Radiant Communications Announces First Quarter 2009 Results
VANCOUVER, May 20, 2009 (Canada NewsWire via COMTEX) --
Companies: Radiant Communications Corp (RCN),
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Company records 28% revenue growth with positive net income and cash
flows
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Radiant Communications Corp. ("Radiant") (TSX Venture Exchange: RCN), Canada's leading supplier of Broadband Solutions for Business(TM), today announced its financial results for its 2009 first quarter ended March 31, 2009.
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HIGHLIGHTS:
- Revenue of $7.3 million for the quarter increased by 28.1% compared to
revenue of $5.7 million for the first quarter of 2008.
- Gross margin was $3.2 million or 43.6% for the quarter.
- The Company recorded EBITDA of $560,291 in the quarter.
- Net income for the quarter was $254,174 or $0.02 per share.
- The Company ended the quarter with cash and short-term investments of
$2.6 million.
- During the quarter Radiant provisioned over 550 new North American
locations for new and existing customers across a wide range of
industries, incuding quick service hospitality, specialty retail,
engineering, finance, and professional services
- Radiant's AlwaysThere(TM) Cloud Computing and Hosted Exchange services
continued to demonstrate solid growth with billings increasing by 19%
compared to the fourth quarter of 2008.
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"In spite of the shrinking economy we were able to grow revenue by over 28%, improve margins over our previous quarter, hold the line on operating expenses, and deliver a positive bottom line," said David Buffett, President and CEO of Radiant. "With more than 1000 locations in backlog waiting to be provisioned coupled with our new Always There Cloud Computing services, Radiant is in a solid position to execute on its growth strategy for 2009.
Financial Review
Revenues for the quarter ended March 31, 2009 increased 28.1% to $7.3 million compared to $5.7 million in the first quarter of 2008. The increase is a result of ongoing sales of new services directed at retailers and larger national businesses as well as the addition of new locations and services to existing customers. Radiant's revenues are primarily recurring in nature and due to extended two and three year customer contracts quarterly revenue growth is relatively predictable and consistent over time. One time hardware revenues can fluctuate from quarter to quarter depending on requirements of customer rollouts that occur each quarter. In the first quarter growth in revenue was attributable to the continuing roll-out of the large customer we announced in September of 2008 as well as the ongoing growth in the new cloud computing services.
For the quarter ended March 31, 2009, the Company's gross profit was $3.2 million compared to $2.8 million in the first quarter of 2008. Gross profit as a percent of revenue was 43.6% for the quarter ended March 31, 2009 compared to 46.2% for the same period in 2008 and 41.0% in the immediately preceding quarter. Approximately 90% of all the Company's access and bandwidth costs are directly variable with revenue, and accordingly, margin percentages are relatively predictable. Overall margin percentage can vary with revenue mix, as hardware revenues carry lower margins than the Company's higher value connectivity and managed services. Additionally, installation and activation efforts and costs, including third party services, are often higher during periods of strong growth.
Operating expenses, including sales and marketing, general and administrative, and amortization costs increased by 4.3% to $2.9 million in the first quarter of 2009 compared to $2.8 million in the first quarter of 2008. Operating expenses decreased by 4.4% in the first quarter of 2009 compared to the preceding fourth quarter of 2008 as a result of cost control efforts across both Sales and marketing expenses include compensation expenses, agent and channel distribution, and marketing costs. For the quarter ended March 31, 2009, sales and marketing expense increased 2.1% to $536,571 compared to $525,282 in the first quarter of 2008. Sales and marketing expenses in the first quarter of 2009 were $46,486 lower than the expenses recorded in the fourth quarter of 2008. The first quarter of 2009 experienced somewhat slower sales volumes, particularly in the retail sector, which resulted in lower commission costs and agent fees.
General and administrative expenses, which include customer care, technical, network, executive and administrative staff, systems development, hardware, software, premises, office and general expenses, were up 6.0% to $2.1 million for the quarter ended March 31, 2009 compared to $2.0 million in the first quarter of 2008. The increase is primarily due the resources required to support a 28% growth in revenue. General and administrative expenses in the first quarter of 2009 decreased by $49,945 compared to the fourth quarter of 2008.
For the quarter ended March 31, 2009 amortization expenses of $262,216 were 8.8% higher than amortization expenses in the first quarter of 2008 of $240,935 as the company invested in a new private network infrastructure as well as virtual server capability and stored area networks to support the new cloud computing offering.
The Company had net income of $254,174 or $0.02 per share for the quarter ended March 31, 2009 compared to a net loss of $157,077 or ($0.01) per share in the first quarter of 2008. The weighted average number of shares outstanding for the first quarter of 2009 and 2008 was 10.9 million.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 2009 Radiant had cash and short term investments of $2.6 million compared to $2.3 million at December 31, 2008. Radiant has achieved a consistent record of positive cash flows from operations that are sufficient to fund all expected capital acquisitions in 2009.
Additional details on the first quarter results, including the unaudited 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 quarter ended March 31, 2009 on May 21, at 1:30 p.m. PDT (4:30 p.m. EDT). Access to the call may be obtained by calling the operator at 1-866-215-0058 (Toll Free North America), or 416-915-9616 (International) 10 minutes prior to the scheduled start time. A playback version of the call will be available for 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 798302. 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.
