March 10, 2005
Company achieves 9th consecutive quarter of record revenues
March 10, 2005 (Vancouver, BC) – Radiant Communications Corp. ("Radiant" or "the Company") (TSX Venture Exchange: RCX), the largest organization in Canada focused exclusively on providing IP-based data communications and Internet services to the business market, today announced its financial results for the fourth quarter and fiscal year ended December 31, 2004. Revenue in the fourth quarter of 2004, the ninth consecutive quarter of record revenues, was $4.9 million, an increase of 23% over the fourth quarter of 2003. Annual revenue for the year ended December 31, 2004 was $18.1 million, up 17% over 2003.
“2004 was an exciting and very successful year for Radiant”, said Jim Grey, President and CEO. “We purposely invested in products and services that met the needs of national customers requiring high availability and high performance, secure networks connecting all of their North American locations. We also invested in products for the retail industry allowing them to connect their IP networks to Canada’s Payment Processors for credit and debit card processing, provide their customers with gift and loyalty cards and provide high-speed access to their back office systems. During the year we grew revenue every quarter, held margins over 47% for the year, added many high profile national customers, launched several new, highly competitive, IP-based products and achieved a break-even position on operations in the fourth quarter. Our successes in 2004 enabled us to raise $2.75 million of new financing in January of 2005 and enlist the services of Don Calder and Wendy Porter as important additions to our Board.”
Recurring Connectivity and Hosting revenue for 2004 was $13.7 million, up 20% from 2003. Overall gross margin for the year was 48% compared to 47% in 2003. The net loss for the year was $3.4 million, which includes $1.2 million of interest expense and $1.0 million of amortization. Not including these expenses the operating loss would have been $1.2 million for the year.
Significant highlights in 2004 included:
- Doubled our network capacity and relocated our Toronto datacenter to 151 Front Street to provide a strong base for future growth,
- Won many new, key, multi-location customers including Wal-Mart, Sun Life Financial, Black’s Photography, Burger King, and A&W,
- Announced the RetailConnectTM product suite including IP-based payment gateway services and managed VPN’s for secure, reliable and fast corporate connectivity,
- Formed significant relationships with other retail industry service providers including hardware and software suppliers and the Canadian Payment Processors to enable us to provide a full solution capability to Canadian retailers,
- Expanded the sales force in Toronto and Montreal to address the growing market opportunities.
About Radiant Communications
Radiant Communications Corp. provides a single source for businesses requiring national IP data communications services including, broadband and managed network services, Internet access, web hosting, web development and marketing services.
The Company offers a complete range of broadband services including DSL, T1, Frame Relay, and Cable. Radiant has also developed IP services for the Canadian retail industry, namely, RetailCONNECTTM IP network services and TurboSwitch IP payment gateway services. Radiant has offices in Toronto, Montreal, Calgary, Edmonton and Vancouver.
For More Information
Radiant Communications
Investors & Media: Chuck Leighton, CFO, 604-692-4531, cleighton@radiant.net
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 the company'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 Sheets
(Expressed in Canadian dollars)
|
|
December 31,
2004 |
December 31,
2003 |
Assets
Current assets: |
| Cash and cash equivalents |
$ 359,967 |
$ 693,744 |
| Short-term investments |
575,000 |
2,650,000 |
Trade accounts receivable, net of allowance for doubtful
accounts of $67,444 (2003 - $96,146) |
2,138,041 |
1,694,382 |
| Inventories |
313,736 |
129,278 |
| Prepaid expenses and deposits |
197,347 |
140,582 |
| Due from officer |
- |
90,755 |
|
|
3,584,091 |
5,398,741 |
| Capital assets |
1,651,143 |
1,133,811 |
| Deferred financing costs |
872,889 |
183,332 |
| Intangible Assets |
1,574,228 |
1,642,236 |
|
|
$ 7,549,650 |
$ 8,358,120 |
|
Liabilities and Shareholders' Deficiency |
| Current liabilities: |
| Accounts payable and accrued liabilities |
$ 3,160,644 |
$ 2,869,249 |
| Customer deposits |
195,740 |
160,947 |
| Deferred revenue |
1,952,634 |
1,708,287 |
| Current portion of deferred lease inducements |
71,763 |
45,670 |
| Current portion of long-term debt |
3,198,670 |
75,802 |
| Current portion of obligations under capital leases |
264,953 |
233,187 |
|
|
5,390,858 |
5,093,142 |
| Obligations under capital leases |
219,357 |
11,419 |
| Deferred lease inducement |
49,420 |
221,666 |
| Long-term debt |
622,470 |
3,137,564 |
|
| Shareholders' deficiency: |
| Share capital |
28,559,806 |
28,559,806 |
| Contributed surplus |
1,595,349 |
300,823 |
| Deficit |
(32,341,156) |
(28,966,300) |
|
|
(2,186,001) |
(105,671) |
|
|
$ 7,549,650 |
$ 8,358,120 |
|
Radiant Communications Corp.
