May 15, 2008
Radiant Communications Announces First Quarter 2008 Results
Company records positive EBITDA combined with investments in new products and customer growth
May 15, 2008 (Vancouver, BC) – Radiant Communications Corp. (“Radiant”) (TSX Venture Exchange: RCN), Canada's leading supplier of Broadband Solutions for Business™, today announced its financial results for its 2008 first quarter ended March 31, 2008.
HIGHLIGHTS:
• Revenue of $5.7 million for the quarter increased by 11.2% compared to revenue of $5.1 million for the first quarter of 2007.
• Gross margin was $2.6 million or 46.2% for the quarter.
• The Company recorded EBITDA of $123,721 in the quarter while investing in new products and significant new customers.
• The loss for the quarter was $157,077 or $0.01 per share.
• The Company ended the quarter with cash and short-term investments of $3.3 million which is an increase of 8% over the ending 2007 balance.
• During the quarter Radiant provisioned over 380 new North American locations for a significant new customer. Although the associated implementation costs had a negative impact on Q1 gross margin and earnings, the company anticipates a significant benefit in future periods due to increased business from this customer.
• During the first quarter Radiant signed up five customers representing more than $1 million in new revenue for our recently announced AlwaysThere™ Hosted Exchange solution. Again, while the assocated start-up costs affected Q1 earnings, Radiant will realize the benefit of these recurring revenue streams for years to come.• Radiant’s new strategy of layering on value-added services was validated in two ways:
• a new multi-location customer purchased not just broadband connectivity, but all our new services (TriplePlay VPN™, AlwaysThere Hosted Exchange, and Digital Voice), increasing the value of the contract by 3x;
• second, existing customers also contracted for these value-added services, tripling their recurring revenue contribution to Radiant in some cases.
• Radiant continued the roll out of high value customers during the quarter including Dollarama, HDS Retail, First Ontario Credit Union, Burger King, MoneyMart, 7-Eleven, lululemon athletica and Liquor Stores of Alberta.
“In the first quarter of 2008, Radiant was presented with two significant opportunities, which were major challenges for our operations, and I’m pleased to announce that our team rose to those challenges and exceeded customer expectations,” said David Buffett, President and CEO of Radiant. “Our first challenge was to gain traction with our new AlwaysThere™ Hosted Exchange solution that we announced late in 2007. Our sales team responded and secured multi-year contracts with 5 customers totalling over 1400 seats in the first quarter. This represents approximately $1 million of new revenue under contract. Our operations team has already provisioned several of these new customers. We are seeing interest from both existing and new customers ranging from small 10 person operations up to large, multi-location customers with several hundred seats. The second significant opportunity and challenge arose from our recently announced Triple Play VPN solution based on MPLS. We have secured several new customers through this technology. One of these required Radiant to install over 380 MPLS sites across North America in under 14 weeks. Again the team rose to the challenge and despite the logistics and costs associated with provisioning a secure network in a compressed time schedule; we were very successful and made significant progress with a very large national account."
“In the recurring revenue business model”, explained Mr. Buffett, “there is often an upfront cost associated with unusual, large or expedited implementations. We experienced all three of these challenges in the first quarter and as a result of higher cost set-ups, line provisioning and regional carrier costs and installations, our cost of sales and operating costs were higher than our normal run-rate. Radiant will realize the monthly recurring revenues going forward and we considered this to be a sound strategic investment. In addition to revenues for these 380 sites we have demonstrated our ability to deliver to a new major account and have the opportunity to secure additional significant new revenues with this customer. We expect our recurring business to benefit from these efforts for the remainder of the year and future periods.”
Additional details on the first quarter results, including the unaudited Financial Statements and Management Discussion and Analysis, will be made available at http://www.sedar.com/ under Radiant Communications Corp.
Radiant will hold a conference call to discuss its results for the quarter ended March 31, 2008 on May 15, at 1:30 p.m. PDT (4:30 p.m. EDT). Access to the call may be obtained by calling the operator at 1-866-400-3310 (Toll Free North America), or 1-416-850-9144 (International) 10 minutes prior to the scheduled start time. 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 911805. The audio web cast will be archived for replay on Radiant's web site at www.radiant.net.
Click here to view remaining Press Release and Financial Statements
|