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EBITDA
Earnings before Interest, Taxes, Depreciation and Amortization is
calculated as follows:
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($000s) Q1 2009 Q1 2008
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Operating Income (loss) $ 233 $(160)
Amortization 262 241
Stock-based compensation expense 66 43
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EBITDA $ 561 $ 124
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ABOUT RADIANT COMMUNICATIONS
Headquartered in Vancouver, Canada, Radiant Communications (www.radiant.net) provides businesses with a comprehensive range of IP-based data communications services including the largest on-net DSL footprint across Canada & the US, T1 and E10/E100 fibre broadband, coupled with MPLS, IPSec, and SSL private networking. From its data centres in Toronto and Vancouver, Radiant also delivers cloud computing services connected directly into customers' private networks. The cloud computing services include hosting mission-critical applications, disaster recovery/business continuity, and fully managed Microsoft Exchange.
In operation since 1996, the company currently serves over 18,000 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.
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The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
RADIANT COMMUNICATIONS CORP.
BALANCE SHEET
(Expressed in Canadian dollars)
(Unaudited)
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March 31, December 31,
2009 2008
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Assets
Current assets
Cash and cash equivalents $ 2,108,995 $ 1,810,478
Short-term investments 424,000 424,000
Restricted short-term investment 109,000 109,000
Trade accounts receivable 2,872,583 2,534,797
Inventories 435,259 674,717
Prepaid expenses and deposits 393,468 275,913
Deferred costs 1,292,493 1,254,309
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7,635,798 7,083,214
Property and equipment 1,549,109 1,648,465
Goodwill 1,574,228 1,574,228
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$ 10,759,135 $ 10,305,907
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Liabilities and Shareholders' Equity
Current liabilities
Accounts payable and accrued liabilities $ 2,471,122 $ 2,333,222
Customer deposits 161,485 162,086
Deferred revenue 4,383,786 4,329,351
Current portion of deferred lease
inducements 16,050 16,050
Current portion of obligations under
capital leases 121,347 176,218
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7,153,790 7,016,927
Deferred lease inducements 67,180 64,509
Obligations under capital leases 81,625 87,203
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7,302,595 7,168,639
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Shareholders' equity
Share capital 3,601,872 3,601,872
Contributed surplus 4,212,143 4,147,045
Deficit (4,357,475) (4,611,649)
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3,456,540 3,137,268
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Contingent liabilities
$ 10,759,135 $ 10,305,907
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RADIANT COMMUNICATIONS CORP.
STATEMENTS OF OPERATIONS, COMPREHENSIVE INCOME (LOSS) AND DEFICIT
(Expressed in Canadian dollars)
(Unaudited)
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Three months ended March 31,
2009 2008
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Revenue $ 7,266,188 $ 5,669,833
Cost of sales 4,101,465 3,051,953
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Gross profit 3,164,723 2,617,880
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Expenses
Sales and marketing 536,571 525,282
General and administrative 2,132,959 2,012,153
Amortization 262,216 240,935
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2,931,746 2,778,370
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Income (loss) before undernoted 232,977 (160,490)
Interest expense 16,999 38,663
Other (income) expense (38,196) (42,076)
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Net earnings (loss) and comprehensive
income (loss) for the period 254,174 (157,077)
Deficit, beginning of period (4,611,649) (4,080,216)
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Deficit, end of period $ (4,357,475) $ (4,237,293)
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Basic and diluted earnings (loss)
per share $ 0.02 $ (0.01)
Weighted average common shares, used in
computing basic and diluted earnings
(loss) per share 10,925,658 10,925,658
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RADIANT COMMUNICATIONS CORP.
STATEMENTS OF CASH FLOWS
(Expressed in Canadian dollars)
(Unaudited)
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Three months ended March 31,
2009 2008
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Cash flows from operating activities:
Income (loss) for the period $ 254,174 $ (157,077)
Items not involving cash
Amortization 262,216 240,935
Stock-based compensation 65,098 43,276
Amortization of deferred lease
inducement 2,671 (12,738)
Foreign exchange (gain) loss (20,790) (16,299)
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563,369 98,097
Change in non-cash working capital
Trade accounts receivable (337,786) 74,665
Inventories 239,458 4,215
Prepaid expenses and deposits (117,555) (27,268)
Deferred costs (38,184) (411,730)
Accounts payable and accrued liabilities 137,900 741,058
Customer deposits (601) (865)
Deferred revenue 54,435 235,117
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501,036 713,289
Cash flows from investing activities:
Purchase of property and equipment (162,860) (403,471)
Cash flows from financing activities:
Payments under capital leases (60,449) (71,418)
Foreign exchange gain (loss) on cash held
in foreign currency 20,790 16,299
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Increase in cash and cash equivalents 298,517 254,699
Cash and cash equivalents, beginning of
period 1,810,478 2,534,271
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Cash and cash equivalents, end of period $ 2,108,995 $ 2,788,970
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SOURCE: Radiant Communications Inc.
Investors and Media: Chuck Leighton, CFO, (604) 692-4531, cleighton@radiant.net; or David Feick, Investor Relations, The Equicom Group, (403) 538-4787, dfeick@equicomgroup.com
Copyright (C) 2009 CNW Group. All rights reserved
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Companies: Radiant Communications Corp (RCN),
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