Stock Exchange - Multiple industry awards and recognition for Redknee's technology, solutions and organizational achievements

Please see section regarding Forward-Looking Statements which form an integral part of this release. These results, along with the audited consolidated financial statements and the Company's MDA are available on the Company's website at and on SEDAR at

Lucas Skoczkowski, CEO for Redknee commented:

Redknee delivered profitable growth and excellent results in 2009 despite the challenging economic and market conditions. We enter 2010 as a stronger global organization, with a growing customer base and a solid financial position. Our strategy has positioned us well to benefit from the opportunities in both the high growth and Tier-1 markets. The quarter-to-quarter revenue volatility and foreign exchange headwinds will continue to present challenges in the near term. We remain focused on our long-term growth in revenues and earnings, with emphasis on increasing our recurring revenues, while continuing to take market share in the real-time monetization space.

OVERVIEW -------- As we continue to make progress toward our vision of becoming the leading global communications solutions provider of choice, Redknee remains focused on the three core elements of its corporate strategy: 1. Continued expansion and evolution of our business-critical solutions to our global customer base; 2. Market share growth and leadership in our served addressable market; and 3. An increasing proportion of sustainable recurring revenues. ---------------------------------- (1) Earnings Before Interest Expense, Income Taxes, Depreciation, and Amortization (EBITDA) is a non-GAAP measure. While useful in understanding Company operational results, EBITDA is not standardized and may not be comparable to similar results reported by other companies. EBITDA described above is calculated as Income (loss) from operations, net of foreign exchange gain/loss, amortization and stock-based compensation.

Sales of Redknee's business-critical solutions have continued to grow in the fiscal year 2009, with our Turnkey Converged Billing and Next Generation Rating Charging solutions contributing more than 90% of revenue.

Sales of Redknee's business-critical solutions continued to grow in fiscal 2009, with our Turnkey Converged Billing and Next Generation Rating Charging solutions contributing to more than 90% of revenue. Through the disciplined product roadmap process, Redknee has continued its investment in advancing its competitive advantage and brought to market new releases of its key flagship offerings - Turnkey Converged Billing, InBill and Next Generation Rating Charging Policy.

Redknee's market leading solutions continue to be recognized globally by telecom providers. Redknee has continued to take market share in its served addressable market by gaining six new customers across Americas, APAC and EMEA through combination of deliveries to new operators, modular software delivery that integrate with existing systems, as well as replacement of competitors' end-to-end platforms. Furthermore, Redknee's customer care solution, One Call Resolution, was awarded the International Engineering Consortium (IEC) Info Vision Award for providing the best network and services management and operations solution available. Technology Marketing Corporation (TMC) has named Redknee's One Call Resolution a recipient of the 2009 INTERNET TELEPHONY BSS/OSS Excellence Award presented by INTERNET TELEPHONY magazine. The One Call Resolution customer service representatives and tactical network support technicians to resolve complex network problems quickly and efficiently. The solution increases the 'first call resolution' of subscriber complaints and reduces call handling times by giving support representatives an aggregated view of subscriber services. Redknee has found that this solution is especially important to operators who are deploying increasing number of smartphone platforms and services in their markets.

Redknee continues to have a strong employee base, a growing number of customers, and the right product offering to meet our customers' demands. Market trends further support our approach; mobile data services continue to grow in Tier 1 markets, and wireless subscriber numbers continue to expand in the high growth markets of Africa, the Middle East and Asia Pacific.

Financial Review ----------------

For fiscal 2009, Redknee's revenue increased by 5 % to $53.3 million compared to revenue of $50.7 million in fiscal 2008. The majority of the Company's revenue is denominated in U.S. dollars and thus revenues may be impacted by exchange rate fluctuations.

Recurring revenue was enhanced by sales and renewals of customer support services, software subscriptions and term licenses. In fiscal 2009, recurring revenues were at 41 % of total revenues compared to 2008.

Gross margin in the period increased to $41.3 million or 78% of revenue from $35.7 million or 70% of revenue in fiscal 2008.

Redknee recorded an EBITDA profit of $6.5 million for fiscal 2009 as compared to a loss of $4.2 million for fiscal 2008.

