August 4, 2005
Company reports 32% increase in connectivity revenue and 11% increase in total revenue over prior year
August 4, 2005 (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 second quarter of fiscal 2005 ended June 30, 2005. Revenue for the quarter was $5.1 million, an increase of 11% over the second quarter of 2004 and 7% over the first quarter of 2005. Connectivity revenue was up 32% over the same period of 2004 and up 8% from the preceding quarter. Professional services revenue was down 10% over the second quarter of 2004, but up 41% from the first quarter of 2005 as several large projects reached completion in the period. The Company’s average gross margin was 47.5% for the quarter, well within the target range for the Company’s product mix and consistent with 47.1% in the second quarter of 2004 and 46.6% in the immediately preceding quarter. The net loss for the quarter was $1.1 million, which includes $0.8 million of interest and amortization expense and the Company ended the quarter with $1.7 million of cash and short-term investments.
“More and more businesses are moving to IP-based services for their everyday operational requirements”, said Jim Grey, President and CEO for Radiant Communications. “Radiant is proving to be the connectivity provider of choice for national, multi-location accounts. Our high-quality, Canada-wide footprint, superior customer response systems and business dedicated product portfolio is a compelling differentiator that has allowed us to maintain a 30% annual growth rate in our core recurring revenue business. With total revenue growing at 7% quarter over quarter and operating costs flat, I believe we’ve demonstrated that our business model is on target.”
Second quarter highlights include:
- Year-to-date record revenue of $9.9 million and record quarterly revenue of $5.1 million,
- Increased cash and short term deposits to $1.7 million as at the end of the second quarter,
- Achieved another record quarter for total value of new recurring revenue orders signed,
- Signed several new, multi-location customers including Loblaws, Westfair Foods, RentCash and Sony Canada,
- Continued to add new locations for existing customers such as Wal-Mart, A&W, The Forzani Group , Dynamite stores, Schenker and Glentel,
- Sold over 200 additional new locations through our business partner channels,
- Held operating costs to a 1% quarter over quarter increase and a 1% decrease from the second quarter of 2004,
- Added two new independent Board members, Brian Nixon and Sam Ketcham
Additional details on second quarter results, including the Management Discussion and Analysis, are available at www.sedar.com under Radiant Communications Corp.
ABOUT RADIANT COMMUNICATIONS
Radiant Communications Corp. (www.radiant.net) 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, Fibre, and Cable. Radiant has also provides specialized 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
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)
|
|
June 30,
2005
(Unaudited) |
December 31,
2004 |
|
Assets
Current assets |
| Cash and cash equivalents |
$1,135,302 |
$359,967 |
| Short-term investments |
608,000 |
575,000 |
Trade accounts receivable, net of allowance for doubtful accounts
of $111,006 (2004 - $75,779) |
2,101,192 |
2,138,041 |
| Inventories |
394,700 |
313,736 |
| Prepaid expenses and deposits |
196,408 |
197,347 |
|
|
4,435,602 |
3,584,091 |
| Capital assets |
1,415,168 |
1,518,442 |
| Deferred financing costs |
498,110 |
872,889 |
| Goodwill |
1,574,228 |
1,574,228 |
|
|
$7,923,108 |
$7,549,650 |
|
Liabilities and Shareholders' Deficiency
Current liabilities |
| Accounts payable and accrued liabilities |
$2,474,564 |
$3,160,644 |
| Customer deposits |
194,690 |
195,740 |
| Deferred revenue |
2,268,320 |
1,952,634 |
| Current portion of deferred lease inducements |
88,903 |
71,763 |
| Current portion of long-term debt |
3,293,407 |
3,198,670 |
| Current portion of obligations under capital leases |
333,373 |
264,953 |
|
|
8,653,257 |
8,844,404 |
| Deferred lease inducement |
167,562 |
219,357 |
| Long-term debt |
1,715,063 |
49,420 |
| Obligations under capital leases |
628,254 |
622,470 |
|
| Shareholders' deficiency |
|
|
| Share capital |
28,573,306 |
28,559,806 |
| Contributed surplus |
2,892,225 |
1,595,349 |
| Deficit |
(34,706,559) |
(32,341,156) |
|
|
(3,241,028) |
(2,186,001) |
|
|
$7,923,108 |
$7,549,650 |
|
Radiant Communications Corp.
