|
Company reports 27% increase in connectivity revenue and 11% increase in total revenue over prior year
November 2, 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 third quarter of fiscal 2005 ended September 30, 2005. Revenue for the quarter was $5.2 million, an increase of 11% over the third quarter of 2004.
Recurring connectivity revenue for the quarter was up 27% over the same period of 2004 and year-to-date recurring connectivity revenue was up 30% over 2004. The Company’s average gross margin was on target at 47.2% for the quarter and consistent with 47.5% for the second quarter of 2005 and 47.8% for the third quarter of 2004. The net loss for the quarter was $2.2 million, which included $1.7 million of interest expense, amortization and discount accretion related to the outstanding debt of the Company and the conversion, repayment and exchange of this debt during the quarter. The Company ended the quarter with $3.4 million in cash and short-term investments, positive working capital and no significant debt other than capital leases.
“Radiant underwent some very significant changes in the third quarter”, said Chris Worthy, Chairman and acting President and CEO for Radiant Communications. “In addition to continuing to grow the core connectivity revenue base by over 25%, the Company retired all of its outstanding debentures and added almost $2 million in cash to the balance sheet. With positive working capital and significant reductions in the use of cash, Radiant is well positioned to leverage sales and customer acquisitions into financial success. Following the end of the quarter, Jim Grey announced he was stepping down as President and CEO. The Board thanks Jim for his many contributions and has instituted a search for a successor to guide Radiant to new levels of growth and financial performance.”
Third quarter highlights include:
- Achieved record year-to-date revenue of $15.0 million and record quarterly revenue of $5.2 million;
- Announced and closed a non-brokered $7.9 million equity financing,
- Increased cash and short term deposits to $3.4 million and reduced debt by $6.0 million,
- The EBITDA loss of $37,000 was significantly improved over the Q2-2005 EBITDA loss of $278,000,
- Achieved another record quarter for total value of new recurring revenue orders signed,
- Announced the 10,000th managed DSL connection for business,
- Continued to add new locations for existing customers including Wal-Mart, RentCash, West 49, Lululemon Athletica, and Loblaws, and
- Reduced Sales, Marketing and Administration costs for the quarter by 8% versus the second quarter.
Additional details on third 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 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)
|
|
September 30,
2005
(Unaudited) |
December 31,
2004 |
|
| Assets |
| Current assets |
| Cash and cash equivalents |
$ 2,785,157 |
$ 359,967 |
| Short-term investments |
608,000 |
575,000 |
Trade accounts receivable, net of allowance for doubtful
accounts of $125,184 (2004 - $75,779) |
2,167,020 |
2,138,041 |
| Inventories |
385,773 |
313,736 |
| Prepaid expenses and deposits |
217,428 |
197,347 |
|
|
6,163,378 |
3,584,091 |
| Capital assets |
1,395,262 |
1,518,442 |
| Deferred financing costs |
- |
872,889 |
| Goodwill |
1,574,228 |
1,574,228 |
|
|
$ 9,132,868 |
$ 7,549,650 |
|
| Liabilities and Shareholders' Equity |
| Current liabilities |
|
|
| Accounts payable and accrued liabilities |
$ 2,705,119 |
$ 3,160,644 |
| Customer deposits |
194,240 |
195,740 |
| Deferred revenue |
2,473,659 |
1,952,634 |
| Current portion of deferred lease inducements |
89,589 |
71,763 |
| Current portion of long-term debt |
72,674 |
3,198,670 |
| Current portion of obligations under capital leases |
382,084 |
264,953 |
|
|
5,917,365 |
8,844,404 |
| Deferred lease inducement |
144,822 |
219,357 |
| Long-term debt |
- |
49,420 |
| Obligations under capital leases |
641,988 |
622,470 |
|
| Shareholders' equity (deficiency) |
|
|
| Share capital |
35,712,621 |
28,559,806 |
| Contributed surplus |
3,578,693 |
1,595,349 |
| Deficit |
(36,862,621) |
(32,341,156) |
|
|
2,428,693 |
(2,186,001) |
|
|
$ 9,132,868 |
$ 7,549,650 |
|
RADIANT COMMUNICATIONS CORP.
