TORONTO--(Marketwire - Feb 13, 2013) - Redknee Solutions, Inc. (TSX: RKN), a leading provider of business-critical software and solutions for communications service providers, reported results for its fiscal first quarter ended December 31, 2012. All figures below are in U.S. dollars.

Fiscal Q1 2013 Financial Highlights as Compared to the Same Year-ago Quarter

• Revenue increased 6% to $14.2 million, with 50% from recurring revenue streams
• Quarter-end contract backlog up 5% to $64.0 million
• Gross profit up 1% to $8.9 million (63% of revenue) from $8.8 million (66% of revenue)
• Adjusted EBITDA totaled $1.0 million vs. $1.5 million
• Net loss totaled $1.7 million or $0.02 loss per share vs. net income of $0.4 million or $0.01 per share
• Quarter-end cash increased from $16.5 million to $32.3 million due to the bought deal financing closed in the period
• Secured a $20 million line of credit with Wells Fargo Capital Finance

Fiscal Q1 2013 Operational Highlights

• Reached a definitive agreement to acquire the Business Support System (BSS) assets from Nokia Siemens Networks. The acquisition will increase the company's global footprint to span more than 90 countries across Asia Pacific, Europe, Middle East and Africa.
• Signed multi-million dollar, multi-year term license billing and customer care contract with Malea Multimedia Mobile and Services to launch a new mobile brand in Niger.
• Signed license upgrades and service renewals in Americas, APAC and EMEA.
• Redknee was highlighted in the Gartner 2012 Magic Quadrant report on Integrated Revenue and Customer Management (IRCM) for communications service providers.

Fiscal Q1 2013 Financial Results
Revenue increased 6% to $14.2 million from $13.4 million in same year-ago quarter. The improvement was primarily due to an increase in software upgrades and support revenue.

Recurring revenue for the quarter was 50% of total revenue as compared to 54% for the same year-ago quarter. Recurring revenues consist of support and maintenance, long-term services contracts and revenue from term-based licenses.

Gross margin was 63% compared to 66% in the same year-ago quarter.

Adjusted EBITDA was $1.0 million or 7% of total revenue, compared to $1.5 million or 11% of total revenue in the same year-ago quarter (see discussion about the presentation of Adjusted EBITDA, a non-IFRS measure, below).

Net loss totaled $1.7 million or $0.02 loss per share, compared to net income of $0.4 million or $0.01 per share in the same year-ago quarter. The first fiscal quarter 2013 net loss included $2.3 million of one-time costs related to the pending acquisition of Nokia Siemens Networks' Business Support Systems business.

Contracted order backlog increased 5% to $64.0 million compared to the end of the same year-ago quarter.

At December 31, 2012, cash and investments totaled $32.3 million, with net cash of $26.4 million. This compares to cash and investments of $16.5 million and net cash of $8.8 million at December 31, 2011, with the increases mostly due to the financing completed in mid-November 2012.

Please refer to the section regarding forward-looking statements which form an integral part of this release. These results, along with the unaudited condensed consolidated interim financial statements and the company's unaudited MD&A, are available on the company's website at www.redknee.com and on SEDAR at www.sedar.com.

Management Commentary
"This first quarter continued to demonstrate our ability to expand our customer base while managing costs and improving operational efficiencies," said Lucas Skoczkowski, CEO of Redknee. "We plan to sustain this momentum by increasing the number of subscribers on our cloud and SaaS-based solutions, which will further drive recurring revenue and visibility. We will also remain focused on securing multi-year term license contracts, which builds backlog and recurring revenue. We believe this strategy provides a clear, profitable pathway toward becoming the world's largest independent, real-time monetization and subscriber management software company in our industry.

"The Nokia Siemens Networks' BSS acquisition marks a major milestone toward this goal. Once completed, the acquisition will increase our global presence to span more than 90 countries across Asia Pacific, Europe, the Middle East and Africa, and would add strong, long-standing relationships with key Tier 1 operators. We will be able to leverage Nokia Siemens Networks' innovative BSS software products, and benefit from their experience and capabilities in real-time software R&D. Our combined solution suite would enable new cross-selling and upselling opportunities, while their global professional services team would help serve our newly combined customer base. As we scale the combined business, we would expect to have additional opportunities to build on this new operational foundation."