For the fiscal year ended September 30, 2009, the Company experienced a foreign exchange loss of $ 0.9 million as compared to a foreign currency exchange gain of $1.6 in fiscal 2008.

Net income in fiscal 2009 was $3.3 million or $ 0.06 per share, as compared to a loss of $4.4 million or $0.08 per share in fiscal 2008.

Cash and investments as at September 30, 2009 was $25.8 million versus $15.3 million as at September 30, 2008.

CONFERENCE CALL The Company will discuss the results on a conference call and webcast at 8:30 a.m. ET time on Thursday, November 26, 2009. To participate in the conference call please dial the following numbers five minutes before the start of the call to ensure your participation: Local dial-in number +1-416-644-3426 Toll-free North America +1-800-731-5319

A webcast will also be available at: sign)2880020

A copy of the presentation for the call will be available at:

Conference Replay ----------------- The conference call will be archived for replay by telephone at: +1-416-640-1917 or Toll-Free at +1-877-289-8525 (Passcode 4181245 followed by the number sign) from 10:30 am on.


Certain statements in this document may constitute forward-looking statements which involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this document, such statements use such words as may, will, expect, continue, believe, plan, intend, would, could, should, anticipate and other similar terminology. These statements reflect current assumptions and expectations regarding future events and operating performance and speak only as of the date of this document. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed under the Risk Factors section of the Company's the most recently filed AIF which is available on SEDAR at and on the Company's web-site at

Although the forward-looking statements contained in this document are based upon what we believe are reasonable assumptions, we cannot assure investors that our actual results will be consistent with these forward-looking statements. We assume no obligation to update or revise these forward-looking statements to reflect new events or circumstances, except as required by securities law.


Redknee is a leading global provider of innovative communication software products, solutions and services. Redknee's award-winning solutions enable operators to monetize the value of each subscriber transaction while personalizing the subscriber experience to meet mainstream, niche and individual market segment requirements. Redknee's revenue generating solutions provide advanced converged billing, rating, charging and policy for voice, messaging and new generation data services to over 70 network operators in over 50 countries. References to Redknee refer to the combined operations of the parent Redknee Solutions Inc, and all wholly owned subsidiaries.

Redknee(R), Redknee Solutions, and the Redknee logo are trademarks or registered trademarks of Redknee Solutions Inc. All other company, product names and any registered and unregistered trademarks mentioned (if any) are used for identification purposes only and remain the exclusive property of their respective owners.

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Redknee Solutions Inc. Consolidated Balance Sheets As at September 30, 2009 and 2008 ------------------------------------------------------------------------ (expressed in Canadian dollars) 2009 2008 $ $ Assets Current assets Cash and cash equivalents 25,663,047 15,242,607 Short-term investments 107,049 56,363 Trade accounts and other receivables 8,160,277 11,192,182 Unbilled revenue 2,670,431 6,060,452 Investment tax credits receivable 600,000 600,000 Prepaid expenses 1,027,056 1,066,584 Goods in transit 242,099 325,716 ------------------------- 38,469,959 34,543,904 Restricted cash (notes 3 and 15(b)) 322,722 409,919 Property and equipment (note 4) 623,567 580,053 Intangible assets (note 5) 1,139,444 1,388,761 Future income taxes (note 11) 334,513 - Other assets (note 12) 464,303 528,294 ------------------------- 41,354,508 37,450,931 ------------------------- ------------------------- Liabilities Current liabilities Accounts payable 907,694 2,172,268 Accrued liabilities 5,899,843 8,678,539 Income taxes payable 2,529,923 2,100,785 Deferred revenue 6,988,512 5,084,287 Obligations under capital leases (note 7) - 619 ------------------------- 16,325,972 18,036,498 ------------------------- Long-term deferred revenue 1,005,164 - ------------------------- 17,331,136 18,036,498 ------------------------- Shareholders' Equity Share capital, net of employee share purchase loans (note 8(a)) 40,744,480 39,686,701 ------------------------- Contributed surplus 4,572,737 4,410,677 ------------------------- Deficit (21,144,555) (24,471,986) Accumulated other comprehensive loss, net of income taxes (149,290) (210,959) ------------------------- Total deficit and accumulated other comprehensive loss (21,293,845) (24,682,945) ------------------------- 24,023,372 19,414,433 ------------------------- 41,354,508 37,450,931 ------------------------- ------------------------- Commitments, guarantees and contingencies (note 15)

