May 5, 2005
Company reports 30% increase in connectivity revenue and 40% increase in new orders over prior year
Vancouver, BC – Radiant Communications Corp. (“Radiant”) (TSX Venture Exchange: RCX), Canada’s leading supplier of Internet-based data communications and Internet services to the business market, today announced its financial results for the first quarter of fiscal 2005 ended March 31, 2005. Revenue for the quarter was $4.8 million, an increase of 19% over the first quarter of 2004. Connectivity revenue was up 33% over the same period of 2004 and up 5% from the preceding quarter. Professional services revenue was up 6% over the first quarter of 2004, but down 31% from the preceding fourth quarter of 2004 due to the timing of several large project completions. Gross margin of 47% in the quarter was within the target range for the Company’s product mix and consistent with the annual results of 2003 and 2004. The net loss for the quarter was $1.3 million, which includes $0.8 million of interest and amortization expense and the Company ended the quarter with $1.6 million of cash and short-term investments.
“2005 promises to be an exciting year for Radiant and our first quarter results have produced a solid return in new business generated from our investments in 2004”, said Jim Grey, President and CEO. “The value of new recurring revenue contracts signed during the quarter was 22% higher than the first quarter of 2004 and 40% higher than the preceding quarter (Q4 of 2004). This strong inflow of new orders to be provisioned will add significant strength to the recurring revenue base in our second quarter of 2005. I’m also pleased to report that during the first quarter we secured $2.75 million in additional funding from existing shareholders and added two new experienced Board members to assist us in managing our future growth. The retail market IP opportunity continues to be driven by a demand for connectivity speed, service and security at a reasonable price and our national solution continues to be a proven leader. ”
First quarter highlights include:
- Closed a $2.75 million financing in the form of 3 year convertible debentures with three existing shareholders,
- Achieved a record quarter in the value of new recurring revenue orders signed,
- Won several new, multi-location customers including First Ontario Credit Union, West 49, Felix Homme, Sheridan Nurseries, Carlton Cards, Irving Oil, and Fruits and Passion,
- Continued to add new locations for existing customers such as Wal-Mart, Burger King, Dynamite & Garage stores, Glentel, A&W, and Reebok International,
- Appointed two industry veterans, Wendy Porter and Don Calder, to the Radiant Board
Additional details on first quarter results, including the Management Discussion and Analysis, are available at www.sedar.com under Radiant Communications Corp.
About Radiant Communications
Radiant Communications Corp. provides a total, integrated solution 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 coast-to-coast broadband services including DSL, T1, Frame Relay, and Cable. Radiant has also provides specialized IP services for the Canadian retail industry, namely RetailCONNECTä 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
(Unaudited)
(Expressed in Canadian dollars)
|
|
March 31,
2005
(Unaudited) |
December 31,
2004 |
|
Assets
Current assets: |
| Cash and cash equivalents |
$ 1,062,643 |
$ 359,967 |
| Short-term investments |
575,000 |
575,000 |
Trade accounts receivable, net of allowance for doubtful
accounts of $91,284 (2004 - $75,779) |
2,202,744 |
2,138,041 |
| Inventories |
402,731 |
313,736 |
| Prepaid expenses and deposits |
169,156 |
197,347 |
|
|
4,412,274 |
3,584,091 |
| Capital assets |
1,411,536 |
1,518,442 |
| Deferred financing costs |
722,479 |
872,889 |
| Intangible assets |
1,574,228 |
1,574,228 |
|
|
$ 8,120,517 |
$ 7,549,650 |
|
Liabilities and Shareholders' Deficiency
Current liabilities |
| Accounts payable and accrued liabilities |
$ 1,965,256 |
$ 3,160,644 |
| Customer deposits |
195,290 |
195,740 |
| Deferred revenue |
2,099,901 |
1,952,634 |
| Current portion of deferred lease inducements |
89,145 |
71,763 |
| Current portion of long-term debt |
3,246,039 |
3,198,670 |
| Current portion of obligations under capital leases |
286,140 |
264,953 |
|
|
7,881,771 |
8,844,404 |
| Deferred lease inducements |
190,302 |
219,357 |
| Long-term debt |
1,635,833 |
49,420 |
| Obligations under capital leases |
608,393 |
622,470 |
| Shareholders' deficiency |
| Share capital |
28,573,306 |
28,559,806 |
| Contributed surplus |
2,849,499 |
1,595,349 |
| Deficit |
(33,618,587) |
(32,341,156) |
|
|
(2,195,782) |
(2,186,001) |
|
|
$ 8,120,517 |
$ 7,549,650 |
|
Radiant Communications Corp.
