Radiant Communications Announces First Quarter 2009 Results



    
    Company records 28% revenue growth with positive net income and cash
    flows
    

    VANCOUVER, May 20 /CNW/ - 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.

    
    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.
    

    "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 RE

SOURCES 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. EBITDA Earnings before Interest, Taxes, Depreciation and Amortization is calculated as follows: ------------------------------------------------------------------------- ($000s) Q1 2009 Q1 2008 ------------------------------------------------------------------------- Operating Income (loss) $ 233 $(160) Amortization 262 241 Stock-based compensation expense 66 43 ------------------------------------------------------------------------- EBITDA $ 561 $ 124 ------------------------------------------------------------------------- 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. 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) ------------------------------------------------------------------------- March 31, December 31, 2009 2008 ------------------------------------------------------------------------- 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 ------------------------------------------------------------------------- 7,635,798 7,083,214 Property and equipment 1,549,109 1,648,465 Goodwill 1,574,228 1,574,228 ------------------------------------------------------------------------- $ 10,759,135 $ 10,305,907 ------------------------------------------------------------------------- ------------------------------------------------------------------------- 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 ------------------------------------------------------------------------- 7,153,790 7,016,927 Deferred lease inducements 67,180 64,509 Obligations under capital leases 81,625 87,203 ------------------------------------------------------------------------- 7,302,595 7,168,639 ------------------------------------------------------------------------- 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) ------------------------------------------------------------------------- 3,456,540 3,137,268 ------------------------------------------------------------------------- Contingent liabilities $ 10,759,135 $ 10,305,907 ------------------------------------------------------------------------- ------------------------------------------------------------------------- RADIANT COMMUNICATIONS CORP. STATEMENTS OF OPERATIONS, COMPREHENSIVE INCOME (LOSS) AND DEFICIT (Expressed in Canadian dollars) (Unaudited) ------------------------------------------------------------------------- Three months ended March 31, 2009 2008 ------------------------------------------------------------------------- Revenue $ 7,266,188 $ 5,669,833 Cost of sales 4,101,465 3,051,953 ------------------------------------------------------------------------- Gross profit 3,164,723 2,617,880 ------------------------------------------------------------------------- Expenses Sales and marketing 536,571 525,282 General and administrative 2,132,959 2,012,153 Amortization 262,216 240,935 ------------------------------------------------------------------------- 2,931,746 2,778,370 ------------------------------------------------------------------------- Income (loss) before undernoted 232,977 (160,490) Interest expense 16,999 38,663 Other (income) expense (38,196) (42,076) ------------------------------------------------------------------------- Net earnings (loss) and comprehensive income (loss) for the period 254,174 (157,077) Deficit, beginning of period (4,611,649) (4,080,216) ------------------------------------------------------------------------- Deficit, end of period $ (4,357,475) $ (4,237,293) ------------------------------------------------------------------------- ------------------------------------------------------------------------- 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 ------------------------------------------------------------------------- ------------------------------------------------------------------------- RADIANT COMMUNICATIONS CORP. STATEMENTS OF CASH FLOWS (Expressed in Canadian dollars) (Unaudited) ------------------------------------------------------------------------- Three months ended March 31, 2009 2008 ------------------------------------------------------------------------- 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) ------------------------------------------------------------------------- 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 ------------------------------------------------------------------------- 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 ------------------------------------------------------------------------- Increase in cash and cash equivalents 298,517 254,699 Cash and cash equivalents, beginning of period 1,810,478 2,534,271 ------------------------------------------------------------------------- Cash and cash equivalents, end of period $ 2,108,995 $ 2,788,970 ------------------------------------------------------------------------- -------------------------------------------------------------------------

For further information:

For further information: 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

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