Conference Call
The company will host a conference call tomorrow (Thursday, February 14, 2013) to discuss these results. Redknee's CEO Lucas Skoczkowski and CFO David Charron will host the presentation starting at 8:30 a.m. Eastern time. A question and answer session will follow management's presentation.

Date: Thursday, February 14, 2013
Time: 8:30 a.m. Eastern time
Dial-In Number: 1-877-941-1427
International: 1-480-629-9664
Conference ID#: 4590886

The presentation will be webcast live and available for replay via the Investors section of the company's website at www.redknee.com.

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 Liolios Group at 1-949-574-3860.

A replay of the call will be available after 11:30 a.m. Eastern time on the same day until March 14, 2013.

Toll-Free Replay Number: 1-877-870-5176
International Replay Number: 1-858-384-5517
Replay PIN #: 4590886

About Redknee Solutions, Inc.
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 90 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, 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. For more information, visit www.redknee.com.

About the Presentation of Adjusted EBITDA
Beginning in this first fiscal quarter of 2013, the company has begun to report adjusted EBITDA, which is not a financial measure calculated and presented in accordance with International Financial Reporting Standards (IFRS), and should not be considered as an alternative to net income, operating income or any other financial measures so calculated and presented, or as an alternative to cash flow from operating activities as a measure of liquidity. The company defines adjusted EBITDA as net income (loss) from continuing operations excluding amounts for depreciation and amortization, finance costs, finance income, income taxes, foreign exchange (gain) loss, share-based compensation, and expenses related to the acquisition of Business Support System (BSS) assets from Nokia Siemens Networks. EBITDA is not a measure of financial performance under IFRS, and should not be considered in isolation or as a substitute for consolidated net income (loss) as a measure of performance.

Other companies (including competitors) may define adjusted EBITDA differently. The company presents adjusted EBITDA because management believes it to be an important supplemental measure of performance that is commonly used by securities analysts, investors and other interested parties in the evaluation of companies in Redknee's industry. Management also uses this information internally for forecasting and budgeting. It may not be indicative of the historical operating results of Redknee or is it intended to be predictive of potential future results. Investors should not consider adjusted EBITDA in isolation or as a substitute for analysis of the company's results as reported under IFRS. See "Reconciliation of Net Income (Loss) to adjusted EBITDA" below for further information on this non-IFRS measure.

Forward-Looking Statements
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 www.sedar.com and on the Company's website at www.redknee.com.

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 SOLUTIONS INC.
Condensed Consolidated Interim Statements of Financial Position
(Expressed in U.S. dollars)
(Unaudited)
			December 31,				September 30,
			2012				2012
Assets
Current assets:
	Cash and cash equivalents		$	31,423,899			$	16,878,523
	Trade accounts and other receivables			13,352,217				10,394,639
	Unbilled revenue			12,281,498				12,125,089
	Prepaid expenses			956,231				799,901
	Other assets			241,582				649,272
	Inventory			266,832				580,171
	Total current assets			58,522,259				41,427,595
Restricted cash				920,873				913,270
Property and equipment				1,059,632				726,818
Deferred income taxes				663,391				659,260
Investment tax credits				543,778				550,000
Other assets				3,847,612				3,170,308
Intangible assets				3,506,514				3,671,306
Goodwill				7,638,590				7,638,590
Total assets			$	76,702,649			$	58,757,147
Liabilities and Shareholders' Equity
Current liabilities:
	Trade payables		$	4,191,037			$	1,756,532
	Accrued liabilities			5,236,708				7,156,844
	Income taxes payable			2,162,168				2,036,864
	Deferred revenue			6,044,265				7,258,759
	Total current liabilities			17,634,178				18,208,999
Deferred revenue				1,054,213				78,002
Other liabilities				599,649				439,398
Loans and borrowings				5,494,703				5,461,970
Deferred income taxes				372,121				408,156
Total liabilities				25,154,864				24,596,525
Shareholders' equity:
	Share capital, net of employee share purchase loans			65,515,926				46,543,100
	Treasury stock			(174,339	)			(264,584	)
	Contributed surplus			4,850,473				4,787,549
	Deficit			(18,657,744	)			(16,918,912	)
	Accumulated other comprehensive income			13,469				13,469
	Total shareholders' equity			51,547,785				34,160,622
Total liabilities and shareholders' equity			$	76,702,649			$	58,757,147