Statements of Operations and Deficit
(Unaudited)
(Expressed in Canadian dollars)
|
|
Nine months ended
September 30,
|
Three months ended
September 30,
|
|
2005 |
2004 |
2005 |
2004 |
|
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
| Revenue |
$15,032,818 |
$13,202,270 |
$5,182,209 |
$4,666,848 |
| Cost of sales |
7,950,910 |
6,787,832 |
2,734,925 |
2,434,070 |
|
| Gross profit |
7,081,908 |
6,414,438 |
2,447,284 |
2,232,778 |
|
| Expenses |
|
|
|
|
| Sales and marketing |
3,105,476 |
2,863,683 |
937,007 |
923,373 |
| General and administrative |
4,857,071 |
4,722,744 |
1,580,009 |
1,502,123 |
| Amortization |
759,640 |
797,333 |
295,899 |
247,646 |
|
|
8,722,187 |
8,383,760 |
2,812,915 |
2,673,142 |
|
| Operating loss |
1,640,279 |
1,969,322 |
365,631 |
440,364 |
| Interest expense |
920,685 |
502,103 |
369,807 |
212,762 |
| Amortization of warrant-based deferred financing costs |
765,474 |
255,158 |
382,737 |
191,368 |
| Accretion of deemed discount on convertible debentures |
1,225,236 |
- |
1,038,597 |
- |
| Non-cash interest expense on warrants |
7,053 |
3,382 |
2,351 |
2,354 |
| Other (income) expense |
(37,262) |
(88,308) |
(3,061) |
(14,706) |
|
| Loss for the period |
4,521,465 |
2,641,657 |
2,156,062 |
832,142 |
| Deficit, beginning of period |
32,341,156 |
28,966,300 |
34,706,559 |
30,775,815 |
|
| Deficit, end of period |
$36,862,621 |
$31,607,957 |
$36,862,621 |
$31,607,957 |
|
| Basic and diluted loss per share |
$(0.16) |
$(0.09) |
$(0.07) |
$(0.03) |
| Weighted average common shares, used in computing loss per share basic and diluted |
28,580,096 |
28,209,724 |
29,260,632 |
28,209,724 |
|
RADIANT COMMUNICATIONS CORP.
Statements of Cash Flows
(Unaudited)
(Expressed in Canadian dollars)
|
|
Nine months ended
September 30,
|
Three months ended
September 30,
|
|
2005 |
2004 |
2005 |
2004 |
|
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
Cash provided by (used in):
Operations |
| Loss for the period |
$(4,521,465) |
$(2,641,657) |
$(2,156,062) |
$(832,142) |
| Items not involving cash |
| Amortization |
759,640 |
797,333 |
295,899 |
247,646 |
Amortization of warrant-based
deferred financing costs |
765,474 |
255,158 |
382,737 |
191,368 |
Accretion of deemed discount on
convertible debentures |
1,225,236 |
- |
1,038,597 |
- |
Cash-based bonus accrual on
long-term debt |
189,474 |
142,104 |
94,738 |
47,368 |
Early repayment amount on senior
secured debentures |
46,154 |
- |
46,154 |
- |
| Stock based compensation |
100,019 |
54,256 |
33,082 |
21,213 |
Unrealized foreign exchange (gain)
loss |
- |
2,443 |
- |
5,054 |
Non-cash interest expense on
warrants |
7,053 |
3,382 |
2,351 |
2,354 |
Amortization of deferred lease
inducement |
(56,709) |
(17,267) |
(22,054) |
(108) |
|
|
(1,485,124) |
(1,404,248) |
(284,558) |
(317,247) |
| Change in non-cash operating working capital |
| Trade accounts receivable |
(28,979) |
(211,753) |
(65,828) |
(7,894) |
| Inventories |
(72,037) |
(345,791) |
8,927 |
(128,842) |
| Prepaid expenses and deposits |
(20,081) |
(101,530) |
(21,020) |
399 |
Accounts payable and accrued
liabilities |
(601,084) |
(46,279) |
114,695 |
(187,296) |
| Customer deposits |
(1,500) |
35,843 |
(450) |
11,118 |
| Deferred revenue |
521,025 |
195,652 |
205,339 |
129,926 |
|
|
(1,687,780) |
(1,878,106) |
(42,895) |
(499,836) |
| Investments |
(Purchase) sale of short-term
investments |
(33,000) |
2,075,000 |
- |
400,000 |
| Purchase of capital assets |
(126,467) |
(406,834) |
(45,806) |
(87,516) |
|
|
(159,467) |
1,668,166 |
(45,806) |
312,484 |
| Financing |
Proceeds from issuance of convertible
debentures |
2,750,000 |
- |
- |
- |
| Deferred financing costs |
(42,640) |
(23,626) |
- |
- |
Proceeds from issuance of common
shares |
3,256,498 |
- |
3,256,498 |
- |
| Share issuance costs |
(35,010) |
- |
(35,010) |
- |
Proceeds from exercise of employee
stock options |
13,500 |
- |
- |
- |
| Repayment of long-term debt |
(1,452,508) |
(71,906) |
(1,405,130) |
(24,135) |
| Payments under capital leases |
(217,403) |
(283,681) |
(77,802) |
(95,372) |
| Proceeds from sale-leaseback |
- |
203,970 |
- |
- |
|
|
4,272,437 |
(175,243) |
1,738,556 |
(119,507) |
|
| Increase (decrease) in cash and cash equivalents |
2,425,190 |
(385,183) |
1,649,855 |
(306,859) |
| Cash and cash equivalents, beginning of period |
359,967 |
693,744 |
1,135,302 |
615,420 |
|
| Cash and cash equivalents, end of period |
$2,785,157 |
$308,561 |
$2,785,157 |
$308,561 | |
