10/21/2015Redflex Bounces Back Overseas, Quarterly Losses Down
Scandal-plagued red light camera firm sees a brighter future in Europe and Australia as US fortunes continue to tumble.
Redflex told Australian investors on Tuesday that rumors of its demise were exaggerated. The red light camera and speed camera firm reported a net loss of just $1.1 million in the first quarter of the 2016 fiscal year -- a significant improvement from the previous year's $3.1 million loss.
"The company has been focused on the development of new revenue streams enabled both by new product development and successful entry into new geographic markets," Redflex told investors in a statement. "The increased international revenue growth was driven by new contract wins in Australia, the United Kingdom and Europe."
Redflex has been steadily shifting its attention outside the United States, with automated ticketing programs outside of North America now representing 44 percent of the Australian firm's cash flow. While the company has seen success in Europe, the Middle East and Asia, its US troubles continue to worsen.
"Overseas business revenue growth was offset by a reduction in revenue in our Americas business of 17.0 percent," the company admitted. "The reduction in Americas' revenue was the result of contract terminations or expirations in New Jersey and Ohio."
Redflex has attempted to stem the tide of lost business as cities have grown increasingly disenchanted with automated enforcement. Other towns have dropped Redflex for fear of being linked to the ongoing bribery scandal. In response, the company has slashed its workforce and even moved its US headquarters to cheaper office space to cut costs by 3.4 percent.
Investors responded well to the firm's renewed dedication to frugality. At the end of August, Redflex stock stood at just 17 cents. It ended trading Tuesday at 36 cents per share. The joy may not last long as the ongoing corruption investigation into Redflex business practices could lead to more indictments and convictions. Already, firm faces the prospect of a $300 million fine for contract fraud in Chicago, Illinois, after executive vice president Aaron M. Rosenberg and former US operations chief Karen Finley admitted their guilt.