Statements of Operations and Deficit
(Unaudited)
(Expressed in Canadian dollars)
|
|
Six months ended
June 30, |
Three months ended
June 30, |
|
2005 |
2004 |
2005 |
2004 |
|
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
| Revenue |
$9,850,609 |
$8,535,421 |
$5,100,239 |
$4,546,350 |
| Cost of sales |
5,215,985 |
4,353,761 |
2,678,628 |
2,407,360 |
|
| Gross profit |
4,634,624 |
4,181,660 |
2,421,611 |
2,138,990 |
| Expenses |
| Sales and marketing |
2,168,469 |
1,940,309 |
1,085,346 |
1,105,694 |
| General and administrative |
3,277,062 |
3,220,620 |
1,654,279 |
1,642,214 |
| Amortization |
463,741 |
549,689 |
232,645 |
234,983 |
|
|
5,909,272 |
5,710,618 |
2,972,270 |
2,982,891 |
|
| Operating loss |
1,274,648 |
1,528,958 |
550,659 |
843,901 |
| Interest expense |
550,876 |
289,341 |
271,672 |
158,004 |
| Amortization of warrant-based deferred financing costs |
382,737 |
63,789 |
191,369 |
63,789 |
| Accretion of deemed discount on convertible debentures |
186,639 |
- |
102,103 |
- |
| Non-cash interest expense on warrants |
4,704 |
1,029 |
2,351 |
1,029 |
| Other (income) expense |
(34,201) |
(73,602) |
(30,182) |
(23,712) |
|
| Loss for the period |
2,365,403 |
1,809,515 |
1,087,972 |
1,043,011 |
| Deficit, beginning of period |
32,341,156 |
28,966,300 |
33,618,587 |
29,732,804 |
| Deficit, end of period |
$34,706,559 |
$30,775,815 |
$34,706,559 |
$30,775,815 |
|
| Basic and diluted loss per share |
$(0.08) |
$(0.06) |
$(0.04) |
$(0.04) |
| Weighted average common shares, used in computing loss per share basic and diluted |
28,235,415 |
28,209,724 |
28,259,724 |
28,209,724 |
|
Radiant Communications Corp.
Statements of Cash Flows
(Unaudited)
(Expressed in Canadian dollars)
|
|
Six months ended
June 30, |
Three months ended
June 30, |
|
2005 |
2004 |
2005 |
2004 |
|
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
Cash provided by (used in):
Operations |
| Loss for the period |
$(2,365,403) |
$(1,809,515) |
$(1,087,972) |
$(1,043,011) |
| Items not involving cash: |
| Amortization |
463,741 |
549,689 |
232,645 |
234,983 |
Amortization of warrant-based
deferred financing costs |
382,737 |
63,789 |
191,369 |
63,789 |
Accretion of deemed discount on
convertible debentures |
186,639 |
- |
102,103 |
- |
Cash-based bonus accrual on
long-term debt |
94,736 |
|
47,368 |
|
| Stock based compensation |
66,937 |
33,043 |
40,375 |
21,874 |
Unrealized foreign exchange (gain)
loss |
- |
(2,611) |
- |
(9,135) |
Non-cash interest expense on
warrants |
4,704 |
1,029 |
2,351 |
1,029 |
Amortization of deferred lease
inducement |
(34,655) |
(17,159) |
(22,982) |
(10,104) |
|
|
(1,200,564) |
(1,181,735) |
(494,743) |
(740,575) |
| Change in non-cash operating working capital |
| Trade accounts receivable |
36,849 |
(203,859) |
101,552 |
(327,848) |
| Inventories |
(80,964) |
(216,949) |
8,031 |
(135,832) |
| Prepaid expenses and deposits |
939 |
(101,929) |
(27,252) |
(112,347) |
Accounts payable and accrued
liabilities |
(715,781) |
235,751 |
509,306 |
786,323 |
| Customer deposits |
(1,050) |
24,725 |
(600) |
17,928 |
| Deferred revenue |
315,686 |
65,726 |
168,419 |
(12,990) |
|
Investments
(Purchase) sale of short-term
investments |
(33,000) |
1,675,000 |
(33,000) |
900,000 |
| Purchase of capital assets |
(80,661) |
(319,318) |
(69,798) |
(36,367) |
|
|
(113,661) |
1,355,682 |
(102,798) |
863,633 |
Financing
Proceeds from issuance of convertible
debentures |
2,750,000 |
- |
- |
- |
| Deferred financing costs |
(42,640) |
(23,626) |
|
(23,626) |
Proceeds from exercise of employee
stock options |
13,500 |
- |
- |
- |
| Payments under capital leases |
(139,601) |
(188,309) |
(66,384) |
(76,503) |
| Proceeds from sale-leaseback |
- |
203,970 |
- |
203,970 |
| Repayment of long-term debt |
(47,378) |
(47,771) |
(22,872) |
(23,979) |
|
|
| 2,533,881 |
(55,736) |
(89,256) |
79,862 |
|
| Increase (decrease) in cash and cash equivalents |
775,335 |
(78,324) |
72,659 |
418,154 |
| Cash and cash equivalents, beginning of period |
359,967 |
693,744 |
1,062,643 |
197,266 |
|
| Cash and cash equivalents, end of period |
$1,135,302 |
$615,420 |
$1,135,302 |
$615,420 |
|
|
