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Message: Announces Fiscal 2008 Results

Announces Fiscal 2008 Results

posted on Mar 28, 2009 02:27PM
March 26, 2009
Radiant Communications Announces Fiscal 2008 Results

Success In New Products and Services Generates Record Revenue

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 26, 2009) - Radiant Communications Corp. ("Radiant") (TSX VENTURE:RCN), Canada's leading supplier of Broadband Solutions for Business(TM), today announced its financial results for the fourth quarter and year ended December 31, 2008.

HIGHLIGHTS:

- Revenue of $24.9 million for the year ended December 31, 2008 increased by 14.3% compared to revenue of $21.8 million for the year ended December 31, 2007.

- Revenue in Q4 of 2008 was a record $7.0 million and a 20.0% increase over Q4 of 2007.

- Gross margin was 44.4% for the year.

- In the fourth quarter of 2008 the Company recorded EBITDA of $162,883 and EBITDA for the year was $591,597 (see EBITDA section for reconciliation to GAAP).

- The Net loss in 2008 of $531,433 amounted to $(0.05) per share with Q4 2008 EPS of $(0.01).

- The Company ended the current year with cash and short-term investments of $2.3 million and generated cash from operations of $517,102 during 2008.

- On September 2, 2008 Radiant announced a significant long term contract with a major North American customer. The 5 year contract for managed services is valued in excess of $20 Million and includes Radiant's state of the art MPLS service being deployed to over 3,000 North American locations. In 2008 Radiant provisioned over 1,200 locations for this customer.

- In 2008 Radiant invested in the completion of its MPLS network, built out a second redundant virtual grid in Toronto, installed new real-time network monitoring systems and significantly upgraded its business continuity and disaster recovery capabilities, all while holding capital expenditures at $1.2 million for the year.

- During 2008 Radiant commercially launched its AlwaysThere(TM) Solutions portfolio of products including hosted Exchange and hosted applications on virtual grid servers. Radiant deployed over 3,000 hosted Exchange customer seats in the year. Monthly recurring revenues for the AlwaysThere portfolio grew from zero to over $60,000 of Monthly recurring revenue as of Dec 31st.

- Radiant's investments in its MPLS network and AlwaysThere solutions portfolio began paying dividends in 2008 with several significant multi-year contract awards.

- Radiant continued the roll out of existing high value customers during the year including Wal-Mart, lululemon, Laura, Sony Stores, HDS Retail and Dollarama.

"2008 was a very successful transformative year for Radiant," said David Buffett, President and CEO of Radiant. "We invested and launched our SaaS AlwaysThere hosted Exchange offering and built that business from a standing start to over 3,000 seats provisioned by year end. The AlwaysThere Business passed the break even mark in September and is contributing positively to our bottom line. Radiant ended the year with a record backlog of customer sites for roll out in 2009 which positions us very well for the upcoming year. In the face of extremely difficult times for Canadian small and medium business we are experiencing continuing record growth as new and existing customers embrace our secure, reliable and highly cost effective solutions."

"In September we signed a 5 year managed services agreement with one of North America's premiere consumer services organizations. The contract, to provide managed connectivity services to over 3,000 locations, is valued in excess of $20 million. We will be continuing the roll out for this customer well into Q2 of 2009 and anticipate that ongoing efficiencies as well as the installed base will assist in margin and EBITDA improvements going forward."

"Our new AlwaysThere hosted Exchange offering is now well established with over 3,000 seats provisioned and a strong funnel of opportunities. Although some customers are delaying IT decisions we are finding that our SaaS solution remains attractive due to immediate cost savings and long term reliability and security. We invested carefully in this product offering and our market channels in 2008, with the knowledge it would temporarily reduce EBITDA and cash flows. With excellent early success and a well established customer base and sales team now in place we will continue to invest in marketing and channel growth in 2009."

"Throughout 2008 we invested in systems, infrastructure and people to ensure that we can deliver on our goals of high reliability and security and superior customer service while preparing the organization for high growth. I am very pleased with our results and I believe we are extremely well positioned in the market to prosper in these turbulent times. With cash in the bank, no debt, a high growth recurring revenue business model, and a superior customer base, I look forward to ongoing success in 2009," concluded Mr. Buffett.

Additional details on the fourth quarter and year end results, including the audited Financial Statements and Management Discussion and Analysis, will be made available at www.sedar.com under Radiant Communications Corp.

Radiant will hold a conference call to discuss its results for the year end and fourth quarter ended December 31, 2008 on March 27, at 9:00 a.m. PDT (12:00 p.m. EDT). Access to the call may be obtained by calling the operator at 1-866-215-0058 (Toll Free North America), or 1-416-915-9616 (International) 10 minutes prior to the scheduled start time. 7 days after the call at 1-866-245-6755 (Toll Free North America) or 416-915-1035 (International). The passcode for the playback is 417004. The audio web cast will be archived for replay on Radiant's web site at www.radiant.net.