Statements of Operations and Deficit
(Expressed in Canadian dollars)
|
|
Year ended
December 31, |
Three months ended
December 31, |
|
|
|
|
2004 |
2003 |
2004 |
2003 |
|
|
(Unaudited) |
(Unaudited) |
|
| Revenue |
$ 18,094,194 |
$ 15,516,458 |
$ 4,891,924 |
$ 4,070,006 |
| Cost of sales |
9,466,768 |
8,271,669 |
2,678,936 |
2,216,518 |
|
| Gross profit |
8,627,426 |
7,244,789 |
2,212,988 |
1,853,488 |
Expenses: |
| Sales and marketing |
3,681,930 |
3,012,360 |
818,247 |
826,367 |
| General and administrative |
6,115,684 |
5,679,608 |
1,392,941 |
1,519,739 |
| Amortization |
1,038,461 |
1,622,601 |
241,127 |
464,222 |
|
|
10,836,075 |
10,314,569 |
2,452,315 |
2,810,358 |
|
| Operating loss |
2,208,649 |
3,069,780 |
239,327 |
956,840 |
|
| Interest expense |
709,546 |
586,907 |
207,441 |
160,272 |
| Amortization of warrant-based Deferred financing costs |
446,526 |
- |
191,368 |
- |
| Non-cash interest expense on warrants |
5,732 |
- |
2,352 |
- |
| Other (income) expense |
(79,737) |
61,109 |
8,571 |
87,021 |
| Due from officer |
84,140 |
- |
84,140 |
- |
|
| Loss for the period |
3,374,856 |
3,717,796 |
733,199 |
1,204,133 |
|
| Deficit, beginning of period |
28,966,300 |
25,248,504 |
31,607,957 |
27,762,167 |
|
| Deficit, end of period |
$ 32,341,156 |
$ 28,966,300 |
$ 32,341,156 |
$ 28,966,300 |
|
| Basic and diluted loss per share |
$ (0.12) |
$ (0.19) |
$ (0.03) |
$ (0.05) |
| Weighted average common shares, used in computing loss per share basic and diluted |
28,209,724 |
19,615,634 |
28,209,724 |
24,187,985 |
|
Radiant Communications Corp.
Statements of Cash Flows
(Expressed in Canadian dollars)
|
|
Year ended
December 31, |
Three months ended
December 31, |
|
|
|
|
2004 |
2003 |
2004 |
2003 |
|
|
(Unaudited) |
(Unaudited) |
|
Cash provided by (used in):
Operations: |
| Loss for the period |
$ (3,374,856) |
$ (3,717,796) |
$ (733,199) |
$ (1,204,133) |
| Items not involving cash: |
| Amortization |
1,038,461 |
1,622,601 |
241,127 |
464,222 |
Amortization of warrant-based
deferred financing costs |
446,526 |
- |
191,368 |
- |
| Bonus accrual on long-term debt |
110,526 |
- |
47,368 |
- |
| Due from officer |
84,140 |
- |
84,140 |
- |
| Stock based compensation |
76,795 |
109,303 |
22,535 |
85,678 |
Non-cash interest expense on
warrants |
5,732 |
- |
2,352 |
- |
Unrealized foreign exchange (gain)
loss |
6,615 |
19,676 |
4,172 |
3,738 |
Amortization of deferred lease
inducement |
(17,376) |
44,556 |
(108) |
20,420 |
|
|
(1,623,437) |
(1,921,660) |
(140,245) |
(630,075) |
| Change in non-cash operating working capital: |
| Trade accounts receivable |
(443,659) |
102,382 |
(190,746) |
15,666 |
| Income taxes recoverable |
- |
45,453 |
- |
- |
| Inventories |
(184,458) |
4,623 |
161,333 |
169,595 |
| Prepaid expenses and deposits |
(58,085) |
73,176 |
43,445 |
12,849 |
Accounts payable and accrued
liabilities |
339,246 |
(372,905) |
304,587 |
(385,682) |
| Customer deposits |
34,793 |
(17,690) |
(1,050) |
(3,509) |
| Deferred revenue |
244,347 |
33,010 |
48,695 |
17,400 |
|
|
(1,691,253) |
(2,037,945) |
226,019 |
(775,193) |
| Investments: |
| (Purchase) sale of short-term investments |
2,075,000 |
(2,650,000) |
- |
(2,500,000) |
| (Purchase) disposal of capital assets |
(436,559) |
(852,167) |
(70,885) |
(228,605) |
| Customer acquisition costs |
- |
(26,474) |
- |
- |
|
|
1,638,441 |
(3,528,641) |
(70,855) |
(2,728,605) |
| Financing: |
| Due to related party |
- |
(281,749) |
- |
- |
| Payments under capital leases |
(365,085) |
(559,506) |
(79,410) |
(94,774) |
| Proceeds from sale-leaseback |
203,970 |
- |
- |
- |
| Proceeds from issuance of debt |
- |
245,000 |
- |
- |
| Repayment of long-term debt |
(96,224) |
(33,748) |
(24,318) |
(10,297) |
| Proceeds from issuance of shares |
- |
4,000,000 |
- |
4,000,000 |
| Share issuance costs |
|
(232,877) |
|
(232,877) |
| Deferred financing costs |
(23,626) |
(1,426) |
- |
- |
|
|
(280,965) |
3,135,694 |
(103,728) |
3,662,052 |
| Increase (decrease) in cash and cash equivalents |
(333,777) |
(2,430,892) |
51,436 |
158,254 |
| Cash and cash equivalents, beginning of period |
693,744 |
3,124,636 |
308,561 |
535,490 |
|
| Cash and cash equivalents, end of period |
$ 359,967 |
$ 693,744 |
$ 359,967 |
$ 693,744 |
|
|