Redknee Solutions Inc. Consolidated Statements of Operations As at September 30, 2009 and 2008 ------------------------------------------------------------------------ (expressed in Canadian dollars) 2009 2008 $ $ Revenue Software, services and other 32,096,609 35,481,999 Support 21,153,523 15,219,345 ------------------------- 53,250,132 50,701,344 Cost of revenue 11,968,026 14,972,692 ------------------------- Gross profit 41,282,106 35,728,652 ------------------------- Operating expenses Sales and marketing 14,608,859 16,566,834 General and administrative 8,983,293 10,768,930 Research and development (note 10) 11,929,925 13,464,000 Amortization of property and equipment and intangible assets 677,229 409,489 Foreign exchange (gain) loss (note 2) 871,514 (1,584,049) ------------------------- 37,070,820 39,625,204 ------------------------- Income (loss) from operations 4,211,286 (3,896,552) Interest income 97,747 451,341 Interest expense (19,687) (27,584) ------------------------- Income (loss) before income taxes 4,289,346 (3,472,795) Income taxes (note 11) Current 961,915 938,409 ------------------------- Net income (loss) for the year 3,327,431 (4,411,204) ------------------------- ------------------------- Net income (loss) per common share (note 8(b)) Basic 0.06 (0.08) Diluted 0.06 (0.08) Weighted average number of common shares (note 8(b)) Basic 57,761,293 56,328,674 Diluted 59,832,102 56,328,674

Redknee Solutions Inc. Consolidated Statements of Cash Flows For the years ended September 30, 2009 and 2008 ------------------------------------------------------------------------ (expressed in Canadian dollars) 2009 2008 $ $ Cash provided by (used in) Operating activities Net income (loss) for the year 3,327,431 (4,411,204) Items not involving cash Amortization of property and equipment 427,912 291,489 Amortization of intangible assets 249,317 118,000 Investment tax credits (200,000) - Unrealized foreign exchange (gain) loss 796,424 (1,371,401) Stock-based compensation 708,727 889,839 Change in non-cash operating working capital (note 13) 5,389,401 (1,708,257) ------------------------- 10,699,212 (6,191,534) ------------------------- Financing activities Collection of employee share purchase loans 484,526 - Proceeds from exercise of stock options 26,586 - Repayment of obligations under capital leases (619) (48,752) ------------------------- 510,493 (48,752) ------------------------- Investing activities Sale (purchase) of short-term investments (50,686) 14,706,683 Purchase of property and equipment (471,426) (586,966) (Increase) decrease in other assets 63,991 (435,581) Loan to Argent Networks PTY Ltd. - (529,463) Repayment of loan to Argent Networks PTY Ltd. - 526,754 (Increase) decrease in restricted cash 87,197 (409,919) Acquisition of Argent Networks PTY Ltd., net of cash acquired (note 16(b)) - (997,985) ------------------------- (370,924) 12,273,523 ------------------------- Effect of exchange rate changes on cash and cash equivalents (418,341) 281,600 ------------------------- Increase in cash and cash equivalents during the year 10,420,440 6,314,837 Cash and cash equivalents - Beginning of year 15,242,607 8,927,770 ------------------------- Cash and cash equivalents - End of year 25,663,047 15,242,607 ------------------------- ------------------------- Supplemental cash flow information Interest paid 19,687 27,584 Interest received 97,747 451,341 Income taxes paid 634,612 1,016,832

SOURCE: Redknee Solutions Inc.

CONTACT: Redknee Solutions Inc., Lucas Skoczkowski, Chief ExecutiveOfficer, David Charron, Chief Financial Officer, Isabel Fernandes-Cunha,Investor Relations, Tel: +1-905-625-2622, Fax: +1-905-625-2773