Non-GAAP Measures

The Company reports EBITDA because it is a key measure used by management to evaluate the Company's performance. The Company believes that EBITDA is useful supplemental information as it provides an indication of the results generated by the Company's main business activities prior to taking into consideration how those activities are financed and taxed and also prior to taking into consideration asset depreciation and other non-cash expenses. EBITDA is not a recognized measure under Canadian GAAP, and accordingly investors are cautioned that EBITDA should not be construed as an alternative to net earnings or loss determined in accordance with Canadian GAAP as an indicator of the financial performance of the Company or as a measure of the Company's liquidity and cash flows. The Company's method of calculating EBITDA differs from other issuers and, accordingly, EBITDA may not be comparable to similar measures presented by other issuers. Please see the schedule below that sets out the Company's EBITDA calculations.

EBITDA

Earnings before Interest, Taxes, Depreciation and Amortization is calculated as follows:

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($000s)                                      Q4 2008      Q4 2007
-----------------------------------------------------------------
Operating Income (Loss)                       $ (171)      $  260
Amortization                                     266          257
Stock-based compensation expense                  68          106
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EBITDA                                        $  163       $  623
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-----------------------------------------------------------------
                                          Year ended   Year ended
                                         December 31, December 31,
($000s)                                         2008         2007
-----------------------------------------------------------------
Operating Income (loss)                       $ (639)      $  729
Amortization                                     981          896
Stock-based compensation expense                 250          150
-----------------------------------------------------------------
EBITDA                                        $  592       $1,775
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ABOUT RADIANT COMMUNICATIONS

Radiant Communications Corp. (www.radiant.net) provides businesses with a comprehensive range of IP-based data communications services including the largest on-net DSL footprint across Canada, T1 and E10/E100 fibre broadband, MPLS, IPSec, and SSL private networking. From its data centres in Toronto and Vancouver, Radiant also delivers network-based Microsoft Exchange(R), email archiving, digital voice, credit/debit payment processing, and disaster recovery services via VMware-powered grid computing facilities directly into customers' private networks.

In operation since 1996, the company currently serves over 16,000 business locations in Canada and the United States from its offices in Vancouver, Toronto, Montreal, Calgary, and Edmonton.

Broadband Solutions for Business and AlwaysThere are registered trademarks of Radiant Communications Corp. All other trademarks, service marks, registered trademarks, or registered service marks are the property of their respective owners.

This press release may contain forward-looking statements, including statements regarding the business and anticipated financial performance of Radiant, which involve risks and uncertainties. These risks and uncertainties may cause Radiant's actual results to differ materially from those contemplated by the forward-looking statements. Factors that might cause or contribute to such differences include, among others, competitive pressures, the growth rate of the Internet and telecommunications concerns, constantly changing technology and market acceptance of Radiant's products and services. Investors are also directed to consider the other risks and uncertainties discussed in Radiant's required financial statements and filings. All other companies and products listed herein may be trademarks or registered trademarks of their respective holders.

RADIANT COMMUNICATIONS CORP.
STATEMENTS OF OPERATIONS, COMPREHENSIVE INCOME (LOSS) AND DEFICIT
(Expressed in Canadian dollars)

---------------------------------------------------------------------------
                             Three months ended              Year ended
                                December 31,                December 31,
                             2008          2007          2008          2007
---------------------------------------------------------------------------
                       (Unaudited)   (Unaudited)

Revenue              $  6,981,267  $  5,818,927  $ 24,900,158  $ 21,782,269
Cost of sales           4,120,549     2,985,168    13,847,038    10,964,994
---------------------------------------------------------------------------

Gross profit            2,860,718     2,833,759    11,053,120    10,817,275
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Expenses
 Sales and marketing      583,057       452,106     2,358,755     2,049,463
 General and
  administrative        2,182,904     1,864,364     8,353,194     7,143,285
 Amortization             265,315       256,615       980,623       895,684
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                        3,031,276     2,573,085    11,692,572    10,088,432
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Income (loss) before
 undernoted              (170,558)      260,674      (639,452)      728,843

Interest expense           13,558        39,219        92,412       139,315
Non-cash interest
 expense on
 warrants                       -             -             -         3,676
Other (income)
 expenses                 (80,789)       36,473      (200,431)      171,288
---------------------------------------------------------------------------

Income and
 comprehensive
 income (loss) for
 the year                (103,327)      184,982      (531,433)      414,564

Deficit, beginning
 of period             (4,508,322)   (4,265,198)   (4,080,216)   (4,494,780)
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Deficit, end
 of period           $ (4,611,649) $ (4,080,216) $ (4,611,649) $ (4,080,216)
---------------------------------------------------------------------------
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Basic and diluted
 earnings (loss) per
 share               $      (0.01) $       0.02  $      (0.05) $       0.04

Weighted average
 common shares,
 used in computing
 basic and diluted
 earnings (loss) per
 share                 10,925,658    10,925,658    10,925,658    10,898,535
---------------------------------------------------------------------------
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Radiant Communications Corp.
BALANCE SHEET
(Expressed in Canadian dollars)