Statements of Operations and Deficit
(Unaudited)
(Expressed in Canadian dollars)
Three months ended March 31, 2005 and 2004
|
|
2005
(Unaudited) |
2004
(Unaudited) |
|
| Revenue |
$ 4,750,370 |
$ 3,989,071 |
| Cost of sales |
2,537,357 |
1,946,401 |
|
| Gross profit |
2,213,013 |
2,042,670 |
| Expenses: |
| Sales and marketing |
1,083,124 |
834,615 |
| General and administrative |
1,622,782 |
1,578,407 |
| Amortization |
231,096 |
314,705 |
|
|
2,937,002 |
2,727,727 |
|
| Operating loss |
723,989 |
685,057 |
| Interest expense |
279,204 |
131,337 |
| Amortization of warrant-based deferred financing costs |
191,368 |
- |
| Accretion of deemed discount on convertible debentures |
84,536 |
- |
| Non-cash interest expense on warrants |
2,353 |
- |
| Other (income) expense |
(4,019) |
(49,890) |
|
| Loss for the period |
1,277,431 |
766,504 |
| Deficit, beginning of period |
32,341,156 |
28,966,300 |
|
| Deficit, end of period |
$ 33,618,587 |
$ 29,732,804 |
|
| Basic and diluted loss per share |
$ (0.05) |
$ (0.03) |
| Weighted average common shares, used in computing loss per share basic and diluted |
28,210,835 |
28,209,724 |
|
Radiant Communications Corp.
Statements of Cash Flows
(Unaudited)
(Expressed in Canadian dollars)
Three months ended March 31, 2005 and 2004
|
|
2005
(Unaudited) |
2004
(Unaudited) |
|
Cash provided by (used in):
Operations |
| Loss for the period |
$ (1,277,431) |
$ (766,504) |
| Items not involving cash: |
| Amortization |
231,096 |
314,705 |
| Amortization of warrant-based deferred financing costs |
191,368 |
- |
| Accretion of deemed discount on convertible debentures |
84,536 |
- |
| Cash-based bonus accrual on long-term debt |
47,370 |
- |
| Stock-based compensation |
26,562 |
11,169 |
| Unrealized foreign exchange gain loss |
- |
6,524 |
| Non-cash interest expense on warrants |
2,353 |
- |
| Amortization of deferred lease inducement |
(11,673) |
(7,055) |
|
|
(705,819) |
(441,161) |
| Change in non-cash operating working capital |
| Trade accounts receivable |
(64,703) |
123,989 |
| Inventories |
(88,995) |
(81,117) |
| Prepaid expenses and deposits |
28,191 |
10,418 |
| Accounts payable and accrued liabilities |
(1,225,089) |
(550,571) |
| Customer deposits |
(450) |
6,797 |
| Deferred revenue |
147,267 |
78,716 |
|
|
(1,909,598) |
(852,929) |
| Investments |
| (Purchase) sale of short-term investments |
- |
775,000 |
| Purchase of capital assets |
(10,863) |
(282,951) |
|
|
(10,863) |
492,049 |
| Financing |
| Proceeds from issuance of convertible debentures |
2,750,000 |
- |
| Deferred financing costs |
(42,640) |
- |
| Proceeds from exercise of employee stock options |
13,500 |
- |
| Payments under capital leases |
(73,217) |
(111,806) |
| Repayment of long-term debt |
(24,506) |
(23,792) |
|
|
2,623,137 |
(135,598) |
|
| Increase (decrease) in cash and cash equivalents |
702,676 |
(496,478) |
| Cash and cash equivalents, beginning of period |
359,967 |
693,744 |
|
| Cash and cash equivalents, end of period |
$ 1,062,643 |
$ 197,266 |
|
|
