– Restructuring Well Underway and Customer Success Program Showing Improvement –

TORONTO, Feb. 7, 2018 /CNW/ - Redknee Solutions Inc. (dba Optiva Inc.) (TSX: RKN), an innovative software and solutions company offering mission-critical monetization and subscriber management to leading communication service providers around the globe, reported results for its fiscal first quarter ended December 31^st, 2017. (All figures are in U.S. dollars unless otherwise stated.)

"This past quarter we kicked off our restructuring activities with proceeds from our Rights Offering," said Danielle Royston, CEO of Optiva. "The restructuring activities will continue through the balance of 2018 as we lay the foundation for our unified operating platform to deliver 100% customer success to our customers. We re-positioned the company by launching our new name and new brand, Optiva, as we prepare to begin execution on our second phase: investing to bring our products up to a market leadership position.  Finally, our first full operational period for our customer success program, Optiva Advantage™, is complete, and we are delighted to report that it has improved from our previous position of 20% up to 27%.  While we still have long way to go, I remain excited about our future and look forward to continued steady progress."

Fiscal Q1 2018 Financial Highlights
(Comparisons made between fiscal Q1FY2018 and fiscal Q1FY2017 results, unless otherwise noted)

• Revenue totaled $34.4 million compared to $37.2 million;
• Gross profit was $14.3 million (42% gross margin) compared to $21.1 million (57% gross margin);
• Loss provisions on certain contracts totalling $5.4 million is impacting gross margins in Q1 by 15%;
• Recurring revenue was 66% of revenue, compared to 62%;
• Operating expenses for the period were $76.9 million compared to $22.1 million;
• Operating expenses include $47.0 million in restructuring costs and increased R&D spend of $7.6 million;
• Net loss was $64.5 million, or $0.25 loss per share compared to a net loss of $6.4 million, or $0.06 loss per share;
• Cash used in operating activities was $16.8 million; and
• Board has approved payment of accumulated dividend on the Series A preferred shares of $7.6 million.

Operational Highlights - Q1, 2018 and Subsequent:

• Terminated approximately 520 employees globally;
• Vacated premises in 11 locations;
• Introduced new Optiva branding;
• Customer Success (rebranded Optiva Advantage^TM) metric showing improvement to 27%, up from 20% in May, 2017; and
• Began offering customers Google Cloud Spanner database services.

Please refer to the section regarding Forward-Looking Statements below which form an integral part of this release.  These results, along with the annual audited consolidated financial statements and the Company's MD&A, are available on the Company's website at www.optiva.com and on SEDAR at www.sedar.com.

Conference Call

The Company will host a conference call tomorrow (February 8, 2018) to discuss their Q1 2018 results. CEO Danielle Royston and Interim CFO Anin Basu will host the call starting at 8:30 a.m. Eastern time. A question and answer session will follow management's discussion.

Date: Thursday, February 8, 2018
Time: 8:30 a.m. Eastern time (5:30 a.m. Pacific time)
Dial-In Number: 1 (888) 231-8191
International: 1 (647) 427-7450
Conference ID#: 5989628

The webcast will be available for replay via Optiva's investor relations website (www.optiva.com) or http://bit.ly/2rvKZNu.

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization.

A replay of the call will be available until 12:00 midnight (EST) Thursday, February 15, 2018.

Toll-Free Replay Number: 1 (855) 859-2056
International Replay Number: 1 (416) 849-0833
Replay PIN: 5989628

Media Inquiries: media@optiva.com

About Redknee Solutions Inc. (dba Optiva Inc.)

Optiva Inc. monetizes today's digital world for communications service providers. Our portfolio of subscriber management software enables real-time billing, charging, policy management and user experience functionality that is mission-critical for our customers' growth and innovation. Available on-premise or in the cloud, Optiva™ solutions are designed to deliver the most impact for the best value. Our deep market knowledge and powerful analytical insights coupled with the Optiva Advantage™ program ensure our customers have what they need to achieve their strategic business goals. Established in 1999, Redknee Solutions Inc. (dba Optiva Inc.) can be found on the Toronto Stock Exchange (TSX: RKN). For more information, please go to www.optiva.com.

Non-IFRS Measures

The Company reports "Recurring revenue," which is not a financial measure calculated and presented in accordance with International Financial Reporting Standards (IFRS), should not be considered in isolation or as a substitute to revenue. Recurring revenue includes revenue from support and maintenance agreements, long term service agreements, and term-based product licenses and software subscription.

Other companies (including competitors) may define recurring revenue differently. The Company presents recurring revenue because management believes this 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 uses this information internally for forecasting and budgeting. It may not be indicative of the historical operating results of Redknee nor is it intended to be predictive of potential future results.

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. Forward-looking statements are provided for the purpose of providing information about management's current expectations and plans relating to the future. Persons reading this news release are cautioned that such information may not be appropriate for other purposes. Such forward-looking statements include statements respecting revenue visibility for the Fiscal 2018; the impact of the challenging macro environment on the Company's revenue; the impact of our restructuring initiatives and ongoing cost management efforts on our results in  next year; as well as statements regarding Redknee's future plans, objectives or performance for the current period and subsequent periods and regarding the markets for our products. These statements reflect current assumptions and expectations regarding future events and operating performance and speak only as of the date of this document. Such forward-looking statements involve known and unknown risks, uncertainties and other factors and assumptions that may cause the actual results, performance or achievements to differ materially. Such factors include, but are not limited to, assumptions respecting : (i) the conversion of sales pipeline into orders and orders into revenue based on the extent and timing of historical conversion; (ii)  the anticipated mix of the sale of products and services of the Company and associated margin being consistent with that realized in the past; (iii) the ability of Redknee to bring new products and services to market and to increase sales; (iv) the strength of the Company's product development pipeline; (v) the estimated size and growth prospects of the markets Redknee seeks to address; (vi) the Company's competitive position in those markets and its ability to take advantage of future opportunities in those markets; (vii) the benefits of the Company's products and services to be realized by its customers; (viii) the demand for the Company's products and services and the extent of deployment of the Company's products and services; (ix) the Company's financial condition and capital requirements; * the stability of general economic and market conditions; (xi) currency exchange rates and interest rates; (xii) capital markets continuing to provide the Company with access to capital. The risks and uncertainties that may affect forward-looking statements include, but are not limited to: the failure of demand for Redknee's products to develop as anticipated, the failure to obtain customer orders or meet customer requirements, the inability of Redknee's products to perform as expected, the inability of Redknee to achieve anticipated cost savings in the time frames and to the extent anticipated, unanticipated negative impacts on customer service or product development as a result of costs savings implemented, a material adverse change in the affairs of Redknee, and the factors discussed under the "Risk Factors" section of Redknee's most recently filed AIF which is available on SEDAR at www.sedar.com and on Redknee's web-site at www.redknee.com. Other unknown or unpredictable factors or underlying assumptions subsequently proving to be incorrect could cause actual results to differ materially from those in the forward-looking statements. Redknee does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.

REDKNEE SOLUTIONS INC.
Condensed Consolidated Interim Statements of Financial Position
(Expressed in U.S. dollars)
(Unaudited)

REDKNEE SOLUTIONS INC.
Condensed Consolidated Interim Statements of Comprehensive Loss
(Expressed in U.S. dollars, except per share and share amounts)
(Unaudited)

REDKNEE SOLUTIONS INC.
Condensed Consolidated Interim Statements of Cash Flows
(Expressed in U.S. dollars)
(Unaudited)

SOURCE Redknee Solutions Inc.