REDKNEE SOLUTIONS INC.
Condensed Consolidated Interim Statements of Comprehensive Income (Loss)
(Expressed in U.S. dollars)
(Unaudited)
			Three months ended
			December 31,
			2012				2011
Revenue:
	Software, services and other		$	8,274,738			$	7,623,792
	Support			5,962,225				5,749,120
				14,236,963				13,372,912
Cost of revenue				5,319,408				4,585,236
Gross profit				8,917,555				8,787,676
Operating expenses:
	Sales and marketing			2,953,095				3,393,658
	General and administrative			2,396,603				1,883,915
	Research and development			3,199,661				2,418,650
	Special charges			2,278,472				-
				10,827,831				7,696,223
Income (loss) from operations				(1,910,276	)			1,091,453
Foreign exchange gain (loss)				360,363				(561,415	)
Finance income				12,181				18,072
Finance costs				(114,162	)			(117,139	)
Income (loss) before income taxes				(1,651,894	)			430,971
Income taxes (recovery):
	Current			125,429				119,287
	Deferred			(38,491	)			(46,460	)
				86,938				72,827
Net income (loss) and comprehensive income (loss)			$	(1,738,832	)		$	358,144
Net income (loss) per common share:
	Basic			(0.02	)			0.01
	Diluted			(0.02	)			0.01
Weighted average number of common shares:
	Basic			75,446,243				64,221,515
	Diluted			75,446,243				65,097,593

REDKNEE SOLUTIONS INC.
Condensed Consolidated Interim Statements of Cash Flows
(Expressed in U.S. dollars)
(Unaudited)
				Three months ended
				December 31,
				2012				2011
Cash provided by (used in):
Operating activities:
	Net income (loss)			$	(1,738,832	)		$	358,144
	Adjustments for:
		Depreciation of property and equipment			71,158				43,138
		Amortization of intangible assets			164,792				191,333
		Finance income			(12,181	)			(18,072	)
		Finance costs			114,162				117,139
		Income tax expense			86,938				72,827
		Unrealized foreign exchange loss			66,462				42,923
		Share-based compensation			392,654				129,325
		Other			-				(30,852	)
	Changes in non-cash operating working capital				(2,841,741	)			405,805
					(3,696,588	)			1,311,710
	Interest paid				(87,236	)			8,398
	Interest received				12,195				(22,096	)
	Income taxes paid				(118,398	)			(6,102	)
					(3,890,027	)			1,291,910
Financing activities:
	Issuance of share capital				18,731,390				-
	Proceeds from exercise of stock options				182,050				94,659
	Repayment of loans and borrowings				-				(354,253	)
					18,913,440				(259,594	)
Investing activities:
	Purchase of property and equipment				(403,972	)			(100,454	)
	Purchase of intangible assets				-				(42,357	)
	Increase (decrease) in restricted cash				(7,603	)			73,844
					(411,575	)			(69,967	)
Effect of foreign exchange rate changes on cash and cash equivalents					(66,462	)			(42,923	)
Increase in cash and cash equivalents					14,545,376				920,426
Cash and cash equivalents, beginning of period					16,878,523				14,879,940
Cash and cash equivalents, end of period				$	31,423,899			$	15,800,366

REDKNEE SOLUTIONS INC.
Reconciliation of Net Income (Loss) to Adjusted EBITDA
(Expressed in U.S. dollars)
(Unaudited)
			Three months ended
			December 31,
			2012				2011
Net income (loss) for the period				(1,738,832	)			358,144
Add back / (subtract):
	Depreciation of property and equipment			71,158				43,138
	Amortization of intangible assets			164,792				191,333
	Finance income			(12,181	)			(18,072	)
	Finance costs			114,162				117,139
	Income tax expense			86,938				72,827
	Share-based compensation			392,654				129,325
	Foreign exchange loss (gain)			(360,363	)			561,415
EBITDA				(1,281,672	)			1,455,249
Adjustments
	Special charges related to acquisition			2,278,472				-
Adjusted EBITDA			$	996,800			$	1,455,249