---------------------------------------------------------------------------
                                                December 31,    December 31,
                                                       2008            2007
---------------------------------------------------------------------------

Assets
Current assets
 Cash and cash equivalents                   $    1,810,478  $    2,534,271
 Short-term investment                              424,000          33,000
 Restricted short-term investment                   109,000         500,000
 Trade accounts receivable                        2,534,797       2,342,465
 Inventories                                        674,717         412,972
 Prepaid expenses and deposits                      275,913         262,741
 Deferred costs                                   1,254,309         535,302
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                                                  7,083,214       6,620,751

Property and equipment                            1,648,465       1,401,203
Goodwill                                          1,574,228       1,574,228
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                                             $   10,305,907  $    9,596,182
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---------------------------------------------------------------------------

Liabilities and Shareholders' Equity
Current liabilities
 Accounts payable and accrued liabilities    $    2,333,222  $    2,189,748
 Customer deposits                                  162,086         164,896
 Deferred revenue                                 4,329,351       3,418,737
 Current portion of deferred lease
  inducements                                        16,050          16,421
 Current portion of obligations
  under capital leases                              176,218         242,945
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                                                  7,016,927       6,032,747

Deferred lease inducements                           64,509          11,868
Obligations under capital leases                     87,203         133,293
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                                                  7,168,639       6,177,908
---------------------------------------------------------------------------

Shareholders' equity
 Share capital                                    3,601,872       3,601,872
 Contributed surplus                              4,147,045       3,896,618
 Deficit                                         (4,611,649)     (4,080,216)
---------------------------------------------------------------------------
                                                  3,137,268       3,418,274
---------------------------------------------------------------------------
                                             $   10,305,907  $    9,596,182
---------------------------------------------------------------------------
---------------------------------------------------------------------------


RADIANT COMMUNICATIONS CORP.
STATEMENTS OF CASH FLOWS
(Expressed in Canadian dollars)

---------------------------------------------------------------------------
                             Three months ended              Year ended
                                December 31,                December 31,
                             2008          2007          2008          2007
---------------------------------------------------------------------------
                       (Unaudited)   (Unaudited)
Cash flows from
 operating activities:
 Income (loss) for
  the period         $   (103,327) $    184,982  $   (531,433) $    414,564
 Items not involving
  cash:
  Amortization            265,315       256,615       980,623       895,684
  Stock-based
   compensation            68,127       106,471       250,427       150,607
  Non-cash interest
   expense on
   warrants                     -             -             -         3,676
  Amortization of
   deferred lease
   inducements             (3,827)      (18,494)       (3,425)      (73,974)
  Foreign exchange
   (gain) loss            (49,371)       47,066       (99,807)      174,239
---------------------------------------------------------------------------
                          176,917       576,640       596,385     1,564,796

 Change in non-cash
  working capital:
  Trade accounts
   receivable            (155,179)     (456,651)     (192,332)     (462,560)
  Inventories             114,206       (38,258)     (261,745)       17,533
  Prepaid expenses
   and deposits           146,346       103,993       (13,172)      (44,856)
  Deferred costs         (201,010)       29,949      (719,007)      (37,209)
  Accounts payable
   and accrued
   liabilities           (276,363)      105,010       143,474      (109,997)
  Customer deposits           (17)         (150)       (2,810)       (2,250)
  Deferred revenue        396,568       134,467       910,614       336,149
  Tenant improvement
   allowance
   reimbursement           55,695             -        55,695             -
---------------------------------------------------------------------------
                          257,163       455,000       517,102     1,261,606

Cash flows from
 investing activities:
 Purchase of property
  and equipment          (142,586)     (238,194)   (1,090,898)   (1,085,752)
 Short-term investments   391,000                     391,000
 Restricted short-term
  investment             (391,000)            -      (391,000)            -
---------------------------------------------------------------------------
                         (142,586)     (238,194)   (1,090,898)   (1,085,752)

Cash flows from
 financing activities:
 Proceeds from issuance
  of common shares              -             -             -       888,437
 Payments under
  capital leases          (42,372)      (71,241)     (249,804)     (517,790)
---------------------------------------------------------------------------
                          (42,372)      (71,241)     (249,804)      370,647

Foreign exchange gain
 (loss) on cash held
 in foreign currency       49,371       (47,066)       99,807      (174,239)
---------------------------------------------------------------------------

Increase (decrease) in
 cash and cash
 equivalents              121,576        98,499      (723,793)      372,262

Cash and cash
 equivalents, 
 beginning of period    1,688,902     2,435,772     2,534,271     2,162,009
---------------------------------------------------------------------------
Cash and cash
 equivalents, end
 of period           $  1,810,478  $  2,534,271  $  1,180,478  $  2,534,271
---------------------------------------------------------------------------
---------------------------------------------------------------------------



The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

CONTACT INFORMATION:

Radiant Communications Corp. - Investors and Media
Chuck Leighton
CFO
(604) 692-4531
Email: cleighton@radiant.net
Website: www.radiant.net

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